[evgeny]

$this->bbcode_second_pass_quote('Taghayee', '')$this->bbcode_second_pass_quote('dissident', 'J')
ust gotta love that patronizing, chauvinist smear about Russians being all brainwashed by state propaganda.
.
.
In complete contrast, as this thread shows, it is people in the west that trust every piece of crap that their media produces.

[Zardoz]

So much for the so-called Russian juggernaut:

Russia’s Comeuppance - Not long ago the balance of global power was shifting toward Russia. The economic crisis has put a stop to that.

$this->bbcode_second_pass_quote('', 'A')ny international economic crisis afflicts different countries in different ways, but an unfortunate few experience every painful dimension of it. In the current crisis, Russia is confronting virtually all the negatives at once--sharply declining export earnings from energy and metals, over-leveraged corporate balance sheets and a chorus of bailout appeals, a credit crunch and banking failures, a bursting real-estate bubble and mortgage defaults, accelerating capital flight, and unavoidable pressures for devaluation.

The Russian stock market is down 70 percent from late spring. The government has burned through more than 20 percent of its foreign-exchange reserves since August. The outflow of capital in October alone was $50 billion. Next year's budget is based on a projected average price for oil of $95 per barrel; now budget planners have to work with forecasts of $50 or lower. Since Finance Minister Alexei Kudrin has said that Russian government spending goes into deficit at $70 per barrel, pressures for spending cuts are starting to mount. Severe reductions have already been announced in housing and education programs.

[RdSnt]

I wouldn't get too excited about Russian problems. They are not bankrupt, as the US is, and the problems with the companies is much more an international problem in that it is a problem with foreign owned companies. It was the corrupt manipulation of the Russian collapse, pre-Putin, that handed alot of companies to foreign owners.

It will be harsh on the population but Russia is in far better financial shape than the US.

[dorlomin]

It seems to be consolidating the power of the security clique that now sits in the Kremlin. Many of the so called oligarchs are finding there wealth severely reduced and themselves more dependent on the state. In the long term this is possibly good for the central government, bad for both the oligarchy and democracy.

[Bas]

I wonder which country will come out of this crisis in the best shape, as it looks now it seems everybody is sinking together and equally fast.

[ReverseEngineer]

$this->bbcode_second_pass_quote('Bas', 'I') wonder which country will come out of this crisis in the best shape, as it looks now it seems everybody is sinking together and equally fast.

[dissident]

So, elected government with popular support means no democracy but unelected oligarchs means democracy. Get real.

[GeneralGreen]

$this->bbcode_second_pass_quote('Bas', 'I') wonder which country will come out of this crisis in the best shape, as it looks now it seems everybody is sinking together and equally fast.

[BlueGhostNo2]

AP news story. So due to a reduction in their huge forgen currency reserves Russia gets downgraded to BBB whilst the US and UK which have huge net forgen currency liabilities get to keep their AAA rating. Anyone understand how S & P figure that?

[DJSNOLA]

Yeah I mean does anyone really listen to rating agencies anymore! They were one of the main players in this whole credit debacle to begin with.

[Tyler_JC]

$this->bbcode_second_pass_quote('BlueGhostNo2', 'S')o due to a reduction in their huge forgen currency reserves Russia gets downgraded to BBB whilst the US and UK which have huge net forgen currency liabilities get to keep their AAA rating... Anyone understand how S & P figure that?

[BlueGhostNo2]

I'm not saying a Russian downgrade doesn't make sense but how come there's no UK downgrade. At least to AA.

The pound is devaluing sharply, the gov admits to 40% gdp dept ignoring the bailouts & off balance PFI's. It has has just announced tax cuts which will put us into an even bigger debt hole. Financial services used to account for 30% of UK gdp, god knows how much was house construction & price rises...


I'm not saying Russia doesn't deserve BBB I'm saying how the hell does UK get to keep AAA?

[ReverseEngineer]

$this->bbcode_second_pass_quote('BlueGhostNo2', '
')I'm not saying Russia doesn't deserve BBB I'm saying how the hell does UK get to keep AAA?

[cipi604]

It's starting to be very interesting, it's a declaration of war, an economic war.
Mother Russia never quits, and they'll manage something pretty soon. Maybe they'll freeze the gas and oil exports. They've been poor before, they know how to survive and they have the resources to do that.... but regarding Europa, without oil and gas from Russia they go in the dark pretty fast. Iran will stop soon exporting oil too... Europa it's in a big mess this days.

[Tyler_JC]

I agree with BlueGhost.

UK should have a debt downgrade as well.

[deMolay]

It looks like the Russian people are going to get hit again. Bloomberg

[dissident]

The best thing that can happen to them is what happened in 1998. The massive devaluation of the currency stimulated domestic production that launched the country into the 10 year boom. None of the "oil price explains it all" pundits can explain why the economy took off in 1999 and not in 2005. One of the reasons that Russia accumulated the large foreign reserves has been because the central bank has been selling roubles to keep exchange rates higher and prolong the import substitution effect which arose out of the 1998 financial crisis.

[Tyler_JC]

No need to panic yet. The Ruble is trading at roughly its mid-2006 level against the Dollar.

The Ruble has been roughly flat against the Euro for the past 4 years.

Does that sound anything like 1998?


There will be a devaluation, no doubt. But it won't be as severe as 1998. Russia is in a much stronger position now.

However, if oil prices fall below $40 and stay there for years...Russia's f*cked.

[dissident]

Cognitive dissonance. Keep on repeating that retarded "oil explains Russia's GDP growth" mantra drilled into your head by the media and maybe it will become true. The average oil prices was under $25 between 1999 and through 2004. Russia's GDP growth shrank in 2005 as the oil price increase had a negative effect on its economy.

2000: 10.0% $27.39
2001: 5.1% $23.00
2002: 4.7% $22.81
2003: 7.3% $27.69
2004: 7.2% $37.66
2005: 6.4% $50.04
2006: 7.4% $58.30
2007: 8.1% $64.20

[Tyler_JC]

$this->bbcode_second_pass_quote('dissident', 'C')ognitive dissonance. Keep on repeating that retarded "oil explains Russia's GDP growth" mantra drilled into your head by the media and maybe it will become true. The average oil prices was under $25 between 1999 and through 2004. Russia's GDP growth shrank in 2005 as the oil price increase had a negative effect on its economy.

2000: 10.0% $27.39
2001: 5.1% $23.00
2002: 4.7% $22.81
2003: 7.3% $27.69
2004: 7.2% $37.66
2005: 6.4% $50.04
2006: 7.4% $58.30
2007: 8.1% $64.20