Russian Economy General News: #2

Austin wrote:Russia-China Deal Could Kill U.S. LNG Exports

+1 for the excellent article.  I've said it before, and I'll say it again and, U.S. Shale is a heavily state-subsidized boondoggle that's a textbook example of economic bubbles created in America, combined with the fact that 1/3 of U.S. Shale reserves are considered non-viable and are being written off, combined with the fact that Russia has Shale reserves in the Arctic that are much larger than those found in the continental U.S., meaning if Shale was all that it was cracked up to be than Russia would still out-pace the U.S. with it's Shale and deliver their energy products at a much cheaper price. We also can't forget that China has large Shale reserves of their own, the U.S. as the world's largest energy supplier is very much a comical and exaggerated claim either way you slice it!

Nice partnership

Russian, Chinese Telecom Giants to Jointly Develop 5G Network: Company

Russia: Hungary is committed to South Stream gas pipeline - Lavrov



...How convenient that the B.O. administration would decide to place sanctions on Hungarian politicians now at the key pivotal time of the South Stream pipeline deal being struck between Russian and Hungary. The politicized nature of the sanctions against Hungarian civil servants is so 'naked' that it's sickening!!!

http://www.finmarket.ru/main/article/3869410

This sucks

Capital outflow in october shot up to $28B

I wonder why such a change.  The article states it but kinda vague.  Only thing they state is that it is FDI leaving.  Others mention it is loans being paid. Cause CB said it would not increase if they go to free floating. It may have to do with the new deoffshoreization bill. So some are trying to still flee their money prior to this bill going into force.

Ruble has increased as the US dollar has dropped.  MICEX and RTS have both increased.

http://www.finmarket.ru/news/3870284

Production of Gold is up but releases of platinum is down.

The following year, the minimum wage in Russia increased by 7.4%
The average exchange rate of the yuan with the term calculations "tomorrow" on trades made 7,466 rubles.


Growth in the Russian retail trade turnover in October remained at the September level
October growth of real incomes of Russians accelerated to 2.1% - Rosstat
Tax revenues of the consolidated budget increased by 12%



In Russia, the unemployment rate in October rose to 5.1% - Rosstat
Investments in fixed capital in Russia in October fell 2.9% - This may be cause of capital outflow.

Russia-China trading settlements in yuan increases 800%

sepheronx wrote:http://www.finmarket.ru/main/article/3869410

This sucks

Capital outflow in october shot up to $28B

I wonder why such a change.  The article states it but kinda vague.  Only thing they state is that it is FDI leaving.  Others mention it is loans being paid.  Cause CB said it would not increase if they go to free floating.  It may have to do with the new deoffshoreization bill.  So some are trying to still flee their money prior to this bill going into force.

Be careful, coverage of Russian financial transactions is idiotic both outside and inside Russia. I have posted articles outlining how so-called
capital flight is nothing of the sort. Same goes for Russia's alleged total "debt".

You are right, there may be a surge of grey and black money due to the new legislation. I would expect some. But I cannot take any
number at face value. The media coverage is just too f*cking sloppy.

kvs wrote:

sepheronx wrote:http://www.finmarket.ru/main/article/3869410

This sucks

Capital outflow in october shot up to $28B

I wonder why such a change.  The article states it but kinda vague.  Only thing they state is that it is FDI leaving.  Others mention it is loans being paid.  Cause CB said it would not increase if they go to free floating.  It may have to do with the new deoffshoreization bill.  So some are trying to still flee their money prior to this bill going into force.

Be careful, coverage of Russian financial transactions is idiotic both outside and inside Russia.   I have posted articles outlining how so-called
capital flight is nothing of the sort.   Same goes for Russia's alleged total "debt".  

You are right, there may be a surge of grey and black money due to the new legislation.  I would expect some.   But I cannot take any
number at face value.   The media coverage is just too f*cking sloppy.

I know I may be asking for much, but KVS, could you please post that link again, or at least the post where you had the link? I would appreciate it!

Good Read both

There Is No Ruble Crisis

Seeking Economic Solutions, Kremlin Targets Corruption

Nice

Rosstat: Russia for 10 months increased agricultural production by 4.5%

Austin wrote:Real Conversations: Crisis Coming? Stockman on ‘Likely Global Recession’ & Consequences of the Fed

Haven't watch but crisis does coming. The last 3-4 months global industrial production, asset allocation et all point to a 2007 situation.

sepheronx wrote:

kvs wrote:

sepheronx wrote:http://www.finmarket.ru/main/article/3869410

This sucks

Capital outflow in october shot up to $28B

I wonder why such a change.  The article states it but kinda vague.  Only thing they state is that it is FDI leaving.  Others mention it is loans being paid.  Cause CB said it would not increase if they go to free floating.  It may have to do with the new deoffshoreization bill.  So some are trying to still flee their money prior to this bill going into force.

Be careful, coverage of Russian financial transactions is idiotic both outside and inside Russia.   I have posted articles outlining how so-called
capital flight is nothing of the sort.   Same goes for Russia's alleged total "debt".  

You are right, there may be a surge of grey and black money due to the new legislation.  I would expect some.   But I cannot take any
number at face value.   The media coverage is just too f*cking sloppy.

I know I may be asking for much, but KVS, could you please post that link again, or at least the post where you had the link?  I would appreciate it!

http://www.themoscowtimes.com/news/article/capital-flight-calculation-open-for-debate/473236.html

http://www.bne.eu/content/story/fears-russian-credit-crunch-greatly-exaggerated-say-analysts

http://en.itar-tass.com/economy/761317

If they are losing this money, then how come they have a gdp growth and growth in consolidated budget? Or is this simply hot air and he means loss in profits? Cause I dont know how sanctions hit them by $40B when all Russia sold them was oil, gas and metals to EU.

Something is off about the article. A lot of info missing.

http://en.itar-tass.com/economy/761354

So what can they do here then? Bar people from buying usd in the country? I thought new bill would prevent capital flight, not increase it?

So in other words, sanctions are nothing compared to Russia's still overwhelming reliance on natural resource prices.
Which puts us at the mercy of teh oil Arabs.

So what exactly is Putin's miracle during his decades in rule?
Same old apparently.

But nothing is stated to be clear in his speech. Because if Russia is having a trade surplus and higher consolidated budget, how or where is this $140B loss? Is it hypothetical loss? He isnt clear in his statement. I read the RT article and he goes on about capital flight. That makes very little sense
Oil accounts for 20% and or less in Russias gdp. So it isnt a loss of grand magnitude but I am curious where this guy is getring the figures from.

many economies are actually in recession, and the world is in stagnation...
due to lower prices consumption will pick up ,in couple of months.
usa friendly arabs are pumping and selling like crazy, but they using same wells from the 80s and after 35 yrs.of use they are getting depleted , it wont work second time like it did with ussr.
shale production is taking a hit in usa ,and you need constant drilling to increase or keep production stabile.
potential investment loss from the west investment is 40 bill. not actual loss...
also lower oil price for whole year means russia loses 90bill from imports.
but not worry too much about ,this are the prices from 2010 and russia had growth in that time.

sepheronx wrote:But nothing is stated to be clear in his speech. Because if Russia is having a trade surplus and higher consolidated budget, how or where is this $140B loss? Is it hypothetical loss? He isnt clear in his statement. I read the RT article and he goes on about capital flight. That makes very little sense
Oil accounts for 20% and or less in Russias gdp. So it isnt a loss of grand magnitude but I am curious where this guy is getring the figures from.

Loss relative to predicted income from pre-drop prices.

Budgets were made with predicted prices in mind, so there will be costs that need to be adjusted for.

TR1 wrote:

sepheronx wrote:But nothing is stated to be clear in his speech. Because if Russia is having a trade surplus and higher consolidated budget, how or where is this $140B loss? Is it hypothetical loss? He isnt clear in his statement. I read the RT article and he goes on about capital flight. That makes very little sense
Oil accounts for 20% and or less in Russias gdp. So it isnt a loss of grand magnitude but I am curious where this guy is getring the figures from.

Loss relative to predicted income from pre-drop prices.

Budgets were made with predicted prices in mind, so there will be costs that need to be adjusted for.

Ah, that makes it very clear now. So due to their prediction of oil at $90-$100bbl, they now determin they 'lost' $140B. So if they had a budget that revolved around $60bbl, then they would have a gain or further surplus in budget.

Thank you, you made it much easier to understand. That said, I think future budget (like next year) needs to revolve around $60bbl speculation so they dont run into this mess.

There is talk though due to consolidation budget being up due to taxation and trade surplus, that there wont be a deficit. If that is the case, then I wonder what all this talk is about? Unless he is clearly warning the government on reliance of their budget on oil prices. Which makes sense.

sepheronx wrote:

TR1 wrote:

sepheronx wrote:But nothing is stated to be clear in his speech. Because if Russia is having a trade surplus and higher consolidated budget, how or where is this $140B loss? Is it hypothetical loss? He isnt clear in his statement. I read the RT article and he goes on about capital flight. That makes very little sense
Oil accounts for 20% and or less in Russias gdp. So it isnt a loss of grand magnitude but I am curious where this guy is getring the figures from.

Loss relative to predicted income from pre-drop prices.

Budgets were made with predicted prices in mind, so there will be costs that need to be adjusted for.

Ah, that makes it very clear now. So due to their prediction of oil at $90-$100bbl, they now determin they 'lost' $140B. So if they had a budget that revolved around $60bbl, then they would have a gain or further surplus in budget.

Thank you, you made it much easier to understand. That said, I think future budget (like next year) needs to revolve around $60bbl speculation so they dont run into this mess.

There is talk though due to consolidation budget being up due to taxation and trade surplus, that there wont be a deficit. If that is the case, then I wonder what all this talk is about? Unless he is clearly warning the government on reliance of their budget on oil prices. Which makes sense.

The Russian government used to have a very conservative oil price in its budget plan (exactly the $60 you bring up), but they have slacked off
and started raising it. At the end of the day it matters only in as much as the missed oil target produces large deficits. I do not see any
evidence of the current oil price producing a budget constriction worth worrying about. Government revenues are in rubles and the ruble
devaluation has offset the oil price decline.

The above is an example for all the Russia hating chimps in the west. They jump up and down when the oil price goes down and scream
Russia is going to go down in flames. They do the same when the ruble exchange rate to the dollar increases. They are brainless idiots
since the two effects cancel each other out.

kvs wrote:

sepheronx wrote:

TR1 wrote:

sepheronx wrote:But nothing is stated to be clear in his speech. Because if Russia is having a trade surplus and higher consolidated budget, how or where is this $140B loss? Is it hypothetical loss? He isnt clear in his statement. I read the RT article and he goes on about capital flight. That makes very little sense
Oil accounts for 20% and or less in Russias gdp. So it isnt a loss of grand magnitude but I am curious where this guy is getring the figures from.

Loss relative to predicted income from pre-drop prices.

Budgets were made with predicted prices in mind, so there will be costs that need to be adjusted for.

Ah, that makes it very clear now. So due to their prediction of oil at $90-$100bbl, they now determin they 'lost' $140B. So if they had a budget that revolved around $60bbl, then they would have a gain or further surplus in budget.

Thank you, you made it much easier to understand. That said, I think future budget (like next year) needs to revolve around $60bbl speculation so they dont run into this mess.

There is talk though due to consolidation budget being up due to taxation and trade surplus, that there wont be a deficit. If that is the case, then I wonder what all this talk is about? Unless he is clearly warning the government on reliance of their budget on oil prices. Which makes sense.

The Russian government used to have a very conservative oil price in its budget plan (exactly the $60 you bring up), but they have slacked off
and started raising it.   At the end of the day it matters only in as much as the missed oil target produces large deficits.  I do not see any
evidence of the current oil price producing a budget constriction worth worrying about.   Government revenues are in rubles and the ruble
devaluation has offset the oil price decline.

The above is an example for all the Russia hating chimps in the west.  They jump up and down when the oil price goes down and scream
Russia is going to go down in flames.   They do the same when the ruble exchange rate to the dollar increases.    They are brainless idiots
since the two effects cancel each other out.  

Very true.  I mentioned this before.  Regarding $100bbl x 1000 x 30 vs $80bbl x1000 x 44.  In the end, Russia gets more Rubles out of this deal.  And yes, it has been mentioned before on the web that Russian budget and economics is based on the Ruble currency.  But capital flight as well as having to pay off foreign debt, add in that growth of USD in Russia is proving to be a problem and no current laws will prevent the issue.  I find it funny that Glazyev says that when I thought the purpose of the new tax haven law would bring back money?  Same with the idea that they were looking at providing domestic loan system as well as China have increased the amount of long term loans to Russia.

Microfinance: Russia Thinks Big by Thinking Small

This may very well be a good idea and help small businesses get the boost they need.

I just do not see a gush of capital flight from Russia. After the EU screwed over Cyprus, Russians have been reducing the offshore
re-investment conduit. Russia is just too big an economy to be damaged by speculative capital movements. It's economy is also
domestic and not some house of cards propped up with flighty foreign capital. This point is often forgotten.

Apparently, by fully floating the ruble the speculative attacks on it have fizzled out. Under the previous semi-floating approach the
CBR would spend huge amounts of money to keep the exchange in some band. This was like honey to the speculator attackers.
Now that the CBR is not spending the money they have lost interest. Another win for Russia.

Now we have talk of the oil price falling to $30. Nonsense. There is no glut of oil. If the price is finagled down to $30 we will see
the mother of all shortages. At $30 there will be no tar sands production in Canada and at any of the non-conventional US fields.
A price of $60 is not sustainable either.

All the joy in the western media about the low oil prices is absurd. It is clear evidence of a recession and a global scale one.

I was reading that Russian net profits in manufacturing is down by 2.5% in september. Question is, wouldnt profits be up due to lower value of ruble (cheaper to produce) and increased demand for import substitution? Agriculture saw the biggest profit increase in Russia.

Edit: tr1 or anyone else with a better grasp of Russian than me, can you please tell me if what is saying in this link: http://www.finmarket.ru/news/3873989.

Is it saying net profit of manufacturing dropped by 2.5% and construction as 25%? Cause if so, they still have a profit, but less than before.

sepheronx wrote:I was reading that Russian net profits in manufacturing is down by 2.5% in september. Question is, wouldnt profits be up due to lower value of ruble (cheaper to produce) and increased demand for import substitution? Agriculture saw the biggest profit increase in Russia.

Edit: tr1 or anyone else with a better grasp of Russian than me, can you please tell me if what is saying in this link: http://www.finmarket.ru/news/3873989.

Is it saying net profit of manufacturing dropped by 2.5% and construction as 25%? Cause if so, they still have a profit, but less than before.

Снижение прибыли было зафиксировано, в частности, в строительстве на 25,3% - на 41,9 млрд руб., в транспорте и связи - на 22,6% (491,4 млрд руб.), в обрабатывающих отраслях - на 2,5% (1 трлн 156,1 млрд руб.).

The profit level of the construction industry fell by 25.3% not that they are now all in the red. The drop for manufacturing is 2.5%. We are in
a global recession right now and that is why the oil price has dropped. Of course the tendency will be to assess the these statistics as
"proof" of the effect of the sanctions.

В январе-сентябре 2014 года сальдированный финансовый результат (прибыль минус убыток) организаций (без субъектов малого предпринимательства, банков, страховых организаций и бюджетных учреждений) в действующих ценах составил 4 трлн 799,9 млрд рублей (40,0 тыс. организаций получили прибыль в размере 6 трлн 516,9 млрд рублей, 17,3 тыс. организаций имели убыток на сумму 1 трлн 717 млрд рублей), свидетельствуют оперативные данные Федеральной службы госстатистики (Росстата).

В январе-сентябре 2013 года сальдированный финансовый результат составил 5 трлн 267,5 млрд рублей. Таким образом, за 9 месяцев прибыль организаций сократилась на 8,9%.

The net profit (all enterprises making a profit minus all enterprises making a loss) went from 5.2675 trillion rubles to 4.7999 trillion rubles over the January to
September period compared to last year, a drop of 8.9%.

US pressing Chinese and Arab banks to sanction Russia – head of VTB bank