Economic Mournings

[I/O]

The DOW opened up today at +366.  If the market closes today at an even higher level (on high volume), we quite possibly have defined the bottom, until the next wave of bad news. 

And..........the DOW has been up and down like a whore's draws ever since, much as our market has. I don't think we have seen a leveling in this whole thing yet, not by a long shot actually. Been watching Volkswagen lately? Or the DAX in general? If I was Russian middle class, I would be watching very closely.

I/O

[wxman]

And..........the DOW has been up and down like a whore's draws ever since, much as our market has. I don't think we have seen a leveling in this whole thing yet, not by a long shot actually. Been watching Volkswagen lately? Or the DAX in general? If I was Russian middle class, I would be watching very closely.

I/O

I like the analogy! This first Dow collapse was solely caused by the financial meltdown. Now the economic numbers are kicking in, and a second bottom will happen. Dow will probably bottom around 7700. One has to wonder if there is something fundamentally wrong with the financial system if it has to be bailed out twice in the last 20 years. I don't think this financial collapse had much to do with Fannie Mae or Freddie Mac. Foreclosures and defaults only made up 2% of all the loans, yet the financial system nearly collapsed? If something don't smell right, then one has to look elsewhere. I believe this was solely caused by the SEC totally ignoring the short selling on banks and other financial institutions. Think of the shorts as some people in your neighborhood buying life insurance on your next door neighbor, and then killing him, and then they collect on the policies with no questions asked. No one is required to tell the neighbor that they bought life insurance on him, and no one is charged with murder.  That is exactly what happened with the financial industry. The short market sole purpose was to create panic in the financial market, forcing a run on perfectly good institutions, which in turn made billions for those owning the shorts. The shorts in reality were trying to destroy capitalism to create a huge profit for a very few. 

[Makkin]

  The dow jones will not be defined at bottom for a while but trends show it will go up and down and adjust until it reaches that lowest point and go up from that point. Making predictions on the dow is rather impossible..lol

  GDP,jobs,credit these rae the factors for a local stock market and if you look at the world areas it makes sense that some will not come back as fast while others will. Problem is that most areas are connected to other parts of the world in finacial terms and investment and when they become too dependent on sayyyy...Australia and Britain or any such case then it wont matter much about local economies because they are usually too small.

Makkin

[Andrew James]

I'd be interested in hearing some of you more experienced guys thoughts regarding how this will affect the business (i.e., the supply & demand aspects) of FSUW-WM marriages in broader terms.

As I mentioned in my first post here at RWD, I seemed to have entered the scene at a time when increased prosperity in the FSU had altered the dynamics of this business - for want of a better word - setting the bar that much higher for guys seeking such women for marriage.

All of which course has many up sides (there is less of chance you will simply be seen as her ticket out, and less of a chance she will have to settle for someone not worthy of her) but also downsides (I refer back to AnnastasiaAsh's post in my introduction thread, and her contention that 'no RW would want to marry a western man like myself, that doesn't own his own house in full'.)

Is it possible we might see change in the dynamics here once more in light of the present crisis, which seems to be hitting Russia and Ukraine particularly hard?

One could argue, of course, that this is a world recession and so likely to affect all players. That said, not all countries will be impacted upon equally; Australia for example is witnessing an end to our long economic boom but we are not expected to fall into recession like a host of developed nations (owing to trade with the robust Chinese economy; it is not all good news for Aussies though with our dollar - which is so tied to volatile commodity prices - plummeting against major currencies and making travel so much more expensive.)

Interested to hear more experienced people's thoughts, especially as I have now booked my flight to Ukraine and Russia early next year.

[docetae]

About owning your house, the time this is not paid, this is not you but the bank who owns it... I have married a ukrainian woman and do not own my house (several factors including previous relationship and change of work)... so there is no rule on this.  About dynamic, the only change I can see since I travel to Kiev every 2 months is more lexus and BMW in the streets..

About economy , my concern is more to know when it will be time to buy... One friend gave me one advise... define your portfolio and invest always the same sum every month during 3 or 4 months instead of investing everything at one time..


It seems to me there are opportunities to rise capital invested now by 30% within 5 years if I look at previous collapses...

[Misha]

There seems to be a shift underway. One of my wife's friends, a young very attractive woman living in St. Petersburg, asked my wife for advice on finding a foreign husband. It was suggested to her by her mother as both do not see any decent options in Russia. I expect that Russia will be hit harder by the crisis and global recession in the coming years, and that will certainly encourage more women to look overseas for potential husbands.

[Mishenka]

MOSCOW - Talking to Russians on the street, you'd be forgiven for thinking there was no economic crisis.
TV channels gloss over the subject and state news agencies are under orders to avoid frightening language. But beyond the spin, Russia's stock markets are plunging, some grocery shelves are empty and one newspaper has even suggested its readers stash some cash — under the mattress.

The Kremlin is grappling with its worst financial crisis in a decade — feeding a liquidity crunch as banks clamp down on lending. And economists are now fretting about how deep the slowdown will be.

In dozens of supermarkets in Moscow this month, shoppers have encountered shelves empty of even the most basic items. At one chain on Wednesday, meat, fish, vegetables, fruit and cigarettes were nowhere to be seen. The dessert section was empty except for a pricey brand of imported Scottish shortbread — priced at $48 — while sugar and salt were in plentiful supply.

Still, Nikita Bondarev, an academic researcher in his early 30s shopping at the Samokhval chain, said he had no particular concerns about the crisis.

"I'm not playing the (stock) market, and I'm getting my salary as usual," he said. But the sight of empty shelves, "brings up unpleasant memories of Soviet times."

This is not the early 1990s, when images of bread lines and food shortages were beamed across the world. But small businesses and even some mid-size chains like Samokhval are finding it impossible to get credit or that it is available only at exorbitant rates.

In the case of Samokhval, which has 60 stores in the Moscow area, and Mosmart, which has 54 stores and four superstores, suppliers are refusing to deliver goods because of outstanding debts, distributors said.

The problems appear to be limited to a few chains so far in a city that is still enjoying a consumer boom — fed by robust economic growth averaging more than 7 percent over the past eight years and windfall oil profits.

Still, memories of the financial collapse of 1998 are fresh in the minds of many. Savings were wiped out amid a wave of bank foreclosures fed by a crisis of confidence. And that's something the Kremlin is eager to avoid repeating.

Last week, the RTS stock exchange suffered its worst trading day on record, plunging 19 percent. The markets were hit after oil prices — the backbone of Russia's economy — slid heavily amid mounting concerns over the global economic meltdown.

But in Russia, it didn't even make the evening news on the three state-controlled channels.

Instead, they aired a meeting between President Dmitry Medvedev and one of the country's richest billionaires, Mikhail Fridman, in which the two discussed the investment opportunities created by the global crisis.

Vladimir Varfolomeyev, first deputy editor at Ekho Moskvy radio, wrote in his blog that the Kremlin recently sent an order to all broadcasters banning the words "collapse" and "crisis." The word "fall," the memo said, should be substituted with "decline." His blog promptly went down.

Meanwhile, a memo circulated at the state-run ITAR-Tass news agency reportedly advised reporters not to publish "provocative reports that can cause panic."

"We're requesting you to STOP covering queues at banks and a shortage of banking funds," said the memo, circulated by several respected bloggers.

Many newspapers, which operate under more liberal constraints, have carried reports of depositors switching their savings from less-secure private to state-owned banks, while noting some smaller lenders have frozen early withdrawals of accounts.

Still, the Kremlin's message seems to be getting across.

In a poll carried out in late September by the Public Opinion Foundation, one-quarter of those questioned said they had heard nothing about the global financial crisis, while 57 percent said they were satisfied with the country's economy — up from 53 percent in July.

The survey of 1,500 people in 102 cities across Russia had a margin of error of 3.6 percentage points, according to the foundation Web site.

Ignoring domestic factors, such as Russia's five-day war with Georgia in August and growing fears of government interference in business, Medvedev and Prime Minister Vladimir Putin have repeatedly singled out the U.S. as the chief culprit for the global financial crisis and Russia's economic troubles.

"Trust in the United States as the leader of the free world and the free economy, and confidence in Wall Street as the center of that trust, has been damaged, I believe, forever," Putin said recently.

The pro-Kremlin newspaper Izvestia, meanwhile, has suggested readers set aside enough cash to cover three months of living expenses — and stash it under the mattress. The advice recalls more difficult times for Russians, when confidence in the banking system was shattered.

For a government that has built its popularity on an eight-year economic boom, the prospects of a severe downturn and a long-term crisis in its financial sector are alarming indeed.

"All we have at the moment are anecdotes, so we simply don't know" how serious the problems are in Russia, said Rory MacFarquhar, a managing director at Goldman Sachs. "The scary anecdotes have just started to come out with the acute phase of this financial crisis basically starting in October. For a statistical reading ... we're going to have wait a whole month. So we're left guessing."

Still, there are signs everywhere.

Construction has been hard hit, with many projects put on hold or canceled. At Moscow's flagship business center Moscow City — a scene of feverish building activity a few months ago — there were only a few workers at the site this week.

The head of Mirax construction group Sergei Polonsky recently urged journalists in an open letter not to fan the flames of crisis.

"We are already lying on our backs, but we still have some strength left to climb back," he wrote. "We beg you to give us reasoned coverage of this sector."

[ScottinCrimea]

There seems to be a shift underway. One of my wife's friends, a young very attractive woman living in St. Petersburg, asked my wife for advice on finding a foreign husband. It was suggested to her by her mother as both do not see any decent options in Russia. I expect that Russia will be hit harder by the crisis and global recession in the coming years, and that will certainly encourage more women to look overseas for potential husbands.

But with all the gloom and doom portrayed on Russian Television about the financial crisis in the US, will FSUW women change their views about the US as a viable destination to ease their own financial problems?

[Makkin]

Nice report...Thanks

[Misha]

But with all the gloom and doom portrayed on Russian Television about the financial crisis in the US, will FSUW women change their views about the US as a viable destination to ease their own financial problems?

Well, networks exist. My wife's friends are asking her as to how Canada is making out and how the crisis is likely to affect Canada. Most Russians have a friend, neighbor, friend-of-a-friend-of-a-former-neighbor who immigrated. Russian television can continue portraying Russia as a blissful utopia, but information circulates in informal channels. Also, people are not stupid. There is always a point where the reality as experienced is too blatantly different from the reality portrayed on television that people will tune out and will refuse to believe what is told to them.

[ScottinCrimea]

Well, networks exist. My wife's friends are asking her as to how Canada is making out and how the crisis is likely to affect Canada. Most Russians have a friend, neighbor, friend-of-a-friend-of-a-former-neighbor who immigrated. Russian television can continue portraying Russia as a blissful utopia, but information circulates in informal channels. Also, people are not stupid. There is always a point where the reality as experienced is too blatantly different from the reality portrayed on television that people will tune out and will refuse to believe what is told to them.

I don't see that it has reached this point yet with most.  Even Russians my wife knows here have skewed views of many things based on rumors from friends or what they have seen on television.  There tends to be a lot of hyperbole being created about the effects of the crisis in all of the countries we are discussing.  You're just not going to hear the stores about those who are doing well or actually profiting from the current situation.  It's just not as much fun to discuss.

[Misha]

I don't see that it has reached this point yet with most. 

Not yet, but give it a year or so. Russia's economy is not very diversified and reliant on oil and gas revenues. With a global recession, oil prices will go down, which will hurt the Russian economy.

[Andrew James]

Well, networks exist. My wife's friends are asking her as to how Canada is making out and how the crisis is likely to affect Canada...

If it any help to your wife's friends, a recent IMF report (September, 2008) http://www.imf.org/extern.../ft/weo/2008/02/index.htm indicates Canada is headed for a recession. That said they top the world in terms of Banking Confidence (US is about 40th), so I think they are in better shape in a number of other ways.

[Mishenka]

It already has hurt their Economy. What I hear from friends in FSU countries is not good. Prices continue to climb daily for power, gas, water, food, and pay is often late or short. Galina was asked to go back to work for her Airlines as accountant, she worked one day and asked about her pay. It was laughable. what pay? how about a box of juice? a loaf of bread? Sorry the shelves are empty because the farms won't deliver because stores are not paying them. Oh well,  trade you a chicken for a liter of milk, anyone? Sure, 5 Kilos of oranges for a kilo of meat?  They know how to survive with or without cash. The problem is, winter is coming, there will be shortages of oil and gas to stay warm. Phones, power and water are often shut off during different hours of the day in Tashkent. This is typical. Why? faulty workmanship? I donno, maybe because people are not being paid at their jobs they have, and many are not employed at all.  Few can pay for food let alone utilities. There is no middle class, there are few rich and mostly poor. The word is, sometime after 6 months of being late on utilitiy bills, the government can take your flat away from you, even when its paid for in full. There are not that many private flats for sale, so ,,, you got to hold on to what you've got at any cost.  With oil prices at half what they were in May, and going down, with Russia having less than 100 days of reserves before collapse, we are talking 3 months not a year, before the next collapse.  This time there will be no one who can bail anyone out. China? I don't think so. Remember they have 1.1 billion mouths to feed, they won't be giving away hand outs anytime soon. McCain is not the only one talking about a spending freeze....

I had to postphone my trip because of so many cancelations for work. I don't see an end to this, unless I change occupations.  "The future's so bright, I got to wear shades"

Mishenka

[Misha]

If it any help to your wife's friend, a recent IMF report (September, 2008) http://www.imf.org/external/pubs/ft/weo/2008/02/index.htm indicates Canada is headed for a recession. That said they top the world in terms of Banking Confidence (US is about 40th), so I think they are in better shape in a number of other ways.

Well, I expect a recession of sorts. Given that the United States is our biggest export market, we will be hurt by their economic troubles. However, we are fortunate in a number of ways: the Canadian federal government has been running a surplus for a decade or so, our debt to GNP ratio is one of lowest of the G7, housing is overpriced in many Canadian cities, but we do not have quite the same mess as the United States and much of Europe when it comes to subprime loans and falling home prices. We have six main banks and they are relatively well capitalized (if only because Canadians get gouged with a variety of fees ). It won't be painless, but it could be a lot worse.

[Andrew James]

Well, I expect a recession of sorts. Given that the United States is our biggest export market, we will be hurt by their economic troubles. However, we are fortunate in a number of ways: the Canadian federal government has been running a surplus for a decade or so, our debt to GNP ratio is one of lowest of the G7, housing is overpriced in many Canadian cities, but we do not have quite the same mess as the United States and much of Europe when it comes to subprime loans and falling home prices. We have six main banks and they are relatively well capitalized (if only because Canadians get gouged with a variety of fees ). It won't be painless, but it could be a lot worse.

Just saw your BC number plate and realized I was actually talking to a Canadian! not to mention someone who is obviously well versed in financial matters. (I get the wife connection now too: they are talking to her because she's Canadian now too).

Quite a few similarities with Australia and Canada actually (with the exception of our export markets, with China giving us something of a buffer.) Just goes to show the value of having a surplace in such times and a well regulated baking system.

Wonder if RW will start considering places like Australia and Canada more in light of recent events in the US, UK and parts of Europe?

[Misha]

Wonder if RW will start considering places like Australia and Canada more in light of recent events in the US, UK and parts of Europe?

Well, Australia is easier as you still have the "fiancee" visas. Canada got rid of those years ago and you can only sponsor a spouse (married or common-law) and you have to demonstrate that it is a legitimate relationship and not a marriage of convenience.

[Andrew James]

MOSCOW - Talking to Russians on the street, you'd be forgiven for thinking there was no economic crisis...

Neglected to thank you for that detailed report on the situation in Russia Mishenka. (It is the most interesting article I have read on the situation in Russia from a social and political - as well as economic - viewpoint.) I wonder how other parts of the FSU compare?

[OlgaH]

Neglected to thank you for your incredibly detailed report on the situation in Russia Mishenka.

Andrew,

you also can join this thread about the article 
http://www.russianwomendiscussion.com/index.php?topic=8463.msg154745#msg154745

[daveyj]

I'm increasingly dumbfounded by the many media reports that we "may" be heading into a severe recession.

Not only do I think we are already into a global recession, but further I think that this will be the biggest ecomomic downturn since the '30's.  (although I don't think this present downturn will come anywhere close to the '30's)

As relates to Russia's prospects...

I was over there recently, and whenever I raised the topic I was greeted with blank looks.  People seem to have no idea what is taking place in the financial markets.

I absolutely think this is going to hit Russia very hard, in the same way I think it will hit every other country in the world.  This is not a "US sub-prime" issue.  The "US sub-prime" was just the spark that lit up the tinderbox, exposing the dried out credit markets throughout the world.  Collectively I think we've been living beyond our means for the past 5-10 years, and the the collective belt tightening is going to decimate consumer spending and asset prices over the next 2-3 years.

As relates to the marriage business...

I think that most FSUW who are interested in WM are more ecomomically motivated than those of their compatriots who are not similarly interested.  Thus, as things get worse, there will be a increase of FSUW who are interested in foreign men.

On the flip side, the economic downturn will weaken the economic wherewithal of foreign men who might otherwise have been considering a Russian bride.

In short, in the marriage business cash will be king, just the same as every other business in the world and it is increasingly a buyer's market.

ps.  Please understand that I'm focusing upon the economics of the situation.  In the arena of marriages, it is of course not just an economic arrangement but also a profound and beautiful union between two people. I don't mean to cheapen it with the above post.

[Mishenka]

The good news for USA,  Oil is down another $5 per barrel, at about 62 bucks,+ or - 60% less than a few months ago. Gas prices have dropped here about 1.20 per gallon, 30% and will continue to fall daily.  Food and transport costs are down. The value of the USD is up against all other world currency about 16- 20 %. When people figure that this is good news, they will begin to travel more and enjoy the higher dollar value and get more for their vacation dollars and spending will increase. Not all housing markets in USA have fallen. There are many pockets of the country where life is business as usual. The Gross Domestic product of USA went up 3 percentage points based on the recent increase in value of the USD, this in turn covers the GW Bush stimulus package rebate to the taxpayers of USA of 50 billion. If this keeps up, with oil prices low and the dollar continues to strengthen, it could solve the financial crisis itself with lower inflation in US and lower cost of living over all. The bad news is, some US Exports will cost more for countries buying US goods and services, food exports. shipping, airline fuels will be less and prices for travel will drop. People will travel more boosting all economies. There is a bit of silver lining in the clouds above. just give it some time to sink in.

As far as Russia is concerned, it will take some time to rebuild any trust lost during the Georgian conflict, to lure investors back and deposit any money in Russian banks. Even working capitol will be kept off shore for a long time now, due to mistrust. The ruble will continue to slide, and sadly prices for Moscow will grow out of reach for most, regardless of what income they take home. The wealthy and Mafia were hurt most by their losses in the stock market and banks. Like everything else, it trickles down, causes layoffs, less money, less ability to compete in global markets. With oil this low, Russia can no longer profit from it. With Ukraine buying natural gas from Turkmenistan now, Russia has lost its biggest customer. This will have a huge impact on the price of oil and gaz for Gazprom and could kill any ideas for growth, and future stability.  Uzbekistan also has renegotiated their gaz prices with Russia and they will have to pay more for it and sell at less profit. Clouds over the Kremlin? keep looking for the silver lining.  I think the Olympics in Sochi will draw bigger crowds if the dollar stays strong. This will ultimately help Russian economy. On the other hand if The boys at the Kremlin make any errors in judgement, and result in isolating themselves,  the Olympic committee can always choose an alternate site.

Examples of errors in judgement IMO are: weapons deals/military bases with Cuba, Venezuela or Viet Nam, as talks reveal.  Any new invasion of a sovereign country, deals with Iran on nuclear or arms etc, all of which demonstrate careless moves of aggression. Notice we only hear of the G7 now and not the G8, we hear nothing about Russia's application to join the WTO. Possible that any ideas of this has been dismissed? Russia stood proud and arrogant during the first few days of the Georgian conflict and within days, weeks, less than 2 months they have less than 80 days cash reserves before a repeat collapse of their economy.  Is it business as usual in Russia? Sure seems like it to me. Reckless actions without careful consideration. Then they get hit hard with the world financial crisis 2 months later which no one can afford. Painful
(no copy/paste was used writing this post)

Mishenka

[Mishenka]

I'm increasingly dumbfounded by the many media reports that we "may" be heading into a severe recession.

Not only do I think we are already into a global recession, but further I think that this will be the biggest economic downturn since the '30's.  (although I don't think this present downturn will come anywhere close to the '30's)

As relates to Russia's prospects...

I was over there recently, and whenever I raised the topic I was greeted with blank looks.  People seem to have no idea what is taking place in the financial markets.

I absolutely think this is going to hit Russia very hard, in the same way I think it will hit every other country in the world.  This is not a "US sub-prime" issue.  The "US sub-prime" was just the spark that lit up the tinderbox, exposing the dried out credit markets throughout the world.  Collectively I think we've been living beyond our means for the past 5-10 years, and the the collective belt tightening is going to decimate consumer spending and asset prices over the next 2-3 years.

As relates to the marriage business...

I think that most FSUW who are interested in WM are more economically motivated than those of their compatriots who are not similarly interested.  Thus, as things get worse, there will be a increase of FSUW who are interested in foreign men.

On the flip side, the economic downturn will weaken the economic wherewithal of foreign men who might otherwise have been considering a Russian bride.

In short, in the marriage business cash will be king, just the same as every other business in the world and it is increasingly a buyer's market.

PS.  Please understand that I'm focusing upon the economics of the situation.  In the arena of marriages, it is of course not just an economic arrangement but also a profound and beautiful union between two people. I don't mean to cheapen it with the above post.

Daveyj, I  agree, with hard times, fewer men would be looking for women to far from home.  On the flip side, where true love waits, no amount of money is going to stop two people in love, they will find a way to be together if it is meant to be. Sure we are in a recession when we have 2 months in a row of negative growth. in USA, its not only the housing market that is down 30% it compounded by what was the high price of oil and cost of goods that followed. Now that this huge adjustment has taken place and oil has dropped to less than half price, now we have hope prices will fall with oil prices and we will recover quickly. As I stated in my last post, the GDP numbers will increase due the the value of the US dollar and will show later as a false marker for growth and not recession. I say false because it could be temporary stronger dollar, we don't know the future.
The economy of Russia is not as attached to the dollar as it is other markets. Global markets are hurting as much or more than USA now, including the strongest, Japan, China, Euro, India,  none are exempt from this crisis. China sales are off and stock piles of goods sit in wherehouses that have no buyers to ship to. Even China with cash reserves that look high, try to feed over 1.2 Billion people with that cash reserve and see how far it takes them. It isn't what it seems. They don't have the GDP to survive very long without income from exports.

[Mir]

http://ap.google.com/article/ALeqM5jpNyLdBl6Nv-epPIAFrpo4dex4bwD940QIDO1

[Andrew James]

Interesting to read of the situation in Ukraine Mir. Talk about Ukraine and Belarus going to the IMF suggests specific regional dynamics to the crisis as well (not to mention different political responses, with the struggle for power in Ukraine being caught up in all of this.)

[ambach123]

I saw a news item that applications for immigration to USA have been greatly reduced.

I have also heard that the K-1 filings have dropped off sharply.

I have no independent confirmation of this. With regard to K-1 it may be several months befor the data would be out by the USCIS.

However if there is a significant reduction in the waite time for K-1 approval, that would be evidence that the applications have been reduced.