Windows to Russia

RBC, 20.02.2009, Moscow 13:47:04.The development of small and medium-sized businesses must be supported to the maximum extent possible, Russian President Dmitry Medvedev said during an extended meeting of the State Council presidium on the support of the country’s real economy sector in Irkutsk today. He pointed out that the creation of new jobs in small businesses was a long-term solution for unemployment, the Vesti TV channel reported the Russian leader as saying.

RBC, 20.02.2009, Moscow 13:19:16.Russian President Dmitry Medvedev has strongly criticized the country’s leadership for “very slow work, unacceptable in times of a crisis.” He made this statement in Irkutsk today during an extended meeting of the Russian State Council’s presidium on developing Russian industries and overcoming the negative effects of the global financial crisis, the Mayak radio station reported. Medvedev stated that the global financial turmoil was still ongoing and had yet to hit its worst point.

RBC, 20.02.2009, Moscow 12:47:05.Russian President Dmitry Medvedev has warned about the danger of the Russian economy hitting rock bottom, as he said during a meeting with the Irkutsk region’s governor Igor Yesipovsky. If the economy drops below a certain critical level, Medvedev stated, Russia may face a repeat of the collapse it faced in the 1990s. “This is absolutely inadmissible,” the Russian leader was cited by the Mayak radio station as saying. He pointed out that Russia must overcome its current critical conditions with minimal losses, so that it would not be forced to resuscitate industries as it had to do after the demise of the Soviet Union. “This scenario is unacceptable, and we must think of ways to keep production intact and save most jobs,” Medvedev stressed.

RBC, 20.02.2009, Moscow 11:59:34.External factors are having a mixed impact on the Russian stock market, experts say. On the one hand, the fall in U.S. indices to the 2002 levels and the ongoing decline on Asian markets combined with negative corporate profit forecasts are pushing Russian shares lower. On the other hand, the Russian market was supported by yesterday’s 5 to 10-percent rise in oil prices driven by a decline in oil and oil product stocks in the United States. At the same time, however, oil prices are correcting downwards after yesterday’s rally. On the whole, stocks are unlikely to maintain their previous levels today, and Russian shares are expected to fall before the approaching long weekend.

RBC, 20.02.2009, Moscow 09:31:28.Russia and Serbia are expected to sign an agreement on visa-free travel today, a source in the Serbian embassy reported to RBC. According to the document, the citizens of Russia and Serbia will be entitled to spend up to a month on the territory of the other country without a visa. Earlier, only Russians were permitted to travel visa-free for a maximum of one month to Serbia.

RBC, 19.02.2009, Moscow 15:38:48.Irkut Corporation’s annual revenue under RAS edged up 1.3 percent from RUB 30.8bn (approx. USD 845m) to RUB 31.2bn (approx. USD 856m), the Russian aircraft builder’s press office reported today. The company expects its revenue to climb 22 percent to RUB 38bn (approx. USD 1.04bn) in 2009.

RBC, 19.02.2009, Moscow 12:43:59.The number of unemployed registered may reach 2.2 million people on average in 2009, deputy head of the Health and Social Development Ministry Maxim Topilin said during a meeting of the Federal Migration Service’s board. He noted that the ministry expected the number of unemployed to increase considerably. The figure currently stood at 1.8 million, compared to 1.2 million people in October 2008. Russia has not seen such dynamics for many years, Topilin stated. He also said that the share of working Russians had fallen to the 2006 level. “This is a very alarming trend, which makes us review the policies we are implementing on the Russian labor market and the quota regulation policies in regards to foreign workers. We must address the issue of amending the quotas very seriously,” the deputy minister said. As of February 11, some 470,000 people received notice that they would be laid off, and another 920,000 people were working only part-time, according to Topilin.

RBC, 19.02.2009, Bishkek 12:19:23.The Kyrgyz parliament has voted for closing the U.S. military base in Manas, with 78 deputies voting in favor of the move, two voting against it, and one abstaining, the parliament’s press office reported today. The bill denounces Kyrgyzstan’s agreement with the United States on the deployment of its air base in Bishkek’s airport Manas. Once the document has been signed by Kyrgyz President Kurmanbek Bakiyev, the country’s Foreign Ministry will officially inform the U.S. government that the agreement has been cancelled, after which the United States has 180 days to withdraw the air base from Kyrgyzstan. Update: The document has been signed by the President.

Hello,

Something has come to my attention about the financial crises in Russia and while I was drinking my morning cup of coffee. There is another issue that is hitting people who have taken out loans for mortgages in Russia.

I call it “Currency Suicide”:

In Russia as in many countries it seems to be common procedure to take out a credit in another currency other than the home currency. This is an issue that I never had to face having been raised in the USA. I have never until coming to Russia to live long term ever thought about anything but dollars.

After talking to my wife, I have come to the understanding that Russians look at taking a loan out in another countries currency as normal practice. The example I will use, is in the video that you see at the top of the article. In this video a woman has a credit for her flat financed in Yens. Now when she got the financing the Yen was weaker against the Ruble. Now the Ruble has weakened against the Yen.

Guess what? She can not make the payment any more because of currency exchange rates!

Why do they do this? The answer to that is multifaceted and has more underlaying reasons than I can put into one simple post, but the main reasons are.

1. Banks steer (turn) customers to a loan package that makes the bank the highest percent yield.

2. Customers see a few dollar savings on their total loan at time of taking out loan.

3. Knowledge of financial systems is lacking, so people do not know what they are doing.

4. A form of currency speculation. **

5. Culturally accepted practice of not keeping all your eggs in one basket.

6. Last but not least: Greed!

As one bank that has a very strong policy against these type of loans, Sberbank Senior Vice President, Denis Bugrov, says that wasn’t a very intelligent move by people.

Many Russians took out mortgages in foreign currencies – lured by exceptionally lower interest rates than on Ruble loans.

Denis Bugrov says, “This shows the level of financial education in our country. Having income in Rubles, people considered its right to have liabilities in other currencies. This was profitable when the Ruble was strong, now it’s the other way round.”

Sberbank says only 6% of their mortgage portfolio was in foreign currencies. Many other banks strongly promoted those loans and have as high as 80 – 90% in their portfolio, making huge profits by borrowing cheap and lending high. While knowing that their customers would suffer from currency fluctuations and speculations.

I remember ARM (Adjustable Rate Mortgages)*** loans in America. I learned my lesson about what I call “loans of stupidity.” (interest only mortgage, the negative amortization mortgage, and the balloon payment mortgage.)

I watch the video and thought about it this way: She would not be upset if she had her loan in Rubles because now compared to other currencies she would have a bargain on her loan payment. So there would be no story.

So now another huge issue of the financial crises has swung into view. People have set them selves up for “Currency Suicide”.

** Currency speculators, who buy and sell currencies to profit from fluctuations in the value of those currencies. Speculators have posted record earnings from such buying and selling since the crisis began last summer.

*** An adjustable rate mortgage (ARM) is a mortgage loan where the interest rate on the note is periodically adjusted based on a variety of indices.

Kyle & Svet

comments always welcome.

Hello,

While Svet was walking around Moscow she happened upon these buildings with some great art work on them. We like to take pictures of this type of art work because it is always of high quality. Here is a link to some more Pictures. (WOW : Moscow Utility Buildings!)

That is all for now!

There will be more pictures as soon. For a photo albumn of pictures from Russia just follow this link to our: Russian Photo Blog!

You will not be sorry.

Kyle & Svet

comments always welcome.

Looks Like Russia has figured out a way to cheaply transport Gas (LNG) with out a pipeline. It has been put into effect on the Pacific Coast and now Russia sees it as an answer to help bypass Ukraine. Ukraine has caused her own problems and now Russia is in full swing to forever keep Ukraine out of the gas delivery loop.

Japan, America and Korea have just signed contracts that last 25 years to purchase all the gas that is produced at the new world’s largest oil and gas project Sakhalin-2 has begun to produce Russia’s first LNG for the world market. The first deliveries will go to Japan, where Russian LNG will have a major impact.

The huge Prirodnoe plant will pump 5% of the world’s LNG to America, Korea and Japan.

Things that make you go Hummmm…

Kyle & Svet

comments always welcome.

Moscow authorities have refused to issue a birth certificate to a six-year-old boy, whose parents named him BOCh RVF 26062002, a records chief told RIA Novosti on Wednesday.

Registration officials refused to register the boy’s name, which translates into a Russian acronym for Biological Human Object of the Voronin-Frolov Genus (DoB) June 6, 2002, to “protect the boy’s own interests.” The parents have insisted on registering the name and have filed a lawsuit.

How would you like to introduce this person to someone…

Hello Andre,

Meet

Glad to meet you…

Kyle & Svet

comments always welcome.

PS: Reminds me of Frank Zappa and his kids (Moon Unit, Dweezil, Ahmet, and Diva Muffin),actually those names seem tame compared to the one above.

The English translation of this video is really good. The Russians seem to be getting better at this game of press releases.

I found this video was full of good information and Medvedev shows that he is on top of things.

Kyle & Svet

RBC, 17.02.2009, Moscow 13:04:08.The Russian Federal Anti-Monopoly Service has opened a law suite against Lukoil, TNK-BP, Gazprom Neft and Rosneft for setting unreasonably high prices for oil products on the retail and wholesale markets, head of the service Igor Artemyev told journalists today.

RBC, 17.02.2009, Moscow 12:40:24.Olimpstroy is ready to announce the first winners of a tender for the performance of works in the construction of Olympic facilities. Forty-five days after all the corresponding documentation is checked, the winners will be able to begin work on the construction sites. All the tenders for the construction of Olympic facilities will be announced this year. Olimpstroy oversees a total of over 40 facilities.

RBC, 17.02.2009, Moscow 12:16:21.The Russian Federal Service for Surveillance in the Field of Consumer Rights Protection and Human Well-Being (Rospotrebnadzor) plans to provide anti-crisis consultations for the population, head of the service Gennady Onishchenko told a press conference today. He pointed out that a special hotline to provide information about “what to do, and how to start your own business” would be launched. Furthermore, the hotline’s operators will provide consultations on eating healthy without spending too much money. Onishchenko also indicated that the same type of information would be available on the service’s website. He did not specify the exact date for the launch of such consultations, however, noting that the watchdog was planning to do research on which areas were most attractive to Russians for opening small-sized businesses.

RBC, 17.02.2009, Chisinau 11:41:35.Russian Foreign Minister Sergei Lavrov plans to pay an official visit to Moldova on February 23, 2009, the republic’s government reported to RBC. Lavrov is expected to meet Moldovan authorities to discuss bilateral cooperation in different spheres, as well as the settlement of the Transnistrian dispute. Moldova places great hopes on Lavrov’s visit, as it is expected to help further improve relations between Russia and Moldova.

RBC, 17.02.2009, Moscow 11:27:37.Russian Foreign Minister Sergei Lavrov met President of the Palestinian National Authority (PNA) Mahmoud Abbas during a visit to Israel and the PNA on Monday. The prospects of settling the Palestinian-Israeli conflict took center stage in the discussion, the Russian Foreign Ministry reported today. Lavrov expressed regret over numerous deaths of civilians in the Gaza Strip during a recent military operation, stressing that such events must never be repeated. Furthermore, the Russian official insists that the blockade of Gaza must be lifted. The parties also discussed the possibility of restoring Palestinian unity on the basis of the Palestine Liberation Organization (PLO).

RBC, 17.02.2009, Bishkek 10:55:39.The Kyrgyz parliament’s committee for international affairs and intergovernmental cooperation has urged the deputies to consider during the next session the denunciation of an agreement with the United States on the deployment of its military base in Bishkek’s airport Manas. According to the republic’s parliament, the next session has been scheduled for Thursday.

RBC, 17.02.2009, Moscow 10:25:06.Experts foresee a sell-off in foreign currencies on the Russian market, which is expected to push the ruble higher on Micex. Advance payments on the single social tax, insurance premiums, and half of excise amounts, which were due on Monday, failed to boost demand for the ruble as they had done in the past. Experts believe that taxpayers sold currency in advance. As reported earlier, the dollar jumped RUB 0.52 and the euro RUB 0.49 yesterday.

RBC, 17.02.2009, Moscow 09:56:52.Russian Defense Minister Anatoly Serdyukov and Iran’s Minister of Defense and Armed Forces Logistics, Brigadier General Mostafa Mohammad Najjar, will discuss current and prospective issues of bilateral relations concerning the two countries’ military agencies. As reported by the Russian Defense Ministry’s press and information office, Najjar arrived in the Russian capital on February 16.

What is Russia up to?

That is a good question: It seems that Russia is signing all kinds of deals with people all over the world. Lets see what they have signed…

Jets for the Arabs, missiles for the Chinese, Kyrgyz government removing a USA air force base, NATO gets a supply route, Bolivia gets Energy contracts and so on and so on! Medvedev stays busy as a bee meeting people from all over the world.

So while Russia is signing up new friends, there is lots of other stuff going on also. Like in sports…

Russia’s Yelena Isinbayeva broke the world indoors record twice in a single day at a Pole Vault Stars meeting in Ukraine’s Donetsk on Sunday, first clearing 4.97 meters and then 5.0 meters.

That is impressive and Russia should be very proud of her. So while Yelena is setting world records the folks back home are remembering Afghanistan…

On February 14, 1989, the last Soviet armored personnel carrier left Kabul. The International Security Assistance Force (ISAF), a NATO-led security and development mission in Afghanistan, is facing the same problems 20 years later.

That is a real mess and now Russia seems to be giving a helping hand to NATO…

The first American non-military cargo to Afghanistan is being put together in Riga, Latvia. The Russian Foreign Ministry says that the freight will be sent to Afghanistan through the Russian territory shortly.

Talking about helping hands, maybe we need to feel sorry for the billionaires in Russia..

Mikhail Prokhorov, the president of Onexim Group, has been ranked by Russia’s Finans magazine as the richest of the Russian super-rich, with an estimated wealth of $14.1 billion in 2008.

I remember when that would have not even made the list. I think that he will get by though. So while the rich are not as rich as they use to be. The poor camels are stuck at a new border…

Two dozens Russian camels bound for Bulgaria, have been stopped on their way again – this time on the border between Moldova and Romania. One animal has already died en route.

Those poor camels, will someone please give them a break. Talking about breaks look like Medvedev is breaking things…

Russian President Dmitry Medvedev has signed decrees to replace four governors and named their replacements, the Kremlin said on Monday. Out with the old and in with the new.

So as Medvedev is breaking some hearts a very sad weekend has happened in Moscow…

Heavy snowfalls in Moscow and the surrounding Moscow Region caused more than 6,000 traffic accidents over the weekend, which resulted in 24 deaths, local traffic police said on Monday.

That is sad and should not happen. We will not talk about Russian drivers right now. What we will talk about is Lenin…

The mausoleum at Red Square, where the embalmed corpse of Vladimir Lenin is housed, will be closed for two months for maintenance works on Monday.

So it seems that he will be getting some spring cleaning. Now lets go to Ukraine, we can not ever do a “What is Russia up to” with out mentioning Ukraine…

Over half of Ukrainians consider the terms of a recent gas deal with Russia were acceptable, Ukraine’s UNIAN news agency said on Monday citing a poll organized by the Kiev International Institute of Sociology (KIIS).

well that is enough and that is just the tip of the iceberg for what Russia is up to. As you can see Russia stays busy and you never know from one week to the next who and what they are going to be messing with…

Have a nice week!

Kyle & Svet

comments always welcome.

Hello,

I was thinking about the Soviet Union and the Afghanistan War while drinking my coffee today. It seems that 20 years ago this 15th of February the Soviets left Afghanistan.

Now the comparisons of that war and the one the USA is waging in Afghanistan is ironically similar.

“As Russia marks the 20th anniversary of its withdrawal from Afghanistan, officials in Moscow are warning that US and NATO-led forces are making exactly the same mistakes as the Soviet Union made when it invaded the country in 1979.”

The Military in Russia have stated many times that it seems strange that no one seems to have learned from their mistakes in Afghanistan. There is still plenty of men who fought in that war still alive. This was a war that will never be forgotten by Russians.

But it seems that bad wars can be forgotten and America seems to have pushed aside the nightmare called Vietnam and now they are in two similar wars that will never end.

Now just 20 years later, the Russians are looking with astonishment at the way the US and NATO-led forces are waging their war in Afghanistan.

Russia shakes her head in disbelief as America has now been caught in this vicious circle called Afghanistan.

Kyle & Svet

comments always welcome.

PS:

Russia does not laugh like America did when the Soviet Union was buried in the quagmire called Afghanistan. Russian does not supply Americas and NATOs enemies with money and weapons to fight against them. (Like America did.)

Russia just feels sorry, because Russia remembers…

Hello,

Back in 1992 Coke took some small steps in Russia and showed that they were willing to start small and let it grow. Pepsi was here before Coke was and Coke knew that they had to build a reputation slowly.

January 17, 1992 (New York Times)
COMPANY NEWS; Coca Cola Sets Russia Venture

The Coca-Cola Company said today that it had formed a joint venture with the city of Moscow to make and sell Coke products in Russia.

Coke is making an initial investment of $12 million in the operation, to be called Coca-Cola Refreshments-Moscow. The venture will focus at first on fountain sales, with distribution through a network of some 2,000 kiosks in the Russian city.

Well 15 years later Coke is calling Russia to be the 5th largest Coke Market in the world in a few years and it seems that Coke will now spend some money and try to finish off its rival Pepsi Cola.

Coca-Cola sees Russian growth, to invest $1.2 bln!

Wednesday 16:09, February 11th, 2009 (Budapest Business Journal)

US drinks maker Coca-Cola Co said it would invest $1.2 billion in Russia over the next 3 to 5 years as it bets sales of the carbonated drink will increase during the economic crisis.

“The company can afford to have aggressive positions in Russia,” Coca-Cola’s Russia, Ukraine and Belarussian head Zoran Vucinic told a news conference on Wednesday. “The market of non-alcoholic beverages is growing during (the) crisis and we want to continue investing in the Russian market.”

It seems that even though the market in the USA has dropped around 3-4% in sales for Coke they are saying that the International market has had continued growth. The market in Russia seems to have grown slightly during the financial crises.

I myself can say that Coke and Pepsi products have dropped in price over the last few months. I just bought a can of Diet Coke for 14 roubles and that is down from almost 20 roubles a few months ago.

Seems that there is a lot of profit in that little can of Coke…

Kyle & Svet

comments always welcome.