Catching up with Red Exile

[the layout of this post goes oddly here and there: I have laboured unsuccessfuly to correct it; sorry]

The most irritating news is that - somewhat predictably I suppose - the property developer doing our new Moscow office has predicted delays; to 10th June (90%) or 14th (100% certain to be ready he says). But our existing lease expires 31st May. So we had a meeting Friday evening. Fortunately we have a contingency plan in place for a temporary home: all at the developer's expense I hasten to add.

Oh, and our Russian bank - a new one which is not impressing me (so watch it Raiffeisen or I will switch our accounts from you!) has been a real pain in the ass. It is an issue of the 'hard currency passport' (yes, everything foreign needs something like a visa here) concerning a large transfer. Now lawyers and finance people in three, no, actually four, countries are beavering to sort it out.

In Russia your corporate bank is not your Friend or business partner: they are the devil! Actually, Raiffeisen Bank in Russia for a while - when I first moved here - set the benchmark of excellence, but I think their service and approach has really declined since they gobbled up Impex Bank. In Russia, it might be branded Austrian, but the middle management and service culture seems to me to have become distinctly Soviet. We were looking to pool our accounts in all the 19 countries of our region with them - I am pushing to ditch them in mine. Right now, I loathe them.

These two events - property and cunty bank - all occured after 5pm on Friday. Exhausted - a hugely busy week and two overnight train journeys in three days (and, like, 11 hours sleep in 72 hours) mean't I got home about 8pm, sank a large Bombay Saphire & Schweppes and went straight to bed - a glorious 11 hours asleep...

So, to catch up with all my news, here's some more annotated updates from my facebook account:

Today

Red Exile says it's nice to wake up in his own bed, which is rare enough these days, especially then to realise it's Saturday.
7:54am meaning only that this week I've woken up on trains and in the 'apartment suite' in our Kyiv facility and, in recent weeks, have travelled a lot. Nothing, alas, more mischievous...


Yesterday

Red Exile is back in the irresistible, terrible, magnificent, pulsing dark heart that is Moscow: where the weather is ghastly.
9:00am


May 22

Exile had a great evening in Kyiv; which really has everything in a city one could wish for. The weather is also lovely.
12:00pm I took the overnight train back again. Luckily it was the flag-ship train, so the 1st class sleeper compartments were top-notch...

Red Exile is actually watching 'the' game & really enjoying it; in the way an ingenue 1st watches a Verdi opera; wide-eyed, without partiality and for the sort of poetry of it. But I thought Mr Ronaldo splendid.
12:30am


May 21

Exile wonders why, if the football match in Moscow doesn't start until 22.45 local time, all the expats going to it are leaving their offices now. It's only Luzhniki!
3:55pm

Red Exile does not feel fresh as a daisy; couldn't sleep as his train rattled and lurched across Russia & into Ukraine.
8:20am


May 20

Red Exile is on way to Kyiv tonight - overnight train (fast one with buffet). Means a dawn appointment with Russian border guards followed by Ukrainian ones.
11:01pm

Red Exile Red Exile enjoys hot humid nights; but they're better naked in the pool; as in my Guadeloupe days. A lifetime ago I lived that.
9:21pm It was my pool, my privilege to swim naked in it at midnight...

Red Exile says Russia's stonking victory over Canada in the hockey Worlds means, if Chelski win Wednesday, that's 3 great sporting triumphs for Russian sentiment in a row.
12:31am Opinions differ amongst my Moscow staffers as to whether they are pro- or anti- Abramovich and hence whether to be pro- or anti-Chelski in fact


May 18

Red Exile sees that 'tree-sperm' season is upon us again in Moscow and the streets full of the snow-storm of germinating stuff. What's is called? Puchre?
1:18pm


May 17

Red Exile said: "and...in an instant...his weekend evaporated...".
7:10pm I had to work the weekend - a crisis management assignment came up.

Red Exile has just realised he has no opera or ballet tickets booked for anything. A sort of panic has overcome him...
2:58pm Situation now rectified! Tonight I am going (for only the second time) to see the Bolshoi dance ' The Golden Age -music by Shostakovitch and choreographed by Yuri Grigorovich


Red Exile is surprised to discover that his Asus has been buggered and so he has no mobile connectivity. Hopefully it is just the usual shoddy Russian SIM card problem.
12:25am It was a SIM card problem - Russian mobile operators seems prone to them


May 14

Red Exile is still in idyllic rural Hungary and this morning will opine on web 2.0: "content may have been king but now aggregation is God".
10:05am


May 13

Red Exile is in a particularly rural part of Hungary, just an hour's drive out of Budapest. Horses are nesting, or whatever they do, outside my window.
12:30pm


May 12

Red Exile has always been fond of Budapest. In 2003 it was on his 'list' with Beirut, Rome & Istanbul. But now 4 years in Moscow; LOL.
11:07pm

Red Exile is landed in Budapest, where everyone is enjoying a public holiday and, by now, very *relaxed*.
6:49pm No Valium? Red wine will suffice. Nasty 'crabbing' or cross-wind landing though.

Red Exile is depressed and anxious. He is about to fly to Budapest and has forgotten his in-flight Valium. Either reader will recall my absurd, but nonetheless serious, fear of flying. On trips longer than two hours I pop two Valium. Actually, I can see why people get addicted to Valium - fabulous stuff - but don't mix it with alcohol (apparently that's not good - but on flights to Kazakhstan? yeah right...)
2:22pm


May 11
Red Exile has his apartment to himself tonight for the first time in weeks, but only has one night to enjoy it.
3:15pm

May 9 - the Victory Day holiday, commemorating WWII

Red Exile Well the parade was later than it should be, and in the opposite direction from that expected, but the tanks and missiles were great big boys' toys. A tank driving up Tverskaya; and part (I was too close to get the whole thing in view!) of a Topol M ICBM, or RT-2UTTH, nuclear missile launcher (NATO IDENT: SS-27). LOL - to think that in Soviet times my photographing it would have been a serious crime.
12:39pm

That night I also took my mother to see the Bolshoi's superb production of Nabucco (4th viewing). Here an excerpt someone has ripped and put on YouTube (Elena Zelenskaya was singing the part of Abigaile that night too - it is great fun for a soprano - a baddy part for them for once to sing! But I think her Tosca is better and Irina Rubtsova the better Abigaile):

(PS: I see that this recording is from the old Bolshoi production though, not the current one! - which is visually much more stunning)

May 8

Red Exile thinks it funny that all the male expats are really excited that Russia's new long-range nukes are being paraded through the streets tomorrow. Smaller WWII ceremonies were also taking place around the city. This one was close by our office:

10:52am


May 7

Red Exile is pleased, thoroughly, to recommend Moscow fishmonger at La Marée (top of Petrovka) & thanks his mate Brian for the tip. Langoustine vivant (but not for long)!
6:55pm

Mother was making her annual visitation to Moscow. She cooked the live langoustine and wasn't the least bit screamish at dunking them in boiling water. We ate them with a mozzarella / pesto/tomato salad; quails' eggs and a Gavi-di-Gavi

Red Exile wonders how long it will take to remember to call Putin Prime Minister and not President; and congratulates Dmitri Medvedev, and Russia, on his special day. 10:05am It was inauguration day - no, I wasn't invited to the ceremony. Outrageous! LOL

Red Exile The RUS govt has just announced *visa-free* travel for Brit football fans for this bloody match: what!?!?! Madness. Are they importing fodder 4 Nashi to bully?12:24pm

We all expected there to be huge trouble with all the Brit football fans coming to Moscow - turns out it all went swimmingly. I was less concerned about Brit rioters, though, than they would be targeted by extreme Russian nationalists. But the Russian security forces had weeded them out most effectively and they were getting no-where near the supporters.

Red Exile wonders why my Lenovo x60 refuses to obey me today. Sighs: I want to go mac.. 11:33am

May 5

Red Exile say street closures for Friday's war parade rehearsal, and later metro closures, will make Moscow impossible this week. 10:11am

May 4

Red Exile exhales: "sublimi il diva; notte di passione e di gioia". Anna Netrebko concert; Moscow. Magnificent! 10:27pm

erm..yes, I can get a little over-excited in post-concert high. It was at the Moscow Grand Conservatoire, which is an amazing venue and only ten minutes walk from where I live. And that day I had dined before at Cantinetta Antinori, on their lovely garden terrace.

Red Exile has enjoyed the longest long lunch; and is going to diva Netrebko's concert. 4:43pm Anna Netrebko is my all-star-world favourite soprano right now. I have all her recordings (thanks to iTunes:

She was four month's pregnant for tonight's concert and was an absolute trooper and stunning to boot. She shared the stage with superb Romanian mezzo-sporano, Rixandra Donose and (s0-so) American tenor, Brad Cooper. Anna and Rixandra dueting in "Si, fuggire!...Ah crudel", from Bellini's Romeo & Juliet (oh yes, it is an opera too, not just a ballet) was excellent. Bellini is hugely tough to sing and sopranos use his music to showcase their voice.

Red Exile today is a 'working day' in Russia. I booked leave. Have now finished essential work and am going to have a la-la long lunch

In contrast to the UK, which pivots all public holidays to a Monday, in Russia the holidays fall where they are on the calendar, which means any day of the week. But, sensibly, the Government bunches them together. The French do this: they call it 'faire le pont" (to make the bridge) - but the French do it by adding in a day. At least they did on Guadeloupe when I lived there. In Russia, in a grasp at efficiency, they deduct a day from a nearby weekend. So: holiday is on a Thursday? Make Friday a holiday too, but work the following Sunday. It is not something I can ever get used to so I book a day's leave; but usually end up spend half of it handling essential emails and calls anyway, so wonder why I don't just give up and work it like everyone else...

In pursuit of further randomness

At 04.00 am the snow-plough that helpfully clears our streets of this weekend’s heavy fall slightly prangs the Lexus parked below my bedroom window: its owners sleep more heavily than me so I listen, sing-songly, to the car alarm for 24 minutes (2 ½ minutes of alarms, in nicely varying tones, followed by a thirty second interval of silence, before it starts all over again).

As the snow-plough withdrew, taking what I guess was a fender with it; it made a soothingly crunching sound…

So, 04.09 am, I find myself thinking about ruble re-valuation – apropos yesterday’s post – it comes to me that there is a very good reason for Russia to re-value.

The Ruble is storming in the forex markets; and structurally has lots of strength to come. Russia hates the US dollar ideologically and, given its last four years’ performance against the RUR, Russia hates it financially as well.

An OPEC-for-gas between Russia, Iran and Qatar (that gas-field with a flag) is looking more likely. But would they want to price gas in USD? They would not. If you had an OPEC-for-gas it would be their choice as to their pricing currency. The Euro is a possibility, but ideologically, the Euro is hardly more popular with either Russia or Iran.

Why not piece gas/MMbtu in Rubles? You revalue the Ruble – at, let’s say 1 RUR = US$4 – and then it makes a good reserve currency for gas. And Iran would love it. Qatar would not object. Ruminations on Russia had a pithy comment on why an OPEC-for-gas should not work; but since when did economics get in the way of ideology?

And why not change the reserve currency for oil? You see Venezuela complaining? (actually, I think China and Japan would, so scrap that). And friends in the Gulf tell me the Emirates and Saudi are sick of their currencies, pegged to oil prices of course and therefore to the USD, slip-sliding as well.

The Ruble as the reserve currency for hydro-carbons? Oh yes. Definitely a possibility. And a *huge* political win in Russia. Instant hero-status for a newly-minted President Medvedev: “Russia *is* the beating heart of the world economy” etc. Fab spin.

Separately, a great brokers’ note from RenCap today, on matters Ukrainian:

“The government has prepared a decree allowing customs and the tax service to countermand 'illegal' court rulings….

“The aim of the new measure is to reduce corruption in the judiciary, sending a message to bribers that the rulings for which they pay will not be enforced, and to judges that they will be held more accountable in future.

“Though the intention is laudable, we think any measure that allows court rulings to be ignored, no matter how exceptional the circumstances, is a fundamental threat to the rule of law and gravely misguided. Unless the government provides substantial clarifications as to how its idea will work, it risks sending the wrong signals to the investment community and electorate alike.”

Personal experience reminds me – having had a client on the shit-end of this stick – you can buy a Ukrainian Supreme for about $50k a decision. Remind me, why was the Orange revolution such a break with the past?

Democracy, with out an independent judiciary, is not progress at all. There is no democracy without rule of law. And there is, literally, more rule of law in Russia.

Blogging tonight in my usual haunt – memo to self: sort out home Wi-fi – I can barely hear myself think. There are only 11 people in the bar. Six of them, sitting together, are damn near shouting. Every other word is ‘f******’; they are drunk and being staggering sexist; indifferent to the fact that all the staff speak fluent English. These are braying, arrogant, appalling expats: 40 minutes in their company and I am coming round to Zhirinovsky’s POV.

PS: if you are about to do business with CB Richard Ellis in Moscow, tell them to have their boys learn how to behave when out in public (the downside, boys, of loud, drunken conversations is we know who you are!). Although illuminating to hear one of you say: “I won’t get out of bed for any deal worth less than 1,000 sqm to me”; which at current market rates I calculate is about $83,000. Tossers!

Is Kazakhstani banking going to hell in a handcart?

I meant to blog about this as it crossed over the wires and dealing screens Monday:

Kazakh president Nursultan Nazarbayev said international rating agencies were biased against Kazakh banks

"Considering that Kazakhstan as a state provides substantial support to domestic banks, construction companies and small and medium business and also that the Kazakh economy is stable and on a firm footing, it's subjective to downgrade ratings," Nazarbayev told journalists in Pavlodar."I think that rating agencies have to consider that Kazakhstan is on a stable footing and will not allow any of its banks to go under," he said."I had already said that if such a situation continued, we would buy out shares of our companies themselves," he said, as cited by Interfax.

The global credit crunch, aside from effectively flooring Northern Rock has wreaked havoc in the Kazakhstani banking system. The Central Bank has pumped in liquidity and this has stabilized what otherwise threatened to be a run on a number of banks.

The picture is much prettier if you also caught how ATF Bank – being sold to Unicredit – had blatantly tried to screw its minority preference shareholders, to funnel all the money into the pockets of a few, very well-connected hangers-on from the Nazarbayev clan. You have to admire plucky little hedge fund, QVT, for sticking to its guns and demanding that ATF and Unicredit play fair: good luck to them! Unicredit seems to attract controversy when it buys these rinky-dink banks. In truth I wonder whether the real lesson we all should be learning here is that - contrary to abundant western-market opinion - Kakakhstan is actually as hopelessly inadequate, for real commercial rule of law, as the other 'stans.

Most of the domestic banking system is controlled either by the First Family, or by their mates, and, boy, have they screwed it up or what?

Today I read that Fitch ratings has followed where S&P have already trodden and have altered their Outlook across most of the KAZ banking sector from “Stable” to “Negative”. Most of these banks now have an S&P rating equivalent of BB-, which means not really good enough credit quality for their banks’ bonds to be bought by mainstream global investment institutions (but only specialist, high-risk funds).

What I think is interesting about the Nazarbayev quote is that, in effect, he says that the Government will guarantee the banking system. Now leaving aside issues about ‘moral hazard’, I have to say that maybe the ratings agencies have got it wrong. If oil-rich Kazakhstan will, as the President says, step in and rescue any bank, then surely the banks’ ratings should rise.

Conversely, it is the sovereign rating for Kazakhstan itself (already recently lowered by S&P to BBB-) which should be lowered again; because de facto Nazarbayev has just added all those banks’ debts to his national balance sheet.

Not, BTW, the brightest move in terms of sound financial economic management; but I suppose if you treat the banking system as being a personal plaything, like you treat the state as a whole…