It seems that the Sochi real estate market, which has gone through a boom because of the Winter Olympics that will be held there in 2014, have come back to normal levels due to the economic crisis. According to data provided by the mayor of Sochi, the average cost of real estate has come down in the third quarter of 2009 by 50% on a year-on-year basis.
From Ria Novosti: “Local realtors and developers are reluctant to talk about the dramatic collapse of the market, persistently calling the crisis a temporary drop in the price correction. Experts interviewed by RBK Daily disagree with the fact that all accommodation in Sochi, has fallen in price by 50%. Most affected by the crisis were business class – high paid managers- buyers from this segement suffered most. So, some newly built objects’ in the business class dropped by 40%, “- stated the paper.
The line ‘the crisis is a temporary price correction’ sounds all too familiar. One wonders how many and which Western banks have been participating in this Olympics bubble.
According to Zaman, Vladmir Putin wants Turkey to replace Ukraine as the main transit route for Russian natural gas. Russia is working to diversify the export routes of its natural gas away from Ukraine.
A good step in that direction was made in August when Putin went to Ankara to close a deal for the South stream pipeline.
Zaman relies on an article in the Moscow Times, however this remark seems to have been a side remark in a larger context of a Friday dinner at the Valdai Club. The Moscow Tims article is here.
The biggest and most secretive gathering of ships in maritime history lies at anchor east of Singapore. Never before photographed, it is bigger than the U.S. and British navies combined but has no crew, no cargo and no destination – and is why your Christmas stocking may be on the light side this year.
Amazing. A huge part of the world’s commercial shipping fleet lies idle off Singapore. This is transport capacity that is no longer needed thus giving evidence of the collapse in world trade.
The Daily Mail article is a must read. Click here.
Poland sold 1.11 billion zloty ($390 million) of 5.75 percent Treasury bonds maturing in April 2014, the Finance Ministry said yesterday. The ministry offered between 1 billion and 2 billion zloty of debt.
Which I find strange. Poland is doing quite well in this economic downturn. It reports a growing GDP for the first half of 2009, although only slowly and diminishing. Poland should have a good chance of selling its treasuries. The article continues:
Polish bonds weakened and the zloty fell after investors bought just over half the five-year notes on offer from the Finance Ministry yesterday in the first auction since the government said the budget deficit will almost double next year.“This is a direct consequence of a very dangerous fiscal outlook presented in the 2010 budget draft,” BNP Paribas wrote in a note to clients today. “We recommend selling Polish bonds across the curve.”
Well, according to the Polish Miniserstwo Gospodarski (Ministry of Economy) the fiscal situation for 2009 looks like this: From the figures in the report above you’ll see that halfway through the year, Poland has already spent 84.4% of the yearly budgeted amount to service its foreign debt. I’m not quite sure how to interpret the figures but it seems to me that there are two interpretations. Either Poland is paying its debt back faster than projected – which would be good news for creditors, or its debt servicing load is much bigger than projected and the 6.1 bln zlotys won’t suffice- which would be bad for Poland. Looks like BNC Paribas takes the latter view and recommends you get rid of all Polish bonds. It is thus possible that this will spill over into 2010 budgeting. Can you trust BNC Paribas analysis? Hhm, probably not.
According to ITAR-TACC the Russian government will send an additional 30 billion rubles (around 970 mln USD) as well as 23 billion rubles subsidies to balance the regional budgets, said Vice-Premier and Minister of Finance Alexei Kudrin. Additionally the Russian government will support the regions’ infrastructure projects with 40 billion rubles instead of the planned 25 billion.
Currently, 1 Russian Rouble = 0.03216 US Dollar [Source Oanda]
The largest Turkish media group Doğan Yayın Holding (DYH) which owns such Turkish newspapers as Hürriyet and Milliyet as well as CNN Türk and Star TV among others has been handed a record taxes and tax-fines of TRY 3.755.000.000 (USD 2.5 billon). The fine is worth more than four-fifth of this media conglomerate which controls more than half of Turkeys non-state media.
After the news the share price of Doğan tanked by some 20%.
The FT thinks that this ¨raises questions about political interference in business and the media that could tarnish the country’s image among foreign investors.¨
Methinks that this might also be a case of Turkey deciding to uphold its laws regardless of the influence of the group concerned and the economic impact. You can call that political interference if you want. Personally, I like that approach. However, this is Turkey so things are probably a bit more complicated than that…
The Marmaray Project in İstanbul, Turkey is about the upgrage of approximately 76 km of commuter railway some of it in tunnels and below the Bospurus (Boğaziçi in Turkish). The project is one of the major infrastructure projects in Turkey.
It will connect Halkalı on the European side with Gezbe in Asia and cut traveltimes from end to end from 185 minutes today to 105 minutes when the trains start operating. A short technical description and other information can be found on www.marmaray.com.
However, the project is about four years behind schedule and over budget as the area is archeologically very rich and apparently there have been many finds that had to be taken care of.
Today the Turkish newspaper Zaman writes that the Minister of Transportation has announced that the project will be completed and will be put into service at the end of 2013 despite the shortfalls in the provinces (İstanbul’s) finances.
The project reached a milestone today when tunnel excavations reached Üsküdar square on the Asian side.
Once the tunnel under water tunnel, which consists of submerged tunnels and will not be excavated is ready this end will be connected to it in March 2010.
The line will have a need for about 440 vehicles which, according to the Wikipedia article on this project, will be provided by Hyundai Rotem.
According to a Gazprom spokesperson the transit costs through Ukraine for Russian gas are expected to increase in 2010. Currently Gazprom’s projection is for an increase of 50% to 58% or from $2.56 to 2.7 per thousand cubic meters gas.
The tariff for transporting gas through Ukraine is set down in the contract. Most notably the tariff depends on the price of oil at the time in question so these predictions might change.
The Ukrainian government head, Julia Timoshenko, said earlier that the tariff will increase by 65 to 70% depending on the price of oil. However, she denied that fines and penalties for arrears that Ukraine has to pay to Russia will be offset by lower cost of transit.
According to RIA Novosti the head of Russia’s Deposit Insurance Agency, Alexander Turbanov, said in a Radio interview that his agency, who had earlier predicted the second wave of the banking crisis to hit Russia in the fall, had pushed back the date to the end of this or beginning of next year.
¨We assumed (earlier) that the second phase of the crisis would start in automn. May be it will come at the end of the year, may be at the beginning of next year,¨ said Turbanov in an invterview with Echo of Moscow.
According to him, the acute phase of the crisis was overcome, and the banking system operates in a stable way, but has not yet reached its pre-crisis level. The head of DIA noted that the first phase was due to a liquidity crisis, while the second wave may be due to bad assets.
“It (the second wave) can have a latent and extended character”, – believes Turbanov. He also said that the current level of bad debts of [Russian] banks is not yet cause for concern. “Delays [ past dues] of up to 5% is the norm in the global banking practice,” – said the head of DIA. However, in his estimation, by the end of the year is a real outstanding debt (not just reporting) could range from 10 to 20%.
Interesting that he makes the distinction betweenreal and reported. It seems that Russian banks are no more trustworthy in their accounting techniques than their US counterparts.
On August 31 2009 the GM factory in St. Petersburg (Russia) started producing Opel Antaras (Опель Антара) and Chevrolet Captivas (Шевроле Каптива). According to GM work on the factory in the Shushary Region (see attached Map) was started in 2006 and planned to end in late 2008.
Apparently the factory is preparing to produce newer models like the Chevrolet Cruise (Шевроле Круз) . These preparotory works should be concluded within a week and GM plans to sell Chevrolet Cruises in fall 2009 to the Russian market.
From the figures in the report above you’ll see that halfway through the year, Poland has already spent 84.4% of the yearly budgeted amount to service its foreign debt. I’m not quite sure how to interpret the figures but it seems to me that there are two interpretations. Either Poland is paying its debt back faster than projected – which would be good news for creditors, or its debt servicing load is much bigger than projected and the 6.1 bln zlotys won’t suffice- which would be bad for Poland. Looks like BNC Paribas takes the latter view and recommends you get rid of all Polish bonds. It is thus possible that this will spill over into 2010 budgeting. Can you trust BNC Paribas analysis? Hhm, probably not.
It will connect Halkalı on the European side with Gezbe in Asia and cut traveltimes from end to end from 185 minutes today to 105 minutes when the trains start operating. A short technical description and other information can be found on 
