Ruminations on Russia

For the PR-niks who subscribe to Ruminations to determine whether your antics are being reported on - hi.

Anyway, tucked in to the bottom of page 3 of Monday's physical version of the FT is a tiny headline - Waxman retreats on Diligence probe (no link love).

Do you think that someone pointed out that his support of IPOC probably flew in the face of a ton of established legal case history?

For those of you who lack my fascination with the Reiman vs Alfa battle (world population minus 1). Henry Waxman is "the Democratic chair of the US House of Representatives' top investigative committee."  Diligence is a UK-based/led "investigative agency" whose Chairman (given that Chairing a company is quite difficult and not possible in English) is Michael Howard, one of the swathe of useless Conservative Party leaders of recent history, and Home Minister under John Major who would have given Genghis Khan a run for his money as a right wing nut.  So reasonable potential for diplomatic consequences.

It would appear that Diligence was retained by/on behalf of etc, Alfa to prove what had been a matter of market knowledge for sometime.  It would appear that Diligence's methods were only slightly more ethical than those employed by the board of HP (pretexting - which is not what happens before you send a sms.)  Which caused someone to get someone on Waxman's staff to get all uppity and subpoena John "Genghis" Howard, or one of his flunkies anyway.  You would have had to have been me to even know, or cared, that this happened in the first place.  You would probably have to be me for a wry grin to cross your face after the subpoena was withdrawn.

I used to use a tennis analogy to follow the ups and downs of this saga.  Well try this one for size - this match is now Tim Henman (Reiman) vs Roger Federer (Alfa) in the quarter final of Wimbledon - only one winner.

Technorati Tags: Reiman vs Alfa, Russia

Fortune Magazine published an article entitled about Academgorodok, Novosibirsk entitled The new Silicon Valley. It is the most delicious-ed article with Russia as a tag, outdoing even English Russia, and its very wrong.

Once upon a time I would have gone to great lengths to explain why, but having read new Silicon Valley articles about, Cambridge, Mass, Cambridge UK, Bangalore, New York (Silicon Alley), China, Moscow etc there is little reason to specifically rubbish Academgorodok.  The author conspicuously fails to explain how Academgorodok will suddenly develop the attributes which makes Silicon Valley home to a unique successful risk-taking culture and Academgorodok to unfeasibly large mosquitos.

Technorati Tags: Russia

Given that VVP and his Fifth Directorate Thugs gets the blame for just about anyone who shuffles unnaturally of this mortal coil.  It is clear that the unnatural death of Bob Woolmer, Pakistan's cricket coach, due to applied asphyxiation (strangling) is as a result of rumours that Bob had been outspoken about VVP's version of controlled democracy and witheringly sarcastic about his "rule of law."  Clearly an enemy of the state. 

I am waiting for Edward Lucas' explanation of the facts to appear in any number of UK-based papers shortly.

Technorati Tags: Russia

Delighted to report that the weather and local populations attempts to succumb to an early and watery death have returned to more normal pattern.

Rescuers have saved all the 15 fishermen who went drifting on three ice floes toward the Gulf of Finland in northwestern Russia Saturday morning, a rescue official said.

Earlier reports put the number of fishermen at 23. The exact number could not be established because the ice floe, which carried the fishermen to the open sea, had broken into several pieces.

"The operation is over, 15 people have been rescued from the ice floes drifting in the Gulf of Finland," rescuers said, adding that the fishermen's health was out of danger.

The source said the fishermen had been rescued by a helicopter because motorboats were not very effective in the rough seas.

Despite warnings from rescue services, catching fish from ice-holes remains a favorite pastime for Russian fishermen in winter. The latest incident occurred on the Volga in mid-January when rescuers saved more than 60 fishermen stranded on drifting ice.

Technorati Tags: Russia

From the Daily Telegraph.

The best quotation:

"A man who thinks he has six children but cannot be sure, Sutyaging kept up a commentary on the adventures he anticipated if his skyscraper had been completed."

Winter and spring that is.  After a week of stunning winter, clear blue skies and good cold weather, I am reliably informed that winter is about to start ending by moving to that phase in which the sun does not shine, it snows/rains/hails and the nation's collective mood sinks a few degrees.  Each journey beyond the front door is a slog through 15cm's of snow-like mud, or is that mud-like snow, gently defrosting dog-turds and a winter of re-emerging cigarette butts.

All of which is made worse by the forthcoming national domestic violence day, otherwise known as International Women's day.

Fortunately, as I rarely see the outside of my office most of this will pass me by and I have no intention of giving SWMBO cheap, tacky cellophane stuffed with flowers.  The one benefit is that my secretary might actually pretend to do some work before next Wednesday so that I have a reason to give her a present.

And real spring, the green-ish one, is another 6 weeks away.

Good morning.

Technorati Tags: Russia, Weather

If, like me you are struggling with a balance sheet that won't balance because of a non-cash transaction which wasn't really non-cash, and I promise you I am not making this up, then here is some light entertainment.

As A Dodo: Bush and Blair 2001-2007:

Comedy fans are mourning the death of one of the world's funniest double acts, Bush and Blair, following today's shock announcement by British Prime Minister Tony Blair that he has decided to withdraw from his comic partnership with the USA's President George Bush and will no longer be joining him on the set of the latest in their series of hilarious "Road To" movies, "The Road To A New Vietnam".

It was in 2001 that Tony Blair decided to replace his former sidekick Bill "Slick Willie" Clinton after Clinton's comic persona as a loveable lothario - and catchphrase "I did not have sexual relations with that woman" - began to prove box-office death in America's post-millennial moral climate. Initially Blair had hoped to hook up with Clinton's old straight man, Al Gore, but was to opt instead for the guy behind the tongue-tied goof routine that stole American hearts and votes during the 2000 Presidential Election.

Almost immediately Bush and Blair began preparations for their hilariously titled - and now notorious - "Bringing Democracy" World Tour, Blair spending each day working on the wonderfully ludicrous "I'm a Pretty Straight Kinda Guy" routine that had won him the laughter of audiences across the United Kingdom, while Dubya perfected everything from his "Kenny Boy Lay? - Never Met Him In My Life" skit to the death-defying piece of physical comedy that was "Chewing A Pretzel".

With Bush and Blair's comic characters in place, Dubya playing a knuckle-dragging jock and Blair the smooth-talking poodle that insisted on following him everywhere he went, Bush's long-time manager Dick Cheney spotted the box-office potential in the sequence of scripts that would become the pair's "Road To" movies. Soon they were laughing on "The Road to Democracy", sweeping along the dusty "Road to Afghanistan Liberation" and crying on "The Road to Iraqi Freedom" (known in Britain under the title "The Road to Electoral Suicide").

It was during the filming of the last of these three movies that rumours of a split first began to surface. Crew members reported the sounds of heated arguments emerging from the pair's trailer and more and more often the once inseparable duo were seen to arrive and leave the set apart. The cause, some claim, was the latest script optioned for the pair by Mr Cheney, "The Road To Iran" (also known as "The Road to Armageddon"). Whatever the basis for the dispute, it was increasingly clear that relations between the two men had begun to sour. Indeed it came as little surprise when, on Tuesday night, Mr Blair announced that he would be pulling out of the duo's latest lraq tour, "The Big Troop Surge", to concentrate on other projects.

The comedy duo that was Bush and Blair will be remembered fondly by its fans, both of whom can be found in a secure wing of The Charge of the Light Brigade Hospital for the Militarily Insane.

Bush and Blair are now working on their solo projects: Tony Blair's "Legacy Tour" (fans should be aware that the tour has now been considerably shortened) and George Bush's "Who Gives A Crap? I Ain't Standing For Election Again" stand-up appearances in Washington's premier comedy venue, the White House.

Andy at Siberian Light commented and cross-posted on yesterday's democracy-themed post.  His question "how does Russia get from here (quasi-democracy) to there (democracy)"  (the italics are added by me for elucidation.)  He obliquely raises a another point; too much commentary on what has been and not enough (intelligent) commentary on where the country will be not just tomorrow but the day after that as well.  Or at least beyond the Presidential election (sic).

From my narrow point of view the answer is relatively simple.  It is not for us to impose our views on Russia based on what we would like our home countries to be like.  Expats are amongst the most critical commentators on their home countries.  I fundamentally believe in the fuck-up theory of history as opposed to the conspiracy theory.  There are very few examples in political history of honourable people doing the right thing based purely on altruism.  My own country, Britain (which begs the question what I think of N. Ireland), has developed its version of democracy as a result of changes forced on the Monarchy and House of Lords and Commons over time.  It was not that long ago that Britain has its own rotten boroughs - the implication to the Duma being rotten is not implied, it's explicit.  The changes were forced at periods of weakness of the ruling power of the time - from Magna Carta through to female emancipation.

So what does that mean for Russia?  Whilst commodity prices remain high and local input prices relatively low I see little change to the Russian polity.  I don't put much faith in a growing middle-class forcing changes until the economy is forcing changes without their help.  No colourful revolutions here.  We may see a little more balance-of-power post-Putin, whenever that may be.  If I am being optimistic, a resumption of balance of power may mean an increase use of the courts as means of conflict resolution.  I generally find being optimistic, uninformed wishful thinking.

Where I may be proved (hopefully) wrong is the absolute fear that Power evidences of the people. This may result in changes running ahead of popular desire for change.  A continuation of the Fifth Directorate Thugs belief that they can manage the people.  See comments on optimism above.

Maybe the best prediction I can make is that the country in which we live and comment on will change in ways that we will fail to predict. 

Technorati Tags: democracy, Russia

Shikhovo, which is only a hop and a skip and way to close to need a jump, from the dacha is apparently one of the centres of the avian flu outbreak.  All of which is probably pretty underwhelming except for the bits of the story which don't add up.

Apparently a resident of Shikhovo who also as it happens to own/run/work at the somewhat malodorous chicken farm the aforementioned hop and a skip away was in Moscow buying chickens.  It was my impression that the role of a chicken farm was to; rear, grow and ultimately slaughter chickens.  Maybe the Shikhovo guy was just fattening up chickens he bought in the Moscow bird market.  What the hell do I know anyway.

The good news is that Russian-officaldom says no need to worry.  Because they are always trustworthy and open with the public.

In case you are interested the weather was great out there this weekend and the skiing tip-top.

Technorati Tags: chicken, H1N5, Russia

In an attempt to lift the La Russophobe debate out of the mire.

For those of you not fully-conversant in the politics of the english-language Russian blogosphere.  Andy at Siberian Light interviewed La Russophobe.  Who is, as the title of her blog suggests, Russophobic, and also anonymous.  The eXile has taken on the role of tracking her down, but as has already decided on the size of her ass - charming boys that they are.

She has many faults; not least of which is a pre-determined view of what has been posted. The one worth debating though is that of a George W. Bush-like fascination with democracy.  Which, in GWB's case seems Florida-strange, but has little to do with this post.

Her interview on SiberianLight mentions democracy a number of times (the list is not exhaustive, and the last point includes democracy in the question only);

• "the end of democracy"
• "democracy in the blogosphere"
• "I’d been told that Russia was a nation of democrats"
• "La Russophobe is trying to save the minority from the majority in Russia"
• "in a sham democracy and thereby poisons the well of Russian attitudes towards democracy"
• "I think anyone who sees a proud KGB spy as a transitional figure on a journey to democracy is quite mad."
• "11. Do you think Russia will ever embrace the style of representative democracy now favoured in (most of) the rest of Europe? Answer - Not unless it is led to the well by a revolutionary equal to Lenin and as steeped in the West as Lenin was and ten times more courageous. I’d be happy if Russia would just adopt the physician’s maxim for its government: “Do no harm.”"

But it is the fourth quotation which really describes LaR's view of democracy as being what she believes is best for the people of Russia.  Which includes having MBK and VVP switching places.  It may well be that MBK has had a Damascene conversion on his long and winding road to Chita.  But right up to the moment of his incarceration his view of democracy, as evidenced by his actions as opposed to his words, was that it was OK as long as it could be bought.  And he was buying it.

Democracy is undoubtedly a good thing, or as Churchill would have it, not as bad as everything else.  As the US-led coalition in Iraq is finding out, democracy is not just about voting, it is about the law, and balance of power which forces respect for a minority position.  Whilst it may be tempting to say that a leader with 70-80% approval rating better satisfies concepts of democracy than his U.S, French and British counterparts, it is important to separate populism from the building of democracy, given that there are and were a number of populist but not entirely democratic leaders around the world - Hitler, in the former category and Chavez in the latter.  Russia, in common with Iraq, has a representative democracy which is totally undermined by a lack of the basic protections of democracy, minorities and indeed life itself.

However, to place the blame for failing to democracy on VVP and his Fifth Directorate Thugs is to take a snapshot of history without understanding the historical relevance.  You will be pleased to know that I am not about to undertake a Figes-like review of Russian history.  The last 14 years condensed in to three periods will do;

• Collapse - financial, moral and of morale
• The pre-crisis party years
• The post-crisis revival - financial, moral and of morale

To tell a people that has suffered from the liberal economic and democratic experiment that it needs saving from itself invites the same reactions as post-collapse feminists encountered when spreading the good word.  And in my opinion rightly so - on both counts.  I have quoted Cobbett's "I defy you to agitate a man on a full stomach" to feel a little like a stuck record.  Repetition however, does not demean the point.  Democracy post-collapse has meant; valueless savings, rampant theft of state property or if you prefer, loans-for-shares, and complete collapse of anything that felt like being in control of your life.  Whereas this lack-of-democracy thing has meant; stability, food and consumerism.  Not unsurprisingly the narod have decided for now that they can live with their democratic freedoms being impinged.  But as they never knew what democratic freedoms were (see bullet three for bizarre belief in what you are told) it is more than likely that they aren't missing them now.  And won't, at least until the commodity cycle changes and they have no way of getting rid of this bunch of thieves.

Democracy is not the answer to Russia's problems, actually in today's environment it may add to them.  Would Russia would be better if it were democratic is like asking if you prefer peace to war - the answer is axiomatic.  However, democracy is not about voting and the right to vote.  That is purely the symbol.  Real democracy can only happen when rights and responsibilities are balanced.  Russia is not there yet.  It is poorer for not using this period of wealth to build the institutions, but a simplistic belief that Russia can copy US/UK participatory democracies and be better for it is too simplistic and short-term.  As always, black and white arguments seem reasonable and make a point.  I am sure that the narod would prefer that Schliefer et al and LaR did not make a point with their lives.

You can disagree with my point of view - but please make a reasoned argument or I will just disallow the comment.

Technorati Tags: democracy, Russia

I have a bit of a thing about space and the theories of physics that describe our world's first few seconds.  Which leads me to websites which have pictures like the one below.  I almost feel calm after abusing moronic drivers on my way back from work.

This all gets a little geeky. Like the changes in temperature post from earlier today the graph showing WTI oil contracts moving from sustained backwardation in to sustained(?) contango all go to highlight that the world in which we are going to live is different from the world in which I got to be old and fat.

The actual post from Seeking Alpha is all about trading oil/product futures.  Which is not overly helpful unless you have physical crude to deliver. 

The infamous Eric Kraus of the Nikitsky Fund and the longest-term oil bull I know (unfortunately RSS-unfriendly) puts it well, and I paraphrase; in a tight market oil prices will tend to be volatile and warm, or otherwise weather, will have a noted impact.  He joins Boone Pickens Jnr as a $100/bbl man.

Oil Contango: Roll Yield Rewards:

Forward shifts in crude oil. Source: thestreet.com.

The above figure shows how oil future forward curves, for any given month, have evolved for oil futures during 2004-05, from the typical oil backwardation to contango curves. As Howard Simons puts it:

Each ribbon in the chart represents a forward curve beginning with the front month and ending with the December 2005 contract. The near months are on the left of the ribbon; the far months are on the right of the ribbon. As time goes forward and as price rises, the switch from a backwardated structure -- front months over the back -- switches to a deeper and deeper carry and a bona fide contango.

Technorati Tags: Oil, peak+oil

Disclosure, to keep LaR happy.  I am personally interested in the weather, it impacts my daily schedule and on days like yesterday results in snow getting over the top of my shoes.  I am also interested because global warming is amongst the greatest threat to our future.  Furthermore I am interested because natural resource prices tend to spike when its very cold and very hot.  That being said you actually have to read the article and understand what it says before you have the right to comment.

I couple of the diagrams failed to import - you'll just have to go to TOD to see them.  Despite quasi-official attempts to say we are just in a period of natural warming its worth looking at the reconstructed temperature graph showing just how much warmer the world is today than the last period of global warming - the medieval period.  But then they did not have a/c, airplanes or cars then - apparently.

Kudos to The Oil Drum (link below).

• The warm anomaly over Asia and Europe has expanded and intensified between December 06 and January 07 (comparing Figures 2 and 3).  Note that the upper scale band for January is 4 to 11.6 degrees compared with 4 to 8 degrees in December.  The North Pole is 4 to 11.6 degrees warmer compared with the datum period (Figure 1).
• The Antarctic in December was cooler compared with the datum period but in January it too is now showing positive temperature anomalies.
• There are a few cool spots in January, notably North Africa, Arabian peninsula, SW USA and Mexico, Australia and East Siberia.  But these are dwarfed by the massive, large positive anomaly over Asia, Europe and the Arctic

• In January 06, Russia and Europe experienced anomalous cold weather that threatened gas supplies and sent gas prices soaring.  This is in stark contrast to January 07 (comparing Figures 2 and 4). Temperatures over a vast area appear to be somewhere between 8 to 20 degrees warmer this year compared to last year.
• North America was somewhat cooler this January compared to last year.

• Orbital / Milankovitch cycles
• Solar / sunspot cycles
• Loss of Arctic sea ice / reduced albedo
• Melting Arctic permafrost

Technorati Tags: global warming, TOD, Weather

I am apoplectic over this complete heap of shit which pretends to be a piece of journalism from the Economist Boyars of Belgravia.  So ridiculously annoyed that you will have to dig the reasonable out of the useless.

A hint as to the title of this post;

"But the mood in moneyed London is still largely positive towards Russia. In thinking London it is increasingly negative. The battle continues."

Where is thinking London to be found?  Clearly not in the Economist which predicted that the collapse of oil would lead to Russia's destruction, nor that Intelligentsia love-child Edward "a monkey would have out-performed my predictive prowess" Lucas predictive prowess regarding almost anything in Russia (and why am I writing this in the past tense) has left him a laughing stock, but still much quoted.  Unless of course thinking is a synonym for morally superior failure to spot the obvious. 

Oh to be a member of the "Thinking Classes."  Would that make me like the the Soviet Union's Intelligentsia; outwardly indignant - soul sold down the river (or at least as far as Zvenigorod).  Happy to read Turgenev and (small frisson of rebellion) Mir - petrified of exerting their moral authority. 

Maybe, if I re-found my moral sight, I could be a member of London's intelligentsia where I would be worried about; which school my child went to, what car I drove and.. oh that's it.  If you want to dispute my bored-beyond-belief recollection of banker/lawyer-land dinner parties over the last 5 years in London stand by for a real rant. 

I could however, join the moneyed classes who spotted that Russia has a spot of oil, a bit of gas and a population willing to doll themselves up in frippery and finery.  These are the same "morally myopic" (hyphened surely - ed?) moneyed classes who spent at least one night not worrying about west London schools and figured out that Russia is a desperately corrupt place (any bids for a Deputy Ministry at the Oil and Gas Minsitry under $5mn for a 1 year appointment not accepted) but that if democracy is the will of the people as opposed to what you (see Thinking Classes above) will the people to think Russians are at least as happy with their lot as you are with Blair/Brown/Cameron.  There is corruption and there is Corruption - but if Loans-for-Peerages and sexed-up intelligence aren't CORRUPTION then we are in desperate need of a moral compass.  And that's before we all agree to start in to morally-religous otherwise degenerate Bush-dom.

No pretension that making money helps develop a middle-class.  The morally myopic make money, the middle-class makes Genghis Khan look only marginally more right wing than Scotland's own English Home Secretary (work your way through that Lothian question). 

Here's a suggestion; think, don't write, for a calm collected moment about the Scooter Libby trial.  Consider your profession to be on trial and take steps to write with balance and intelligence - or write about your own extinction as the much-derided amateur press do what you should be doing only better - and more cheaply.

Yours from nowhere near Tunbridge Wells.

Technorati Tags: Economist, Russia

If you work for Galmond (sic) in his battle to drag his erstwhile financial stable mate through the world's courts and press and you monitor my blog via email leaving your out-of-office reply switched on rates as not very clever.

If you want to know why I write about this subject a. find my name out - not very difficult, b. google and work out what I was doing in 1999-2000 also not difficult c. investigate the transactions that did and almost happened during that time period related to your clients (named and otherwise) d. assume we had meetings and did due diligence. e. ask yourself why you are perpetuating a lie.

Technorati Tags: Reiman vs Alfa

It's been a while but the Royal Gazette yesterday dropped this little nugget in to my feed reader.  The summary is that the Bermudan financial services is taking steps to close down Mr. Galmond's (sic) IPOC fund and, it would appear, a number of associated vehicles. 

Naiive statement for February; how can a telecom minister carry on in his job when an uncontroversial paper like the Royal Gazette makes statements like:

In a written statement yesterday confirming the move, Ms Cox said that it was sometimes necessary to take legal action “to address seeming breaches of our laws and apparent regulatory infractions”.

Some matters relating to the case have been passed on to the Bermuda Police Service for investigation.

The legal action is the latest twist in the IPOC saga, which has sparked litigation in several countries amid claims that the Fund was a money-laundering vehicle.

It was alleged that it was effectively a holding company for around $1 billion in telecommunications assets transferred through a network of shell companies. The WSJ claimed the scandal went all the way up to the Russian IT and Communications Minister Leonid Reiman.

A Swiss tribunal in May last year, found that Mr. Reiman was the “sole beneficial owner” of the Fund. The tribunal stated that the close ally of President Vladimir Putin had amassed great personal wealth in the IPOC Fund by taking advantage of his role in public office.
Puisne Judge Ian Kawaley later upheld the ruling in a related case in the Bermuda Supreme Court.
It was alleged in Zurich that money skimmed during the privatisation of the Russian telecommunications industry during the early 1990s was laundered through the Bermuda-based fund.

IPOC has consistently claimed that Danish lawyer Jeffrey Galmond is the Fund’s owner. Mr. Galmond did not respond to our call yesterday.

KPMG Advisory Services was commissioned by the Ministry of Finance in 2004 to carry out an investigation of IPOC. The findings were passed on to Government in June last year.

Technorati Tags: Corruption, Reiman vs Alfa, Russia

I read them so you don't have to.

It seems that Russian fishermen are trying hard to keep the demographic profile plunging this year.  The latest attempt to prove Darwin would have been just as likely to discover his theories of natural selection in Russia as the Galapgos sees "hundreds" of fishermen rescued, finally, from a lump of ice in the sea of Okhotsk.  Not before many of them had consumed 50 grams or so of the national brew.

Apparently many of those rescued were in a state of "heavy alcoholic intoxication".

Russia anglers saved in ice drama

Technorati Tags: Darwin, Russia

Which is as much of a lie as VVP denying using energy as a political tool.  And they should be as well (dyevs and VVP.)  At the risk of sounding slightly dated; if you've got it, flaunt it.  And the last time I looked the dyevs aren't shy about flaunting it.  I also had not noticed the USA hiding its economic and political might under a bushel.  Russia has energy, energy and maybe an education system - time to pull on the low-cut top, high-cut skirt and killer-stilettos.  Shout it from the roof tops.  We have energy, listen to us idle old-Europe if you want to stay warm, or cool.

I believe a certain ex-Pole by the name of Brezinski would call it Real Politik.

Putin shrugs off criticism that Russia deploys its vast energy resources as political weapon.:

Russian President Vladimir Putin rejected Western criticism that Russia has been using its vast energy resources as a political weapon. " We are always told that Russia is using its...economic resources to achieve its foreign policy aims. This is not the case", said Putin at a news conference Thursday. "Russia has been meeting all of its obligations in full, and will continue to do so in the future", however "…we're not obliged to subsidize the economies of other countries. Nobody does that, so why are they demanding it of us?", said the Russian President who noted that everything Russia does as part of own energy strategy, as well as its accords with transit countries are aimed to better meet the needs of major consumers of the Russian energy.

Technorati Tags: dyev, Energy, Putin, Russia

Given the option of reviewing comments on Mem & Arts or scribbling some thoughts on staff - the blog wins.

By way of a long explanation:

Last night we were fortunate enough to get a freebie meal from one of Moscow's soon-to-be high-end restaurants courtesy of Eric, previously of Carre Blanc.  If it has a name it passed me by. I'll link to it when it opens. The creme brulee would win the Moscow creme brulee competition - not that the competition is stiff.

Anyhow to the point (finally).  The restaurant should have opened a year ago but complicated building works, including keeping the river Neglinka out of the basement, has kept it shuttered. Now they are mostly ready to launch but for the fact that they need to hire 20 kitchen and wait staff.  Currently they are adding them at 1-a-day.  Should be ready for a cash opening in 3 weeks time.  Fortunately the owner won't miss the cash he is currently losing.

It is fairly unusual to use the restaurant business as a proxy for business in general.  In this case it works.  Businesses are looking for qualified and experienced marketing, finance etc etc etc staff.  At a price which reflects their value to the business and on the off chance that they might stay in the business for more than 18 months. I would go as far as to say that they are not available.

As anyone with the barest understanding of supply and demand will know that high demand and low supply will theoretically drive prices up to bring more people in to the industry and suppress demand.  Anecdotal evidence (from my credit card statement) would suggest that restaurants are not passing on cost increases to consumers, or I am drinking less.  But costs are definitely on the rise.  Staff costs are rising everywhere, in every business.

There is a gap between published inflation and real inflation.

On a tangential note; Cantinetta Antinori is Eric's favourite restaurant in Moscow.  That's depressing - nice enough restaurant, good enough food.  But that's about as far as it goes.  Plenty of new restaurants - still no good food.

Technorati Tags: inflation, Russia

This reported by UFG, sorry that should be Deutsche UFG, via BNE (also my browser but I can't share that).  This on the same day that it was reported via Kommersant that Itera intends to return its gas assets to GAZP, continuing noise on Kovytka.  Not to mention the less-than-white Gutseriev and Russneft.

Maybe more importantly the definition of a strategic gas field was set at 50bcm (~300mn BOE).  Which is close to saying that my sock draw contains a strategic number of the global sock population.

Somewhere, easy enough to fathom - the Kremlin, a bunch of people are fighting battles; the end game of which is not entirely clear.  Please, please, please VVP can you put a lid on this.

6. Government sees increasing role of independent gas producers
Deutsche UFG, Russia
Wednesday, January 31, 2007

According to Kommersant, the Minister of Industry and Energy, Victor Khristenko, has said that by 2015-2020, independent gas producers will start to dominate the domestic gas market. We expect independents' share to grow from below 20% last year to 35% in 2015 and 45% in 2020. The changing structure of the domestic gas market is due to the fact that Gazprom's exports are increasing faster than its production, resulting in it losing its market share of domestic customers.

We note, however, that if Gazprom continues to acquire independent gas producers (previous examples include Northgas, Sibneftegaz, Sakhalin-2), its monopoly status will only strengthen. We expect further consolidation on the domestic gas market around three key independent gas producers/oil companies: Novatek, LUKoil and Rosneft. According to our estimates, they have a combined potential production capacity of 180 bcma, compared with Gazprom's 550 bcm last year.

Yesterday, Khristenko reiterated the key principles of the domestic gas market liberalisation, which will make this operating segment increasingly attractive.

Technorati Tags: Energy, Gas, GAZP, Russia

I first started doing business in Russia in 1994, I had more hair, less belly and a chin then, I can't exactly remember when the first news story appeared touting a rail link between Sheremeytevo and Moscow but it was definitely BC (before the Crisis.)  And it's back again.  I am not sure if the wolf really is coming this time or it is just a red herring designed to make us think that Sheremeytevo might at some point stop feeling like the Black Hole of Calcutta (with apologies to Calcutta.) Or any other not entirely appropriate analogy.

As I am willing to pay large sums of cash to airlines which fly out of Domodedovo in preference to sitting for hours on Leningradski Prospect, and then standing for hours* for one, or more of; entering the airport security, customs, checking-in, passport control, a toilet which is not closed for cleaning (at least 40 minutes in every hour) I don't actually care.  It was just a warm feeling of deja vu.

Rail Line Planned to Sheremetyevo:
Russian Railways will spend 2 billion rubles ($75 million) in 2007 to build a branch line to Sheremetyevo Airport.

*  Note that I did not expect to queue.  In the days when I flew in and out of Sheremeytevo regularly I used to bring my own line with me.

Technorati Tags: airports, Russia

I was reminded today that Business New Europe (BNE) is now up and running.  It's the brain child of Ben Aris who writes more commonsense than the average journalist (damning with faint praise).  It's a better round up of business related news than most of the news agencies.  Being a new kid on the block you can read the website, get your news via email or have it delivered to your favourite feed-reader via RSS.

Go support Ben.

Updated to replace the "t" in now with the more traditional "w."

Technorati Tags: Russia

Someone, somewhere linked to 42 "you know when you've been in Russia too long when."  Here are some additions:

When you believe that you can get "the flu" from an air conditioner

Q: Russians tend to believe that illnesses can be caused by air currents, whether the source is an air conditioner, a draft or even a breeze on a warm day. Foreigners tend to disagree. Who is right?

Dr. Natalia Udaltsova, Centro Medico Italiano:
"Drafts and cold air currents have the same effect on people as cold drinks -- everything depends on the strength of each person's immune system. Overcooling and drastic changes in temperature can result in a cold or fever for people with a weakened immune system.
"Also, an air conditioner in a confined office space creates the effect of fresh air without any disinfectant functions. In other words, it is just driving the existing bacteria and microbes around in circles."

Dr. Irina Perrin, European Medical Center:
"Foreigners are correct in their belief. Everything depends on the patient's immune system."

Dr. Svetlana Zorina, Ne Bolit Medical Center:
"Cold air currents, including those from air conditioners, can cause muscle fever or myositis, especially if you enter a conditioned room after intense physical exercise or after being outdoors in hot weather."

Technorati Tags: Russia

The First Post a strange English, as opposed to British, online newspaper, the purpose of which I have yet to fathom, has a piece on Putin's Kanutian desire to restore the Russian language:

The Year of the Russian Language

The problem is apparently that the near abroad prefer their own language and English to Russian and Russian (strange that), and native Russians (whoever they may be - but that's a different topic altogether) have a nasty habit of eating sala, drinking vodka, not having enough sex, too many abortions, dying early and generally being fewer at the end of the year than at the beginning.  Not so much a dying language, as a population suffering from a collective heart attack.

If I can give VVP one hint to help the adoption of Russian, and I am not going to get in to the Latinisation of Cyrillic here, it would be the simplification of verbs of motion.  I frequently physically fly back and forth to London but grammatically I go, don't come back or come back on a different route having confirmed that I was indeed about to board and return on a BA flight.  As you can imagine this causes some concerns with drivers who are trying to arrange when to meet returning flights and with domestic help concerned that you may be about to walk out of Moscow forever.  At least it has been some time since I caused concern that I had walked back from wherever I had been. 

So VVP please help us poor non-sala eating Russian speakers out by allowing us to simply go and come back; an upgrade at Sheremeytevo wouldn't be amiss whilst you are at it.

Thanks

Technorati Tags: death, Russia

MSM was concerned when the Turkmenbashi finally shuffled that there would be another tussle between Russia and the US for control of Turkmenistan's gas.  Whilst that balance-of-power struggle may/is still be going on behind the scenes, Turkmenistan's gas is still routinely transiting Russia on its way to Ukraine for one blindingly obvious reason; it has nowhere else to go - hence the title of the post.  Gas transportation relies on fixed infrastructure (pipelines).  Marginally less important, Turkmenbashi's successor is Kremlin-friendly, or not unfriendly.  It could have been nasty if the US had managed to install a friendly puppet; I am not quite sure how Russia would have squared its need for Turkmenistan's gas with its need to ensure that it keeps flowing north and nowhere else.

This is a reality born of fixed infrastructure and European energy demand.  As much as Turkmenistan may want to have alternate routes to sell its gas; east to China, south through Afghanistan and Pakistan (clearly one of the world's more stable regions) or south west across the Caspian and over Central Asia's San Andreas fault, the only pipelines that work today (and even then at 60% of design capacity) pass through Kazakhstan and enter southern Russia.  So as much as Cheney et al would like to ensure that Russia cannot control Turkmenistan's gas there is no other option today, and the only one even vaguely likely in the future will be a Kazakh pipe going to China.  Which really does not help the US efforts at world domination at all.

Turkmenistan's gas is officially sold to Ukraine (each molecule is tagged as it crosses the border in to Russia to make sure that it ends up in Ukraine); more importantly it forms a significant part of Russia's gas supply balance.  Broadly speaking there are three demands on Russia's gas in reverse order of profitability for GAZP; Russia, the near abroad (ex-FSU) and Europe.  Re-ordering the list in terms of GAZP's obligations would result in Europe and Russia sharing first place and the FSU coming in a very distant third.  Except, as we have come to learn, the export pipelines, before Schroeder's pipeline,  still have to pass through Ukraine and Belarus who have a nasty habit of taking what they need before allowing the balance to make it to Europe.  Thus, if history were to repeat itself, if Turkmenistan's gas does not come north there will not be enough gas for Ukraine, which will probably means there is not enough gas for Europe.  Meanwhile, Russia will still have access to enough gas to fire its electricity generators, steel and aluminum plants creating an ever more economically powerful Russia.

Hyper-expensive pipelines across opium-growing Afghanistan or linking with the gas version of the Baku-Ceyhan pipeline are never going to happen.  For which Europe should be very pleased.

Technorati Tags: Energy, FSU, Gas, GAZP, Russia, Turkmenistan

Alexei Golubovich, from the days of the battles of Volgotanker, provides a perfect demonstration of the Prisoner's Dilemma.  With a twist.  In this game MBK, Golubovich's previous boss, is the prisoner.  Mr. G wants to see his mum, the Prosecutor's office wants to see Mr. G. 

Solution; sell the prisoner down the river - no dilemma.

YUKOS Ex-Executive Back in Russia to Testify against Khodorkovsky

Technorati Tags: Russia

From Kurt Wulff via Seeking Alpha.  Wulff is an independent US-based oil and gas analyst with a real focus on economics.  His price btu comparisons are worth a thought.

Gazprom: World’s Greatest Energy Company?:

Kurt Wulff (McDep Associates) submits: Buy-recommended Gazprom (OGZPY.PK)’s sales of natural gas are as large as Saudi Arabia’s sales of crude oil in heating equivalent, and superior in environmental quality. Yet Gazprom’s selling price at about $2.50 a million btu is only about one-fourth of Saudi Arabia’s at some $60 a barrel, or $10 a million btu.

In view of that price chasm one can hardly fault Russian President Putin for attempting to secure market value for a precious resource. Yet, Russia, unlike Saudi Arabia, offers ordinary investors, as well as anyone who objects to a nearer-to-market price for clean energy, the opportunity to participate in the producer profit by owning shares of what may become the “World’s Greatest Energy Company.”

Meanwhile, results for the second quarter of 2006, reported according to international financial standards on December 21, confirm a modest one-third increase in natural gas price over the previous year. With continued progress there would be justification for upward revisions in estimated net present value, currently at $56 a share, that amount to a modest multiple of current cash flow from a low natural gas price.

• Read more articles  by  Kurt Wulff
• Read more on the symbols OGZPY.PK,  RDS.A
• Subscribe to email alerts about OGZPY.PK, RDS.A and Energy Stocks Read more on the themes Natural Gas,  Long Ideas,  Oil Price

Technorati Tags: GAZP, Russia

As promised posting is slow.  I am going to fire off a couple of quick posts a sort of personal break from the pain of editing a 140 page document.

As we await Hurricane Cyril over the weekend I thought that it would be instructive to post this comparative temperature map from The Oil Drum.


December 2006 was 8 degrees warmer than December 2005, and I have no recollection of December 2005 being particularly cold - that came mid-January.

What is worse, as we await a new moon, it is dark, dark, dark in Moscow, without the usual covering of snow which helps to lift the gloom.

As this unseasonal weather repeats itself all over western Europe it will be intresting to see what Gazprom's year-on-year sales to western Europe will be both during the winter when it is not cold and then during the summer when it very definitely will be air-conditioning warm again.

The comparative weather picture came from The Goddard Institute for Space Studies.

Lord Skidelsky, wrote a somewhat balanced view in the Moscow Times (hurry the link will die tonight) on the Russia / Belarus spat earlier this year.  Copydude has been all over this both politically and musically (follow the link).  Skidelsky, somewhat more reasonably, than the blogosphere takes MSM to task for rolling out the same old list of misdemeanours without bothering to dig in to the background of the story.

The FT under Neil Buckley's leadership in Moscow has become a useless source for Russia insight and The Economist, with the honourable exception of Gideon Lichfield has maintained Edward Lucas' policy of being on the wrong side of the story so often as to be a great counter-indicator of reality, as Konstantin has catalogued. 

Intelligent comment is very difficult to find.  I am told that Le Monde is a good source, but my French is not up to it.

Coming Out Negative in the Balance:

"Let me return to the question of why Russia gets such bad press. First, many of the actions of the Russian state can and should be criticized -- as much by Russians as by those in the West. The country has no understanding of the meaning of the rule of law. It uses legal devices to obtain political objectives. This makes it look shifty and vindictive. Secondly, journalists are often just lazy. It is much easier to compile lists of misdemeanors and assert trends than to dig into the circumstances of particular cases."

Technorati Tags: belarus, blog, Russia

I am struggling to see why the EBRD should be financing Shell / Sakhalin II Consortium at all.  I think that would fall in to the crowding out regular lender category. 

EBRD's mandate is to help finance Russia's emerging economy, which implicitly means being a prudent lender or investor to businesses where there are no established means to finance them.  A Shell-led consortium does not meet those conditions.  If it cannot find projects to fund within its mandate then I would suggest that it return capital to its investors - otherwise known as governments, and they to their tax payers.

EBRD financing not critical for Sakhalin II - Gazprom:
MOSCOW, January 17 (RIA Novosti) - A senior Gazprom [RTS: GAZP] official said Wednesday that financing from the European Bank for Reconstruction and Development was not critical for the current phase of the Sakhalin II hydrocarbon project off Russia's Pacific coast.

Technorati Tags: GAZP, EBRD, Russia, Sakhalin2, Shell