Russian Bull's Comments RSS Syndication from SeekingAlpha.com http://seekingalpha.comuser/225268/comments http://seekingalpha.com/article/175542-where-the-dubai-fallout-will-land?source=feed#comment-781466 781466
Instead, it seems that the Panic of 2009 might have started here in Dubai Inc (which is a city-state basically reliant on construction and real estate and in a sense, similar to a large development company). As everyone knows, real estate development requires capital as it is capital intensive. Dubai Inc has just increased their borrowing costs while also limiting the pool of prospective lenders when what they need most is liquidity. If the advisors to Dubai had waited another 3-4 months things in the US might have been bad enough that no one would notice and they could have blamed the US for the market volatility and then quietly and discretely renegotiated. I'm not sure what the advisors to Dubai Inc are charging but it seems as if their advice is somewhat suspect.

Instead, and for whatever reason, the advisors to Dubai Inc have suggested a getaway style more common to a bank heist: enter the bank, shoot your shotgun in the ceiling, make an announcement, take the cash, and make the dash to Eid holiday. I suspect when the markets and investors and creditors and anyone else with an interest in Dubai wakes up and shakes off the dust, here is what will happen:

1. Capital will leave the UAE, or, at the least, have very little interest in the market there unless it is compensated as such. And even then, once the current creditors have their first taste of the court system in Dubai, the appetite to lend even at “Loan Shark” rates will be diminished.
2. Liquidity will again dry up in Dubai. Last year it dried up in about 35 days. This time it will be about 3.5 days.
3. Real estate prices will lose at least another 30% in Dubai and plunge through the “cost-basis floor”.
4. Another smaller round of job losses, cost cutting, jettisoning Porsches at the airport, etc. will take place with another exodus for the expat population thus driving down demand for real estate.
5. As Dubai World liquidates assets or re-price them, there will be a negative feedback loop in the market.
6. Vacancies go up driving real estate values down.
7. Banks and construction companies in the region are crushed.
8. Reputation is lost and will be difficult to recover. Figure it takes 7-10 years to recover to 2008 levels.
9. UAE as a whole suffers from increased borrowing costs
10. Lose points for bad style and form

The next step is to sit wait, watch and see what Abu Dhabi and its SWF does. Dubai Inc is basically a huge real estate machine. Really. That’s all they have to offer the world. To have a functioning real estate machine one needs capital. To borrow a line from Les Grossman in “Tropic Thunder”, someone just crapped in the money bed. ]]> Sun, 29 Nov 2009 10:25:44 -0500
Instead, it seems that the Panic of 2009 might have started here in Dubai Inc (which is a city-state basically reliant on construction and real estate and in a sense, similar to a large development company). As everyone knows, real estate development requires capital as it is capital intensive. Dubai Inc has just increased their borrowing costs while also limiting the pool of prospective lenders when what they need most is liquidity. If the advisors to Dubai had waited another 3-4 months things in the US might have been bad enough that no one would notice and they could have blamed the US for the market volatility and then quietly and discretely renegotiated. I'm not sure what the advisors to Dubai Inc are charging but it seems as if their advice is somewhat suspect.

Instead, and for whatever reason, the advisors to Dubai Inc have suggested a getaway style more common to a bank heist: enter the bank, shoot your shotgun in the ceiling, make an announcement, take the cash, and make the dash to Eid holiday. I suspect when the markets and investors and creditors and anyone else with an interest in Dubai wakes up and shakes off the dust, here is what will happen:

1. Capital will leave the UAE, or, at the least, have very little interest in the market there unless it is compensated as such. And even then, once the current creditors have their first taste of the court system in Dubai, the appetite to lend even at “Loan Shark” rates will be diminished.
2. Liquidity will again dry up in Dubai. Last year it dried up in about 35 days. This time it will be about 3.5 days.
3. Real estate prices will lose at least another 30% in Dubai and plunge through the “cost-basis floor”.
4. Another smaller round of job losses, cost cutting, jettisoning Porsches at the airport, etc. will take place with another exodus for the expat population thus driving down demand for real estate.
5. As Dubai World liquidates assets or re-price them, there will be a negative feedback loop in the market.
6. Vacancies go up driving real estate values down.
7. Banks and construction companies in the region are crushed.
8. Reputation is lost and will be difficult to recover. Figure it takes 7-10 years to recover to 2008 levels.
9. UAE as a whole suffers from increased borrowing costs
10. Lose points for bad style and form

The next step is to sit wait, watch and see what Abu Dhabi and its SWF does. Dubai Inc is basically a huge real estate machine. Really. That’s all they have to offer the world. To have a functioning real estate machine one needs capital. To borrow a line from Les Grossman in “Tropic Thunder”, someone just crapped in the money bed. ]]> http://seekingalpha.com/article/175542-where-the-dubai-fallout-will-land?source=feed#comment-781452 781452 Sun, 29 Nov 2009 10:13:13 -0500 http://seekingalpha.com/article/129967-russia-s-economy-contracts-by-7-in-q1-will-2010-be-even-worse?source=feed#comment-460357 460357 Sun, 12 Apr 2009 09:32:43 -0400 http://seekingalpha.com/article/122574-russia-s-economy-falls-at-an-8-annual-rate-in-january?source=feed#comment-410632 410632 Tue, 03 Mar 2009 06:39:36 -0500 http://seekingalpha.com/article/119364-is-russia-s-economy-heading-towards-the-abyss?source=feed#comment-385902 385902 Thu, 12 Feb 2009 13:21:17 -0500 http://seekingalpha.com/article/118103-u-s-debt-default-dollar-collapse-altogether-likely?source=feed#comment-379848 379848
For me, it seems that the reduced tax revenues--at both the state and federal level--will become the next crux of the current US crisis. It will be interesting to see how that plays out in the next 12-18 months.

With regards to the passing of any storm....I do believe we are going into the backside of the storm so things will get worse before they get better and, again, the reduction in tax revenues will lag behind the market by some 'N' amount of time and its effects are still unknown (though California seems to be giving us a lead on that.)

In terms of the USD....I can only hypothesize that due to the amount of forced liquidations, desire for people to sit on 'cash', and the current fear in the emerging markets (and their currencies), we are simply seeing an increased demand for USD.

Which leads me to the top of this article and the question posed by a commenter: what if you had a printing press in your basement? Would you ever default or would you quietly keep paying the butcher, the baker and the bread maker with your Super Notes?]]> Sun, 08 Feb 2009 10:39:38 -0500
For me, it seems that the reduced tax revenues--at both the state and federal level--will become the next crux of the current US crisis. It will be interesting to see how that plays out in the next 12-18 months.

With regards to the passing of any storm....I do believe we are going into the backside of the storm so things will get worse before they get better and, again, the reduction in tax revenues will lag behind the market by some 'N' amount of time and its effects are still unknown (though California seems to be giving us a lead on that.)

In terms of the USD....I can only hypothesize that due to the amount of forced liquidations, desire for people to sit on 'cash', and the current fear in the emerging markets (and their currencies), we are simply seeing an increased demand for USD.

Which leads me to the top of this article and the question posed by a commenter: what if you had a printing press in your basement? Would you ever default or would you quietly keep paying the butcher, the baker and the bread maker with your Super Notes?]]> http://seekingalpha.com/article/118146-ruble-s-fall-continues-as-russian-unemployment-soars?source=feed#comment-379610 379610
It is well known that the largest players are taking their overnight loans and shorting the Ruble--literally taking money from the stabilization fund and depositing it into the pockets of the traders.

While this may be like shooting fish in a barrel in terms of making a short term profit for the banks (and boosting their balance sheets) it is at the expense of the country, its people, and is hamstringing the real economy through a lack of confidence.

I agree that a stable Ruble is a prerequisite to any kind of recovery in Russia--and who knows when that happens and confidence is restored in the Ruble and Russia.]]> Sun, 08 Feb 2009 00:33:16 -0500
It is well known that the largest players are taking their overnight loans and shorting the Ruble--literally taking money from the stabilization fund and depositing it into the pockets of the traders.

While this may be like shooting fish in a barrel in terms of making a short term profit for the banks (and boosting their balance sheets) it is at the expense of the country, its people, and is hamstringing the real economy through a lack of confidence.

I agree that a stable Ruble is a prerequisite to any kind of recovery in Russia--and who knows when that happens and confidence is restored in the Ruble and Russia.]]> http://seekingalpha.com/article/114691-gold-viagra-and-emerging-markets-harry-dent-on-2009-and-beyond?source=feed#comment-356242 356242
But Russia does have a declining population problem--among other severe challenges right now of course--but I have no doubt (based on my own analysis) that Russia will come through this on the other side stronger than before.

Nevertheless, very much enjoyed this article though generally speaking I do prefer blinis and vodka to curries and tea.]]> Thu, 15 Jan 2009 01:34:29 -0500
But Russia does have a declining population problem--among other severe challenges right now of course--but I have no doubt (based on my own analysis) that Russia will come through this on the other side stronger than before.

Nevertheless, very much enjoyed this article though generally speaking I do prefer blinis and vodka to curries and tea.]]> http://seekingalpha.com/article/114000-oil-stocks-where-can-you-find-black-gold?source=feed#comment-352145 352145
Oil service companies will--until US politicians say otherewise--sell their expertise to the highest bidder (with contract and equipment payments up front of course). ]]> Sun, 11 Jan 2009 05:40:34 -0500
Oil service companies will--until US politicians say otherewise--sell their expertise to the highest bidder (with contract and equipment payments up front of course). ]]> http://seekingalpha.com/article/113198-manufacturing-collapse-reminiscent-of-great-depression-s-beginning?source=feed#comment-347215 347215 Tue, 06 Jan 2009 07:58:57 -0500 http://seekingalpha.com/article/108305-deleveraging-pushes-the-dollar-up?source=feed#comment-317103 317103
It will be interesting (to say the least) to see what happens in February/March 2009.]]> Sat, 29 Nov 2008 10:00:41 -0500
It will be interesting (to say the least) to see what happens in February/March 2009.]]> http://seekingalpha.com/article/104954-as-russia-tests-the-waters-oil-and-gas-showdown-looms?source=feed#comment-315256 315256 Wed, 26 Nov 2008 03:30:38 -0500 http://seekingalpha.com/article/99495-gold-the-last-carry-trade?source=feed#comment-282043 282043
Besides, you can always show it off to your date. Drop an ounce of gold into a girl's hand and watch her eyes light up. Cheap thrills, yes, I know, but it beats the hell out hiding in your basement, eating MREs and waiting for the world to end.]]> Tue, 14 Oct 2008 10:24:46 -0400
Besides, you can always show it off to your date. Drop an ounce of gold into a girl's hand and watch her eyes light up. Cheap thrills, yes, I know, but it beats the hell out hiding in your basement, eating MREs and waiting for the world to end.]]> http://seekingalpha.com/article/98526-tarp-is-just-the-beginning-barron-s?source=feed#comment-273794 273794
As for "further action"....well, I guess you can lower interest rates but I agree with ScobbyDude that it doesn't mean banks will loan money (or if they do, they may price it higher for a riskier market). Beyond that, I guess you can start giving money to people (again) to spend. Frankly, at this point, not sure what else can be done or should be done as we already have several states going to the Fed with begging bowl in hand.

I'm waiting to see what happens this week with the CDO auctions.
]]> Sun, 05 Oct 2008 08:31:39 -0400
As for "further action"....well, I guess you can lower interest rates but I agree with ScobbyDude that it doesn't mean banks will loan money (or if they do, they may price it higher for a riskier market). Beyond that, I guess you can start giving money to people (again) to spend. Frankly, at this point, not sure what else can be done or should be done as we already have several states going to the Fed with begging bowl in hand.

I'm waiting to see what happens this week with the CDO auctions.
]]> http://seekingalpha.com/article/98459-the-die-is-cast?source=feed#comment-273763 273763
and then thanksgiving rolls around and they get their heads chopped off before they know what is coming.

i'm just saying experience and history aren't always worth the value people put into them.

typing from iphone so mea culpa on lowercase]]> Sun, 05 Oct 2008 07:03:28 -0400
and then thanksgiving rolls around and they get their heads chopped off before they know what is coming.

i'm just saying experience and history aren't always worth the value people put into them.

typing from iphone so mea culpa on lowercase]]> http://seekingalpha.com/article/97846-is-the-dollar-becoming-less-global?source=feed#comment-270613 270613 Wed, 01 Oct 2008 14:02:27 -0400 http://seekingalpha.com/article/96926-the-family-foresight-thought-experiment?source=feed#comment-262716 262716
(this is a nice distraction)]]> Tue, 23 Sep 2008 14:24:17 -0400
(this is a nice distraction)]]> http://seekingalpha.com/article/95145-emerging-markets-so-much-for-decoupling?source=feed#comment-257706 257706
I think what we are seeing is simply economic collateral damage from the US. When the smoke and dust settles, I will still be a fan of emerging markets (including Russia) and the GCC markets. I am expanding positions where I can and am very dissapointed the Russian market is locked up--but could be worse, I could be a common shareholder of a Lehman or Fannie.]]> Thu, 18 Sep 2008 04:14:24 -0400
I think what we are seeing is simply economic collateral damage from the US. When the smoke and dust settles, I will still be a fan of emerging markets (including Russia) and the GCC markets. I am expanding positions where I can and am very dissapointed the Russian market is locked up--but could be worse, I could be a common shareholder of a Lehman or Fannie.]]> http://seekingalpha.com/article/94189-rescuing-frannie?source=feed#comment-247291 247291
These companies should have been allowed to fail. So much for capitalism. I agree also that what these two 'companies' do can be done better by a pure market-based company and that the market would find its even keel faster and more effectively.

But overall, my impression is, "Svine! When did the US become a centrally planned economy? I thought that period of history was kaput!" ]]> Sun, 07 Sep 2008 07:38:05 -0400
These companies should have been allowed to fail. So much for capitalism. I agree also that what these two 'companies' do can be done better by a pure market-based company and that the market would find its even keel faster and more effectively.

But overall, my impression is, "Svine! When did the US become a centrally planned economy? I thought that period of history was kaput!" ]]> http://seekingalpha.com/article/92027-russian-oil-exports-dropping-but-why?source=feed#comment-238442 238442
Russia will have to deal with the challenges of running off the Majors, but again, I would urge one to visit SLB in Moscow for a glimpse of the future.]]> Mon, 25 Aug 2008 10:56:05 -0400
Russia will have to deal with the challenges of running off the Majors, but again, I would urge one to visit SLB in Moscow for a glimpse of the future.]]> http://seekingalpha.com/article/92208-geologist-in-terms-of-supply-and-demand-the-oil-peak-is-past?source=feed#comment-237240 237240
Good luck with that plan. The NIMBYs and City Councils won't let you do jack until its too late...which it already is if you get passed your fear and look at flow rates. Will we ever run out of oil? Hell no. But it will cost you. My advice: go long SLB and RIG as the NOCs need them more than they need the XOM and BPs of the world.]]> Sat, 23 Aug 2008 13:17:10 -0400
Good luck with that plan. The NIMBYs and City Councils won't let you do jack until its too late...which it already is if you get passed your fear and look at flow rates. Will we ever run out of oil? Hell no. But it will cost you. My advice: go long SLB and RIG as the NOCs need them more than they need the XOM and BPs of the world.]]> http://seekingalpha.com/article/91341-russia-s-too-risky-barron-s?source=feed#comment-232849 232849
Russia has its problems--no doubt--but in terms of risk I think the perceived risk is much higher than true risk in reality.

Funny, the media makes a lot of noise over Yukos and BP, but the fact of the matter is that Russia has declared the oil and gas industry a "state secure sector". The Western National oil companies are no longer needed by Russia and their contracts are being re-negotiated. That's life in the big city. Ask the shareholders of IndyMac about governmental takeover risk.
]]> Mon, 18 Aug 2008 06:05:34 -0400
Russia has its problems--no doubt--but in terms of risk I think the perceived risk is much higher than true risk in reality.

Funny, the media makes a lot of noise over Yukos and BP, but the fact of the matter is that Russia has declared the oil and gas industry a "state secure sector". The Western National oil companies are no longer needed by Russia and their contracts are being re-negotiated. That's life in the big city. Ask the shareholders of IndyMac about governmental takeover risk.
]]> http://seekingalpha.com/article/84920-china-russia-exceptions-to-global-economic-slowdown?source=feed#comment-206290 206290
That said, there are problems; corruption and red tape are still very bad; getting a visa into the country is challenging; and the Ruble (while undervalued) still has the stigma of the 90s attached to it.

As for surviving the global financial crisis...the Russian Finance industry is very simplistic and I think this will serve them well in the future as our banks pass through the housing MBS blow up, into the credit card CBS blow up; and finally into the wave of derivatives failures.]]> Tue, 15 Jul 2008 15:29:07 -0400
That said, there are problems; corruption and red tape are still very bad; getting a visa into the country is challenging; and the Ruble (while undervalued) still has the stigma of the 90s attached to it.

As for surviving the global financial crisis...the Russian Finance industry is very simplistic and I think this will serve them well in the future as our banks pass through the housing MBS blow up, into the credit card CBS blow up; and finally into the wave of derivatives failures.]]> http://seekingalpha.com/article/84966-gas-lines-coming-this-fall?source=feed#comment-206283 206283
As for the transition times, I actually think it is too late to transition to any kind of "other" energy without feeling some pain for many people here in the US. ]]> Tue, 15 Jul 2008 15:22:56 -0400
As for the transition times, I actually think it is too late to transition to any kind of "other" energy without feeling some pain for many people here in the US. ]]> http://seekingalpha.com/article/84672-putting-1t-subprime-mortgage-losses-in-perspective?source=feed#comment-203469 203469
Lastly, given he teaches at the University of Michigan--one of the most depressed states in the US (there, I said it, depressesion), but I would imagine that he can probably walk out of his front door and see the effects of a few billion of lost value. Go to some parts of Detroit, stand on a corner, and preach your message there. I'd be curious to see the reception you receive.

Or not. Maybe he is a big fan of "The Secret".]]> Fri, 11 Jul 2008 22:07:40 -0400
Lastly, given he teaches at the University of Michigan--one of the most depressed states in the US (there, I said it, depressesion), but I would imagine that he can probably walk out of his front door and see the effects of a few billion of lost value. Go to some parts of Detroit, stand on a corner, and preach your message there. I'd be curious to see the reception you receive.

Or not. Maybe he is a big fan of "The Secret".]]>