anvor

Twilight of Autocracy: China, Russia and the Financial Crisis

Paul -

With all my respect (and I do respect you): What is your interest in Russia and China? Do you have your own personal experience working there or you just publicize opinions of others, which you cannot gauge as being right or wrong, to the rest of experience-deprived speculators combing this web site? Are you looking for information or providing it?

Who Will Win the Economic Battle for Ukraine?

Beware of amateurs like this author offering you professional advice.

Wage Cuts as Alternative to Devaluation in European Economies

Mr. Hugh,

You sure write thoughtful columns. Shows your vast knowledge. However, the branching language of your reports could be pruned to cater to your readers. If you only limit the use of brackets and end sentences before they get to the third line, you'll be just as quotable (and popular) as Paul Kruegman. Really.

Google Dethroned?

Sarah is darn convincing on the macro-level. On the micro-level she alluded but skipped over one thing: Google managed to screw up its management model just like all other "four-year" wonders. Management hubris is virtually irresistable: once you've got the power - you're addicted. As I pointed out elsewhere, being a management researcher I’ve always thought that the accounts of the “uniquely productive” properties of Google’s loose’n'messy management system were more glitter than substance. On TechCrunch accounts point to the proof.

While productivity of human collaboration can be improved by better organizational structure, better incentives, or bonding effect of a worthy goal (and sometimes by manipulative charisma of leaders), Google’s “smartest guys on the planet” have failed to invent the smartest organizational environment. Now that the carrot of stock appreciation isn’t there, expect more stick… Which is rather sad, since there are far better solutions to this.

Googlers and others, tell me if I am wrong (or right) at [e-mail]

As Its Politicians Battle, Ukraine's Economy Tunnels South

Yamu -

In which countries behaviour of politicians is different?

Four Commonsense Clues to a Genuine Market Bottom

Gena might be a genius on his point #4, but I'll take his point #2 on M&A activity pick-up over any other. The predators and vultures from Private Equity, who are now saddled with mountains of debt and while their portfolio company values sinking right under their feet, will be my canary in the mine.

Although, if a really long and deep depression hits, they (PE guys) might eventually be forced to sell their portfolio companies just to liquidate their funds, creating an uptick in that very M&A activity... But lets not think of that scenario...

A Russian Perspective on the Rise of the U.S. Dollar

Countries with sufficient foreign currency reserves - like Russia and China - will weather the currency boom/bust gyrations quite well. However, to pay for our 10 trillion dollar debt (or 50+ trillion if you take the Peter Peterson Institute measure), we'll have to gradually - or by leaps and plunges - devalue our currency. Whether it will be done intentionally or for the lack of other options, is not important. In the long run the currency of a country that relyes on export of IOUs can't remain strong compared to currency of a country that relyes on actual goods bought for cash by foreigners as well as its own citizens. The short-term run up and then plunge of commodities nonwithstanding, Russia is an enviable position currency-wise.

Grigori is scared in the short term. As most Russian "analists" he's most likely got the brains of a petty speculator who is "street smart" and lives in the now, and only now. Raised in the country that went through several crises of unstable and weak governments, he is not trusting his new strong, rich and all-powerful (autocratic but deliberate) government. His reaction is justified by crises of the past, although not necessarily by the current.

Besides, what is $25K for a Russian market speculator? If he is rich, it's pocket change, a small safety margin in case the bank closes doors for "back holiday." And if he is not rich, and it is big money for him, why do you listen to a poor schmack?

Finally, don't forget the nuances that might have been lost in translation, even from his Russian English to your American English. The environment in which you function affects your understanding of information. I often speak to my friends in Russia in perfect Russian but as our actions later show we get very different ideas from the same seemingly clear conversations. The same thing happens between parents and teenagers everywhere all the time. So, perhaps Grigori - as smart as he might be - meant something different than you understood.

My two cents.

An End to Efficient Market Theory

Very calming article...:)

America's Ad Hoc Fiscal and Monetary Policy

Hell-o-o-o, socialism! Let the government bail out everyone, own everyone, deside for everyone. Way to go :)

The New Energy Cold War: The Warsaw-Tehran Connection

Dear Mr. Litle:

Congratulations for your three-part article. As a Russian-Canadian and former Visiting Professor of one of American Schools of Diplomacy, I find your analysis somewhat simplistic, but it is WAY better than most professional analysts, journalists and politicians offered to the American and European public.

Few understood that Russia defended its own citizens in a break-away region from the haphazardly planned by Saakashvili ethnic cleansing, Croatia-style. You may not remember, but in the late nineties ethnic Serbs were ethnically cleansed from two break-away Krayina and Vucovar Serb-majority regions of Croatia by Croatian regular military which was armed and trained by the U.S.

Milosevic, who at that time still ruled Serbia, didn't respond. However, Putin clearly remembered the case, knew that the conflict with belligerent Georgia was coming and had a clear pretext to get involved given that a dozen of Russian peace-keepers were killed by Georgians. The simple indignation that the peaceful city of Tzhinvali was carpet-bombed like it was a military field (and from the horrendous losses they suffered during the WWII the Russians viscerally know what that is like), Russian public firmly stood by his side.

After so much bizarre analysis by the Western news media circuits, as American taxpayer I was grudgingly expecting our government to start wasting our money on Georgian re-building and on further alienating Russia. Well, today it happened, and a billion of my and your dollars will go to build new Georgian roads and military bases, despite the fact that New Orleans has not yet recovered from Katrina…

In the long run, the end of the 15-year South-Ossetia and Abkhazia stalemate and the unexpectedly easy Russian victory will prove to be the event that has fleshed up the realities of an emerging multi-polar world. It is up to our leaders to choose how much we will lose in pretending that Russia is intrinsically “bad” and that it needs to be “taught a lesson” of obeying our will...

I find it difficult to imagine that Russians will lose here. After all, this time they have all the strong cards, and we have mostly the misplaced disgust and pathetic indignation. But those are the usual feeling of losers.

Again, thanks for your article.

Hedge Fund Manager's Notebook: Blood on the Streets - Buy Russia

The thought here is: the current Russian government will slowly try to wrestle the natural resources from the "oligarchs" who, in essence, stole them from the Russian people in the nineties.

It will be a VERY slow process, but you'd never know who among oligarchs will be next. If you invest in Russia, try to invest in services, construction, food, perhaps utilities, etc., the sectors that do not depend on WHO owns the natural resources. Besides, they will be the ones on the upswing more than the commodities, anyway.

The good thing - the government there is stable and VERY popular with the electorate (in part for its attempts to sideline the power of the oligarchs). Condi Rice may say Russian gov-t is not as "democratic" as, say, Georgian (Medvedev/Putin never got less than 65% of the vote, Saakashvili in January - 53%) but a smart investor isn't spooked by China's Communist gov-t, right?

On Country Selection

What the heck did Roger meant by this?: "One thing to remember here is that in the last few years foreign markets have dramatically outperformed US markets which creates the opportunity for confusing genius with a bull market."

Big Lots, Wal-Mart and Costco: 3 Musketeers of the Pooring of America

I drive by a Big Lots every Tuesday. The parking lot is nearly empty at 6:30 p.m. Always. Which tell me that perhaps the people who shop there during working hours are the bums and the retired (looking inside store - bums and illegals). Meaning, BigLots appeal is not universal, and may not have an up trend in the wings.

Eastern Europe: The Worst is Yet to Come

Of the three Baltic countries, Estonia should be the more difficult to sink - economically and even linguistically it is tied to Finland, which incidentally was instrumental in Estonia's economic "miracle" of the last decade. Thus, if a currency attack comes, it might be against the latvian lat, not estonian krona. Or, perhaps, the other way around.:)

Beware of Crumbling BRICs

Just read, belatedly, that Buffett recently said that the US is in "stagflation" in which "stag-" will deepen, while "-flation" will continue to soar. Betting against Buffett is not my cup of milk, so let me think aloud: With some BRICs "damaged", we still have the other two. So, long Russia and Brazil? (and "so long" CHina and India?:)

With Russia in particular: since russian ruble will continue to appreciate against the dollar, it makes sense converting dollar-denominated instruments into ruble-denominated ones and sleep quite happily on the Russian index (even their largest, fully state-insured bank offers 9% on ruble 3-month deposit.) Inflation or not, I'll be up in the end, for higher ruble securities eventually converting into diminishing dollar should make additional sense. With both Putin and his puppet gearing to combat inflation, russian growth may not be above 10% as it should be with this price of oil (which ain't coming down, folks), but even 8% GDP will do wonders for my Russian index.

Tell me if I am wrong. Ple-ease:)