Voices from Russia

Saturday, 10 February 2018

The Next Crash: Or, Why a Stock Market Booming While Life Craters is a Social Ponzi Scheme, Not an Economy

________________________

Oh, no, friends… the Dow crashed… cue hysteria over everything from gold to retirement accounts to Bitcoin to Trump. Hold on a minute. What does it really mean? Here’s something to bear in mind. Investing in a collapsed society, where people have little left to be preyed upon for (and even those meagre morsels of returns an authoritarian could snatch away in a heartbeat) is a foolhardy bet. If it’s opaque, we’ll get to what that means.

Let’s start with what you probably know. The stock market isn’t the economy. The market boomed… but real incomes stagnated for decades. However, even that’s not really “the economy”. The economy is how well people’s lives are doing, and on that score, America’s in uniquely bad shape among rich nations… falling life expectancy, rising mortality, mass killings, stress, rage, misery, loneliness, and distrust. Therefore, ironically, it appears to me that Americans speak of The Market like the Soviets spoke of The Party. Just as Soviets said, “The Party’s in fine shape!”, so, today, Americans say, “Comrades! The stock market’s booming!” Both are myths that deflect from reality, protecting us from the harder work of seeing things as they are. Just as the Party wasn’t Soviet society… just a twisted caricature of it… so the stock market isn’t the American economy… it’s a bizarre upside-down mirror image.

While I’m sure you’ve had similar thoughts, here’s what you might not have gotten to yet. This shell game… a stock market booming while an economy and the lives in it crater… can’t go on forever. An economy based on such is a Ponzi Scheme of prosperity conducted on a massive social scale. One day, the bill must come due. Perhaps, you think… what could be better for capitalists than a nation of neo-peasants? However, the truth is a little more subtle. The stock market booming while life falls apart reflects a real economic transfer… the average person’s quality of life, stability, security, opportunity, and (of course) his income and savings dissolve into the future profits of predatory entities, whether they’re banks, corporations, hedge funds, etc. Where a truer capitalism… if such a thing exists… might focus on providing value, these self-evidently don’t… hence, life falling apart.

How long can all that go on? There must be something to prey on. However, the average American doesn’t have much left to give. His income is shrinking. He has less than 1,000 USD (58,366 Roubles. 6,290 Renminbi. 64,220 INR. 1,258 CAD. 1,280 AUD. 817 Euros. 723 UK Pounds) in savings. He has no real vacation or leisure time, working longer and harder hours than his peers anywhere else. He’ll never retire, be able to educate his kids, or afford decent healthcare. He’s even given his life… to the point where his longevity is now declining. Is there anything left for monopolistic predatory capitalism to take? Not much. This game can’t just go on forever… it can’t go on much longer at all. What happens when markets understand all that? They fall hard and fast. The market isn’t the economy… at least until there’s nothing left to syphon off, and, then, suddenly, kaboom. Markets must ultimately reflect the economic, social, and political reality of a failing nation, too… just as they had to before the Depression, reflecting inequality, stagnation, and predation.

What does that all mean, at the root? Markets must price in risks. However, the greatest risk of all for America is one that we haven’t yet priced in… one not considered, valued, and accounted for. That’s political risk. For example, markets discount perpetually chaotic Latin American or Eastern European economies; now, they’ll have to do the same for America. You see, not only is American life falling apart… American democracy is too. A (literal) Nazi is running unopposed for Congress in Illinois. That’s a tiny example of the trends that daily headlines reveal all too well… America is imploding from an imperfect democracy to an authoritarian kleptostate. The nearest parallel is probably Russia. Nevertheless, one doesn’t put one’s money into Russian investments without carefully considering political risk.

What does “political risk” of “autocracy” really mean? Why do markets care? Think of it as a country run by and for mafias. Mafias run protection and extortion rackets for small enterprises… the same is true for kleptocrats on a national scale. They grant favours to whoever will pay them off the most. They give shares in privatised industries to their cronies. They use every trick in the book to make already-tilted playing fields ones that players can’t enter at all unless there’s money paid out, whether in soft or hard bribery. They’ll mercilessly extort whoever isn’t part of the organisation or the family. Let’s say you’re an investor, looking at America. How far away is it from such a scenario? Already, nationalist sentiments have gone all the way to the top. They’re ripping up trade deals. They’re choosing favourites. Instead of doing business, CEOs try to curry favour… although they hold their noses at the stench. Going forward, you’d be very foolish not to begin pricing in all this risk… that one day, at the whim of a single authoritarian leader, all your money might simply disappear, be expropriated, be seized… the first step in most such situations is that you must give a portion of it to his family, friends, allies, just to do business at all.

There’s a steep political risk now for money flowing into America, just as there is and has been for other fallen states. However, the difference is that markets haven’t priced in this risk yet. They’ve coasted on two comfortable illusions:

  • American democracy will magically fix itself
  • The gains from preying on its imploded middle class outweigh the rising costs of autocratic politics

Nonetheless, those gains are drying up… all that’s left now are the costs… strongmen, extremism, and authoritarianism. That points to a very simple conclusion. The American stock market is in for a historic crash. It can’t go on being a perverse mirror image of economic reality forever. It goes up; it goes down. However, at some point, it’ll fall and fall mightily, as investing in a collapsed society where people have little left to even be exploited for (even those dwindling returns an authoritarian could snatch away from you in the blink of an eye) is a foolhardy bet. Of course, that isn’t a “prediction”. Markets always suffer crashes. It’s only a way of understanding the next crash. Perversely, the market boom of the 2000s was due to riches gained from the implosion of American life. However, the crash to follow will be about what happens after a society implodes… the loss of American democracy, prosperity, confidence, and growth, replaced by despair, cruelty, authoritarianism, and collapse.

5 February 2018

Umair Haque

Eudaimonia

https://eand.co/the-next-crash-254816fbbeb7

Advertisements

Tuesday, 16 January 2018

Experts Say FIFA World Cup Will Bolster Russian Beer Market

________________________

Data provided by Morgan Stanley showed that the upcoming 2018 FIFA World Cup in Russia this summer would boost beer consumption. It estimated football fans’ impact on beer consumption at 2 percent. As a result, it expects that Russia’s beer market would grow during 2018, for the first time in a decade. The Russian Brewers’ Union confirmed that beer sales in Russia, which declined steadily over the past few years, could indeed grow in 2018. Kirill Bolmatov, Corporate Relations Director at Heineken Russia said:

To begin with, there’s no bad news. The excise duty didn’t rise in 2018, nor were there any new restrictions. Non-alcoholic beer made a substantial contribution, which is the most promising segment now.

According to the Russian Brewers’ Union, despite a decrease in beer consumption, sales of non-alcoholic beer grew by 5.6 percent from January to September 2017. Oraz Durdyev, Legal and Corporate Affairs Director at SUN InBev, a subsidiary of Anheuser-Busch InBev, pointed up:

Football can be of help as well. As a rule, during World Cups, beer consumption in a host country grows by about 5 percent. Largely, this is due to the established consumption culture in Western countries, because beer is always associated with football.

Pavel Filippov, PR manager at Efes Rus said:

In addition to that, the event will be in the summer, which is the peak season for brewers.

11 January 2018

TASS

http://tass.com/pressreview/984567

Monday, 15 January 2018

Mining Town of Snezhnoe Greeted the Old New Year with an Agricultural Market

________________________

Today, residents of the mining town of Snezhnoe in the eastern DNR replenished their stock of New Year’s goodies at an agricultural market that honoured the Old New Year. Ella Gorvat, head of the department of trade, consumer services, and consumer protection in the Snezhnoe GGA*, told us:

  • GGA: Municipal State Authority

We invited several major food and processing enterprises to participate in the Old New Year agricultural market. They included the Shakhtersk Poultry Farm, Snezhnoe Sausage Shop, the Marinovka and Dmitrovka village farms, and individual entrepreneurs. In total, more than a dozen local enterprises and farms presented their products at the market. After we held a Christmas Market in the city, this is our first “Weekend Market”.

Last year, 53 such markets took place in Snezhnoe. Notably, not only local processors and farms, but also enterprises from Donetsk, Amvrosievka, Gorlovka, Yenakiyevo, and other cities and districts of the DNR took part. The frosts that hit the Donbass today didn’t bother the market participants in Snezhnoe. They supplied milk, sausages, vegetables, and chickens… more than 100 items. By tradition, prices at the market were below usual retail level.

14 January 2018

DAN Donetsk News Agency

https://dan-news.info/obschestvo/shaxterskij-gorod-snezhnoe-vstretil-staryj-novyj-god-selskoxozyajstvennoj-yarmarkoj.html

Editor:

People in the DNR have enough to eat… people in American-occupied Banderstan don’t. Fancy that. Note that starving people don’t move the Anglos and their Uniate running-dogs. Tells you much about them…

BMD

Thursday, 23 March 2017

Rolling Blackouts Announced in Seven Ukrainian Oblasts

____________________________________

On 22 March 2017, Ukrenergo announced rolling electrical blackouts in seven Ukrainian oblasts. If alternative supplies of coal don’t materialise soon, the Ukraine will begin earlier-announced major electrical blackouts. Today, Ukrenergo Acting Director Vsevolod Kovalchuk told journalists in Kiev:

If new coal supplies aren’t forthcoming, we may have to implement the plan we spoke of in February [serious limitation of energy consumption: Aleksei Zhuravko]. At present, the power stations are working normally, based on coal reserved stockpiled prior to the blockade. We can manage until the early spring due to conservation measures at coal-powered power stations [that is, power blackouts and brownouts: editor].

Previously, media reports stated that power blackouts in case of a negative scenario would occur in seven oblasts… Kharkov, Dnepropetrovsk, Kiev, Chernigov, Zaporozhye, Sumy, and Cherkassy. Governmental authorities in these areas are responsible for organising ad hoc departments to deal with this emergency in the power sector. Yesterday, Ukrainian Prime Minister Groysman stated that the Ukraine is exploring the possibility of buying coal in the USA, Australia, and South Africa. Because of the trade embargo with the LNR and DNR, coal reserves at Ukrainian power stations are close to zero. Previously, Groysman stated that the Donbass blockade would cause the loss to the Ukrainian state budget of 3.5 billion USD (201.43 billion Roubles. 24.11 billion Renminbi. 229.2 billion INR. 4.67 billion CAD. 4.6 billion AUD. 3.25 billion Euros. 2.8 billion UK Pounds) and idle 75,000 workers. The State National Commission for Energy and Utility Regulation will increase the wholesale market price for electricity by 1 percent, instead of the previously-announced decline of 5.8 percent, due to cost increases mandated by the purchase of imported coal.

22 March 2017

Aleksei Zhuravko

Facebook

« Previous PageNext Page »

Blog at WordPress.com.