[dorlomin]

Should be in economics and finance but Greece is also scaring the markets this weekend.

[eXpat]

Should be in economics and finance but Greece is also scaring the markets this weekend.

Plus Dubai of course, the cracks are starting to get louder...

[eXpat]

This could well be the last winter that Ukraine enjoys Russian gas.
Ukrainian official: IMF unfreezes $2B Ukraine bailout loan for payments on Russian gas

KIEV, UKRAINE — Ukraine has convinced the International Monetary Fund to release a $2 billion bailout loan that will help the ex-Soviet nation pay for Russian natural gas and avoid a repeat of a January crisis that cut off gas supplies to Europe, a top Cabinet official said Friday.

Ukraine's Deputy Prime Minister Hryhoriy Nemyria said he secured the deal during a meeting with the IMF's leadership in Washington, D.C. earlier this week. "Ukraine has met the primary demands of the IMF," Nemyria said in a statement.

In October, the IMF halted a $3.8 billion portion of its bailout loan to Ukraine and demanded that the country's leadership resolve its budget crisis before the funds would be released.

Nemyria's spokeswoman Nataliya Lysova said part of the money will be needed to pay Ukraine's gas bill to Russia, which comes due early next month.

http://www.sfexaminer.com/economy/ukrainian-official-imf-unfreezes-2b-ukraine-bailout-loan-for-payments-on-russian-gas-79071402.html
Is going to be very cold in winter after this...

[radon]

Ukraine's foreign exchange reserves reached a record high, said Prime Minister Nikolai Azarov, in an interview with the First National Channel. Head of the government attributes this to the the substantial growth of export, and increase in remittances from Ukrainian citizens working abroad. In addition, Ukraine implemented a number of successful projects.

"Our foreign exchange reserves have reached a historical high. They make up about 37 billion dollars. This has never happened in the history of Ukraine previously", - the press service of the government quotes the prime minister.

"Basically, we have a positive balance of payments, I emphasize, for both goods and services, but for goods specifically, in fact, there is a definite deficit, but in general more currency enters the country than leaves, so our currency reserves are growing", - said Mykola Azarov.

According to him, the negative balance of trade in goods was due to the fact that disposable income of consumers has increased and so did the demand for imported goods.

"So, the Ukrainians have bought twice as many new cars in the past year compared to the previous year. We have increased the purchasing power of people. Whatever anyone says, the consumers are now buying more imported goods. Our import has grown by 30%", - summed up the head of the Government of Ukraine.

04 May 2011

link

I did not find the story in English so I put it through the google translator and amended it a bit.

Interesting that they have negative trade balance in goods. The country is really well-endowed agriculturally and has a soft climate. They also have natural resources, like metals and coal, and manufacturing. Nevertheless, the goods balance is negative and compensated by the balance "in services". Ukraine is no India and hardly provide lots of outsourced services, so this position is likely to be attributable to the "remittances from abroad" and "successful projects", the latter likely being the direct foreign investment.

But I would guess that this is hardly enough to balance the growth in import. Most likely, they have an inflow from speculative money from various QEs around the world, in the form of loans, stock/forex exchange and equity investments. I have not followed their story so this is just a guess.

They'll probably see their currency strengthening, short term at least.

[Pretorian]

They'll probably see their currency strengthening, short term at least.

The owner of the current president and PM there is a major exporter, so, not likely.

[radon]

The owner of the current president and PM there is a major exporter, so, not likely.

There is little benefit for Ukraine to have its currency strengthen, given that they already have a trade deficit in goods. If this is hot QE money looking for parking, then these money may easily produce a local bubble with all the unfavorable consequences. In addition, the local manufactures will come under further pressure from the importers.

Probably, the hot QE money do not care who owns presidents and PMs, so long as there is an opportunity in sight. Interesting that this happens against the backdrop of serious problems in some EU economies.

[Pretorian]

The owner of the current president and PM there is a major exporter, so, not likely.

There is little benefit for Ukraine to have its currency strengthen, given that they already have a trade deficit in goods.

sure thing , if you discount teachers that make $100 a month and pay $6 per pound of beef

[radon]

sure thing , if you discount teachers that make $100 a month and pay $6 per pound of beef

Well, I am speculating, so you may well be right here.

On the other hand, the problem is not so much in that pound of beef costs $6, the problem is that the salary is $100. This is not a forex issue, this is a fiscal policy issue, if we talk about the public sector salaries. The low salary may actually be an indication of hidden structural unemployment. This is not exactly the problem that you want to address by strengthening your currency and squeezing your competitive domestic producers from the markets in favor of importers.

Ukraine is really blessed agriculturally, and more then self-sufficient when it comes to beef production. They have everything to be a prosperous economy, a breadbasket. They may do a number of things to institute a socially-oriented policy in respect of basic foodstuffs - they may introduce export tariffs, extend agricultural subsidies and tax credits/exemptions, introduce state purchases of beef, curtail or completely shut down beef exports, establish a regulatory price ceiling. Raise hryvna salaries of the teachers, after all. Or teach the teachers new skills. The last thing that you want to do is to strengthen your currency, particularly in the view of the trade deficit in respect of goods.

They don't seem to have problems with the beef. They say they are buying lots of imported cars, hardly an indication of malnutrition problems.

If their boom is propelled by forex speculative investment and borrowing, than it may fuel some kind of bubble, like that in housing, which would send the housing prices galloping and unaffordable, and so on. Then crash comes. Just as it happened in Russia couple years ago.

Anyway, this was just a speculation of mine. I have taken a brief look on a Ukrainian news website, and the analysts seem to be ascribing the trend to the "private remittances" from abroad, meaning the private transfers by Ukrainians working outside Ukraine. On the other hand, the banks appear to be on the expanding mode in respect of the private mortgages, and the "private remittances" would hardly be a source of finance for those.

Most interesting that this all happens at the time when Portugal, Greece etc. are having difficulties.

Couple latest news from a Ukrainian news website:

In Ukraine, the euro fell in value by more than 20 copecks

The euro dropped significantly in price on the Ukraine forex market [today]. Buy bids fell by 22-26 copecks, sell bids - by 16 copecks. Quotations of the U.S. dollar have not changed.
...
06 May 2011

link

The hryvnia until late June to remain stable - analyst

05.05.2011 08:52

National currency will remain stable until late June....

In particular, there is no reason for the devaluation of the hryvnia in terms of components of the balance of payments.

On the contrary, in the view of the balanced supply and demand in the forex market, the excess foreign exchange inflows in the form of private remittances over the outflows from Ukraine could result in a moderate strengthening of the hryvnia.

According to the analyst, the average selling rate of cash dollar by the end of the second quarter will probably be in a range 7,95-8,00 grn.

link

[Pretorian]

The low salary may actually be an indication of hidden structural unemployment.

well , it is a tradition for employers to pay as little as they can get away with, otherwise, i do agree with all that

[Beggion]

No, that is actually not a slogan for a new staring Jason Statham movie, this is Ukraine btch! A friend of mine is working for BP international and yesterday they've received this report from Ukrainian Lutsk where last Friday took place rather unpleasant for the company accident in one its petrol station. The story is (sorry I made it short): last Friday, a motorcade of about 50 vehicles blocked one of the BP stations not far from Lutsk, after what a gang of gunmen in red and black masks demanded to fuel for free all their vehicles. The weighty arguments were a treat to blow the station and a pistol at the station's attendant (Ukrainian) temple. For sure the attackers implicitly got what they wanted. My friend says BP got no such accidents even during muslim revolution in Egypt. So... do someone here still got questions about current business conditions In Ukraine? Anarchy is action.

[Tanada]

IMO that isn't quite anarchy. That is gang rule, and it really stinks even on ice, but actually anarchy is even worse. Typical gang rule means if you knuckle under and prove useful you survive, real anarchy means survival is much harder to achieve.

[Sixstrings]

Every 10-15 years this place has a major revolution. And each time it’s precipitated by one basic principle: money.

All people really want is to be in a place where they can improve their lives… where their children can have a brighter future than they did.

The system in Ukraine did not provide those conditions. It was designed for a tiny political and banking elite to enrich themselves at the expense of everyone else.

This revolution was borne from economic frustration, plain and simple.

Yet each time this happened in the past, all they really did was change the players… not the game. They just ended up with a different set of criminals in charge.

This time around there seems to be serious effort to at least change the rules.

Many are talking about major revisions to the Constitution (leading one local journalist to ask– “Why don’t we use the American Constitution? It was written by really smart guys, it has worked for over 200 years, and they’re not using it anymore…”)

He’s right. Much of the West, in fact, has descended into the same extractive system as Ukraine.

There’s a tiny elite showering itself with free money and political favors at the expense of everyone else.

Dow 17,000 means that a handful of people at the top are making boatloads of money thanks to quantitative easing, some upper-middle class are doing fairly well, and the average guy pays higher prices for food, fuel, education, medical care, etc.

It’s not just the US. France, for example, is simply not a place where you can work hard and expect to improve your life anymore. In Greece and Spain, half of the nations’ young men are broke and unemployed.

And along they way, they have all set aside civil liberties and turned into vast police states.

Ukraine may be in the midst of turmoil right now, but they at least hit the big giant reset button and are looking to build something new.

The West, meanwhile, continues down its path of more debt, more money printing, more regulations, and less freedom. How long can this really go on without consequence?
http://www.zerohedge.com/news/2014-07-04/ukrainian-journalist-lets-borrow-us-constitution-theyre-not-using-it-anymore

I'll probably get in trouble for making a new Ukraine thread, but I saw this on ZH and couldn't help posting it.

It's the same thing I've been saying for so long.

They really are changing things in Ukraine, this time. Ukraine will wind up being an example and change agent for Russia.

And they're smart enough to see the value in our Constitution, and smart enough to see where we've gone wrong drifting away from it -- "let's use the American Constitution, they aren't using it anymore." It's funny, because it's true.

Everything going on in Ukraine, the Maidan and revolution and the reforms they're talking about, their fight to join the West and their idealism -- it reminds us of OUR own values, what we're supposed to be about, and how we become more like a Putin's Russia even as this last soviet comes to join us.

Happy 4th, by the way!

[evilgenius]

The advantage of a parliamentary system is that decision making falls into the hands of the few. It avoids the decision by committee problem. You know, that an elephant is a camel made by committee, and vice versa. This works very well when there actually are very talented people who do know better making the decisions, and they have the best interests of the people at heart.

The disadvantage of a parliamentary system is that it basically elects a PM as king. Some countries with parliaments avoid this by having both a president and a parliament, like Russia, for instance. This works very well when no one person is capable of running everything, and the interest groups are capable of negotiating with each other, not so regimentally selfish as to skewer the common good in the name of gaining victory only for themselves.

Both systems are only as good as the people for whom and by whom the government draws its legitimacy. The biggest problem facing these conflicts is the lack of a secular identity by the citizens of these countries. In Ukraine an ethnic Ukrainian is somehow different than an ethnic Russian. In Israel a Jewish citizen is somehow different than an Arab citizen. In the UK a white Anglo-Saxon citizen is somehow different than an Asian descended citizen. In every case instead of looking to the individual as the source of all rights there is an appeal to a group for them. That would be okay if that group were the society as a whole, but it's not. This is the same problem that happens when a particular area has been affected by the arrival of many new people over the course of time, especially if the rate of their arrival has been too fast for changes in infrastructure to keep up. Before long the old guard begin to bawl and squall that the newcomers are akin to cancer or something.

[radon1]

Why don't they adopt English as their sole national language. All problems solved.

[Sixstrings]

The advantage of a parliamentary system is that decision making falls into the hands of the few. It avoids the decision by committee problem. You know, that an elephant is a camel made by committee, and vice versa.

...

The disadvantage of a parliamentary system is that it basically elects a PM as king. Some countries with parliaments avoid this by having both a president and a parliament, like Russia, for instance.

Here's how our American system really works:

Our laws are written by lobbyists. That's not always a bad thing -- these interest groups are the ones that know the most about a topic. Congressional staffers write the actual bills. Staff goes into the private sector / lobbying, after Congress, as do congressmen.

Then, you've got a committee in Congress -- both houses -- to handle every niche issue. And this is why term limits actually are not good, because you want some folks in Congress for a long time that become experts on various issues.

Where Ukraine would do well to copy us are in principles, like how our presidents must divest themselves of investments and businesses (Poroshenko has done that).

Our system has enough corruption as it is, but Russia and Ukraine is just off the charts. They're more like we were a long time ago, during our patronage eras and our teapot dome scandals. Russia and Ukraine are akin to a 19th century America, they have growing to do. Russia has the "president for life" problem though, they had modeled after us at first with term limits but Putin likes being president so he changed that.

It's not good. It leads to dictatorship. These are genuine lessons we've learned in the US, and others can take note of that.

Ukraine would do well to model our checks and balances. Independent branches with equal powers: executive, legislative, judicial. And anglo style of rule of law. All moving parts need each other -- the free press exposes corruption, and the independent judiciary prosecutes it.

Ukraine would do well to have a constitution that is difficult to change -- require a supermajority in the legislature for amendments, then ratification in regional legislatures. That's served us very well for 200 years. As it is, in Russia and Ukraine they can just change the constitution willy nilly in the legislature, that isn't good.

Ukraine would do well to have a Bill of Rights, and as they say "give us your Constitution you Americans aren't using it" -- they could do better than we do, and really stick to it. INVIOLATE freedom of speech, freedom of assembly, and separation of church and state and a neutral government that favors no ethnicity or religion.

In Ukraine an ethnic Ukrainian is somehow different than an ethnic Russian.

They're actually not too different. From all I've read, it's been a long time since the USSR and Russian-speaking Ukrainians identify as Ukrainian. Especially the younger ones -- they look to Europe, not Russia. That old generation is dying off and will be gone.

Your larger point about sectarianism is correct. The US has done so well, at being a melting pot, thanks to our Constitution and our principles. We were a melting pot from the beginning as colonies -- dissidents coming here from all kinds of factions. Puritans, quakers, Cathloics, all persecuted minorities.

Irish were starved out and persecuted, and came here. It's the whole Statue of Liberty thing, give me your tired huddled masses. Persecuted people trying to get away from oppression and have some freedom to live their lives and be left alone by their gov and neighbors, all found that here.

That's the American principle -- a neutral government, favoring no religion nor ethnicity, and that you get to be different and live your life with the caveat that you respect your neighbor's right to be different and do their thing.

And what unites you, in this melting pot, is that Constitution and your shared constitutional rights that everyone believes in whether you're black or white, environmentalist or gun nut, christian or muslim, whatever.

Ukraine can have that too, with no ethnicity nor religion oppressed, united by common constitutional ideals and civil rights -- whether they are Ukrainian or Russian speaking, christian or tatar muslim, right sector wing nut or Russian nationalist. NOBODY has to be oppressed. It doesn't have to be the Putin Way.

You really can let people be free, and trust democracy, as long as you keep the system honest with a good independent judiciary watching over it, and a legislature with equal powers, and then the executive with equal powers and they all check and balance the other.

P.S. Ukraine has actually always done well getting along up until now, muslim Tatars liked it, east and west never fought before. I predict they'll do fine, when things settle down and they get settled in with Europe.

If they cut that corruption by even half then that's massive progress for them.

[Sixstrings]

Why don't they adopt English as their sole national language. All problems solved.

EDIT: rephrase, I don't want to be a russophobe jerk

I just support democracy in Ukraine, them making changes and having human rights and these trade deals will be good for them and lift their living standards.

And I'm an OWS type, so I get their gripes about the massive corruption they've had for so long. THAT is what the revolution was about, they're tired of the corruption and the oligarchs.

I support Ukraine staying intact and not becoming a Syria -- better they have a strong president that can do that, than to become a Syria.

If you are Russian then you know about the corruption in Ukraine, and you know that if they got that cut by even just half, that's a massive improvement for them. That corruption is their #1 problem. The new government seems serious about finally tackling this problem, so, that's a good thing.

[Keith_McClary]

Your larger point about sectarianism is correct. The US has done so well, at being a melting pot, thanks to our Constitution and our principles. We were a melting pot from the beginning as colonies -- dissidents coming here from all kinds of factions. Puritans, quakers, Cathloics, all persecuted minorities.

Irish were starved out and persecuted, and came here. It's the whole Statue of Liberty thing, give me your tired huddled masses. Persecuted people trying to get away from oppression and have some freedom to live their lives and be left alone by their gov and neighbors, all found that here.

That's the American principle -- a neutral government, favoring no religion nor ethnicity, and that you get to be different and live your life with the caveat that you respect your neighbor's right to be different and do their thing.

And what unites you, in this melting pot, is that Constitution and your shared constitutional rights that everyone believes in whether you're black or white, environmentalist or gun nut, christian or muslim, whatever.

A muddled timeline - blacks and natives were oppressed when the (white) Irish came.

[noobtube]

Your larger point about sectarianism is correct. The US has done so well, at being a melting pot, thanks to our Constitution and our principles. We were a melting pot from the beginning as colonies -- dissidents coming here from all kinds of factions. Puritans, quakers, Cathloics, all persecuted minorities.

Irish were starved out and persecuted, and came here. It's the whole Statue of Liberty thing, give me your tired huddled masses. Persecuted people trying to get away from oppression and have some freedom to live their lives and be left alone by their gov and neighbors, all found that here.

That's the American principle -- a neutral government, favoring no religion nor ethnicity, and that you get to be different and live your life with the caveat that you respect your neighbor's right to be different and do their thing.

And what unites you, in this melting pot, is that Constitution and your shared constitutional rights that everyone believes in whether you're black or white, environmentalist or gun nut, christian or muslim, whatever.

A muddled timeline - blacks and natives were oppressed when the (white) Irish came.

Never the let the truth get in the way of a good story.

And, Americans love their stories.

[M_B_S]

http://www.theecologist.org/News/news_a ... s_gas.html

Ukraine - it's the gas, gas, gas
Mike Whitney

10th July 2014


in Ukraine, as in Afghanistan, Libya, Iraq, and Syria, US policy is all about dominating the world's fossil fuel supplies, writes Mike Whitney - in this case, the gas pipelines from Russia to Europe. But the 'great aggressor', Vladimir Putin, is refusing to play his part. So what next?
******************
WAR!


M_B_S

[Keith_McClary]

http://www.theecologist.org/News/news_analysis/2472120/ukraine_its_the_gas_gas_gas.html

Ukraine - it's the gas, gas, gas
Mike Whitney

10th July 2014


in Ukraine, as in Afghanistan, Libya, Iraq, and Syria, US policy is all about dominating the world's fossil fuel supplies, writes Mike Whitney - in this case, the gas pipelines from Russia to Europe. But the 'great aggressor', Vladimir Putin, is refusing to play his part. So what next?
******************
WAR!


M_B_S

Have you changed your opinion on US policy in Libya?