Russian Woes

[jyl]

Snce July, the Russian Ruble has plunged vs the US Dollar. From 35 RUB = 1 USD to 62 RUB = 1 USD, or >50% decline in a few months. This has to be one of the most impressive declines I've ever seen in a major country's currency.

Russia had USD 465BN in reserves back in August, but that is probably significantly lower now, it had already fallen USD 70BN in just the preceding 10 months. Actual liquid reserves might be more like USD 300BN.

Russian companies had USD 660BN in external debt in August, most of that is denominated in USD. About USD 55BN matured in 4Q14, I think another USD 100BN matures in 2015. Russian companies are effectively frozen out of the foreign debt markets, and have been since about mid 2014.

Interesting stuff.

[Bill Douglas]

Their own fault.

[motion]

No worries... Putin sees it as a positive.

We were in St Petersburg in October when it was 36:1 and were very pleased with overall affordability. A lot has changed since then.

[onlycafe]

i was expecting an anastasia dating story... drat!

[jyl]

I have a hard time thinking Putin sees it as a positive. He doesn't care about the citizenry, or about most Russian businesses, but he probably does care about the FX reserves getting drained, the biggest Russian companies defaulting on debt or needing bailouts from the govt's FX reserves, and oil at about 60% of what his budget needs it to be.

I still think Putin would like to see some missiles fired into Saudi oil facilities . . .

[strupgolf]

Maybe the sanctions are finally taking hold. Good

[porwolf]

Here we go again: Cold war, season II. Western war on Russia, economic style. Keep pumping oil with prices falling to squeeze Russia. Saudis on board. Stay tuned.

[Evans, Marv]

Saw on one of the news channels Putin is increasing defense spending by 85% through 2015 for more airfields, tanks, missiles, etc. Maybe he has accumulated enough power he feels he can ramp up his military regardless of the cost to the civilian population. With China becoming a major military player, the U.S. probably won't have the resources to do a repeat of ramping up military spending and bankrupting Putin trying to keep up.

[Nostril Cheese]

War is coming. Looks like many will profit.

[Tobra]

Es verdat

[Scott R]

The favorable conversion rate has us hiring software developers in St. Petersberg.

[jyl]

Saw on one of the news channels Putin is increasing defense spending by 85% through 2015 for more airfields, tanks, missiles, etc. Maybe he has accumulated enough power he feels he can ramp up his military regardless of the cost to the civilian population. With China becoming a major military player, the U.S. probably won't have the resources to do a repeat of ramping up military spending and bankrupting Putin trying to keep up.

Um, US military spending is $640BN, and Russian is $88BN . . . and US budget deficit is shrinking very fast while Russia's is ballooning . . .

[BRPORSCHE]

Sooooo.... Should I plan a trip to Moscow since everything will be cheap and tourism will be on the slide due to political instability? I bet I could stay at a nice hotel on the cheap.

[Evans, Marv]

Wasn't necessarily comparing military budgets or deficits. Just commenting that Putin isn't concerned about helping the country in a positive way, and with the ascendency of China's military in the future the U.S. will have too much on it's plate to do a repeat.

[motion]

Originally Posted by BRPORSCHE

Sooooo.... Should I plan a trip to Moscow since everything will be cheap and tourism will be on the slide due to political instability? I bet I could stay at a nice hotel on the cheap.

Yes, but not Moscow. Aside from Red Square, there's not much there. St Pete is where its at. You should be able to get a 5 star hotel right text to the Hermitage for less than $100.

[motion]

Wow, I just checked hotels in St Petersburg out of curiosity. They are stupid cheap. We stayed at the Renaissance a few months ago for $150 a night. Going for $49 a night now. Great hotel and location.

[KNS]

And on top of all this Putin's popularity rating among Russians remains quite high (one figure I'd heard recently was 80%) though I don't know how long that will last...

[jyl]

Background: The Russian economy: The end of the line | The Economist

Ruble now 72 RUB = 1 USD.

[Tobra]

Originally Posted by KNS

And on top of all this Putin's popularity rating among Russians remains quite high (one figure I'd heard recently was 80%) though I don't know how long that will last...

As long as he says so, that is how long.

I must say, I view the Russian Bear with a great deal of trepidation lately, their economic troubles are only due in small part to the sanctions. Vlad is not someone I expect to behave well when crowded into a corner.

[red-beard]

Originally Posted by motion

Yes, but not Moscow. Aside from Red Square, there's not much there. St Pete is where its at. You should be able to get a 5 star hotel right text to the Hermitage for less than $100.

A bed warmer will not cost a lot more...