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Paul Holmes
Lounge Wizard
Joined: 12 Apr 2005
Posts: 1071
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 Posted: Fri Oct 17, 2008 6:52 pm Post subject: |
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You think so?
So if you do not have money in Russia than it is ok.
See that is the problem with Russians in general that they feel they are an island and can do what they please without consequences. Same attitude as Americans have in general.
Problem is this, that Russia is a net importer of food and manufacturer goods including the lovely computer that you type in. So it sells oil and returns money to buy computer, cars, grain, mangoes and so on.
YOur nationalist view that Russia should build everything at home is quite admirable, but again naive. Other countries can/will do things that better and more efficient than you and that is why we have a world economy.
Anyways in order to build factories, private sector are the ones who invest money to build factories or discover oil or build smelters. Remember Gov't tried it once in Russia and it was called communism and put you in bankruptcy. If you happen to know, it was Western companies that have made the biggest discoveries in oil and gas in Russia, although stolen latter by Russian companies.
You correct that stocks is not only way to finance construction, but the other is debt. Since the actions of credit crisis and poor shape of Russian banks, lending is almost and very expensive. Stock markets are failing so they cannot sell stock. 40-50% of the Government revenue comes from Oil and Gas and now it is under 50% of the highs and the government has already placed over 200 billion to solve bank crisis and spend another 67 billion on new military equipment, so the government will not be able to help everyone when it may face a deficit. Foreigners who were burned in the past, will not invest. So who is going to build these new factories, new smelters, and discover more oil. Where is the money coming from? If new jobs are not created, who is going to keep the price if property high?
You better hope that Oil prices remain high, or you have not seen anything yet. |
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staleek
Frequent Guest
Joined: 09 Sep 2007
Posts: 27
Location: Rochester, NY USA
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Paul Holmes
Lounge Wizard
Joined: 12 Apr 2005
Posts: 1071
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| Posted: Wed Oct 22, 2008 7:30 pm Post subject: |
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Russian Gov't is starting to prepare for the worst.
They are stop feeding the Oligrachs and trying to save them. Which is great news.Putin is no longer speaking about the economy, but people who actually who are good at handle the situation are.
Oil is coming down quicker than they thought and spending has to be cut.
Russia is using reserves to wait out the crisis and the friends who ask for help, are getting kicked to the curb. Russia has to take care of Russia, not Chavez, Iceland, Ukraine, Belarus, or Iran.
Job losses is next and real estate crunch.
Suggestion
Let the small banks collapse and join into a large strong regulated banks.
Install regulations in the Financial industry.
Focus on corruption and reduce regulation
Instead of propping up the greedy oligrach, spend the money on infrastructure to keep employment high and allow support for new industries. |
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Shadow
Frequent Guest
Joined: 14 Sep 2008
Posts: 12
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| Posted: Fri Oct 24, 2008 11:50 am Post subject: |
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| Paul Holmes wrote: | KGB tactics does not work in the Capitalist economy.
Increased bank regulations is needed now. Increase deposits security should be done also. |
Wich regulations do you suggest? |
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Paul Holmes
Lounge Wizard
Joined: 12 Apr 2005
Posts: 1071
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| Posted: Fri Oct 24, 2008 5:57 pm Post subject: |
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| Quote: | Ukraine in for tough times amid global crisis
Today, 14:55 | Associated Press
Ukraine in for tough times amid global crisis
Jittery Ukrainians lined up to buy
dollars at exchange offices
KIEV, Ukraine (AP) _ Construction cranes have stopped swinging and thousands of steel workers face layoffs as Ukraine braces for a severe economic downturn.
Lacking the large foreign currency reserves of China and Russia, more integrated into the world economy than some smaller countries, Ukraine is being hit harder than other former Soviet states by the global financial crisis.
"Ukraine has been exposed as the most vulnerable," said Jan Randolph, an emerging markets analyst at Global Insight.
On Thursday, the Ukrainian currency plunged against the dollar to a historic low amid a run on banks and a frantic rush to convert savings into U.S. currency. Ukraine's hryvna plummeted to 6.01 hryvna per U.S dollar in trading at Ukraine's currency exchange.
Jittery customers lined up to buy dollars at exchange offices across the capital, some of which ran out of cash. The country was already short on foreign currency, as demand for steel, its main export commodity plunged. The Ukrainian currency has lost over 20 percent since September.
Four years of robust economic growth left Kiev clogged with shiny imported automobiles and dotted with upscale fashion outlets. Real estate prices exceeded those of Rome for a time, and the stock market gained an astonishing 130 percent in 2007.
But today, experts agree, Ukraine is in for tough times.
Falling demand for steel has widening the external trade deficit to a hefty $12.5 billion so far this year, compared to $ 5.9 billion last year. After excessive reliance on foreign credit to feed its vast consumer boom, which sent Ukrainians rushing to buy mobile phones, cars and apartments on credit, the economy was hit hard when panicked foreign investors abandoned emerging markets and European banks slashed lending, crippled by their own liquidity crunch. Inflation soared to 31 percent in May, year over year, and cooled to 16 percent in September.
The government spent $2.9 billion buying hryvnas to support the currency this month alone, bringing its reserves down to $34.2 billion, according to the central bank. One global rating agency after another has downgraded Ukraine's creditworthiness.
Today Ukraine is pinning its hopes on a loan of up to $14 billion from the International Monetary Fund. But unlike Hungary which has also turned to the IMF for money, Ukraine does not benefit from EU aid.
Plans to receive the much needed loan were threatened by a marathon political struggle between President Viktor Yushchenko and Prime Minister Yulia Tymoshenko, as the IMF negotiating team could not be certain if the next government would stick to the commitments of the current one.
A standoff over early elections, which Tymoshenko wants to avoid to retain her job, has further soured the investment climate as Ukrainian stocks lost over 70 percent of their value this year.
"This will hurt," said Olena Bilan, a macroeconomic analyst with Dragon Capital investment bank. "It will be painful in any case. The question (is) how painful it will be."
The effects of the financial crisis have been quick to trickle down into the real economy. Banks have hiked interest rates and slashed lending, for example, bringing the car boom to an abrupt end.
Output in the construction industry, which is highly depended on loans, was down 7.2 compared to last year's figures, according to Dragon Capital. The real estate market has seized up and many realtors have been forced to look for new jobs. Investment banks in Kiev have also slashed jobs.
Anna Kiptenko, whose firm services cash registers for retail traders, was promised a 500,000 hryvna ($100,000) loan for her business, but the bank froze the money. Now she can't afford to pay for her son's law studies in Kiev.
"The government is assuring us that there is no crisis, but I can see that it is already here," said Kiptenko, 42, as she emerged from an office of Pravex bank in downtown Kiev.
Experts say the expected IMF loan will save the country from all-out collapse. "They want to cool the economy in general to avoid a crash landing," said Randolph.
But a deep economic slowdown appears inevitable.
Ukraine exports steel and cast iron to the Middle East, Europe and former Soviet Union countries, where they are used in housing construction, machine and ship building. But production by the country's metal industry, which represents 6 percent of the GDP and accounts for 40 percent of the country's exports, was down by 30 percent.
Steel magnate Serhyi Taruta, chairman of the Industrial Union of Donbas, told the newspaper Kommerstant Ukraine that his company plans to lay off as many as 20,000 people.
Dragan Capital's Bilan predicted the economy, which grew at an average 7.4 percent over the past four years, will slow to 4.8 percent this year.
Tymoshenko urged Ukrainians to "tighten their belts" and proposed to raise taxes for the rich.
Yushchenko, meanwhile, called for the laying off of every fifth state bureaucrat, promising to start with some in his own office.
Ukraine faces further stress from a likely hike in the cost of its natural gas, almost all supplied by Russia. That could mean a drastic increase in utilities bills.
"There will be a lot of angry people," said independent financial analyst Geoffrey Smith.
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Paul Holmes
Lounge Wizard
Joined: 12 Apr 2005
Posts: 1071
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| Posted: Fri Oct 24, 2008 6:08 pm Post subject: |
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| Shadow wrote: | | Paul Holmes wrote: | KGB tactics does not work in the Capitalist economy.
Increased bank regulations is needed now. Increase deposits security should be done also. |
Wich regulations do you suggest? |
Too much easy money was given out too quickly and to kids for cell phones, to people who bad income.
Too many banks that were no solid
Read above which mirrors Russia a bit. |
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Paul Holmes
Lounge Wizard
Joined: 12 Apr 2005
Posts: 1071
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Paul Holmes
Lounge Wizard
Joined: 12 Apr 2005
Posts: 1071
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| Posted: Fri Oct 24, 2008 6:55 pm Post subject: |
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| Quote: | Russian exchanges plummet, MICEX trading suspended
Today, 15:09 | Associated Press
Russian exchanges plummet, MICEX trading suspended
Trading on the MICEX is suspended until
Oct.28 after shares dropped nearly 15
percent.
MOSCOW (AP) - Both Russian stock markets fell dramatically Friday afternoon with blue chips Sberbank and Gazprom down heavily over fears that plunging oil prices will hurt the economy.
Trading on both exchanges was halted for one hour early in the day after sharp falls, but the declines only accelerated when trading resumed.
MICEX was down 14.2 percent to 513.6 points in early afternoon when trading was suspended again, this time until Oct. 28.
State-owned Sberbank, Russia's biggest bank, lost 20.5 percent and state-controlled gas giant Gazprom fell 16.5 percent. Oil company Lukoil lost 14.2 percent.
The other exchange, the RTS, was down more than 10 percent to 571.5 points in early afternoon.
The dollar-denominated RTS is down 77 percent from its May peak, while MICEX is off almost 74 percent. Tumbling oil prices and mounting economic woes in the West triggered huge falls in September and October.
Analysts predicted another volatile day for Russian stocks after big falls on Asian and European markets and falling oil prices -- the backbone of the Russian economy.
Crude oil in New York plummeted to US$63 a barrel on Friday. Ratings agency Standard & Poor's on Thursday dropped the outlook on Russia's long-term sovereign ratings to "negative" from "stable." The credit agency said it expected further defaults among corporations and banks, as not all institutions will have access to government bail-out funds. |
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