Russian Economy General News: #6

Report
http://unctad.org/en/PublicationsLibrary/webdiaeia2016d1_en.pdf

Vann7 wrote:

Kudrin is again cheerleading the western Liberals... he says Russia economy
will sink 6% in recession in 2016 if Oils start at $30 and then he went to say
that never again Oil prices will return as high as a decade earlier.  


Kudrin: Russia’s budget deficit to amount to 6% of GDP in 2016, if price of oil is $30



http://tass.ru/en/economy/851009


however UN economic experts paint a totally different picture.
They predict Russia 0.7% growth. with 10% inflation.

http://tass.ru/en/economy/851073


So which one is it?  What people here predict will happen if things remain the same
as today?

I have read this before and it is bullshit, the oil prices will go up, if Russia waits it will go up slowly and if Russia supports the Houthis, then it will go up faster.

The Russian economy is in a recession but then again, every oil producing country is, here in Alberta Canada, jobs are being cut, pays being frozen and other stuff, in the long term, Russia needs to learn to diversify it's economy.

http://southfront.org/moscow-nervous-russia-slips-unexpectedly-rapid-in-a-recession/

Do you guys have some kinda problem with comprehending what you are reading as well as blatantly ignoring the rest of the thread? Holy hell.

I had to post a comment in that southfront article cause crap man, that was a shitty article.

Militarov wrote:

Please don't re share same stuff. Look it up I've shared it already.



RUSSIA'S FOREIGN DEBT DROPS BY $85 BILLION IN 2015

The CBR has reported that the country's total foreign debt fell to $515.3 bln in 2015. The non-financial corporate sector reduced its debt by nearly $35 bln, while banking foreign debt shrank by $39 bln. Public sector debt was also down. The figures include ruble-denominated foreign debt (held by foreign investors) and intra-company debt. Total foreign debt was down by around 14% last year. This deleveraging will lend some support to the current account in 2016, as interest payments will be lower.
Russia's international reserves remained largely unchanged last year (in fact they edged up by around $1.3 bln). Given that the current account surplus reached $65.8 bln in 2015, the sale of foreign assets accumulated previously may have supported last year's deleveraging in the corporate and banking sector. All in all, the economy has proven to be rather resilient to strong external shocks, as the average annual price of oil fell 45% last year.

More on Vneshprombank's license revocation and demise. Probably has not been determined how much the government will have to pay to depositors, etc. Not clear what the fall out will be in terms of harm to businesses and other banks financially linked to Vneshprombank.

Tass article on Vneshprombank

You are aware that they ascess the damages prior to revoking the licenses, right?  Other banks will get more business.  I imagibe the major purpose of thiese revoking licenses is to remove none performers in the banking sector and allow other banks to increase their liquidity by obtaining more assets.  Russia seems to be a wild west for banks as there are significantly more banks than most.

sepheronx wrote:You are aware that they ascess the damages prior to revoking the licenses, right?  Other banks will get more business.  I imagibe the major purpose of thiese revoking licenses is to remove none performers in the banking sector and allow other banks to increase their liquidity by obtaining more assets.  Russia seems to be a wild west for banks as there are significantly more banks than most.

The issue in a case like this is how much actual assets does the bank actually have to recover. If assets were falsely reported or valued by the bank and/or stolen from the bank, then it will likely take a while to sort out and for creditors' true losses to be assessed.

Generally, it is a very good idea to revoke bank licenses and more carefully examine bank operations in times like these.

I for one am happy they decided against bailing the bank.  Let others take the assets and if they lied about assets and value, start jailing those in charge.

Just wondering why Saudi rial is not getting impacted by Oil Fall

http://www.bloomberg.com/quote/SARUSD:CUR

http://russia-insider.com/en/politics/ruble-crashes-record-lows-panic-some-investors-are-selling-any-price/ri12355

KVS, you may get a laugh at this.

Is Russia Insider a member of the 5th column?

sepheronx wrote:No.  They are good guys.  I conversed with head man via email.  The article was from zerohedge apparently.  Since Zerohedge gas many writers that all fall under same alias, you dont know who wrote it.  It is a mixture of pure speculation and just mentioning what others saying.  RI follows kinda same path.  They are just posting what others saying.  I find such articles none important or just outright wrong, but it is about Russia so of course RI will mention it.

seph.. lol

It seems pretty much all this about Ruble  and Russian economy ,really
have you very defensive on everything. As is personally affects your own income. lol
I understand that , just relax. i don't think any kind of internet biased reports will change
reality in Russia. If any ,im pretty confident Russia will pass this crysis of oil and western
sanctions. As incredible as this seem.. even for me , my biggest concern is US economy.
Nope.. i will not mind if its get beaten so much ,that US is forced to close all its military
bases in the world and stop financing NGOs and terrorism. that will be good.  

My biggest concern is a total collapse of US economy , the last statements of donald trumph
are not very encouraging. .. he is a top business man and have the best economist and financial experts money can buy on his side.. and so he also have business world wide so he knows a little bit of what is going on. And just recently trumph told US economy will become a third world country its economy when their economic bubble will explode that many people and business will go bankrupt.. much more than in 2008 ,that today the economy problems
that US face are farse worse than 2008 with a 21 trillion debt. and if US economy goes in total default , it will be not good for people like you and me living in the west. Riots and civil unrest
and a governeless country is what follows. Since not even police will have a job. and if this is a real possibility to happen if a nation economy totally crash ,specially if people are already very angry with that government and will like it go away. (contrary to USA , Russia do not have that level of hate of people for its government). So US will not survive , if ever face an economy crash like the one ARgentina had to face more than a decade ago.. it will split in many countries. Soviet style..And you already have signs of States seeking to split from washington DC. So a new american civil war is very possible.  in the first one more than half a million  people were killed. All said , Russia a united nation,of people + government will handle anything even if Ruble value becomes in the west zero..but Americans not so. it will be a living battlefield
and that will also affect anyone in the west ,who one way or other depends on american produced technology or services. Even the internet in US will be affected if its services providers goes bankrupt.

So after hearing Trump words.. "US will become a third world nation" and "many people will go
bankrupt" that is in the supposedly world top economy, and that the economy state
is really serious. im begining to believe is imminent now and it will be a matter of time.
And while people are "cheering" the "Strong Dollar" vs Ruble or how Obama claims is "defeating Russia" with its Sanctions and energy industry , all that looks more like smoke and mirrors and
the real face of US economy will be seen clearly once the bubble explode and no one can rescue the dollar and confidence of investors this time.

Project Canada wrote:
Is Russia Insider a member of the 5th column?

No. It is more on the "stronk" side. But lately there have been some not so stronk articles there as well.

Vann7 wrote:

sepheronx wrote:No.  They are good guys.  I conversed with head man via email.  The article was from zerohedge apparently.  Since Zerohedge gas many writers that all fall under same alias, you dont know who wrote it.  It is a mixture of pure speculation and just mentioning what others saying.  RI follows kinda same path.  They are just posting what others saying.  I find such articles none important or just outright wrong, but it is about Russia so of course RI will mention it.

seph.. lol

It seems pretty much all this about Ruble  and Russian economy ,really
have you very defensive on everything. As is personally affects your own income. lol
I understand that , just relax. i don't think any kind of internet biased reports will change
reality in Russia. If any ,im pretty confident Russia will pass this crysis of oil and western
sanctions. As incredible as this seem.. even for me , my biggest concern is US economy.
Nope.. i will not mind if its get beaten so much ,that US is forced to close all its military
bases in the world and stop financing NGOs and terrorism. that will be good.  

My biggest concern is a total collapse of US economy , the last statements of donald trumph
are not very encouraging. .. he is a top business man and have the best economist and financial experts money can buy on his side.. and so he also have business world wide so he knows a little bit of what is going on. And just recently trumph told US economy will become a third world country its economy when their economic bubble will explode that many people and business will go bankrupt.. much more than in 2008 ,that today the economy problems
that US face are farse worse than 2008 with a 21 trillion debt. and if US economy goes in total default , it will be not good for people like you and me living in the west. Riots and civil unrest
and a governeless country is what follows. Since not even police will have a job. and if this is a real possibility to happen if a nation economy totally crash ,specially if people are already very angry with that government and will like it go away. (contrary to USA , Russia do not have that level of hate of people for its government). So US will not survive , if ever face an economy crash like the one ARgentina had to face more than a decade ago.. it will split in many countries. Soviet style..And you already have signs of States seeking to split from washington DC. So a new american civil war is very possible.  in the first one more than half a million  people were killed. All said , Russia a united nation,of people + government will handle anything even if Ruble value becomes in the west zero..but Americans not so. it will be a living battlefield
and that will also affect anyone in the west ,who one way or other depends on american produced technology or services. Even the internet in US will be affected if its services providers goes bankrupt.

So after hearing Trump words.. "US will become a third world nation" and "many people will go
bankrupt" that is in the supposedly world top economy, and that the economy state
is really serious. im begining to believe is imminent now and it will be a matter of time.
And while people are "cheering" the "Strong Dollar" vs Ruble or how Obama claims is "defeating Russia" with its Sanctions and energy industry , all that looks more like smoke and mirrors and
the real face of US economy will be seen clearly once the bubble explode and no one can rescue the dollar and confidence of investors this time.

It can go multiple of ways.  The worst is prolonging the inevitable.  The other bad way for everyone is stopping this ponzi scheme.  But that will affect everyone as well.  It is damned if you do, damned if you dont.  If it stops now, it will take less time to recover.  People will need to learn to live in their own means.

And no, I am not over emotional about this, I am just tired of some of you guys repeating same lines that were either debunked or already heavily criticized and gone through with.  I may be harsh in some things I write and I appologize but I usually hate having to go through the same thing half a dozen times.

sepheronx wrote:

PapaDragon wrote:
Originally from Christian Science Monitor, more reality creeping in...

''Cheap oil roils ruble, but Russia bears the pain''

http://news.yahoo.com/cheap-oil-roils-ruble-russia-bears-pain-195430842.html

Instant garbage article, both Christian science monitor and Yahoo news.  Regardless if the Ruble drops to whatever to the USD, it really doesn't effect Russians much other than buying bullcrap items that were coined as "luxury" because some jerkoffs overcharge an asian product (iPhone).  In many instances, other companies that export to Russia or make in Russia have lowered prices to be able to still meet a demand.

I know it is garbage, the content is usual " Russia doomed" BS. Reason I posted it was the difference in tone. This is first time that something like CSM suggests that Russia might actually pull trough all this.

Here is a similar one:

The Ruble's Fall Is Just What Russia Needs To Deal With Oil Price Collapse

http://www.forbes.com/sites/timworstall/2016/01/20/ruble-fall-past-80-to-the-just-what-russia-needs-to-deal-with-oil-price-collapse/#272971f362c7b0f77ac362c7

Tim Worstall

It might seem a little odd to be cheering on the collapse in value of a currency. It does, after all, mean that the people of that country are becoming poorer. However, there are times when that is the right thing to be happening and right now in Russia is one of those times. It’s good news, good economic news at least, that the Russian ruble is falling in value against the dollar. For that the exchange rate is falling, down through 80 rubles to the dollar today, is one of the things taking the sting out of the fall in the oil price for Russia. A falling exchange rate means that while the dollar oil price is falling, plunging in fact, the ruble price is falling rather less. This alleviates at least some of the pressure on Russia’s government budget, something determined in rubles and largely fed by taxes on oil exports.

As to the news itself:

The Russian currency hit a historical low Wednesday as it went through 80 to the U.S dollar for the first time since the 1998 currency crisis. The ruble’s extended slide has occurred in sync with the decline in the price of oil, Russia’s chief export, reducing the Kremlin’s spending power and causing problems for President Vladimir Putin.

That’s the bit that report isn’t getting. The slide in the currency boosts the Kremlin’s spending power. They now get more rubles per barrel of oil exported than they did. Sure, the falling oil price is working in the other direction but this currency fall mitigates that. That’s why it’s so good.

In a country where many consumer goods are imported, the ruble’s drop will also push up inflation, testing the so-far robust public support for President Vladimir Putin in a year when Russia holds a parliamentary election.

Well, yes, but it also means that there will be more domestic production of those very same consumer items. Which is, in these times, just what that economy needs.

Think of it this way. For a country, like Russia, which lives largely off oil and gas exports (at least the government does) the falls in prices of those exports is a disaster. Suddenly huge holes appear in budgets and so on. And what is needed is some manner of turning the economy around, to make it produce more of what was previously imported and which can no longer be afforded as export income collapses. Well, what achieves that? A fall in the value of the currency achieves exactly that. It makes imports more expensive, lowering the amount imported. It makes domestic production more profitable, thus boosting that. It also makes exports of other goods cheaper, thus boosting non-oil exports. This is exactly what the doctor ordered for that economy. So, it’s great that it is happening.

The Bank of Russia won’t intervene in the currency market unless the ruble’s swings threaten the stability of the nation’s banking industry, Nabiullina said in an interview on Wednesday.

Quite right too. When the markets unadorned are doing exactly what is needed to offset that fall in the oil price why stop them?

Of course, this does have the unfortunate effect of making all Russians poorer. But then the fall in the oil price means that all Russians are poorer. Might as well simply accept this fact and get on with trying to improve things rather than denying recognition of reality.

kvs wrote:

PapaDragon wrote:
Here is a similar one:  

The Ruble's Fall Is Just What Russia Needs To Deal With Oil Price Collapse

http://www.forbes.com/sites/timworstall/2016/01/20/ruble-fall-past-80-to-the-just-what-russia-needs-to-deal-with-oil-price-collapse/#272971f362c7b0f77ac362c7

Tim Worstall

It might seem a little odd to be cheering on the collapse in value of a currency. It does, after all, mean that the people of that country are becoming poorer.

This is patent nonsense.  The only way that the people are becoming poorer is that they cannot afford some of the imports.   Since Russia can
actually replace these imports with domestic production, there is no impoverishment at all.   Worstall, in spite of his softer line, is still peddling the
BS that Russia's economy depends on exports and in particular on oil.  

If a country imports nothing or almost nothing, then a devaluation of its currency is not such a big deal to the country's citizens. Russia is a large country that imports far more than it imports. However, the world we live in is so interconnected by trade, etc. that Russia and its people will always acquire lots of items from international producers. That is normal and a good thing. To deny that a crash in the ruble and its consequences hurts the average Russian today is misguided.

The major effect in the past would have been the purchases from China where they had to convert from ruble to USD in order to buy from China.  Since the Yuan is dropping and convertable to Ruble, the costs are not going to be nearly as high for Russia and thus inflation wont be as much as a problem.  A lot of or most domestic consumer goods around the world comes from them anyway.

sepheronx wrote:The major effect in the past would have been the purchases from China where they had to convert from ruble to USD in order to buy from China.  Since the Yuan is dropping and convertable to Ruble, the costs are not going to be nearly as high for Russia and thus inflation wont be as much as a problem.  A lot of or most domestic consumer goods around the world comes from them anyway.

Correct me if I am wrong but wasn't the YCN/RUB exchange rate like 5.5 at the beginning of 2014? It's at almost 12 now. What am I missing?

I am not sure, but somewhat close to that, yes.

But also look at costs in China and the fact that Russia does direct trade rather than going through USD. There is a reason why they pushed for this such trade.

sepheronx wrote:I am not sure, but somewhat close to that, yes.

But also look at costs in China and the fact that Russia does direct trade rather than going through USD.  There is a reason why they pushed for this such trade.

It appears that someone in Russia buying a product from China today would have to exchange a LOT more rubles into yuan in order to buy that product, as compared to the same transaction in early 2014. That sucks.

A Different Voice wrote:

sepheronx wrote:I am not sure, but somewhat close to that, yes.

But also look at costs in China and the fact that Russia does direct trade rather than going through USD.  There is a reason why they pushed for this such trade.

It appears that someone in Russia buying a product from China today would have to exchange a LOT more rubles into yuan in order to buy that product, as compared to the same transaction in early 2014. That sucks.

Yes and No.  Now they don't have to convert to USD to do it.  As well, the costs of goods vs the deflated value of the currency kinda balance out, sorta.

Edit: Man, now I think about it, for how cheap it will be to make smartphones and stuff like that in Russia would really benefit a lot. They gotta do it.

A Different Voice wrote:

sepheronx wrote:I am not sure, but somewhat close to that, yes.

But also look at costs in China and the fact that Russia does direct trade rather than going through USD.  There is a reason why they pushed for this such trade.

It appears that someone in Russia buying a product from China today would have to exchange a LOT more rubles into yuan in order to buy that product, as compared to the same transaction in early 2014. That sucks.

You are correct in your views. but there is some ways to waive around those limitations for the weakening Ruble. Russia Government for example can trade with China without currency at all. One ton of Titanium in change for x tons of food.. etc. and trade for the right price a fair one.
On division of S-400s in change for X tons of Gold from china. In reality you don't need currency at at all to trade , the whole system of Economy in the world ,will not be in the current state is now with US allowed to make infinite debt and not pay a cent of it.. just taxes. and overvalue currency etc. Even paper credit is being sold as "Gold" ,and western Economy is becoming more
like a religion , that you need to believe by faith on the system. Had the world had a strong System of trade without money , the speculation and artificial economies will end. To make real money nations will need to produce things of value. Russia was already trading with IRAN for example ,but also with North Korea using pure trade system , since their currency long time ago have no real measured value.

Russia added 208 metric tones of gold to CB reserves in 2015, bringing total to 1415 tons