Sunday, November 30, 2008

New Format

After much thought, and after careful consideration of the manpower available and its experience (mine mostly) it is best to focus the blog on the understanding of Russian evolution in this time of crisis, which to many has invaded the circumstances unexpectedly. Why then is it unexpected? Is the Russian economy prepared? Are the Russian people today calmer than they were exactly ten years ago when the severity of the government's default shattered all hopes toward a recovery? RTTT will provide an explanation of this and put it into a perspective...

Saturday, November 15, 2008

The Curious Case of the Markets

As reported by the Guardian, the world leaders gathering in Washington today are completely overwhelmed by debt, with one particular exception - Russia. Refer to the listing below:

- United States ($8,400bln)
- Japan ($7,450bln)
- Italy ($2,190bln)
- Germany ($2,070bln)
- France ($1,630bln)
- United Kingdom ($1,200bln)
- India ($630bln)
- China ($580bln)
- Russia ($76bln)

Russia's reserves are enough to cover its debt burden five times over and still have leftovers for a corporate party where Pink Floyd can fly in and perform in President Medvedev's office. Why is it then that its economy is being battered, its major companies have seen share prices fall by 75%+ since May? Look for answers in the wild-ride the oligarchs had on the global leverage train on the back of commodity prices shooting through the roof along with the sudden choking of financial inflows from abroad in August, not due to Georgia, but due to a general liquidity problem in foreign markets. Who would hold money in Emerging markets, when you could feel safe in US Treasuries at a time of recession? Russia's ruble has faced significant pressure after strange decisions by its Central Bank to raise the base borrowing rate to offset the currency's fall while ignoring any pressures on the credit market within the country.

All in all, Russia has for three months been on the short-list of investors worldwide. And you better believe it when people tell you that a 20% chance of default is now priced in on Russia's debt. Investors speculate that the riddle wrapped in an enigma will not be able to pay-off $80 billion with $400 billion...very crudely speaking. It may happen within a year if the same slope is followed.

Friday, November 14, 2008


- President to be elected for six years
- Vladimir Putin may step in for 2010 onwards
- Russia unbelievably for some rattled by financial crisis, losing 20% of its reserves in a mere three months
- Saakashvili being threatened to be "hung" be his balls (doubtful he has any left)
- Iskander in Kaliningrad and Belarus

Maybe this blog should revive at some point after a year of being shut down. At least a brief version of it.