Russians and their Money

I do find it interesting that most Russians think real estate is one of the safest ways to “save money” in Russia. It shows a confidence that I did not expect. Old fashioned paranoid that I am, in Russia I would have said “gold”. Unless Russians are worried that gold, as movable piece of property, is much easier to steal.

In another thread there was some mention of Silicon Valley venture capitalists. As a sign or the times, James Fallows has an interesting post (with links) about them:

http://jamesfallows.theatlantic.com/archives/2008/10/the_crisis_of_the_startups.php

Yes, lots of Americans thought real estate was a safe place for their money also.

Thanks for the article, Kolya. I’m sure my analysis of Russian real estate investment is overly simplistic; it’s based on what I could see by walking down Kutuzovsky, Novy Arbat and similar boulevards in Moscow and Petersburg over consecutive summers recently. That is, I observed how many apartments in the old Stalinist/Krusjtjovian buildings had new thermal-pane windows. Probably inside they had lots of new energy-efficient appliances. I think that’s a pretty good RE investment. Long overdue too.

Compared to the U.S. model of R.E. investment that involved sinking one’s savings into developing corn fields, deserts and sage brush patches into McMansion neighborhoods, my bet would be on the flat in Moscow to hold its value.

From a long-term perspective I would agree that Russian property generally has a good future.

I think this is more due to absence of any other serious investment mechanisms. The market is anemic and volatile as it should be in an emerging economy. Banks are hugely mistrusted after 1998. Gold requires security, so do cash stashes like my mother’s cookie jar.

And this is not unique to Russia. I would be very surprised if real estate was not one of the major investment mechanism in every early capitalist state. Early capitalism has limited options for means of production. Real estate is usually the most affordable way to own means of production. When the market becomes developed and stable and banking system becomes developed and safer via regulations, capital start flowing into these other mechanisms. It’s all too natural.

My (positive) surprise had more to do with the trust that Russians exhibit with respect the recent (post-Soviet) changes in the laws. Not that I expected that they would fear a return to communism, but I expected that they would not quite have the solid assumption that real property laws will not be changed to their detriment.

I guess I’m infected my own life experience: I have seen acquaintances buying real estate and then either losing it outright or not being able to sell it at value because of governmental changes (needless to say, I’m not talking of either the US or Russia).

If people are willing to spend the money they saved on a real estate down payment (plus loans), this only means that they are confident not only about the value of their property but also about the stability of the laws. And that, of course, is a good thing.

> I do find it interesting that most Russians think real estate is one of the safest ways to “save money” in Russia.

Kolya, it very simple. Most of those who replied “real estate” cannot afford buying a single square meter in a new apartment building. They have just heard that it’s good and reliable . Actually, I’m one of them and I would give the same answer, had someone asked me. Because at least, you’ll have a place to live when you lose everything else.

That’s why it’s called ‘real estate’ – it’s real. Provided you actually own it, rather than the bank.

Apropos of just about nothing, the 2005 television version of Master and Margarita can now be seen on youtube with English subtitles here: http://ca.youtube.com/view_play_list?p=9D3DE5519646C8D8

It’s superb and I highly recommend it, despite Bulgakov’s unfortunate theological error in identifying the Devil, and not the State, as the cause of Evil.

Compared to the U.S. model of R.E. investment that involved sinking one’s savings into developing corn fields, deserts and sage brush patches into McMansion neighborhoods, my bet would be on the flat in Moscow to hold its value.

That’s not real estate investment, per se – that’s real estate development. This kind of development, along with an extensive highway system and lots of land – is what keeps real estate prices relatively low in the US.

That’s why it’s called ‘real estate’ – it’s real. Provided you actually own it, rather than the bank.

It is ‘real’ regardless of having a mortgage on the property or not.

despite Bulgakov’s unfortunate theological error in identifying the Devil, and not the State, as the cause of Evil.

Of sure, Bulgakov was really talking about the Devil.

This TV version has been available on DVD for quite a while now in the US (with or without English subtitles). I own a copy. I’ve heard mixed opinions from Russians on the film, however.

You don’t get it. For Bulgakov, totalitarianism is a result of evil. The truth is the reverse!

According to Woland, the source of man’s degradation in 1930-s Moscow was “kvartirny vopros’, in other words socialized housing.

You don’t get it. For Bulgakov, totalitarianism is a result of evil. The truth is the reverse!

I get it very well. You are somewhat talking in circles, however.

I’ve seen no evidence that Bulgakov believed in “The Devil” as you reference it, but surely he believed in the evil that can reside within men, and mankinds ability to create and inflict evil upon one another. You can call this evil “The Devil” if you wish, but I see no evidence that Bulgakov literally believed in such an embodiment. His work is dark satire. And of course, Bulgakov is correct in recognizing that evil predates governments, totalitarian or otherwise.

Where did totalitarianism come from? Did some mechanical, non-human instrument known as the “state” invent it? Of course not, it comes from men, from people, it can not be invented or created from anything else.

If humans create an “evil” mechanism such as totalitarian government, does that make the human creators and those who support the government evil as well?

This then becomes a dicussion of the evil or blackness in humans themselves, the evil things that they are capable of doing. Totalitarianism did not invent this – history shows us it always existed in manking. Totalitarianism was but one recent, wickedly effective tool to inflict evil upon humans.

I’m not surprised by “real estate” – just a few years back the Americans also thought that they could get rich by selling their houses to each other. At the time a lot of people when asked about their wealth would answer: “My house is worth half a million” or something like that.

The housing bust happened in the US a year ago or so, but in Russia it is only about to happen. Hence the attitude.

At the time a lot of people when asked about their wealth would answer: “My house is worth half a million” or something like that.

You shouldn’t go around thinking that the real estate market has completely collapsed in the U.S. In my region of the country, prices and values of real estate have barely budged.

Median home values in eastern Massachusetts are still around $400,000 to $500,000 that you cite, and are unlikely to change much. News articles I’ve read for this region show real estate prices down approximately 5 to 10%. Not much.

Of course, the contrasts starkly to Las Vegas (where I was just visiting). My brother’s home value has gone from around $240,000 to about $120,000 to $140,000. At this point, it only matters if he tries to sell his home, which is obviously unlikely.

immovable property is the safest bet not as an investment but as security.

Exactly. Physical goods don’t lose their use-value as a result of inflation or other financial crises. Their relative value may fluctuate, but if acquired for their function (rather than speculation), only expropriation can hurt them. So, they are in fact safe – and hence a good means of saving ‘money’.

They are not, however, better investments than others. We tend to forget the difference between these categories.

Me: “Compared to the U.S. model of R.E. investment that involved sinking one’s savings into developing corn fields, deserts and sage brush patches into McMansion neighborhoods, my bet would be on the flat in Moscow to hold its value.”

Wally: “That’s not real estate investment, per se – that’s real estate development. This kind of development, along with an extensive highway system and lots of land – is what keeps real estate prices relatively low in the US.”

#1) What relevance ‘per se’? Why do your arguments always hang on these technicalities? One can apply macro or micro econ and long-term vs. short-term thinking; I like your thoughtful comments, but why these false and short-term delimiters around what’s really happening?

#2) The developers were ‘people investing’. Have you not heard about the massive number of ‘flippers’ – all those folks that moved from whatever jobs they might have had pre-9/11 into real estate development? And how about those drafty manor owners holding the bag, when the developer has gone bankrupt? Don’t count either? ‘Low cost’? We’re talking a huge percentage “under water” and more to come.

#3) I was making a comment on the long-term environmental impact on divergent RE bubble activities in USA vs Russia. Now that we’re comprehending the actual pump price of fossil fuel and the environmental costs, people in these ‘low cost’ developments accessed by long highways pay a hefty premium for their drafty manors and are destined for nothing but higher taxation.

#4) The damage is hitting every demographic. In my high-end suburban neighborhood you wouldn’t believe the number of formerly corporate females (and sometimes their made-redundant husbands) who exited to become real estate agents, mortage brokers, title handlers, stagers, decorators, land scape consultants, etc. etc. They are wearing very long faces these days. I think when the smoke clears we will recognize just how much of ‘the money’ was being circulated by these folks – and in the end they created no lasting value or even negative value because they’ve left an environmental mess in their wake.

#5) Ending on a brighter note: Berkeley prof Michael Pollan is suggesting that, with Government direction and incentives, those developments with golf courses in the middle might be able to be turned into collective farms — Here is one parallel solution to the dacha-hard-times-garden-patch I wondered about earlier.
Good spam word again: rent

I have a feeling Russian public might have a picture of US at the verge of a collapse painted for them by the state influenced media. The real estate market did not collapse, the stock exchange did not collapse, soup kitchens are not operating yet. It is just a needed correction. Painful for some but mostly for those that benefited from excesses. Just like in Russia and its oligarchs loosing what, 60%?

The foreclosure problem and collapse of security trading companies do not make a cause and effect pair. They latter is caused by securitizing of bundled up sub prime loans – a tricky mechanism to capitalize on government pushed sub prime loans to people who should not be buying real estate.

There is another interesting fact about foreclosures. I have no knowledge of proportions but there is quite a number of foreclosure cases where “owner” does not loose anything, since they never put any money down and had no equity in the real estate anyway. Quite often these are wealthy people (or groups of people) that financed themselves properties they rented out.

In this case, I am not sure why as a taxpayer am I supposed to bail anyone out in these cases? I guess the proper answer would be that as a member of the voting public that en masse elected bozos to Congress, I am responsible for their stupidity and wishful thinking.

Why do your arguments always hang on these technicalities?

I am always very specific with language. You should be also. These are fairly detailed discussions we have. Words are important; in fact, data and word choices are all you have to represent your ideas in this forum. Don’t blame me for your poor communication and incorrect language.

Considering that I work with real estate developers, I know very well the difference between individuals who invest in real estate (typically their home) and how the developers you cite operate.

Have you not heard about the massive number of ‘flippers’

What do you consider massive numbers? I would say there are not “massive numbers” of flippers, in comparison to the US economy or work-force. Cite something specific.

You call this a technicality, I call it getting your facts straight and not using loose language.

If you want to get specific, I can promise you that number of flippers and their size of dollar investment is nothing compared to larger real estate developers such as Pulte Home, Toll Brothers, and the like. Massive is an inappropriate word for individual developers or home flippers, when compared to Fortune 500 companies.

I was making a comment on the long-term environmental impact on divergent RE bubble activities in USA vs Russia.

Maybe you haven’t been to Moscow recently. Russians (and Europeans) have adopted the same real estate development strategies as have existed in the US for generations. You’ve probably never heard of the International Council of Shopping Centers (ICSC)?

There are multiple high-end residential and commercial real estate developments around Moscow that are devouring former farmlands. There are also many “big box” developers that are expanding around city perimeters throughout Russia (I should know, I interviewed for an engineering position with one of them; this particular developer is/was proposing 30 new HUGE stores/malls across Russia, Ukraine, and Kazakhstan, all Greenfield projects.)

Greenfield development exists, not to ravage mother nature (Mooo-hahaha!), but because of land price differentials, zoning laws, capital, and available infrastructure. Greenfield land is generally cheaper per acre than Brownfield land, is zoned for residential or retail development, costs less to develop, and has easy access to infrastructure to support development. The Russian real estate and development market has these same factors involved.

If you want to tangle on the topic of real estate development, you are debating with the wrong person.

In this case, I am not sure why as a taxpayer am I supposed to bail anyone out in these cases? I guess the proper answer would be that as a member of the voting public that en masse elected bozos to Congress, I am responsible for their stupidity and wishful thinking.

Come on, get it all out, don’t be vague. I’m sure you are anxious to blame the situation on Barney Frank.

There were many factors beyond just the US Congress and any regulation or legislation they did/didn’t pass or enforce.

Most people in Russia don’t have mortgages. There is also no culture of refinancing.

Although, I must say that a Russian friend of mine in St. Petersburg complained today that it is becoming almost impossible to get a mortgage now in Russia. We didn’t chat long enough for her to explain the comment.

Yes, I use ICQ to keep tabs with friends in Russia.

I’ve also known Russians who used loans against flats or homes they owned, to purchase other flats or homes as rental properties.

In general, I agree with your comments though, I just knew of some specific exceptions.

But in general,

damn typing/editing errors

“Mooo-hahaha!” is right.

If you’re lending your vast talents to the International Council of Shopping Centers, I think I called it right with the term: short-sighted. Your big-box buddies are in a shrinking industry for the foreseeable future here… Circuit City, Shoe Pavilian, Mervyns..just google “Big Box Bankruptcies” to get that warm cuddly feeling about how you are spending your time.

Sure I know the suburbs of Moscow, the suburbs of Petersburg, the suburbs of London and Paris. As much as the ICSC would like them all to be just like Wasilla – 2-stories, 3-car garages and everything choked to the gills with Chinese junk – Europeans just didn’t have the space, the 0% financing, the deregulation, or the inclination to compete.

In 2006, flippers represented some 12 to 20% of the Sacramento, CA, market.

PS: The people that brought us derivative trading thought they were smart too.

Come on, get it all out, don’t be vague. I’m sure you are anxious to blame the situation on Barney Frank.

Not at all. If I wanted to, I would not hold my punches. Singling out Frank or Dodd or any one individual is to oversimplify to the point of stripping all meaning. Bush administration in general is just as culpable for the insane pushing of the “American Dream” surrogate reduced to “owning a home”.

I also heard from Russians that ипотека dries out. As for Russians having mortgages – that is the phenomenon of the last several years and in no small manner is responsible for real estate bubble.

As Sean pointed out, Wally is correct about the unevenness of real estate problems in the US–it’s regional specific. Here in Vermont prices dropped only a few percentage points and it has one of the lowest foreclosure rates in the country. And thanks Sean for clarifying the differences between the American and Russian notions of real property–there are still important differences. As Dmitri Minaev wrote, “at least you’ll have a place to live when you lose everything else.”

The economic downturn in the US is all too real, but life goes on. This reminds me of the difference between MSM news and reality. For example, in the 1990s I did my share of back and forth travel. While sitting in the US and reading and watching the news the situation in Russia always seemed much more dire than when I would be in Russia itself.

So is the 2005 Russian production of The Master and Margarita worth watching? I always hated the idea of making a movie out of it, even a several episodes long TV special. My own images are so firmly imbedded in my mind that I’m afraid that anything else will be a letdown. But I guess I’m willing to give it a try if enough people say it’s actually a good production.

I looked for 5 minutes…and told wife never watch it when I was at home if she didn’t want her laptop (as she used it for movies as well) to be smashed…

I have a copy of Master & M. and have watched it, in my effort to learn Russian. No subtitles. I read the book first – in English, so knew the story. Yes, my own pictures were better; but I still enjoyed the production.

ivanov, how come I’m not surprised that your way of solving what is purely a conflict about preference by means of violence?

“There were many factors beyond just the US Congress and any regulation or legislation they did/didn’t pass or enforce.”

There is really only one factor that matters in the creation of the current problem: the legal monopoly over the supply of money by non-competitive Central Banks (and becoming ever more non-competitive as the issue moves forward).

By keeping interest rates artificially low, the market was saturated with cheap credit for investments the market had no demand for and which were therefore unproductive. The ‘crash’ is the direct consequence of the ‘boom’ and is actually a good thing.

The rapid and spectacular increase in housing and stock-prices was simply driven by the insane expansion of the money supply (and prior to the derivative bubble, it was the tech-bubble).

What would be needed is the rapid ‘deleveraging’ of the entire economy – in other words, let the cleansing flames of bankruptcy run their course and henceforth stop monetary inflation.

Not that this would ever happen, since governments depend too much on the current set-up of the monetary system.

Very true. The property value bubble is regional
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Gee, you, guys, sound like you are all in real estate or something (“NOW is the time to buy a house”, “real estate prices always go up”, “house is the best investment”, etc), – with all due respect, of course.

According to CNN (CNN wouldn’t lie right?), over all America’s real estate lost in value like trillions. So the problem cannot be that regional. Why would the banking system collapse? Why would Fannie and Fredie would have to be saved by the government?

You are talking like there was no housing bubble bust recently, like the Americans didn’t believe 3 years ago that they all could get rich by selling their houses to each other.

ivanov, how come I’m not surprised that your way of solving what is purely a conflict about preference by means of violence?

It was warning! To prevent my further torture by this [censored] movie.
Also smashing my own private property – laptop – is not violence

“like the Americans didn’t believe 3 years ago that they all could get rich by selling their houses to each other.”

I prefer black tulips, actually.

“You are talking like there was no housing bubble bust recently, like the Americans didn’t believe 3 years ago that they all could get rich by selling their houses to each other.”

First, when seeing it from a national level it is undeniable that there was a collapse in the housing market in the US. But this collapse is by no means uniform across the US and this is what we are referring to. Moreover, remember that large regions of the US did not experience a housing bubble at all. And when the downturn came, some regions were hit very hard, while others (e.g., where I live) were hit only mildly.

Second, three and even four years ago there were plenty of people already talking about a coming burst in the bubble housing market. It was not a surprise. I think that 2005 (in general terms) was the year in which housing prices reached their peak.

Ivanov, as you indicated, it is your wife’s computer.
Further, threats are inherently violent, since they offer the victim no possibility of improving their current situation.

“like the Americans didn’t believe 3 years ago that they all could get rich by selling their houses to each other.”

I prefer black tulips, actually.

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it was done, wasn’t it (in Holland, 300 years ago)?

I think that 2005 (in general terms) was the year in which housing prices reached their peak.
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Precisely, that’s when the book “Empire of Debt” came out with all the warnings; I believe there were people talking about coming bust…. But what about the main stream media? What about real estate agents, financial advisors, mortgage brokers, etc? There was such a fog of lies that the majority (I believe) believed otherwise: “The prices will never go down, we have a unique demographic situation”, “The housing market is where it is at right now”, and so on ….

Wally, if any 3-bed detached houses in central Montpelier fall below $300,000, drop me an email.

“Empire of Debt”

Never heard of that book, but I’m rather ignorant on such things. In any event, I know that by 2004 there was talk on the Internet, magazines, TV about a coming burst of the housing market. Some were saying it’s inevitable, others that it’s avoidable, others that it’s unlikely, others that it will not so much a bursting balloon but more of a balloon gradually losing air, etc, etc.

“There was such a fog of lies that the majority (I believe) believed otherwise: “The prices will never go down, we have a unique demographic situation”,”

I may be wrong but that’s not my impression at all. I think the general consensus was that real estate, as the stock market, is a good LONG TERM investment. That there will be ups and downs, good periods and bad periods, but that when viewed from an historical perspective real estate is usually a good investment. And once again, remember that there were tremendous regional differences. Large sections of the US did not experience a dramatic rise in real estate values.

“Wally, if any 3-bed detached houses in central Montpelier fall below $300,000, drop me an email.”

Montpelier, Vermont? That’s about a 30 minute drive from my house.

Tim, median in the most lefty place of the country – Santa Cruz, CA just went down to about $500,000. Want to move here from your oil platform instead?

I often wonder why the two most lefty cities in the country – San Francisco and Santa Cruz are also least affordable for many years straight. (ratio of median income to median real estate)

Montpelier, Vermont? That’s about a 30 minute drive from my house.

That’s the place. Smallest state capital in the US, looks like an English country town. I stayed in a converted army base called Camp Meade just outside Montpelier back in summer 2000. I got the impression that Vermont, especially Montpelier, is not short of wealth. Lovely place.

Tim, median in the most lefty place of the country – Santa Cruz, CA just went down to about $500,000. Want to move here from your oil platform instead?

I’m working on this damned thing in order to afford such a place.

I often wonder why the two most lefty cities in the country – San Francisco and Santa Cruz are also least affordable for many years straight. (ratio of median income to median real estate)

I did notice that a lot of the hotbeds of “working class” Democratic activism tend to be in astonishingly wealthy areas. And for all the talk of Republicans looking after only the rich, a lot of the Republican hotbeds are utter shitholes.

Greetings from Latveria.

I think that part of the Dem’s problem is that while they do appeal to the economic interests of the working class, the rural population (overlapping with working class but also including small farmers like my granddad), and also lumpen elements (to use Marx’s term), the “cultural values” they also embrace contradict those of the working class (etc.).

Working class people are not usually big on gay marriage, for instance.

“Large sections of the US did not experience a dramatic rise in real estate values.”

Which ones?

M&M or Eminem (hopefully no musical)? I have it on DVD too and at first look I was disappointed, though this may have more to do with having listened to it as a radio play in english (BBC) – I have the russian version somewhere. If the visuals bother you, radio is the way to go!

Italian movie version soon:
http://www.masterandmargarita.eu/en/index.html

Here’s the book “Empire of Debt”:

http://rs472.rapidshare.com/files/156218370/Empire_Of_Debt_-_The_Rise_Of_An_Epic_Financial_Crisis.pdf

Enjoy. It’s not only about the housing bust. Very educational. Vladimir Vladimirovich (Putin) and I enjoyed the book immensely. We are thinking about republishing it in Russian.

“Wally, if any 3-bed detached houses in central Montpelier fall below $300,000, drop me an email.”

I got the impression that Vermont, especially Montpelier, is not short of wealth

Another topic near and dear to my heart.

I live and work in the NH and MA seacoast region, north of Boston. However, my family is from Vermont and we have deep roots there (great-great-great-grandfather Abel Shedd from Albany, Vermont was a U.S. Sharpshooter during the Civil War). I graduated from high school in Vermont and started my university education in Vermont.

All that being said, native Vermonters are generally not wealthy, particularly in the north-central and northeastern areas of the state. When Katja and I go for long drives in Vermont (visiting family or leaf-peeping) we’ll see some broken-down farm with rusted truck and tractor and I’ll make jokes about how we are in glorious Russia now.

However, there is an influx of “flat-landers” from Massachusetts and New York with stacks of cash who come to Vermont, pay for a big house on a dirt road and semi-retire. Many native Vermonters complain these relatively wealthy invaders make it more expensive for everyone, driving up prices on land, etc. My brothers and I have been discussing buying a camp on Lake Elmore ourselves (my parents and family are from the Stowe-Morrisville area).

I think you would despise Vermont politics Tim; it is one of the most liberal states in the US. That’s not to say there aren’t a fair share of gun-carrying, NRA types, but in general Vermonters march to the beat of a different drummer. Bernie Sanders is one of their Senators, for example.

All that being said, it is a beautiful state. I left because cost of living is high and good jobs are scarce.

Last note – Russian Life magazine is based in Montpelier, Vermont.

Note to Mr. Newman – I’ve been contacted recently by an engineering recruiter regarding work as a Civil Engineering Supervisor on a project in Khabarovsk (I’m presuming based on other positions described this work is related to the pipeline project).

I’ve been asked about salary requirements – do you mind if I pick your brain off-line?

Here’s the book “Empire of Debt”

That’s how I know when a book is really good – it’s available by the same website (rapidshare) that people generally use to share porn.

According to CNN (CNN wouldn’t lie right?), over all America’s real estate lost in value like trillions. So the problem cannot be that regional. Why would the banking system collapse? Why would Fannie and Fredie would have to be saved by the government?

You are talking like there was no housing bubble bust recently, like the Americans didn’t believe 3 years ago that they all could get rich by selling their houses to each other.

That is because we actually live here.

Many Americans did increase their wealth through real estate, many continue to do so, and many will make money in real estate in the future. All real estate by definition is regional – the price and availability of homes in Florida and New York have little influence on prices and availability in Boston and Los Angeles, for example.

As I’ve pointed out, real estate prices in my region of the country have slid about 6% (I said 5 to 10% just to provide a safe range). My work is in the construction sector, real estate development, and our company remains busy, although we are cautious about 2009, as eventually credit factors will affect developers in this region also.

Others have echoed this sentiment, noting where real estate prices remain strong. I’ve noted Las Vegas where real estate values have fallen by roughly 50% from 2 years ago.

To be honest, my wife fields many questions from friends in Russia about what is going on here, and she says you can’t tell there is some “economic crisis” going on. In fact, she was looking for a job last month and had a long list of interviews. The changes in this region of the country have been small, thus far. However, other regions are greatly affected.

That is just reality. I won’t apologize for it not meeting your hopes and dreams.

Here’s the book “Empire of Debt”

That’s how I know when a book is really good – it’s available by the same website (rapidshare) that people generally use to share porn.
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I didn’t know about that (Rapid Share used to distribute porn). You can buy this book off Amazon.com if you wish.

That is just reality. I won’t apologize for it not meeting your hopes and dreams.
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I appreciate your irony, but don’t you think the same dictum could be used to all this news published here about “Russia and its crisis”? Or, “Russian corruption”? Doesn’t it look like a typical case of “projection”?

-It looks like that some people who are “interested in Russia” are only interested in distributing negative information about Russia (real or not).

You can patronize all you want and talk about real estate in your region (you are in this business, so, of course, you are expected to insist that the problems are regional), but it would be impossible to rebuff to simple facts, namely that a healthy economy is based on

1) savings
2) industrial production, or manufacturing that adds value

These actually made America a great country in the past, that’s what Chinese economy is now, while the “service economy” of the USA generates only debt and at a high rate.

Here are today’s CNN economic news (doesn’t look like the problems are regional):

Latest News
Last Updated 27 minutes ago

* Stocks in early slide | Credit gets snagged
* GM signals more cuts
* Greenspan: It’s a ‘credit tsunami’ | Watch – LIVE
* Cheaper gas won’t revive economy
* Goldman Sachs to cut 3,260 jobs
* Initial unemployment claims up
* Picking a health insurance planvideo
* The 3-step retirement check-up
* Oil inches up to $67 | OPEC battles cheap oil
* Why we need to cut seniors’ benefits
* MasterCard braces for a crisis
* Swing states weigh economic woesvideo

You are such a turd sometimes.

By the criteria you lay out:

1) savings
2) industrial production, or manufacturing that adds value

- the US is one of, if not the top economy in the world. I’ve laid this out for you before, you simply choose to ignore it. The US is ranked #1 or #2 in the world in all top technology manufacturing sectors. Value added also refers to information based sectors, and the US leads in these categories also.

I can’t help it if you want Americans to be making cars and shoes … and we’re instead manufacturing aerospace, communications equipment, office machinery and computers, pharmaceuticals, and scientific instruments.

Despite the losses in real estate and the stock market, the US is an incredibly wealthy country. Further, our losses in these financial areas have not been so great a percentage of our wealth as say, stock market losses in Russia, or many other countries.

Nobody here is pissing on Russia. However, you quite gleefully and prematurely seem to delight in financial sector problems in the US, without consideration for what is happening within your own country.

You are such a turd sometimes.

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First of all I’d appreciate we we don’t get personal, so please save the word “turd” for other occasions. As I cited before “Strong and bitter words indicate a weak cause.”

By the criteria you lay out:

1) savings
2) industrial production, or manufacturing that adds value

- the US is one of, if not the top economy in the world
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As for your arguments, you didn’t provide any. Yes you sound like CNN News, but the truth remains that 70% of American economy is service and … with how many countries does America runs a trade deficit? Like all of them?

And “aerospace, communications equipment, office machinery and computers, pharmaceuticals, and scientific instruments” is now can be manufactured and is manufactured in other countries. What is that America can do that others cannot produce (cheaper and better)?

Nobody here is pissing on Russia. However, you quite gleefully and prematurely seem to delight in financial sector problems in the US, without consideration for what is happening within your own country.
—————————————–
Right, read the title of the topics … Hardly any of them is positive. Of course, I try to counter balance them with what’s going on in the USA.

When things get sour, one way to make yourself feel better is to talk about other people problems. I couldn’t help noticing that the leading American newspapers started running huge articles about the “collapsing Russian economy” once the financial crisis began in the US.

“What is that America can do that others cannot produce (cheaper and better)?”

Denny’s.

The negativity in the titles is a result of what Sean is interested in.

“Denny’s”? What is that?

Sean is hardly at fault, even if that’s what he is interested in. Otherwise his blog wouldn’t be so popular. Apparently that’s what the people want to hear. Let me quote from “Empire of Debt”:

“SENSATION MONGERS: People think that the news media just reports facts. Yes, a zillion things happen everyday and the news media doesn’t mention any of them. Instead, the media confines itself to amplifying the madness of crowds and reporting all the news that fits in group-think agenda.”

One cannot not know Denny’s and claim to know America.

Doom has spoken.

Yet another debt generating business in America:

http://www.dennys.com/en/?

I think what is interesting about this blog and particularly this thread is the ability of most here to be able to juxtapose history/culture current events in Russia vs.U.S. For example: on the topic of infill vs sprawl. Candide channeling Bulgakov gives us: “the source of man’s degradation is socialized housing.” Wally plots a native-US evil on the other end of the spectrum from “kvartirny vopros’, with his pitch for leaving the leadership role to the International Council of Shopping Centers. (moua-ha-ha). All on one thread – pretty cool. Where’s the medium, I like the strong land-use laws as in Portland, Oregon. If we are approaching a time of government work programs, I hope we get higher energy performing buildings, great civic spaces and better public transportation.

I’ve never been to Montpelier, Vermont, but I can bet that it’s a slow ride in — past many, many Lowes,Borders, Target’s and other big boxes. Identical to that crawl through the Chicago, Atlanta or Bay Area suburbs. I have friends in commercial real estate assessing – and the future values being projected for these retailers and their boxes is not good. At least the traffic might move faster on your future ride to Lake Elmore. (You may want to bring up the greening of Wal-Mart; Yeah, Yeah) Love that anti-spam: IKEA

“Does von Doom have a Denny’s in Latveria?”

Latveria’s late-night clubgoers must be kept fed somehow. Doom is a caring master.

Chris, you forced me to try to find something on the Internet. Here is a link that shows (by state, so it’s not fine grained) levels of home appreciation in the USA from 98 to 06. Home values in several states appreciated less than 20 percent during that period (e.g., Iowa, Ohio, Kansas), while other states appreciated more than 80 percent (e.g., California, Florida, Maryland).

http://en.wikipedia.org/wiki/Image:USA_home_appreciation_1998_2006.svg

Tim, yes, Montpelier is a lovely town–very New England. We almost moved there. And homes are not too expensive there. I love Vermont, but as Wally said, if you live here don’t expect to make a lot of money. The quality of life is high but it’s not a rich state. In terms of per capita personal income it’s in the 23rd place among the 50 states. Despite such a modest ranking, Vermont (comparatively speaking) does not have much poverty: 43 out of 50 states have a higher percentage of people living under poverty. It’s a safe state to live (low crime rate). Wally is right, though, although an easy-going place, you will probably find it too lefty. The governor is a Republican and he will surely be reelected because many Democrats will vote for him. Why? The usual answer is, “Oh, he’s a Republican, but he’s a nice guy, so why not?” Granted, he’s a Vermont Republican, which means he’s more “liberal” than many southern Democrats.

Wally, I’m a fairly new Vermonter. After hearing all those “flatlander” stories, I was surprised that most of the people I met are actually native Vermonters. According to (a great site), 55 percent of Vermonters were born in the state, while 45 percent of NH residents were born in NH. As to where your brother lives, only 28 percent of Nevada residents were born in Nevada (the lowest such ratio in the US.)

Okay, enough statemaster stuff….

“Home values in several states appreciated less than 20 percent during that period (e.g., Iowa, Ohio, Kansas), while other states appreciated more than 80 percent (e.g., California, Florida, Maryland).”

I thought so. Low population density regions vs. high population density.

The value of Doom’s castle has depreciated 25% in the past week. Doom is very upset.

RICHARDS!!!!!!!

Vermont also happens to have the most liberal gun-laws outside Puntland.

I’ve never been to Montpelier, Vermont, but I can bet that it’s a slow ride in — past many, many Lowes,Borders, Target’s and other big boxes.

You’ve obviously never heard of ACT 250 in Vermont. Perhaps you should try Google. Vermont simple does not permit the kind of development that is seen in most states. As I mentioned before, local laws and zoning often determine the preference for Greenfield development, and in many cases they can further restrict such developments. More power to those communities who choose to do this.

Kolya could elaborate, but one of the negative consequences of these policies is Vermont has notoriously high cost of living, compared to other states in the region. For example, I think milk is about a buck a gallon more in most areas of Vermont than what I pay, living 3 hours away in NH.

I think there almost none of those stores you cite in the entire state of Vermont. For many years they opposed even having one Wal-Mart store in the state, now I think there are now two stores in the entire state and they both had to meet specific size requirements (that is, be smaller than a typical Wal-Mart).

In fact, I believe Montpelier holds the distinction of being the only state capital without a McDonalds.

Not that you ever let a little thing like FACTS get in the way of your warped opinions.

So, in other words Vermont is run by gun-toting socialists.

Weird.

with how many countries does America runs a trade deficit?

And what’s wrong with trade deficit? All it means that there is a current account surplus. I personally have a 100% trade deficit with my grocer. They never buy a thing from me. Should I be concerned?

I don’t think my opinions are warped. I’m consistent. I like strong urban planning. I cited Portland,OR – one of my former ‘home towns.’ And, I admitted I’d never been to Vermont.

It’s you that lacks consistency. You snipe, “You’ve probably never heard of the International Council of Shopping Centers (ICSC)” like the organization is something sanctified. The fact that you considered going to work for the ICSC to help it bring questionable ‘big box civilization’ to the Russian territories – given how shortsighted the build out now appears to be here – says it all about your moral compass. Then you say you’d prefer to live in Vermont which has long-enforced land use policies – keeping the ICSC in check. Who’s warped?

The fact that you considered going to work for the ICSC to help it bring questionable ‘big box civilization’ to the Russian territories – given how shortsighted the build out now appears to be here – says it all about your moral compass.

A like/dislike of big stores is somehow a moral compass issue?! This is warped and wierd. Every Russian I know is happy to have lots of huge shopping centers and big box retailers to go to. Beats standing in line in a corner store Овощной магазин.

I like them as well both there and here. I prefer Costco, WalMart and Home Depot to most local yokel outfits. I guess I am an immoral person now.

OK. I take back the ‘moral’ word. It’s not shopping at one that’s offensive, it’s building more. As Sean was pointing out in an earlier post, it’s recognizing all the costs in that cheaper gallon of milk in NH vs. Vermont. With this credit crisis, we are starting to be able to count those costs. So many metro areas in the US were not as foresighted as Vermont; they didn’t plan for a time when consumers couldn’t buy, and were chasing a short-term profit motive. Cleaning up the social/environmental problems resulting from the abandoned big boxes should be factored in. It will mean more government spending. Maybe they will be re-tasked; but, I see quite a few empty boxes already. Then you have headlines like today’s: Commercial property values seen dropping 25-30 pct http://www.reuters.com/article/marketsNews/idUSN2346025020081023 We’re just in suspended animation now…it’s going to get worse.

with how many countries does America runs a trade deficit?

And what’s wrong with trade deficit? All it means that there is a current account surplus. I personally have a 100% trade deficit with my grocer. They never buy a thing from me. Should I be concerned?
———————————————–
You cover your “trade deficit” with your income. America covers her trade deficit with running a debt. So if living a lie by living a life off debts is “normal” then I won’t argue.

After all that’s what the Americans have been brain washed about: “Debt don’t matter”, “live big”, “buy, buy, buy” and so on.

According to Medvedev the US has been brainwashed with messages such as “debt don’t matter”. Really? There is way too much debt, but it’s plain silly to state that the US has been brainwashed with such message. Actually I never heard such a message.

Medvedev, most of the people who comment about Russia in this blog have lived (or live) in Russia. How much time have you spent in the US? I ask because plenty of self-assured assertions about the US betray a lot of ignorance.

———-

Another thing I like of lefty Vermont: no highway billboards!

And here is an ironic Vermont factoid: Vermont is one of the states with the strongest opposition to Bush’s war in Iraq, and yet is the state with the highest (per capita) Iraq War deaths. Utah, one of the strongest supporters of the war, has the lowest rate of fatal casualties in Iraq.

Deficit don’t matter:

http://wonkroom.thinkprogress.org/2008/10/02/cheney-deficit-debt/

I’ve been to US many times, visited various parts of it, know many people from the US, read American books, news, etc. Just like the people in this blog “who know everything about Russia” (better than real Russians).

As blaming that somebody you dont know is “ignorant”, isnt it a projection?

You cover your “trade deficit” with your income.

Ever heard of credit? Consumer credit, mortgage… Ипотечный кредит Russia is agog about, double digits being a norm. There is nothing wrong with debt if it is reasonable and it is used responsibly. Louisiana purchase is a great example of debt financed investment. So was the Cold War.

But you have avoided answering the question: what’s wrong with having trade deficit?

Wally, about the cost of living I’m not a good person to ask. Before moving to Vermont we lived in the DC area (within the beltway, Maryland side) and it’s definitely cheaper in Vermont than in the DC area. We did one of those location comparison things and it’s supposedly 12 percent cheaper to live here than were we used to. VT could well be more expensive than NH or upstate NY.

We do have some of those big box stores (Home Depot, Costco), but thankfully not as many as elsewhere.

Vermont is definitely one of the most liberals states of the country, but despite it’s high taxes it has a fairly strong libertarian streak. From what I have seen, social conservatives don’t get much traction here.

whatever generates debt is bad for a country especially a country not able to generate wealth any more. How will the debt ever be paid? By declaring a bankruptcy? By starting another war? How? Or following the rumblings of Thomas L. Friedman and “going green”? I don’t see it … everything is based on the assumption that the future generations will be better trained, will have better skills, better morals, virtues … and somehow they will not make their own debts instead will pay the debt generated by this generation.

As an ancient Chinese philosopher said:

“When a country acquire many things its people don’t need, it becomes poor”.

I’ve heard of credit all right. But I understand by it something that you are able to pay, something you want to pay back, a temporary measure, a necessary measure. Not a way of living, living a lie.

I’ve been asked about salary requirements – do you mind if I pick your brain off-line?

Go ahead: if it is for a Spanish company called Tecnicas Reunidas on the Alliance refinery upgrade, I can tell you a lot.

I think you would despise Vermont politics Tim; it is one of the most liberal states in the US.

I’m not sure. On foreign policy, admittedly I’m a Reaganite hawk. On domestic policy, I’m libertarian, almost the exact opposite end of the scale to a Republican conservative. I’m all for gay marriage, legalisation of drugs, do-what-the-hell-you-like-just-leave-me-alone. I’d certainly not be in any hurry to back Palin’s ideas of what government is for. Unfortunately, I’d not back any of Obama’s ideas either.

Medvedev, Vicepresident Cheney was rightfully pummeled and ridiculed in the US for his statement that deficits don’t matter. Is this your proof that Americans have been brainwashed to think, as you wrote, that “debt doesn’t matter.”

I based my assessment that you don’t know much about the US on your own statements. The assertion that Jackson was killed, recommending that Russian program about how the US manipulates the world with dollars (the one that asserted that Coolidge was assasinated), and so on.

But Medvedev, be specific, who among the commenters in this blog fits the below description of yours?

“Just like the people in this blog “who know everything about Russia” (better than real Russians).”

I would like to know the names of the commenters here that either assert or imply that they “know everything about Russia,”

What is that America can do that others cannot produce (cheaper and better)?

One answer, purely off the top of my head: design and manufacture deep directional drilling equipment. In the oil industry alone, there are hundreds of more such examples. Across all industries, there will be hundreds of thousands.

Is this your proof that Americans have been brainwashed to think, as you wrote, that “debt doesn’t matter.”
———————————————–
The way America and its people live is the proof.

Nobody is answered my question, how and when the debt will be paid.

What is that America can do that others cannot produce (cheaper and better)?

One answer, purely off the top of my head: design and manufacture deep directional drilling equipment. In the oil industry alone, there are hundreds of more such examples. Across all industries, there will be hundreds of thousands.
——————————————-
If you say so Tim, you are an expert in oil drilling – otherwise you wouldn’t be working in Russia in that field.

However “across all industries”, I’m not so sure – the truth remains America’s economy (once based on saving and manufacturing) is now 70% service. I bet there are more real estate agents in the country than engineers.

Kolya,

You tried to discredit me many times on this blog (just like American politicians try to discredit Russia on a regular basis). Please try to stick to the agenda and not get personal.

Just like people are entitled to having (critical) opinions of Russia seeing its shortcomings, I am also entitled to seeing what I wish to see in America. Besides, right now America doesn’t provide enough reasons to see it in a positive light.

Vermont is run by socialists, which is why everybody there is poor, miserable, and unfree, crawling by night out of the wreckage of their homes to fight with bears for scraps of food as the glacial New England cold slowly leeches the heat from their bones. Their guns will not help them, no! For the State has taken their bullets.

And then the government comes and taxes their food.

It’s my favorite state.

Medvedev, when I find specific errors in your statements, I point them out. All too often you make an assertion but then cannot prove it. For example, that Americans are brainwashed into thinking that “debts don’t matter”. Or your statement that in this blog there are non-Russians claiming to know everything about Russia. When I asked you to name at least a few of them, you decline from answering.

There is nothing wrong about being mistaken as long as one is willing to admit the mistakes and learn from them. I’ve certainly learned several things in this blog, and when I realize that I’m wrong I admit it.

Evil Statist, there you go again with our exaggerations. Let me rebute your outrageous lies!

“Vermont is run by socialists”

Not true! At least some of them are Republicans and a few more are Democrats.

“which is why everybody there is poor”

Another lie! I know there are at least three millionaires living in Vermont!

” miserable, and unfree,”

Okay, that’s true. But that does not excuse the lies!

” crawling by night out of the wreckage of their homes to fight with bears for scraps of food as the glacial New England cold slowly leeches the heat from their bones.”

Half true. This happens only during the winter.

” Their guns will not help them, no! For the State has taken their bullets.”

Another lie! We make our own bullets at home.

“And then the government comes and taxes their food.”

Half true. Food is not taxed it’s organic. That’s why all Vermonters only eat organic food.

“It’s my favorite state.”

Mine too. It reminds me of Russia.

Medvedev, do you not understand the difference between trade deficit and budget deficit? I ask you about one, you give a link about another. В огороде бузина… Still waiting for explanations of why trade deficit is bad.

What is that America can do that others cannot produce (cheaper and better)?

Can is irrelevant. Doing is relevant. Russia theoretically can produce lots of things, but she produces almost nothing her own people consume, except when foreigners build factories. No, wait, I forgot, Russia produces huge bureaucracies that live off her people.

Look at vinyl based construction materials. I checked what Russian distributors sell – mostly US brands made in US or
Canada. Look at information technology and see if you can find anything of significance that rivals Cisco. The rave in Russia right now… iPhones! On sale for $1000. I bought mine for $200 last month.

There is no doubt that quite often US acts against its own economic interest. Over the last decade I have witnessed that stupid security guidelines almost killed US satellite manufacturing industry. When I entered the field as an interpreter in 1994, Hughes boasted 70% of all satellites in orbit were made by them. Now, Hughes does not exist. Alcatel managed to grab many contracts from under LM, Boeing, SS/L only because they did not have to abide by Pentagon guidelines.

What is that America can do that others cannot produce (cheaper and better)?

One answer, purely off the top of my head: design and manufacture deep directional drilling equipment.
———————————————-

Tim, your answer reminded me the movie “Armageddon” with Bruce Willis it’s about drilling you should have watched it.

Cyrill,

I’ve heard of vinyl siding already. Once could argue that vinyl siding is a specialty item, in Russia like the rest of Europe houses are built in brick (unlike in the US/Canada with their rather flimsy cheaply built houses). The truth remains: America lives off debt.

As for a difference between ‘difference between trade deficit and budget deficit’ in the American case – there’s no difference – in both cases negative.

You still can not give an answer of why trade deficit is bad. If you knew, you would. Three strikes and now it is obvious: you have no clue and have repeated something you heard someplace as a slogan. Repeating catch phrases without understanding them is a clear sign of brain washing.

in Russia like the rest of Europe houses are built in brick

Yes, but you need vinyl sidings to cover up horrendously clumsy brick laying skills. Granted, construction has markedly improved since the USSR days but quality is still lacking.

Overall, I find this whole situation amusing: someone from a country that produces zilch and imports everything under the sun has something to say about lack of production in other places.

Oh.. another area of interest might be: high end (anyone can make a rifle invented in 1947) military hardware . In answer to what America can produce and others don’t produce. F22

“trade deficit”: Normally if it is negative the wealth is leaving the country with negative trade deficit (US, for example), and vice versa (China, for example).

Russia produces zilch… Hmmm Russia is so weak in aerospace industry that the US is using at present its rocket boosters to supply the ISS (Shattle is grounded).

Being an American and criticizing construction in another country is unwise on your part. Compare flimsy American houses with that of built mmmmm even in Mexico (brick, ceramic tiles roof).

America imports nothing? Visit the nearest Wall-Mart then and start thinking. Wall-Mart being the biggest company in the US (for the obvious reason).

Ok. Let’s save time. Answer me this: America is becoming richer with every passing year, or poorer? (forget deficits and other jargon).

Sean, I think it’s too early to assume that Obama will win. I hope he does, but I rather wait until there is an official winner to feel either happy or disappointed. (Knowing your skepticism about this whole process, I assume that although you prefer an Obama victory, you would neither feel elation if he wins, nor be too downcast if he loses.)

In any event, it’s obvious that Russian men want a McCain victory. Not so much because of McCain, but because of Palin. What’s my evidence? This youtube video clearly captures the sentiments of most Russian males (even if these two guys are somewhat lacking in the macho department):

http://www.youtube.com/watch?v=XR9V_aOCga0

This is not my discussion, Medvedev, but who was the idiot who said that “America imports nothing”? Was it a man made of straw?

Compare flimsy American houses with that of built mmmmm even in Mexico (brick, ceramic tiles roof).

Which doesn’t really explain why anyone with cash in Russia builds himself a nice new house – in an American style!

“trade deficit”: Normally if it is negative the wealth is leaving the country with negative trade deficit (US, for example), and vice versa (China, for example).

Wealth is leaving the country? And we don’t get anything in return… I see. What do you think happens to lots of those dollars? I can clue you, they come back as investments in the US to fuel the economy further and consequently sustain US standard of living.

Trade deficit is an accounting term. The current account balance is zero. Trade deficit means investment surplus since the money come back.

The strong GDP growth developed economies consistently run trade deficits because they have more wealth and more people want to sell to them.

Hmmm Russia is so weak in aerospace industry that the US is using at present its rocket boosters to supply the ISS (Shattle is grounded).

Oh Russia is fine in Aerospace. Unfortunately it’s living off the USSR investment. It’s Proton is flying since 1960-s and still uses relays instead of transistors. Hence, it is twice the size of a comparable Atlas and uses at least one extra stage (and lot more fuel). US uses Soyuz and Proton simply because it is cheaper to use Baikonur and all the conscripts that clean up the mess a launch produces and nobody raises any environmental stinks. Beats cleaning up the Cape after using an N2H4 fuel engine. And after all it is an International station: you got to let others play in that sandbox.

What’s with the medieval fixation with brick? Why would I want a brick house in California where it will crack apart after the next earthquake. And that should be an indication of construction quality. None of the downtown San Fransisco skyscrapers suffered anything after the 1989 7-something jolt.

This construction argument is silly and reminds me when Russians would say there is no good bread in US. Of course, they went to Safeway and bought the cheapest disgusting sponge. Same thing with buildings. Are there flimsy cheap apartment buildings with paper thin walls and ceilings you can reach from the couch – of course there are. It is just one segment and often people make conclusions based on their own limited experiences.

This is not my discussion, Medvedev, but who was the idiot who said that “America imports nothing”? Was it a man made of straw?
———————————————
No wonder nobody likes Americans in the world anymore. Diagnosis? Arrogance. Sorry I forgot there are exceptions: Kosovo, Georgia, Poland.

America exports must less than it imports. It imports the junk its consuming economy is based upon.

Cyrill,

Brick houses … have you eve occured to to you that living in a syrophome house contribute to American people\’s allergies?

You mention bread…. well it is not only bread or houses. Let me cite \”Empire of Debt\” by two Americans – Bill Bonner and Addison Wiggin:

\”What Levey and Brown were trying to tell us is that we have nothing
to worry about. Yes, it is true that we Americans spend 6 percent more
every day than we earn. Yes, $11.5 trillion worth of U.S. assets are in foreign
hands and our net international investment position has gone negative
at more than 3 trillion. And yes, it is true that we save nearly nothing.
But we can still feel good about ourselves, they say.

But we can still feel good about ourselves, they say.
The numbers obscure “the United States’ institutional, technological
and demographic advantages,” they say. What are those advantages? The
two never quite said. But what could they say? Other countries have
different institutions. Others have different demographics. Others use
different technologies. Who knows which are an advantage and which
are a hindrance? You only know—and then, only by inference—after the
fact. At the height of its bubble in 1989, it was widely presumed that
Japan had all the advantages. Hardly a single issue of the business press
failed to mention them. Now, 15 years and a major slump later, Japan
seems to have all the disadvantages, while the advantages somehow
crossed the Bering Strait into North America.
Today, the mainstream press tells us how dynamic, f lexible, and open
the U.S. economy is. At the end of their article, Messrs. Levey and Brown
told us that the only real threat is that “protectionism and isolationism at
home will put an end to the dynamism, openness and f lexibility that
power the U.S.”11

And now, Americans put on their own gaudy tunics—so proud of their
“dynamism,” their “f lexibility,” their “openness.” Who cares that they
spend more than they can afford? Who worries that we have no savings and now depend on the kindness of strangers to maintain our standards of living?
Who realizes that the Chinese or Japanese could bring the U.S. economy
to its knees with a single word?
But what about our houses? Aren’t we rich? So what if the Chinese
and Japanese sell our bonds, we still have our houses!
\”

“Americans deceive themselves with the fanciful notion that people
who live in hovels, eat disgusting animals, and earn less than 1⁄20 as much
per hour will be willing to finance our new houses and new wars forever.
Why? Our economy is so “dynamic” . . . so “flexible” . . . so “open”—
the poor peasants can’t resist!”

“And we don’t get anything in return…”

What is this “we,” foreigner?

You mentioned the American bread, it’s not only that, it’s “food, life expectancy, crime rates, transportation,
liquor, women, and architecture”:

“People love myth, fraud, and claptrap—especially when it flatters
them. Maybe their food, life expectancy, crime rates, transportation,
liquor, women, and architecture are nothing to brag about, say Americans
to each other, but when they grub for money, they grub good. “Old Europe,”
they say, making a comparison, “is too rigid, fossilized, hidebound
. . . a museum.”
And yet, even this is a fraud. Despite Laffer’s curve, Greenspan’s
Bubbles and Reagan’s revolution, the U.S. economy has done no better
than Europe.”

“So what if the Chinese
and Japanese sell our bonds, we still have our houses!”

That’s actually correct. It’s the Chinese and other suckers who are getting screwed over: they accept potentially worthless debt obligations in exchange for real goods.

If given the choice between a paper currency whose M3 is currently expanding at a rate in excess of 10% annually for something tangible I can use for as long as I need it (and most things we buy today are build to last for a long, long time if we want them to instead of changing them for the next even better version), I’ll take the latter any given day.

Bascially, America has been robbing the Chinese and Koreans (while it is still manufacturing nicely at home – only about 10% of the US GDP is involved in international trade).

The US material economy is doing fine, and always will. The financial aspect of it may take a serious hit, and some people may lose their jobs, but that is generally taken care of quite easily if nominal wages and other prices are allowed to find their natural level.

The US economy could even survive a default. It would be rough for a year or two, but – it would be liveable.

Societies are resilient, it takes extra serious determined effort to really screw up a society.

Medvedev,

yes, America is in such horrible shape, millions of US citizens are desperately trying to get out every year and the EU will have to impose strict visa requirements soon just to protect itself from the hordes of Americans seeking refuge. That’s how sucky it is in the US, and how good it is in the EU.

Medvedev, stop this brick houses nonsense. Yues some buildings are being built out of brick in Russia and in Europe. But go look at public housing projects I at outskirts of major European cities – horrible soviet blocks. I personally saw USSR style concrete apartment buildings aka корабли coming up right now in St Petersburg.

As for the quote from a book sold at porn sites, TNT, sorry you wasted virtual trees. Now, quote some Michael Moore as well to support your points.

“So what if the Chinese
and Japanese sell our bonds, we still have our houses!”

A silly and meaningless hypothetical. If they sell these bonds, they loose their value. They know it better then authors of dumb books and producers of dumb videos you site here.

Civil Engineering Supervisor on a project in Khabarovsk (I’m presuming based on other positions described this work is related to the pipeline project).

I’ve been asked about salary requirements – do you mind if I pick your brain off-line?

Don’t forget to ask them who will pay for your winter clothes! It’s rather cold there Windy and -30 C

Poor Medvedev is losing it: reverting to early puberty, and becoming more frantic and irrational. Sadly, it seems he was infected with Averko viridae.

“If they sell these bonds, they loose their value. They know it better”

Which just proves that the Chinese and Koreans got shafted. They are sitting on a dung-pile of book value they can never use for anything but national masturbation.

Hey Kolya, I think you’ll like this: http://www.youtube.com/watch?v=XR9V_aOCga0

“It’s the Chinese and other suckers”
————————————————-
General,

You explicitly implying that the USA is cheating the world. As I said in a previous e-mail if you cannot achieve what you want through economic means (barter, exchange) what you want, you try to achieve it through political means (cheating, stealing).

Unfortunately for the American people, USA resorted to the latter.

yes, America is in such horrible shape, millions of US citizens are desperately trying to get out every year and the EU
————————————————-
General,

You are wrong about it, I’ve know quite a few Russian academics working in the USA, they tell me the same – many “bright and smart” who are about to graduate thinking about “working overseas”, because “this country is falling apart”. Another worrisome scenario is that many European academics when they have a choice choose Canada over USA now.

Sorry.

As for the quote from a book sold at porn sites, TNT, sorry you wasted virtual trees. Now, quote some Michael Moore as well to support your points.
———————————————-
Cyrill,

This is very low of you to try to discredit me. It seems you are only good at this – playing politics. Of course what you said has nothing to do with reality. I’m happily married and don’t know anything about porno sites. I wanted to do you a favor and provide with a free copy of the book sending you a link (I got it from an American!) to where this book could be downloaded.

Once again, it is very low. You should have read this book:

http://www.investmentu.com/resources/empireofdebt.html

Poor Medvedev is losing it: reverting to early puberty, and becoming more frantic and irrational. Sadly, it seems he was infected with Averko viridae.
————————————————
Kolya,

Shame on you. You are trying to do more of the same: labeling, discrediting, … in short playing politics instead of responding to the facts.

However, I’m not surprised by how some people react to the truth. It’s always in 3 stages:

1) denial
2) anger
3) acceptance

You are at stage 2) so far.

”Oh Russia is fine in Aerospace. Unfortunately it’s living off the USSR investment. It’s Proton is flying since 1960-s and still uses relays instead of transistors. Hence, it is twice the size of a comparable Atlas and uses at least one extra stage (and lot more fuel). US uses Soyuz and Proton simply because it is cheaper to use Baikonur and all the conscripts that clean up the mess a launch produces and nobody raises any environmental stinks. Beats cleaning up the Cape after using an N2H4 fuel engine. And after all it is an International station: you got to let others play in that sandbox.”

Cyrill I’m frankly disappointed in the above statement. You’ve got to give the Russians credit for their space achievements, especially in the 1990s when they were still sending up rockets inspite of dire cash circumstances. And apart from anything else, given the choice who’d you go into space with – the Russians on a Soyuz or the Yanks on the shuttle? Thats an easy one I think. I dont think the US problem is environmental or cash – I just think they cant get the thing right, hence the use of Russian equipment. Time to give some credit to the Russians I think.

”Don’t forget to ask them who will pay for your winter clothes! It’s rather cold there Windy and -30 C”

I was in Moscow in early January 2003 and it was -32. Its hard work thats for sure. At least there was no wind, but first going outside was really tough on the senses. And before you answer ivanov that -30 in Moscow is ‘no problem’, it actually is a problem for people like me who dont experience it on a regular basis. And its funny to see Russians here in Ireland sneezing and snotty nosed after the first bit of damp to hit the country. They cant handle our weather at all, which I find amazing.

President Medvedev:
the notion that the US is a modern Rome that consumes all and produces nothing is simply not true. First of all the US bailed out Europe with the Marshall Plan, without which the continent might have remained in ruins until well into the 1960s. You might also note the massive supplies of arms given by the US to the USSR to help against the Nazis. It amazes me that Europeans ignore this stuff simply cos it happened a while back; the prosperity of modern Europe was made possible by tons of FREE cash from the US. More pertinently though, you’re ignoring the fact that the US still has an enormous industrial production base that serves both home and abroad – high end gear like cars, planes, ships, electronics – the Americans dont make junk because it doesnt pay them to do it, they let the Chinese instead. Also, the US, unlike Rome, has not robbed countries of their resources – the US tends to pay for things, now or later, and now that recession is at the door they’ll be doing less buying of crap. We’ll see what China is made of then. Please dont mention Iraq; if you do, try to remember that not one US company has pumped a drop of oil there yet, and have not received any preferential treatment in the bidding process. I know the US can drive everyone mad sometimes, but they are not the cause of all the world’s ills, and glorying in their misfortune – which, suprise, suprise – is everyone’s misfortune (cos the US buys a lot of shit from all of us) – is bad form indeed.
Better worry about the rouble and your stock market, which once again closed for business. What a clever tactic indeed. Its a bit like just not opening the phone bill and hoping the line wont get cut.

Irishman,

I didn’t mean undermine America’s past achievements and what had made it a great country. Russian people are deeply grateful for the help they enjoyed from the Americans during WWII. I know about Marshall plan… etc. I wasn’t talking about “then”, I was talking about “now”.

And all this “you better look at Russia and Russian ruble …” is exactly my point. Picking out bad news about Russia and then dwell on them, is not a way to go, given the fact what’s going on in the “Free World”, notably in the USA.

I’ve done nothing beyond the usual “reverse psychology” and it made a lot of people angry.
So, you know how I feel.

Hey W. Shedd, maybe you don’t have to face Khabarovsk at -30C. It may be the dawn of your era right here.

http://www.bloggingstocks.com/2008/10/24/volcker-u-s-needs-more-civil-engineers-and-fewer-financial-eng/

Cyrill I’m frankly disappointed in the above statement. You’ve got to give the Russians credit for their space achievements, especially in the 1990s when they were still sending up rockets inspite of dire cash circumstances.

Alright, Ger, I admit it did not sound right.

I would absolutely give them credit. I watched it myself over the years and I know how difficult it was at times and how little did they know about marketing their services and how frankly patronizing US bureaucrats were – not engineers mind you.

What I am saying is that except for some upgrades, main Russian launch vehicles Proton and Soyuz are still using USSR 1960-70 technological and production base. Soyuz was Korolev’s design for crying out loud.

And in addition, that a huge factor in money savings for Russia is that they use conscripts to service launch bases.

Both Soyuz and Proton are great performers and have the best or near best reliability records. They are 30 years behind Atlas and Ariane and are still competitive. Unfortunately, they will die some day and if Russia is having troubles investing in its bread and butter – oil and gas, then what do you expect will happen to aerospace.

You might also note the massive supplies of arms given by the US to the USSR to help against the Nazis.

US sold arms to Russia. S-O-L-D! You can call whatever you like – lend-lease, help etc. but it was pure business.

\”Cyrill I’m frankly disappointed in the above statement.\”

Ger, have you not yet realized that Cyril is a slightly more cerebral version of Yakov Smirnov? He takes anything about the US that he likes, inverts it, and applies it to Russia. “In Soviet Russia, radio shows with no listenership host crazed right-wing lunatics!”

Doom has spoken. Submit.

“As I said in a previous e-mail if you cannot achieve what you want through economic means (barter, exchange) what you want, you try to achieve it through political means (cheating, stealing).”

Has Medvedev turned Libertarian?????? That dichotomy is generally used by Libertarians.

odd.

You might also note the massive supplies of arms given by the US to the USSR to help against the Nazis.

US sold arms to Russia. S-O-L-D! You can call whatever you like – lend-lease, help etc. but it was pure business.
———————————————-

Some of it was LEASED. That’s why the programme was called “land-lease”. Thus, after the war USSR had to return those Studebbeker trucks and Jeeps. Soviet Union also depleted its gold reserves during the war with payments to England and the US.

Has Medvedev turned Libertarian?????? That dichotomy is generally used by Libertarians.

odd.
——————————————-
I’m tired pointing out: No arguments – attack the opponent with a personal insult.

Medvedev,

regardless of my disagreements with you, thanks for the reference and link to the Empire of Debt book. Going to read it now.

General,

Enjoy the book. My favorite quotations from this book:

“Sometimes we get not we want, but what we deserve”.

“It’s much harder to be a good person than a smart person, that’s why there are so many smart people around.”

Best wishes, DM.

I went through the sources. The approach to using sources is idiosyncratic, to be mild, but I’m impressed by the names in the references. Chodorow, Rothbard….

Medvedev, I’m impressed. Will be a fun read.

General,

Yes, it is interesting to read. Who are Chodorow and Rothbard (I don’t apologize for my ignorance, since I’ve been accused of it many times today)?

“Hey Kolya, I think you’ll like this: http://www.youtube.com/watch?v=XR9V_aOCga0”

Thanks, Evil Statist! I have to admit it moved me to tears. A fitting and loving tribute to a classy lady who one day will rule us all.

Chris, since in Russia they probably didn’t show this historic event, I’m sending you this clip of US presidential electoral politics at work:

http://www.nbc.com/Saturday_Night_Live/video/clips/update-thursday-bush-endorsement/783981/

Medvedev,

Murray Rothbard and Frank Chodorow are two of the most radical economic thinkers of the 20th century. Their works are available mostly for free at http://www.mises.org.

The only reason Rothbard never got a Noble Prize is because accepting his ideas would mean the end to the profession of economists (in principle, a completely unnecessary profession).

Fellas,

I hear that you all were ganging up on Dima on Friday. Why don’t you pick a guy your size? Wanna gang up on me?

”Some of it was LEASED. That’s why the programme was called “land-lease”. Thus, after the war USSR had to return those Studebbeker trucks and Jeeps. Soviet Union also depleted its gold reserves during the war with payments to England and the US.”

There isnt a hope that Stalin paid full-whack for anything from anyone, let alone the Americans. At most they got the gear at huge, huge skidka. So the USSR DID get massive help, no doubt about it.

”What I am saying is that except for some upgrades, main Russian launch vehicles Proton and Soyuz are still using USSR 1960-70 technological and production base. Soyuz was Korolev’s design for crying out loud. ”

Ancient agreed, but oldies are often goodies, and the Russians have consistently got their business right in space. There is much to slag Russia about, but their contribution to space exploration and technology, especially again nowadays with the ISS, is simply beyond slagging. Their determination to land probes on Venera, after multiple failures, is the stuff of legend amoung astronomers:
http://www.mentallandscape.com/V_Venus.htm
I do take your point though that they havent developed new gear, but if it aint broke, why fix it? They havent the cash.

”Fellas,

I hear that you all were ganging up on Dima on Friday. Why don’t you pick a guy your size? Wanna gang up on me?”

Prime Minister Putin, when last I heard your English wasnt great so using the word ‘fellas’ is a bit innapropriate, no? Reminds of young Russians who can say ‘fuck’ and ’shit’ in English but cant use articles properly. Where is President Medvedev? You’d miss him around the place.

The bloody Soviets had the first Space Station, with – as far as I know – never a fatality while on-board. It was up there in space for almost two decades.

Now if you ask me, I’d say it was a complete waste of time and money, and … but, that’s water under the bridge. The Sovietskies did it, and the West did not.

The Soviets were amazing at pushing old technologies to the very edges of what was possible. That wasn’t efficient, but it was damn effective (it is probably not by accident that the Russian language does not readily distinguish the two)…

Now if you ask me, I’d say it was a complete waste of time and money, and … but, that’s water under the bridge. The Sovietskies did it, and the West did not.

I don’t know if it was. You never know what you can find out there. I remember being told by the Designer General of one of the Russian space design “bureaus” – as they call them, that the reason Mir had not been scrapped until that late was that they have found some sort of mutated mold that was eating through Plastics.

The concept was to turn it into an environmental cleanup helper. Well, then they thought – when that thing is done eating plastics, what would it turn to eat to then.

The first module of the ISS was basically an upgraded MIR module. Pig iron shell but filled with US avionics instead.

”Some of it was LEASED. That’s why the programme was called “land-lease”. Thus, after the war USSR had to return those Studebbeker trucks and Jeeps. Soviet Union also depleted its gold reserves during the war with payments to England and the US.”

There isnt a hope that Stalin paid full-whack for anything from anyone, let alone the Americans. At most they got the gear at huge, huge skidka. So the USSR DID get massive help, no doubt about it.
=============================================
General,

You are demoted to the rank of colonel for spreading false information.

So, colonel

You are only partially right. Stalin didn’t pay back in full for the land lease programme. However, in the 70s during “razrjadka” we paid back what was left so that we could develop our commercial relation with the USA. So we did paid back what was agreed by the Americans, but alas 30 years later.

Will the Americans ever pay their debts to China and other countries? I wonder.

Brezhnev – dithering old man, you should have noticed that I have said NOTHING about whether or not Stalin paid anything back. I didn’t even discuss Lend and Lease.

Now, go and get your spa treatment.

The bloody Soviets had the first Space Station, with – as far as I know – never a fatality while on-board. It was up there in space for almost two decades.
=============================================
Colonel Khlynov,

Your sources are wrong again. You risk being demoted to the rank of a corporal.

There were fatalities, read up:

http://en.wikipedia.org/wiki/Soyuz_1

Brezhnev – dithering old man, you should have noticed that I have said NOTHING about whether or not Stalin paid anything back. I didn’t even discuss Lend and Lease.

Now, go and get your spa treatment.
=================================================
Capitan Khlynov,

A distinctive feature of an adult is that he or she admits his or her mistakes. An immature person normally denies them.

Ok.
US sent Studebbeker trucks and got money for that. Years later.
Russia (USSR) sent people and …
I think Russia should sent an invoice for saved lives of US Marines. Years later (but better late than never).

Brezhnev,

why am I cursed with foolish opponents? I explicitely stated there were, to my knowledge, no fatalities ON BOARD of Mir. Your link talks about the SOYUZ’s return flight crashing.

will you now be an adult and admit you were wrong TWICE in accusing me of error??

Somebody please find me a worthy opponent.

Brezhnev, you are truly dithering and drooling. Don’t forget to take the turn during the parade.

Ok.
US sent Studebbeker trucks and got money for that. Years later.
Russia (USSR) sent people and …
I think Russia should sent an invoice for saved lives of US Marines. Years later (but better late than never).
*******************USSR*************************

Indeed, those trucks were excellent, but we had to send the back after the war… However, the Americans also supplied a great deal of other great staff: food, petrol, planes, textile, rubber, aluminum and so on …

Some of it were paid during the war with gold (which depleted most of the gold mines in Kolyma, btw … we used (political) prisoners to work in those gold mines – so some of the American gold is soaked with blood of the Russian political prisoners).

But after the Cold War erupted Stalin stopped payments (he was a tough cookie indeed), so 30 years later or so I had to settle these things with Nixon and the Americans accepted whatever we agreed to pay outstanding …

That’s the story. Yes, we helped the reduce American losses, but on the other hand they helped to reduce our losses too. Those planes and trucks and medicine and food – were excellent and were helping us a great deal. What wasn’t so good – American tanks, – our tanks and German proved to be better.

So it’s wrong to say (as some Soviet historians did) that the American help during WWII was negligible. Just like it is wrong to say (as the American historians do) that the American help was decisive – we wouldn’t beat up the Germans without it. We would, but with much heavier losses.

Be good. Pass on my regards to Capitan Khlynov.

Brezhnev,

why am I cursed with foolish opponents? I explicitely stated there were, to my knowledge, no fatalities ON BOARD of Mir. Your link talks about the SOYUZ’s return flight crashing.

will you now be an adult and admit you were wrong TWICE in accusing me of error??

Somebody please find me a worthy opponent.

Brezhnev, you are truly dithering and drooling. Don’t forget to take the turn during the parade.
*******************USSR*************************
Capitan Khlynov,

My memory is not as good as when I was young (I was quite a womanizer back then, you know), same can be said about my abilities to stay focused. But I still understand well things in general, speaking of which you don’t deserve to be a general (no pun intended), hence the demotion, Capitan.

+

Leonid Ilyich, I guess you are not going to admit you were wrong, even though I have said none of the things you claimed I have said?

I guess that is why you qualified to be GenSec, and I did not

You and ivanov should make great compadres.

Capitan Khlynov,

It’s a bad deal for you, sorry. Once I said, when someone accused me of immodesty: “YES, I am a GREAT leader, because the leader of the Communist Party of the Soviet Union CANNOT be mediocre”. Get it?

So, you have to bear with me. Do you like cognac?

If I had to spent time with you, I would probably not be able to manage it WITHOUT cognac. It better be 6 star from armenia, though.

Now you are talking! But don’t get too informal, don’t push the envelope – show some respect.

P.S. I’ve some of what cognac – wink, wink.

sorry, I meant “some of that cognac” – as you can see I’ve already had some, would you like to have a drink?