Year: 2008

The Cost of Believing in America!

I had to reprint this article: It says a lot in a short amount of time!
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By Konstantin Sonin,

Ten years ago, an economic crisis in one developing country could set off a chain reaction among investors around the world. And once investors suffered sharp losses in one place — for example, Thailand, South Korea or Indonesia — they began rolling back everywhere. This time around, the scenario is playing out differently. Although the financial markets crisis that began last year has not yet reached the point where investors are pulling out of developing markets, money continues to flow freely in the opposite direction as the world’s financial giants tap into government funds from former Third World countries.

Citigroup and Merrill Lynch announced multibillion-dollar losses in connection with their mortgage portfolios last week. Citigroup has twice over the past three months turned for cash to so-called sovereign wealth funds. It sold 5 percent of its shares to the Abu Dhabi Investment Authority for $7.5 billion in November, and now it is offering shares to financial corporations controlled by the governments of Singapore, Kuwait and Saudi Arabia. The haste with which Citigroup is seeking investment from the developing world suggests that the company does not see any light at the end of the tunnel for its internal financial problems.

In all fairness, though, this is not the first time Citigroup has resorted to such measures. The Saudi royal family, along with others, first came to Citigroup’s rescue early in the 1990s. In fact, it is difficult to find a global financial giant that is not hunting for cash these days. Merrill Lynch has already turned for help to a Singapore government investment fund, while Swiss-based UBS received $9.7 billion from another Singapore government fund last fall. At the same time, Morgan Stanley received a $5 billion investment from a Chinese government fund.

It is understandable why these corporations are turning to foreign investment funds for badly needed cash. They very well might not know the full scope of their financial losses stemming from the collapse of the subprime mortgage market. But what can be motivating the owners of these sovereign funds to invest? Of course, buying into a “distressed” company often leads to reaping big profits down the line, and there is the possibility that this might actually be one of those rare opportunities that investors dream about their entire lives — to buy a valuable commodity at bargain prices. But there is also a high probability that they could end up on the losing side of this gamble. The owners of sovereign funds understand that, as foreign investors, they are treated as outsiders by U.S. politicians, and this carries a certain element of political risk from them.

The dollar has become the world currency based largely on the belief that the democratic system in the United States will not allow the government to shift to inflationary financing. Thus, Chinese and Singaporean investors are willing to channel huge sums of cash into Citigroup and Merrill Lynch in the belief that U.S. democracy — with its competitive electoral system, independent judicial system and a media acting as a powerful Fourth Estate watchdog — will continue to function as an effective and powerful regulator of financial corporations and guarantor of political and economic stability.

We have already become accustomed to a growing U.S. trade deficit and to the fact that the developing world finances American consumers to a large degree. It may now be the case that taxpayers’ money from developing countries being sent to the United States will end up covering losses incurred by irresponsible bankers and inattentive market regulators.

Keeping faith in the United States’ economy and democracy comes at a price indeed.

Konstantin Sonin, a professor at the New Economic School/CEFIR, is a columnist for Vedomosti.
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Kyle

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Does The World Have Faith In America?

Hello,

Just some news off the wire, Russian stock market is being affected by this also. Looks like the world is losing a lot of faith in the American Dollar! Russian stocks down about 7 % today.
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LONDON (Reuters) – World stocks nosedived and demand for safe-haven bonds and currencies soared on Monday as fears gripped investors that a deteriorating U.S. economy would drag others down with it.

The losses on the blue-chip stock indexes of Germany, Britain and France alone amounted to more than $350 billion, or roughly the size of the combined economies of New Zealand, Hungary and Singapore.

MSCI’s main world stock index, a benchmark gauge of stock markets globally, sank 3.3 percent, falling below its 2007 bottom to lows last seen in December 2006 and taking it down more than 12 percent so far this year.

Its emerging market equities counterpart lost more than 5.5 percent. Meanwhile, the spread between emerging market bond yields and U.S. Treasury yields, a key gauge of risk appetite, was just off its widest in two years.

“Weak global economic data, poor corporate data, increasing fears about the possibility of a recession … have left investors drowning in a sea of red,” said Henk Potts, equity strategist at Barclays Stockbrokers.
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I hear rumor that England is having to back the banks with a lot of their Nations money??
I also hear that Bush is asking countries for help and to still believe in America??

Looks like my articles are correct, The Dollar is going down! (Thump)
http://windowstorussia.com/2007/12/russia-not-happy-that-dollar-crashing.html
http://kylekeeton.com/2007/11/russia-dollar-is-hurting-overseas.html
http://kylekeeton.com/2007/11/russian-rubles-dollar-is-unstable.html
http://kylekeeton.com/2007/11/russians-do-not-give-us-dollars.html
http://windowstorussia.com/2007/10/russian-ruble-growing-stronger-everyday.html
http://windowstorussia.com/2007/09/10-reasons-why-russia-cant-trust-uncle.html
http://windowstorussia.com/2007/08/rbc-tells-it-like-it-is-dollar-going.html

This is not something I am proud of & wish that America would have dealt with her problems years ago. I was in the business of making money for companies all my working career! This was a problem that has been in the works for many years. Now it is a problem for the world!

Do you think that there is a replacement Dollar in the works?

America is going to have to bite the bullet on this one!

Kyle

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Russia: British Need To Cooperate!

Looks like: cultural and educational?

The Russian Foreign Ministry stated Friday that the British Council’s regional offices might be allowed to reopen if Britain resumed cooperation with the Federal Security Service and expressed a willingness to ease visa rules for Russians. It was this lack of cooperation in the first place that expelled Britain!

Britain refused to hold talks to simplify the visa regime and stopped cooperating! After Britain became stubborn, the conditions had to be recreated for the resumption of talks.

Britain may not be ready to resume cooperation, there seems to be a list of 34 Russian diplomats who may face expulsion from Britain. The group includes Alexander Sternik, head of the Russian Embassy’s political section, and Andrei Pritsepov, aide to the ambassador, & Britain still makes public statements that Russia is to blame for the all the issues! (Seems childish)

While all these issues are flying around; The Britain council’s Moscow office remains open. Seems that the Moscow Britain office knows how to be nice and give the local government what they want?

A statement from Britain was issued, “The standoff was harming the Russian people but not Britain.” also stated, “We concluded that the only victim in this issue appears to be the people of Russia.” also said. “Sharing our cultural and educational technologies benefits Russians and not Britons. Thus it is only Russia that is losing.” also said, “British newspapers are warning Russia of possible repercussions!”

Is Britain really serious about this? (What makes Britain so special?)

America once had to get tough with the British! Looks like Russia needs to put them in their place also!

Now I see the root of the Visa issues in Russia, We can all thank, British Government!

Kyle & Svet

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Russia: Wal-Mart Next?

NEW YORK (Reuters) – Wal-Mart Stores Inc (WMT.N: Quote, Profile, Research), the world’s biggest retailer, could expand its reach into Russia in within the next 24 months, according to a research note from UBS.

“We believe expansion into Russia rounds out Wal-Mart’s ‘BRIC’ (Brazil, Russia, India and China) exposure,” UBS analyst Neil Currie wrote in a note on Thursday.

Currie said he expected Wal-Mart to make the leap into Russia within the next 12 to 24 months, probably by taking a minority stake in a local retail chain.
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This is not a good thing for Russia!
Kyle & Svet

comments always welcome.

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Russia: American Style Foods!

Hello,

I was drinking my morning cup of coffee and I was thinking how glad I am that Russians seem to eat so much less processed foods. I feel that my diet here is so much better. It is very easy to get fresh foods. You can buy fresh vegetables and fruits at almost every bus stop & Metro in Moscow. When we travel to the Village we pass by areas that specialize in certain fruits. On a 350 km trip we pass what I call; Pear valley, Apple way, Potato City, Cranberry Mile & Blueberry Village! These are just a portion of the available foods on the road trip. Then I was presented with an article about “Kellogg Foods” from America! I then realized that Russians are eating more like Americans everyday.

Once again Russia has let an American company buy up a gold mine! (link)

I have watched, in the 2 years I have been studying Moscow, The infiltration of American foods! Example: 2 years ago peanut butter and maple syrup was almost impossible to find. Now you can find more than one brand and the price is dropping fast! 2 years ago you could not find celery anywhere, now every fruit and veggy stand carries it as normal product. 2 years ago the availability of lettuce was very scarce. Now they have leaf lettuce everywhere! The list goes on and on….

We go shopping and you see rows of Lays Potato Chips,Coke,Pepsi & Products labeled American! The Red, White & Blue stands out like a sore thumb on the shelves. 🙂

Now Kellogg has infiltrated Russia in a big way! With all the food brands from America here, I feel right at home!

So if you travel to Russia, You will have no problem finding foods that you can eat and recognize.

I am not sure that is a good thing??

Kyle & Svet

comments always welcome.

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(Click: Read more for Kellogg article!)
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Kellogg, whose cartoon tiger is pictured on its Frosties cereal boxes, announced Thursday that it had purchased United Bakers Group, the country’s biggest breakfast cereal maker, to take almost complete control of the local market.

United Bakers’ products, marketed primarily under the Yantar and Lyubyatovo brands, are very popular, and the company said it had a market share of 90 percent. Kellogg’s share is miniscule.

Both companies were tight-lipped about the terms of the deal, but Kellogg said it would have no impact on its 2008 operating profit.

Kellogg chief David Mackay described the acquisition as “an exciting strategic development for Kellogg.

“Consistent with our strategy, we continue to pursue the right kind of opportunities to grow our business,” he said in a statement.

The deal gives Kellogg its first plants in Russia — a total of six scattered across the country — as well as a large sales and distribution network.

Kellogg is coming to the right place at the right time because consumers have just started shifting en masse toward light-and-fast meals for breakfast, said Andrei Nikitin, a retail analyst with UralSib bank.

“Power-advertising by the likes of Kellogg and a new business culture have weaned Russians from their traditional breakfast meals, such as kasha,” Nikitin said.

“Many Russians now favor fast breakfast meals such as Kellogg Corn Flakes and Rice Krispies, in part because of strong advertisement by big companies with huge budgets like Kellogg,” he said.

Rice Krispies are not widely available in Russia, although Special K, Corn Flakes and Frosties can be found on many Moscow store shelves. Tony the Tiger, one of the company’s best-known trademarks, is known in Russia as “Tigr Tony.”

“This is fertile soil for Kellogg, and the trend will accelerate,” Nikitin said.

With the buy, Kellogg will make considerable savings on import tax, which had increased prices for its products, said Andrei Verkholantsev, consumer analyst with Antanta Capital Investment.

“Kellogg could leverage the synergy and economics of scale accruing from the deal to emerge as the single largest player in Russia,” he said.

Yevgeny Okulich-Kazarin, general director of United Bakers, called Thursday’s deal a reward for the company’s hard work. “This is an opportunity for United Bakers to further grow the business,” Okulich-Kazarin said in an e-mail.

Voronezh-based United Bakers, a closely held company, posted net sales of about $100 million in 2007. Like Kellogg, it also produces biscuits.

The company was founded in 2002 with an initial investment from the European Bank for Reconstruction and Development. Eagle Urals Fund, a regional venture fund managed by the Dutch company Eagle Venture Partners, acquired the company in 2004 and immediately invited in new investors. Alfa Capital Partners took over in 2005 and a year later sold control to International Moscow Bank. United Bakers’ nearly 4,000 employees, including its management team, will join Kellogg under the terms of the acquisition. The business will continue to have its headquarters in Voronezh and will report to Kellogg’s European division.

With 2006 sales of almost $11 billion, Kellogg Company is the world’s leading maker of cereal and a leading producer of convenience foods. Kellogg products are manufactured in 17 countries and marketed in more than 180 countries around the world.
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Russia: Village Homes!

Hello,

Just thought that we would post some pictures of village homes in Russia!

Kyle & Svet

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Russia: Coca Cola Woke Up!

Hello,

I have been writing about Coca Cola and their issues with Russia! Link 1 ; Link 2

It seems that Coke got smart and bowed to the pressure. This was a good move on their part, it might just have saved the Coke business in Russia!(Click: Read More for rest of article)
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Coca-Cola has called off a promotion after offended Orthodox believers lodged a complaint with prosecutors, a sharp reminder of the cultural pitfalls that foreign companies face when doing business abroad.

Hoping to tap into a growing tide of patriotism, the U.S. beverage giant had placed pictures of religious sites together with its logo on fridges in kiosks and shops in Nizhny Novgorod, the country’s third-biggest city.

In mid-December, a group of Orthodox believers sent an angry letter to the Nizhny Novgorod prosecutor’s office, the local bishop and the regional governor complaining about the promotion, which it claimed was blasphemous.

Some images, the authors of the letter said, portrayed religious sites upside down, including the cross. An inverted cross is said to represent a mockery of the Christian cross.

“In line with our internal policy of responsible marketing … we have decided to withdraw the images of religious objects and not to use them in the future,” Coca-Cola spokeswoman Yana Guskova said Tuesday.

Guskova maintained that the promotion had not intended to cause offense.

“This was an initiative using famous Russian historical sites and images to try to promote Russian cultural heritage and the idea that we need to preserve it,” she said.

All the pictures contain an outline of a Coca-Cola bottle with a photograph of a local religious site, such as a cathedral, captured inside it. The slogan “The Value of Tradition” runs up the side of the fridge, while the Coca-Cola logo dominates the other.

Orthodox church representatives said, however, that Coca-Cola had ridden roughshod over cultural sensitivities. “Large corporations have to take into account the local context, particularly the Christian context,” said Mikhail Prokopenko, spokesman for the Moscow Patriarchate. “[Coca-Cola] didn’t recognize the boundaries.”

The Orthodox protesters said in December that Coca-Cola should face formal charges for “inciting religious hatred.” But Prokopenko urged restraint, and said, “Both sides are at least now listening to each other, thank God.”

Irina Monakhova, a spokeswoman for the Nizhny Novgorod prosecutor’s office, said investigators were conducting an inquiry into the claims at the request of the residents and would make their findings known by the end of January.

Coca-Cola has run similar — but not so overtly religious — promotions with refrigerators in St. Petersburg, Ufa and Kazan without any problem, Guskova said.

Advertising slip-ups, while not uncommon, are often accidental in Russia, said Donald Tursman, creative director at the advertising agency TWBA in Moscow.

“In Russia, most clients are very conservative. They avoid drawing too much attention to their brands. It’s why most ads are bland and formulaic,” he said. “If there is even a chance that an ad will cause a stir, they won’t run it.”

In contrast, he said, some Western advertisers “intentionally run controversial ads because they know the media will talk about it.”(Moscow Times)
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Coke needs to realize that this is not America! I think that they got off easy this time.

Kyle & Svet

comments always welcome.

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Russia: The Bridge That Ran Away!

Hello,
I was drinking my morning cup of coffee & thinking about an article that has stayed in my mind for several days! This article reminded me of an old bridge in Missouri, USA. The bridge was all steel except the floor, (part you drive on) . That part was made of about, 4 inch thick by 12 inches wide, Oak planks! The State Department replaced the Oak planks one day; The next day all the planks were gone! Seems that bridge theft is not isolated to the USA.
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A steel 11.5- meter (38 feet) long car bridge was stolen in Khabarovsk, Russia’s Far East, local officials said on Saturday.

The bridge was made of four steel pipes half a meter in diameter and covered with steel plates.

The thieves, who stole the bridge most likely to sell it for scrap, worked at night when there was no one around, a spokesman said. That is why they managed to dismantle the heavy construction and to take it away, Kazinform cites, RIA Novosti.

Local workers came to the scene on Saturday morning to discover that the only bridge which was the direct way to a thermal power station disappeared. Now the drivers will have to look for bypass roads, the spokesman added.

“The total loss sustained by the bridge-owner is estimated at 400,000 rubles ($16,000). However, repair works for the energy company will cost over a million rubles ($40,500),” the spokesman said.

The new bridge will be made of reinforced concrete, instead of steel, and repair works will take at least a month, the spokesman added.
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This article tickled me: I have seen in my time a lot of crazy things. The criminals should be caught unless the locals hide them. (That is a lot of bridge for scrap metal!)

Yes the Oak plank criminals were caught: The men who took the planks built a barn,and that could have been the end of the story. But every plank had a State Seal burned into the end and middle of the plank! So being intelligent enough to steal the planks they did not notice that all over their barn was 20 to 25 little pictures of the State of Missouri!

This was a hidden memory until I read this article on stolen Russian Bridge! Strange how memories can be activated?

Did you ever see anything like a bridge that just disappeared?

Kyle & Svet

comments always welcome.

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Russian News: January 15th, 2008!

RBC, 15.01.2008, Moscow 15:54:25.West Siberian Resources (WSR) and Alliance Oil Company are poised to sign a final merger agreement in early February, the Russian oil company’s press office stated today. Meanwhile, the merger has yet to be approved by each company’s Board of Directors, as well as by WSR’s shareholders at a general meeting scheduled for late February, the Swedish oil producer indicated in a statement. In addition, approval from antitrust agencies will be needed. The merger is expected to be completed at the beginning of March. WSR and Alliance announced the signing of a memorandum of intent for the creation of a vertically integrated company earlier today. To achieve this, WSR will issue 1,783,540,968 common shares, or 60 percent of the company’s share capital after the issue, in favor of Alliance’s shareholders. Once Alliance becomes WSR’s subsidiary, the Russian company’s shareholders will retain a 60-percent stake in it. The total market capitalization of the joint company is expected to reach some $2.5bn.

RBC, 15.01.2008, Kiev 13:45:33.According to unofficial data, Ukrainian Prime Minister Yulia Timoshenko’s visit to Russia can take place in the near future, a source close to the republic’s government told RBC today. It is quite possible that Timoshenko will come to Moscow before the end of January. Ukraine’s Embassy in Moscow has confirmed the fact that PM’s visit was being planned, adding that Russian and Ukrainian Foreign Ministries were in talks on the visit time frame.(Click: read more for more news!)

RBC, 15.01.2008, Moscow 13:36:43.Central Banks of Russia and Cyprus have singed a memorandum of understanding on the basis of recommendations made by the Basel Committee on Banking Supervision concerning consolidation and cooperation in banking supervisory matters, the Bank of Russia indicated in a statement today. The two banks are planning to exchange information on licencing procedures, combat money laundering and sponsorship of terrorist organizations, supervise the development of the banking sectors in accordance with national laws, among other things.

RBC, 15.01.2008, Moscow 09:44:23.Russian bank accounts frozen by France’s judicial authorities have no funds that belong to the Russian government, the Russian Finance Ministry said in an official statement on Monday. The ministry stressed that the money was attached without a prior notification issued to the Russian government or the holders of the blocked accounts. According to the ministry’s statement, French law enforcement officers froze Russian organizations’ bank accounts at several French banks in Paris on January 2. These included the accounts of the RIA Novosti news agency and several deposits placed by the Central Bank of Russia. According to legal documents sent to French banks, the seizures were in line with a Stockholm arbitration court ruling made in favor of the company Swiss company Noga in 1997.

RBC, 14.01.2008, Chisinau 19:36:39.Moldova’s inflation reached 13.1 percent in 2007, Moldova’s National Bureau of Statistics reported. Specifically, prices for foodstuffs rose 15.4 percent, nonfood prices increased 11.6 percent, and tariffs on services climbed 13 percent. In 2006, the country’s inflation amounted to 14.1 percent. Meanwhile, in December 2007 alone, inflation stood at 0.9 percent, with prices for foods gaining 1.4 percent, those for non-food goods moving up 0.8 percent, and the cost of services inching up 0.2 percent. Moldova’s government proposes to keep inflation within the planned range of 10 percent in 2008.

RBC, 14.01.2008, Moscow 18:29:48.Foreign car sales jumped 61 percent to 1,645,630 cars in Russia in 2007 compared to a year earlier, the automobile manufacturers’ committee of the Association of European Business in Russia indicated in a statement today. In December, foreign car sales rose 50 percent to 178,095 cars against the same month in 2006. The most popular foreign car brand on the Russian market in 2007 was Chevrolet, with sales of 190,553 cars, including GM-AVTOVAZ’s share. Ford was in the second place with 175,793 cars sold, and Hyundai came in third with sales of 147,843 cars.

RBC, 14.01.2008, Moscow 15:24:30.Two hours before the close of today’s special dollar trading session for tomorrow deals, the high on deals remained unchanged at 24.30 RUB/USD, while the low was down RUB 0.04, at 24.45 RUB/USD, dragging the weighted average dollar exchange rate to 24.28 RUB/USD, RUR0.01 below the official rate set by the Bank of Russia for January 15. The dollar’s continued decline on MICEX has been triggered by the dollar’s almost unremitting depreciation against the euro on international exchanges, where the latter is now trading at nearly USD1.4910, up from less than USD1.4870 this morning. Considering the current developments on the domestic and global markets, the ruble can be expected to keep strengthening against the dollar at the next special session.

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Svet Sunday: Vinni Puh! (Winnie the Pooh)


Winnie the Pooh & Vinni Puh!
Hello,

Today I want to tell you about Winnie the Pooh! Oh, no! You all know about Winnie the Pooh, I am sure you read the book by Alan Alexander Milne and watched hundreds of series of Winnie the Pooh by Disney! Winnie the Pooh is very popular! You can see him everywhere: on cup of your little son or an application on a dress of your little niece. Even we; have sheets with Winnie the Pooh. They are very good by the way ;).

No, I will not tell you about Winnie the Pooh I’ll tell you about Vinni Puh or even better, I’ll show you a cartoon about Vinni Puh! Who is Vinni Puh? Vinni Puh is Russian version of Winnie the Pooh. Russian writer of children book Boris Zahoder had read the story of Alexander Milne in 1958. He liked this book very much and decided to retell the story for Soviet kids. And soviet cartoon-studia “Souzemulfilm” made 3 cartoons about Vinni Puh. (Part 2: Here)

Today we will watch the fist cartoon: “Vinni Puh gets acquainted with several very strange bees”(1969).

What else I can tell: Cartoons about Vinni Puh were our favorite. People in Russia picked up some phrases from the cartoons and still use them today!

Это “Жжж” не с проста – This Bzzzz could not be without reason (When Vinni sits under the Oak and hear some strange Bzzzz)
Кажется дождь собирается – It seems it will be raining.. (When Vinni tries to pretend he is a cloud, and Piglet/Pyatachok, walks under umbrella near the oak)

If you like this cartoon, we will post the rest? There are three of the series!

Do you want to see the other two?

Best wishes for all!
Svet

comments always welcome.

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