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The USA Service Activity Index

Thu, 07 Feb 2008 15:29:40 EST

The USA Service Activity Index - by tvdovichenko

The USA Service Activity fell down to the minimum fixed in October 2001.

The index of business activity in the service sector in USA fell down to the level 44.6 points in January, and it indicates the recession coming. We can see results of regular monthly researching, which was taken by ISM in USA and published in February 5, 2008. The current indicator became the lowest one from the moment of acts of terror in September 11, 2001 in USA.

This index is a result of managers’ pulls in the sphere for evaluation the changes in this branch. The value more than 50 points presents increasing of the business activity, and if the value is below 50 – we can talk about its reducing. ISM experts admit the decreasing index below 50 had happened the first time during last 5 years. Experts forecasted the index at the level of 52.5 points, and in December 2007 it was 54.4.

The index of new orders for the service sector decreased to the level of 43.5 points in January 2008 in comparing with the previous month (53.9). The index of supply fell down to the level 49.0 points in comparing with 52.5 and the index of prices shortened from 71.5 points to 70.1.

Also ISM conclusion showed the unemployment increasing in the service sector, because of 24 employers reduced the number of stuff in their companies. At the same time only 6% hired workers additionally. In December these indicators were 13% and 16% respectively. The ISM index, which reflects the level of employment in the service sector, fell down to the level of 43.9 points in comparing with 51.8 in the previous month. Also this information was confirmed by the USA government, which informed about reducing the number of stuffs in February 1, 2008.

It is curious that in December 2007 similar reducing we could see in the sector of production in USA. Once the ISM index fell down to 47.7 points in comparing with 50.8 points in the previous month. The index value was minimum from April 2003. Then the index was reviewed to 48.4 points, but its reducing was tangible.

In January the ISM index of the production sector increased to 50.7 points in comparing with the December indicator. Experts forecasted its reducing to the level of 47 points.

The increasing is seen only in 8 from 18 branches of production. Analysts suppose that such numbers are indicative of the tendency of the reserved growth speed. The index of new orders increased to the 49.5 points, and in December it was 46.9 points. The production index rose from 48.6 points to 55.2.

The combined ISM index, which is counted at the base of the production and service indexes, was 44.6 points in January in comparing with 53.2 points in the previous month.

Before at the same day it was informed about the factor of business activity reducing in Europe, but there it stopped at the level of 50.6% (53.1 points in December), and it means the low increasing. Experts waited for the index of the business activity reducing to the level of 52.0 points.

In Italy, France and Germany the index was below forecasts and marks of the previous month. The index PMI in Germany fell down to the level of 49.2 points and 51.2 points in December. The index PMI in the service sector of France reduced to the level of 56.6 points in January in comparing with 58.9 points in December. PMI service index in Italy was 47.9 points in January (the previous indicator was 49.7 points).

In Great Britain on the contrary PMI service index increased and was fixed at the level of 52.5 points in comparing with 52.4 points in December.

The World Recession and Ukrainian Hryvnja

Tue, 29 Jan 2008 09:54:45 EST

The World Recession and Ukrainian Hryvnja - by tvdovichenko

The threat of recession in the world economy can force investors to reduce their positions at emerging markets, where Ukrainian market belongs to.

And deceleration the growth of direct foreign investments and loans can cause the threat of Hryvnja’s devaluation. To lower this risk is possible only to change the system of monetary politics and not to fix exchange course.

The reducing of prime interest rate by Fed added liquidity to financial markets, but didn’t increase inflow of capitals to emerging countries, as it was noticed at moments of previous rate reducing. It seems investors understood that activities of Fed are not only the wish to help Wall-Street to cope with losses, caused by mortgage crisis, but acknowledgement of the real threat of recession in the world economy.

Reducing the rate of investing increment will hurt to emerging economics. Many of them have joined to the model of the global support not long ago and satisfy the requirements of population at the expense of import goods without considerable export facilities. As results of such political direction are very serious deficits of running account in balance of payments of Romania, Turkey, Hungary, Bulgaria and Ukraine, which were covered by capitals inflow to the running accounts in balance of payments.

Accordingly reducing of the capital inflow to these countries can cause deficit of foreign currency for financing import volume needed and devaluation of national currencies. Experts from Bank of America suppose the currencies are going to weaken in European emerging countries, where the deficit of running account outbalance the similar indicators of emerging countries in other regions.

The most risky zones for investing staring investors in the face are Ukraine and Bulgaria. Only these two countries are characterized by expanding deficit of running account in balance of payments in fixing the firmly managed exchange course. Three years ago the deficit of the running account in Bulgaria was close to 7% GDP (this is the forecast of the Central Bank of Ukraine for 2008) and was formed by at the expense of energy resources and investing import. Therewith the stable economical situation in the country and perspectives of including to EU stimulate the growth of the population’s income, which was supported by considerable inflow of direct foreign investments to the country. Pending three years the deficit of running course in balance payments has increased to 12.6% GDP (totals of III quarter of 2007).
Analysts of the Central Bank in Ukraine are sure, that Ukrainian government will not permit such sharp increasing of the running account deficit. However, in the structure of Ukrainian import energy resources are dominated (so-called investing import). Ukraine has begun to face with massive inflow of consumers’ import goods, which are not included to inner production (as energy resources and equipment). And the deficit of the running account in balance of payments is covered by medium-term and short-term investments.

So using abovementioned information we can make a conclusion about high risks of balance of payments in Ukraine. And the Central Bank if Ukraine informs about possible fluctuations in the rates of Hryvnja exchange in the basket of Dollar and Euro for determining its course.

Chinese oil companies pushed Russian

Tue, 29 Jan 2008 07:29:44 EST

Chinese oil companies pushed Russian - by tvdovichenko

All Russian oil-and-gas companies were pushed from their positions by emerging Chinese companies in yearly rating PFC Energy 50. The first place was taken by Petrochina, which displaced ExxonMobil. As a result, Gasprom was only third. Analysts admitted there are 2 reasons:
1) in general the problem of inflation production cost all over the world;
2) a very strict tax conditions for Russian companies in opposition to the world companies, which are not so pressed.

Every year PFC Energy publishes the rating of 50 biggest of market capitalization companies in oil-and-gas industry. In 2007 the total market capitalization of included in the rating companies increased to 45%, and was $5 trillion. In fact, the authors of the rating mention that essential part of this growth is caused by exchange difference, e.g. Shell increased to 19% in USD and 8% in Euro.
This year was not very fortunate. Gasprom moved from the 2nd to 3d place, Rosneft – from 13 to 15, Lukoil – from 15 to 19, Surgutneftegas – from 17 to 26. Russian state companies showed their rising up: Gasprom to 13%, Rosneft –o 5%. At that time private companies Lukoil and Surgutneft fell down to 1% and 19% respectively.

Average growth of Russian companies was 15% - the same as ExxonMobil and BP.
And experts note additional troubles in the Russian oil-and-gas sector. The reason is in reducing the operational and financial indicators. For example, in 2007 rate of mining growth to 11%, now - 2-2,5%. During last few years the growth of specific consumption was close to 20% yearly. And the main factor restricted the oil-and-gas capitalization companies was the system of taxes, connected to the price for oil and leveled the effect of the price growth.
Russian experts suppose next year Russian companies will not be able to increase their positions. Only after government make necessary arrangements for smoothen the system of taxes, but it is possible not earlier than 2011.

The absolute leaders of PFC rating are Chinese companies. Petrochina took the first place (quoted structure of state CNPC), which capitalization increased to 181% ($723.2 billion) after IPO at Shanghai Securities Exchange. Sinopec increased to 157% and moved from 12 to 15 places, CNOOC – to 80% and became a leader of mining companies. China Oilfield Services became a leader in the sector of oil services (+633%), took the 5th place after traditional leaders, such as Schlumberger, Halliburton, Baker Hughes and Weatherford. Besides, the first time Spain Iberdrola Renovables Company of alternative energy appeared in the rating and took the 36th place. All companies in this sector presented average growth to 145%, more three times than basic rating.

Assets of the last hope

Mon, 28 Jan 2008 14:33:22 EST

Assets of the last hope - by tvdovichenko

The collapse of stock markets and recession of quotations are reasons for thinking about possible purchase of assets became cheaper. For example, nowadays Russian “blue chips” cost at 20% cheaper than a week ago. Besides the biggest companies’ shares among leaders of investing attractiveness futures contract for gold, which is the last instance in periods of market turbulence.

Unplanned checking.
In the middle of December 2007 it was seemed that financial crisis was stopped at the world markets and a new wave of stock markets' recession of indexes didn’t come. USA and Europe showed consolatory macroeconomic statistics, and representatives of money authorities declared hoping notes about impossibility of recession in USA.

But on the contrary of these wishes, in the end of December leading world financial institutes published whitepapers of IV quarter. It is common knowledge that nobody can be imprisoned for his/her smiles but it’s possible to do for the falsification of the corporate reports. That’s why members of markets were able to look through the real facts of loss. Promulgated facts were really horrible: if Merrill Lynch demonstrated writing off $7.9 billion for IV quarter and Citigroup informed about loss of $10 billion, the general public could only to suppose conditions of less reliable banks.

The world stock indexes fell down, for instance Dow Jones began slowly reducing to 100 points a day (0.7-0.8%) from the end of December. Russian market didn’t pay much attention to the total dynamic of quotations, but volatility was very high in fact - to 5% per 1 trade session.

The crisis started on January 15, 2008, when macro economical statistics from USA reflected essential reducing of the population’s expenses in December, the time of the holidays sales. Rumors about coming recession blazed again, and Dow Jones lost 280 points (2.3%) per 1 trade session.

Next days waves of crisis raised to the world markets and January, 21 reached Russia, - per 1 trading session the index lost record 7.38% (2000 points). So we can fix, that Russian market resisted to the outside influence for a long time and it was not outside of the world economical processes.

In fact, at the same day, January 28, 2008, Japanese index Nikkei fell down to 752 points (about 6% - the record of last 10 years). The government of Japan noted that they were going to consult USA because the reason of collapse at all world markets is the American crisis of the mortgage system. True, Dow Jones didn’t pay attention to the Japanese alerts of January 21, 2008 and lost only 128 points (1.1%).

Russian "blue chips" suffered more than other securities. Per 4 trade session from January 16, 2008 Russian market lost about 15%, but "blue chips" fell down more than 20%. No wonder that from the beginning of 2008 foreign investors had been reducing domestic securities, and to the middle of January 28, 2008 the disposals came up to maximum. So, you were able to notice in selling investing funds, which left Russian market per August and October crisis and had time to come back, and being ones.

Present changes of strategy are clear and connected to the huge sizes of the world markets reducing. Incurring losses in different segments of the world market investors were forced to sell securities for long-term profit. And Russian "blue chips" were not included to their totals and their mass selling stimulates new waves of reducing at domestic markets.

Step forward and two steps back.

American money authorities tried to assume the urgent measures to crisis and recession of the national economy. Therewith experts propose only 2 ways of treatment. January 17, 2008 George Bush made public the strategy of the struggle to crisis. According to the document’s points, 1% of national produce is planned to spend for current problems of financial system. Funds will be used for reducing the taxes of population and corporations and for encouragement of real estate building. USA government is going to shorten the term for green card receiving for emigrants if they are building own dwelling during this time. But it is in perspective.

Nowadays the main measures are reduction the rate of Fed. January 8, 2008 it was informed about subsequent the rate of interest reducing. Members of market began to talk about the level of reducing, but the sharp drop of market amended – the Fed rate was reduced to 0.75% (to 3.5%) on January 22, 2008. So, we see the Fed rate fell down to 1.75% on a half a year.
Some experts are aiming very radical. For example, a famous American financier George Soros, noted in Davos on January 23, 2008, that being crisis is not caused by the estate falling down, but this is the end of the system of credits and Dollar as the reserve currency. And nowadays other countries don’t want to accumulate dollars.

Statistic improved the words of the financial guru. Under the report of International Monetary Fund, published on January 21, 2008, central banks shorten the part of dollars in reserve to 65% in IV quarter.

It’s time for purchasing.
The collapse of stock markets can influence to the sceneries of Russian and world economy. Before crisis the main tendency was assets’ inflation. In the world economy excess of liquidity was formed, which supported the rising up of the world prices to energy resource and metal, and increasing pf the stock markets in emerging countries. Russian stock market also took part in this process and in 2004-2006 rose on the background of excess of liquidity and developed economics.

If markets continue to reduce and USA economy fell down to recession, emerging markets can loose their liquidity. In addition, reducing of prices to main Russian export goods – energy resources and metal – will hurt to domestic economy. Also it can be caused by shorten demand for these goods in developed countries.

We can see similar experience at Japanese economy. Reducing of discount rate doesn’t guarantee that economy is not under stagnation. As known, discount rate is the lowest in this country - 1%. At that time Japan doesn't demonstrate outstanding results of the economical growth.

But Russian members of market and representatives are not pessimistic nowadays. We can even say about optimism and wishing to take part in honorable saving the earth. For example, January 23, 2008 at the International Economical Forum in Davos the minister of finance Aleksey Kudrin noted, that Russia as the country with huge reserves can take part in the world crisis. Also Russia can be attractive for investing foreign capitals. At that time now Russia really can't be as stabilizer of the world economy, rather India and China can play such role.

If Kudrin's opinion is right, present crisis will not become the world recession. Level and demand for goods of Russian export, which was supported by odd liquidity of developed economics, can be provided by the Russian and Asian increasing. We can see these facts in prices to oil and gold in time of crisis.
So, “blue chips” become really attractive objects for investing.

Total Review Of the World IPO

Sat, 26 Jan 2008 05:23:20 EST

Total Review Of the World IPO - by tvdovichenko

Last year investment of capital profitability of Russian shares overrode 4 times American shares capital profitability. Emerging markets demonstrated a huge rising up last year, while others had more modest results. The leader became Nigeria Stock market with its increasing to 115.32%.
The Company Standards&Poor’s published its review of global stock markets "World in numerals", where you can see data of different countries’ markets rising in 2007.

It was clear that last year the most profitable securities were shares of companies in emerging countries. Emerging markets increased to 42%, developed markets – only to 9.4%.

According to Standard&Poor’s review, in December 2007 the reducing of profitability was fixed in 19 from 26 countries with developed stock markets.

However, this fact was better in comparing to November 2007, when the profitability reducing was fixed at 24 developed markets.

The worst matters are in Iceland, where 2 months in succession reducing is stable: in November it was 15.48%, in December – 11.58%. In Canada negative profits were considerable in autumn (11.17%), but in December the situation became stable and increasing was fixed at 2.69%.

The best activities at the developed markets were demonstrated by Luxembourg (3.83%).

At the emerging markets the situation is really contrary. 16 from 26 emerging markets finished December with positive results.

The best resume were demonstrated by Indian stock exchange (rising is 9.09%), Nigeria (8.75%), Egypt (8.07%). Chinese market was reduced to 3.82% in December.

What about totals of the year? Profitability of emerging markets was really impressive. In 11 from 26 emerging countries the rising of profitability exceeded 50%. The leader was Nigeria (115.32%).

India and China demonstrated really great results: India - 80.85%, China – 69.83%.

Russian market doesn’t have such wonderful results, but showed good increasing too - 23.06%.

So, investment of capital profitability in Russian shares exceeded American securities 4 times: USA market increased only to 5.78%.

Japan lost 5.35%. Europe showed rising up to 7.47%.

It’s necessary to admit that German stock market increased to 33.83% in 2007.

Also Ernst&Young experts accentuated, that the biggest IPO were fixed at emerging markets in 2007.

The most global IPO of 2007 were the Russian bank structure “VTB” ($8 billion) and Chinese oil company PetroChina with $1 trillion of capitalization; and it was the absolute record.

Asian Countries and Their Currencies In 2008

Thu, 24 Jan 2008 11:23:15 EST

Asian Countries and Their Currencies In 2008 - by tvdovichenko

In 2007 economics of Asian countries were really unexpected. And their national currencies increased. Otherwise experts are waiting for continuous growing up of Asian currencies and their indicators will be depended on the level of inflation and the domestic demand.

This year is really very complicated for investors. Analysts are talking about the further discount rate reducing by Federal Reserve System of USA. It can cause onflow of investments to Asian countries. On the other hand, if USA economy is in the stage of recession, the first victims suffering from export are supposed to be Asian countries, and this fact can influence to their currencies in the bad way.

In 2007 weakening Dollar influenced to Euro and raw currencies in most cases. But this year Euro and raw currencies don’t have such potential for further strengthening. That’s why places of leaders will be won by currencies of emerging Asian countries. To economists' of Citigroup opinion, the effective rate of emerging Asian countries currencies in consideration of inflation will be 3.4% in 2008 and 4% in 2009. Reuters suppose that leaders are Chinese yuan, Indian rupee, and Thailand baht.

It’s necessary to admit that in 2007 most of Asian currencies increased indeed with respect to Dollar, and the most noticeable was Philippine peso – its rate increased to 19%. According to International Monetary Fund this year growth rate of Asian countries economics is expected to be higher than growth rate of other emerging countries economics. Accordingly we can forecast subsequence strengthening of their currencies.

Most analysts are proceeding to stake on peso and rupee; because they are sure in 2008 we can expect a sharp onflow of capital to India and Philippines. From Citigroup specialists’ point of view till the end of 2008 peso will increase to 10% and 1 dollar will cost 37.5 peso.

Chinese yuan increased to 6.9% in 2007 and in 2008 it will rise to 10%.

Also it was really important to know that the Central Bank of China will allow yuan to strengthen its positions with respect to other world currencies. Asian exporters are using yuan to count competitiveness ability of prices and if the Celestial Empire’s currency will increase, we can expect the growth of currencies in other countries (especially Malaysian ringgit which is closely connected to yuan).

Some News From the USA Mortgage

Tue, 22 Jan 2008 06:12:50 EST

Some News From the USA Mortgage - by tvdovichenko

Bank of America leaders are carrying on negotiations about purchase of the mortgage lender Countrywide Financial Corp.

Countrywide may decide all its troubles by this dealing with a dash of the pen.
From the beginning of hypothec crisis in USA, caused by prices reducing to the dwelling and many cases of the lenders’ deprivation to foreclose on a mortgage, the market value of the Company Countrywide Financial sharply fell down. Now it is evaluated of $4.8 billion, in February 2007 it was evaluated of $26 billion (before crisis).

In summer last year the company reviewed the idea of extending credits and suspend relations with lender of not irreproachable repute and others risky credits. It happened after Countrywide had to close the credit line of $11.5 billion, because of no one investor had attentions to purchase it and became the sub-creditor.

In the III quarter 2007 the Company suffered damages again. It was $1.2 billion and 11 thousand of working places were reduced. Now Countrywide cut down the number of given credits to curtail the risk of their non-repayment.

Therewith the situation is continued to make worse. The Company management informed that in December last year the revocation of right of mortgage redemption and delays in payment reached to top positions.

At that time, the Countrywide management declared about its sufficient means of liquid funds but investors didn’t trust with these statements.

To the experts’ opinion, if Bank of America, the biggest organization in the field of mortgage credits, purchase Countrywide, it will save the situation.

Once Bank of America helped Countrywide with purchasing preference shares to the sum of $2 billion with 7.25% of the yield yearly. In conversion of these shares to ordinary shares, their cost is above $18/one, and Bank of America will be the holder of 16-17% shares of Countrywide.

After it was said about the possible deal the value of Countrywide shares increased to 51.4% at New York commodity exchange, one share cost increased of $2.63 and became $7.75.
At that time the Bank of America share rose to $39.3.

Both companies’ representatives are not making remarks till that time.

Dwelling In the World - Part II.

Tue, 22 Jan 2008 04:16:59 EST

Dwelling In the World - Part II. - by tvdovichenko

Let’s compare the rent of apartments in Japan.

For long time prices of the apartments' rent were stable here. In every street you can see a lot of lodgings (Russia doesn’t adopt such practices till that time).If we are talking about Tokyo, simple apartments look like a students' dormitory, which consists of a small room, kitchen, hall and WC, will cost $400 per month.

A two-room flat with a large living room costs $1000 per month at average, and in most cases prices are really different. Also it is necessary to add some sum of money for household running costs about $100-$200 monthly to this price. In general you can see Japanese rent is more acceptable than Russian.

It is significant that in Japan the contract assigning with the lessor includes a nonrecurrent exaction of 2-3 months sum: a deposit and “gratitude” to the owner of the dwelling. Similar actions are prohibited in many countries and are specific only for Japan.

But the most expensive is a rent in the main city of USA. If you would like to rent apartments n New York, it will cost $2922 per month at average, – Forbes.com is informing. There is a very low level of the demand for the apartments market, that’s why a high rent prices are stable and maybe even increase to 6.6%. The most expensive are apartments close to Manhattan and along the Central Park.
To be convinced of high cost of living in New York, you can rent a one-roomed flat in Washington of $1302.

Now let’s travel to the countries of the former USSR. There the dwelling is really cheaper because of a low life level of their population.
The capital of Ukraine – Kiev – is characterized by a high value of apartments in comparison with other countries of the former USSR and is close to Moscow. A one-roomed flat is about $700 at average, a two-roomed flat - ≈ $1000. a three-roomed flat - ≈ $2000.

As everywhere one-roomed flats are in deficit. The minimum of their rent increased to 12% from December, 29 2007 till January, 12 2008; a two-roomed flat rent fell down to 0.6% and a three-roomed flat fell down to 3.7%. In some districts of the city, you can find a three-roomed flat cheaper than a one-roomed flat in the center - $900-$1300 monthly.

Belarus is characterized not high prices. In the center of its capital – Minsk – you can rent one-roomed apartments of $500 monthly. The difference between rent cost of one-roomed and two-roomed flats is $50. At average a one-roomed flat costs about $200 per month, two-roomed - $250, three-roomed - $300, including household running costs.

It’s interesting to compare prices: in 2000 a one-roomed flat costs $40-$50, and now $200-$250.

You can rent a one-roomed apartment for $200 in Tbilisi, the capital of Georgia. Preconditions, noted by tenants, are light and gas accommodations presence, because there is no central heating there, only autonomous. In residential districts you can rent a dwelling for $100, but really it’s non-presentable. A three-roomed flat costs minimum $350 per moth. Diplomats like to rent private houses for $4000-$5000, especially with the fireplace for frying shish kebab.

Baku is more expensive in comparison to Tbilisi. A one-roomed flat costs $400-$500 per month in the center, in outskirts - $150-$200. Two-roomed apartments in the center of the capital of Azerbaijan cost $400-$500, in outskirts - $300-$400.

Prices for three-roomed apartments vary from $500-$1700 depending on accommodations and location.

You can rent a four- or five-roomed flat for $1500-$2500 per month. At that time elite dwelling in architectural and new-built districts costs $5000. In most cases high-ranking diplomats and manager of the local offices, representatives of the foreign oil companies, are renting them.

Dwelling In the World

Mon, 21 Jan 2008 08:46:46 EST

Dwelling In the World - by tvdovichenko

What about your life level? Are you a rich person? Can you tell the world you possess the best apartment?

These and many others questions were viewed by Russian experts.
First of all they compare the cost of apartments. Every person has his/her place of living, and according to its conditions we can compare countries and life level of their population.
Let’s compare countries of the former USSR and the world.

Rent of Moscow apartments is higher than New-York and London. Among countries of the former USSR, the closest is Kiev, the capital of Ukraine. In other countries of the former USSR the flat rent is cheaper some times.
In Moscow from January 2007 the rent for the one-roomed flat increased to 23.76%, the two-roomed flat – 34.29%, the three-roomed flat – 25%. The flat located to the metro terminal station costs $800-$1000 per month, in the center – $1500 and more.

In European countries housing conditions are differ. A place, titled as dwelling in Italy can be mentioned as ruins in Germany. A place, titled as a standard in Germany, can be supposed as luxury in Great Britain.

Last years London has the reputation of the richest city in Europe. A one-roomed flat in London can cost £240 per week ($470 in weekly and $2350 monthly). The two-roomed flat renting not in the center costs at average £300-£400 monthly. The total cost of apartments in London depends on the city district. Specially the flats are expensive in the quiet regions, such as Hampstead.

In Paris the flats rent is rising because of a noticeable population increase and the dwelling deficit. As always, there is a huge demand for the one-roomed flats (45% of market) and two-roomed flats (38%).
As a rule, a usual one-roomed flat in Paris costs €560 monthly ($830), a two-roomed flat - €800 ($1184), a three-roomed flat - €1450 ($2146), a four-roomed flat - €1480 ($2190).

Earlier the difference between not expensive region of the French capital East and luxurious West was marked, but now prices are the same. The most expensive districts are 7 and 8 close to Eiffel Tower and 4-5 districts close to Sorbonne, the cheapest regions are 18 to the North of Paris.

Rome is the most active developing city in Italy, but the estate market is very small there, and this fact caused high prices. In this country apartments are more expensive only in Venice and Milan.

A one-roomed flat costs €500 ($740) monthly. The most prestigious to live in the Old City – a dwelling costs €650-€1800. The cheapest region is Via Laurentia, to the South of Rome.

Berlin has a glory of the cheapest Western capitals. The demand for dwelling is more than offer and last 10 years prices increased only to 5%. German like to count the apartments cost in m². At average 1 m² costs €7, so a one-roomed flat of 35 m² costs €245, and a two-roomed flat of 60 m² costs €420. But these facts are individual . The main costs of apartment depends on its location and not only of its quality.

A monthly rent of a three-roomed flat without furniture and Western-style renovation in prestigious region costs €740 ($1095). Analysts suppose some increasing of the apartments’ cost.

To be continued...

10-million bond

Mon, 21 Jan 2008 07:53:34 EST

10-million bond - by tvdovichenko

Last week the Central Bank of Zimbabwe issued the 10-million bond of Zimbabwean dollar at the background of the economy situation worsening in the country.

Theoretically this bond can be exchanged at the rate $33, really at the black market it costs only 33 cents.
At average the government employee’s salary is 250 million of Zimbabwean dollar.

Every day in Zimbabwean banks a lot of people stand in long queues for money withdrawing.
There are lacks of foreign currency, food and electricity.

Last year in autumn experts from ICG (International Crisis Group) noted, that economical and liberal crisis let the country to total chaos.

The government is trying to correct this situation with mints and it caused hyperinflation today.

Few last months the official data about inflation were not published, and experts supposed the inflation rate is more than 50000%.
Business representatives assume 10-million bond introduction will shorten queues but not dimensioned economic problems and slow down the country’s impoverishment.

Do you like champagne?

Mon, 21 Jan 2008 07:22:09 EST

Do you like champagne? - by tvdovichenko

The trade mark is connected to Champagne, the region in France, where traditionally different kinds of grapes used to the sparkling wine manufacturing are grown.

As always French government strictly limits sizes of the vineyards and density of canes planting in Champagne.

Now these rules may be weaken in case of the increasing demand for the sparkling wine not only in USA and Europe, but at emerging markets – in Russia and China.

Analysts from Breakingviews.com portal suppose champagne fell prey to its glory. The demand for champagne had been really phenomenal during last 10 years. As a result it is not sufficient and its limits increased to the highest degree in being conditions.

Sorts of grapes used to this wine manufacturing are grown to the North-East of France, and its volume is fixed at 330 billion bottles in a year. All in all prices to champagne are rising and manufacturers are not interested in this factor, that’s why sooner or later the demand for it will be weakening.
The only way of this problem deciding is to widen the area of vineyards in Champagne.

In XIX century the vineyards’ area in Champagne was bigger till some territory was destroyed by phylloxera (injurious insect of grapes). And now French government is discussing a possible return to historically determined borders of wine-growing region, recovery of former vineyards, annihilated by greenflies.

Huge profit and a battle for positions.
Widening of the vineyards territory can have grave great consequences. The matter is about huge prospective income for wine-makers. If 5000 hectares, where sugar beet is grown now, are going to return for grapes, it will bring in an income increasing tenfold.

Theoretically their income in 10 years may increase to €6 billion – but really manufacturers of champagne will become richer only after the first appearance of new vineyards and vines will fructify.

Also analysts suppose champagne may loose its position in the world if nothing to do. From every quarter a lot of rivals are attacking champagne, sparkling wines without such famous past, but at a reasonable price: Italian prosecco and asti, Spanish cava, effervescent vines from Germany and Great Britain.

Therewith if forecasts of the world economy recession become true, the demand for champagne will be reduced.

Today the demand for champagne is increasing by sharp tendencies, and manufacturers of champagne are able to take this occasion pro domo sua.

What Is Life Level of Russian People?

Tue, 15 Jan 2008 07:56:54 EST

What Is Life Level of Russian People? - by tvdovichenko

Russia got a 134 place in Distribution of Global Economic Freedom ranking, made by the American Researching Fund Heritage Foundation and The Wall Street Journal together. Last year Russia took a 120 place, located between China and Nepal. In 2008 ranking Russia is between Ukraine and Vietnam.
This ranking consists of 10 nominations, i.e. "Business freedom", “Trade Freedom”, “Investment Freedom” etc. Russia has the lowest point in “Freedom from Corruption”. The highest mark Russia got in “Fiscal Freedom”. Russia outran USA (5 place) with this mark.

At the first stage Hong Kong is located (total 90.6 score), the second – Singapore, the third – Ireland. Also the top 5 countries Australia and USA belong to. Then New Zeland, Canada, Chile, United Kingdom and Denmark are following.

In 2008 the average world point is 60.3, and it is similar to last year. It is admitted that former British colonies in Asia are leaders. Otherwise a half of leading 20 countries are located in Europe.

The Heritage Foundation and The Wall Street Journal authors publish yearly Distribution of Global Economic Freedom ranking 14 times. They are sure that Economy Freedom and its growth are closely connected.

Chinese Toys And Our Children

Tue, 15 Jan 2008 07:13:19 EST

Chinese Toys And Our Children - by tvdovichenko

China government annulled licenses of more than 600 manufacturers (Hinhua informed), refer to the State Administration of quality control, inspection and carantine.

Pu Changcheng, the representative of authority noted, that from August 2007 in China the monitoring of 3000 companies of toys production was going. In the issue, a new system of quality control was created, which guarantee absence of serious troubles in future.

This campaign was arranged because of a great quantity of complains to the quality of Chinese goods, and first of all kids toys. These charges came to a head during tha scandal with Mattel goods, where Plumbum and other dangerous for health wastes were determined. Earlier Chinese government had already annulled licenses of manufacturers. In November 2007 only 764 companies in Kwangtung province had licenses for export.

China is one of the biggest manufacturer of children goods. In 2006 China exported 22 billion toys, and it was near 60% of the world market in this sector.

Disputes Around Future Gas Pipeline Laying on the Baltic Sea

Tue, 15 Jan 2008 06:49:35 EST

Disputes Around Future Gas Pipeline Laying on the Baltic Sea - by tvdovichenko

In Helsinki port you can see few vessels, which belong to Russian “Gasprom” of Nord Stream consortium. So, now we’re going to discuss and maybe even review some disputes about a future gas pipeline laying there.

For many months ship’s companies have been putting to sea to research the sea bottom for safe gas pipeline laying.

This task really isn’t easy. The gas pipeline seems to be 1200 km in length and will lay from Viborg in Russia to Grayffsvald in the North Germany on the Baltic Sea bottom.

These arrangements will be finished in the end of 2010, and after Russian gas will supply European consumers. The long-term goal is to supply 55 billion m³ in a year.

By the way the laying is not a cheap activity. Experts suppose the gas pipeline will cost €5 billion, and this mind can be changed because of some delays.
At that time some governments and Nature secure companies protest against the gas pipeline laying.

There is an opinion, that this project was created by Russian State Energy Company “Gasprom” and Germany without agreement of other countries.
Poland and Baltic countries prove, that they were sidestepped this question, and afterwards they will loose profits from gas transit.

A new posted Polish Prime Minister Donald Tusk is going to press for Russian-German gas pipeline transit laying at Polish territory, not on the Baltic Sea bottom. Also he supposes the route across Poland will be cheaper and to his opinion energy supplies are diversified and Russia is trying to become more independent.

Finland experts also have some doubts as to the gas pipeline location. Finnish Ecology Department demands on to move the pipeline laying to the South, because of possible pipeline’s influence to the natural surroundings. At that time Finland is interested in the successful pipeline laying to have the alternative source of energy.

The environmental pressure group “Greenpeace” criticizes this project too. They mentioned the Baltic Sea bottom will be dirty and some toxic wastes can come to the water surface. Therewith somewhere the pipeline will come across the Sea nature reserve zones.

To answer all these questions Nord Stream is researching possible influence to the nature, using all advanced industrial processes. They include acoustic measures, scanning, applying practically submarine vessels with remote control and gradiometers.

The Gulf of Finland was mined in World War II years very density. There a lot of toxic chemical wastes were submerged.
Engineers, providing researching, had been combing every centimeter of the Sea bottom for safety.
They divided 1200 km to some parts and explored a lot of information. All done pictures of Sea bottom are learning and then will archive.
Nord Stream experts say till that time some huge stones and ship frameworks are found and even some shoppy trolleys and laundry washers

What about mines?
There were some objects belong to ammunition. These zones are known and determined in the gas pipeline location.
The main troubles of the project are: length of the pipeline, small depth of the Baltic Sea and rugged topography of the bottom.
Nord Stream representatives try to assure this gas pipeline project isn’t a bilateral agreement of Russia-Germany.

Nord Stream consists of “Gasprom” (51% shares), German energy companies E.ON Ruhgras and BASF/Wintershall (40% shares) and Dutch Energy Company Gasunie (9% shares).
This project is supposed to be international and advantageous for every partner. EU titled it as “the priority project”, because the demand for gas is increasing and local sources are weakening.

And now we would like to ask the main question: Why did Nord Stream decide to start laying of the Sea gas pipeline instead of ground?

Its representatives prove there are a lot of commercial and ecology advantages. If to lay the pipeline on the ground it is necessary to deal with settlements, forests and lakes. That’s another pair of shoes to work with the submerged pipeline. We will be able to pipeline transportation under high pressure. It will not be necessary to discharge the gas additionally on the halfway, and that’s why it will be cheaper and more effective.
Next steps.

Nord Stream is going to finish the fourth part of researching in January 2008.
Consortium is planning to publish its conclusions about influence to the natural surroundings in spring 2008, according to U.N.O. ecology laws.
Otherwise, Nord Stream will be accompanied by many of legal battles in future.

KamAZ Will Arrive To India

Fri, 11 Jan 2008 10:25:52 EST

KamAZ Will Arrive To India - by tvdovichenko

On February 2008 the Company “Kama-Techincom” is going to assign the contract with the Company Tatra Vectra about the creation the joint car assembly plant, which can become the biggest production plant of trucks out of Russia. The high competitive ability of Russian goods will be supplied local components. First of all, heavy models more than 25 ton will be offered to Indian consumers.

This enterprise, in which “Kama-Techincom” will have the control holding of shares, will organize the small parts assembly of the Russian dump trucks and main prime movers with semitrailers in Hosur town to the South of India.
KamAZ representatives suppose Russian trucks should be popular in India, because their price is lower to compare technical characteristics with West enterprises. This price to KamAZ is caused by using components of the Indian production.

At the first stage it is planned to use 10% local components, and in 2-3 years the share will increase to 30-40%.

Last year “Kama-Techincom” had been providing the analyze of the Indian market and demand and made a conclusion about heavy trucks more than 25 ton need.

Also this fact was proved at IX International exhibition “Auto Expo 2008” in New-Delhi, where Russian heavy models were under interest.
“Kama-Techincom” introduced the dump truck “KamAZ-6540” and the main prime mover “KamAZ-5460”. These two models will be proposed to Indian consumers first of all.

In case of successful creation of the joint car assembly plant in India the new production of KamAZ will be able to orientate sales to regions of Bangladesh, Myanmar, Sri Lanka, and in future Malaysia possible.
Now KamAZ has car assembly plants in Ukraine, Kazakhstan, Vietnam, Pakistan and Iran.

The Group "KamAZ“ is the biggest automobile corporation in Russian Federation, and it enters to top 10 of the world producers of heavy trucks more than 14 ton and took the 8th place in the world by the production diesel motors value.

The complex “KamAZ” consists of 13 the biggest specialized divisions of development, production, car assembly plants and car components, and also marketing of finished goods. There are 110 plants, including joint plants in the former USSR and foreign car assembly units.
Production capacities are 50,000 heavy trucks, 75,000 power aggregation and 1000 buses.

Some Minds Review About the Oil Production Market

Fri, 11 Jan 2008 08:58:18 EST

Some Minds Review About the Oil Production Market - by tvdovichenko

The World Economy is going to be more dependence from OPEC, because of the level of oil extraction is falling down.

According to suggestions of the US informational analytics, it was caused by the reducing of production in states, which are not members of OPEC. OPEC will spread its influence to all market. Russian experts suppose it will not increase price for oil through fear of recession at the world market and continue to look for the golden mean in pricing.

EIA analytics are sure, in 2008 the subordination level of the world economy from countries – OPEC members – will rise. Experts from Norway, Mexico, Great Britain, which are not OPEC members, are thinking in the same way.

EIA forecast, located at their site, which was given this year is contrary to last year one. Earlier they supposed, in average price for fuel should be lower in 2008, than in 2007, and pointed $81,67/1 barrel. Otherwise bargaining, took place at the beginning of 2008, forced them to change the position. And according to their last news, hydrocarbons raw is expected to reduce, and average price for American oil supposed to be $87,21/1 barrel.

Let's admit, last week oil price reached $100 at the background of conflicts in Nigeria, Iran and Irak.

Also EIA forecast the demand for the oil will increase to 1,6 billion barrel in a day because of high economical increasing of China and other countries of Central Asia and Pacific region. Lets compare these thoughts with facts, that in 2007 the demand for the oil rose to 1 billion barrel in a day.

As per new forecast data of the oil volume production OPEC, given on December 2007, were corrected to 32,58 billion barrel in a day. It is more than 1/3 of the world raw production. Countries, which are not members of OPEC, will produce 50,21 billion barrel in a day in 2008.

According to this document, the raw deficit will not been expected. Reducing of production in Great Britain, Norway and Mexico will be compensated by supplies increasing from Azerbaijan, Russia, Canada, Republic of Sudan, Kazakhstan, Brasilia and USA.

Analytics from Financial Bridge are sure it's too early to prove the world market dependence from OPEC.

Russian experts are talking about countries becoming to be set the title of monsters among oil production companies. Also they point the cool attitude of these countries to USA and West countries in total. This fact can cause anxiety in Europe and USA politics. At the same time let’s admit that old deposit occurrences become depleted and production places can locate in zones of instability or to the third countries. In close future, deposit occurrences will be reduced in the North Sea, while OPEC will be able to keep high level of the oil production. In other regions it would be necessary to follow the deep-water shelf development and bitumen sands. These facts will cause the prime cost increase and the oil and oil products will be more expensive at the world market.
Additionally the total value of the oil production OPEC countries consists the 1/3 part of the world level and this fact predetermine the leading role of the cartel in the world energy balance regulation. Countries-importers, especially USA, will try to obtain the increasing of quote for production. Of course, exporters are interested in high prices for energy resources, but they also take into consideration possible recession of the world economy and reducing of demand for the oil as a result.
That’s why OPEC will play with the balance of the demand and offer and try to grade sharp sudden changes of the rate.

The next possible increase of quotes will be able to look through at the meeting of OPEC ministers on February 1, 2008. From November 2007 the cartel has been increasing the oil production to 500,000 barrel in a day.
Maybe, the quotes rising will not play a major role for the oil changes of the rate, because now the main factors influencing the pricing are considerable indraft of the speculative capital to the Commodities sector, and military risks of Middle East and Africa.

The End of the Dollar Epoch and its Effects for Russia

Thu, 10 Jan 2008 06:51:04 EST

The End of the Dollar Epoch and its Effects for Russia - by tvdovichenko

US Dollar is loosing its positions as the international reserve currency. The sharp weakening of its exchange, shown in 2007, undermined its authority. Analytics suppose the real altenative to Dollar is the multiple-currency system.

The Dollar share fell down to the record low level in the III quarter 2007. It reduced to from 65% to 63,8%. At that time Euro share increased from 25,5% to 26,4%, and British Pound Sterling increased from 4,6% to 4,7%.

In 2008 experts forecast following reducing of American Currency. The Dollar epoch will not have been extending the 100 years term. Its beginning we can consider from the First World War start. Till that time from 1820 The Gold Standard dominated in the world, and the fact reserve currency Pound Sterling was present. In 1914 North and Latin America formed the dollar zone. The final change of the leaders was in 1931, when the panic at London's financial market put off the Dollar to the background. It's interesting to know, this panic was caused by the Great Depression in USA. And the dominant role of American Dollar was approved by the Breton Woods Agreement in 1945.

According to its points the Dollar Standard was approved and the currencies of 44 countries were connected to the US Dollar, and the Dollar was connected to the Gold in propotion %35/troy ounce.

Otherwise, The Dollar End was forecasted earlier - every time, when its course was weaken: at the end of 1970, in 1985-88, in 1993-95. But such fact was missed, that the Currency's status as reserve didn't depend on its exghange course. The main task of national reserve was guaranteeing people trust to its own state Currency. That's why the reserve Currency should be converted in an easy way, and in critical situation should become the source of cash position.

The nearest persecutor of Dollar is Euro.

It is supported by European Community, which running account is balanced, and its dependance from the oil is less than USA. Otherwise, the incresing Euro course is starting to provoke complications in Europen producers, and this fact is really not so optimistic.

Besides, we don't know if the central banks trust the young currency. The US Dollar can be displaced only by some currencies, such as Euro, Chinese yuan, Japanese yen.

In Russia Rouble is going to become one of the reserve currency. In June 2007 at Petersbourg International Economy Forum the president V.Putin mentioned, that present financial system don't reflect the global economy needs, because of course fluctuations are negative for financial reserves of countries. Putin supposed Rouble to be one of the first candidates of international currencies.

If these thoughts become to life, Russia will have some advantages. It will be convenient for Russian people - exporters and importers needs. Russian banks and other financial institutes will have more remunerative work, because of their advantages in Rouble operations. And the third: the profit from the money emission, when other countries credite Russian economy looks like today financial of the US deficit.

Therewith the country which possesses reserve currensy is supposed to be more prestigious at the world politic field.

Also there are some minuses, such as serious variations of currency demands, and this fact will cause some troubles for the Bank of Russia control. Besides, the currency increase and following average demand of it will lead to the course strengthening, which is not preferable for producers-exporters.

These obstacles don't threaten Russia, because in near future Rouble is not going to become the world reserve currency. The Dollar reducing is disturbing the community because of most financial institutes continue to save up capital in American currency. All the hugest contracts are closed in the USD.

Till these days Dollar is the most liquid currency, and there are any hindrances for serious financial contracts supply. But most oil exporters are worried about possible future oil sale in Rouble: capitals would change to Rouble can disappear. The Central Bank should have a plenty quantity of Currency to provide buyers in accounts.

The real alternative for Dollar is the multiple system. The main accent is to changereserve struction and to increase Euro and other currencies share.

A New Historical Gold Price Record

Wed, 09 Jan 2008 08:49:32 EST

A New Historical Gold Price Record - by tvdovichenko

Today new historical records were settled at New York commodity exchange. As results of morning dealership in electronic commerce CME GLOBEX, the maximum price for precious metals are: gold (February) - $894,4/oz; platinum (April) - $1565,0/oz.

The heightened interest to precious metals was stipulated by such factors: possible recession in USA economy, apprehension of follow descent basic interest Fed rate, tension in USA and Iran relations, and high oil price.

Coal price forecast in 2008

Wed, 09 Jan 2008 06:52:41 EST

Coal price forecast in 2008 - by tvdovichenko

The rate of Coal price reached an all-time high in 2007 on the background of a great demand sharp rise for this fuel and supply missing. And there are all reasons to think that in 2008 these troubles will direct to further price increase.Though, traders and analytics pay attention to a little reduction of prices at the 2008 beginning and then this raw-material market will be characterized by buoyancy.

In practice all experts agree with the affirmation, that coal price is being stable on a high level. Also spesialists suppose to expect a little coal surplus in 2008 (near to 10 billion ton). At that time the world value supply should increase to 35 billion ton, from which 5 billion Australia will supply, 15 - Indonesia, 4 - Columbia, 2 - South Africa, 8 - USA.

Otherwise, most traders and producers are talking about the point, that even one trouble with supply becomes to this raw deficit in 2008. True, in 2007 the sharp price increase was caused by different trubles, i.e. jams in Australian ports, low traffic capacity in USA and transport missing.

Also Russian experts admit, if the question of shipping is not solved till June 2008, the next price increase is possible. In general the situation with supply isn't very favourable and every country-exporter has such troubles.

It is necessary to note, that the main importer of coal was China during all 2007. By the way, The National Comittee of development and reforms informed, that China is going to keep its positions in 2008. At that time in September-October 2007 it reached the point of $130/ton. So, in 2008 this fuel price will be near $85-100/ton.

Also the coal price increse can be caused by bottleneck problems and workers strikes connected to pay rise. True, in 2006 coal production workers at Drummond Coal organized 3 months strike in the Columbian mine and new negotiations are going to start in May 2008.

Russia-Iran possible gas cooperation

Wed, 09 Jan 2008 06:10:48 EST

Russia-Iran possible gas cooperation - by tvdovichenko

Iran offered Russia to create a powerful joint gas company. It was declared by Mannusher Mottaki, Iranian Foreign Minister, during the special session of the intergovernmental committee.

To his opinion, this joint company could realise projects in countries, which have huge natural resources, particularly in Asian republics and Persian Gulf countries.

Russia-Iran cooperation in the gas sphere could become alerted European Community, all the more so it will be directed to projects realise in Central Asia.

Europe has been looking for a possibility to reduce its volatility from Russian gas. In this respect EU pins its hopes on Central Region resources. Besides, Iran is examined by Europe as one of the biggest alternative supplier of energy resources.

Specifically one of the main European projects of last few years - gas pipeline Naducco should fill with the gas from Central Asia countries, including Iranian gas delivery. In September 2007 Teheran declared about ownership of all necessary points for 35 billion cubic metre gas supply yearly to Europe. EU reacted to these intentions in a positive way.

Otherwise closed partnership of Russia-Iran in the gas sphere will reserve present being conditions in fact - Europe will not receive the alternative supplier in Iran. And this joint-stock company of Russisa-Iran in Central Asia region, taking into account Iran influence, could become a serious competitor for European and American companies, which work in Central Asia.

Also it is necessary to admit, that Europe morbidly responds to intergovernmental Russian negotiations with transit countries, in questions connected to gas. It should think of Russia-Algeria talks about possible coordination their actions in gas supply. At that time the idea of gas cartel became to life. In consideration of Algeria, as Russia, is one of the main gas supplier, these initiatives were met by Europe in a very negative way.

By the way, not so much time ago a very perspective plan of "Gasprom" about commercial development of Algerian deposits was interrupted. It is high-probability caused by European lobby. However perspective cooperation with Iran are well keeping.

Iran isn't a strategical gas supplier to Europe till that time. But EU isn't ruled out, in future this country resources contained of 28 trillion cubic metre, will supply them to European market. In connection with this opinion the reaction to possible Russia-Iran cooperation is understood.

At that time Iran has other huge projects of gas export, i.e. the dimensioned construction project of gas pipeline to India (now there some troubles caused by complicated questions between India nd Pakistan). But in such favorable contingency, it is possible for Russian companies to take part in these plans, because they are owners of up-to-day technologies of gas production and transport. From this point of view gas cooperation with Iran is seemed to be very perspective in ecnomic and geopolitics keys.

The US Dollar is going to stop its falling

Tue, 08 Jan 2008 10:24:35 EST

The US Dollar is going to stop its falling - by tvdovichenko

US Dollar must stop weakening against Euro in 2008, because of State Funds from Asian countries and Middle East will buy American assets in a more active way. According to medial assessment, based on the Bloomberg News poll of 42 analytics, euro-to-dollar rate is going to reduce from 3,5% to $1,40 (1 euro). In 2007 the dollar-to-euro rate lost 9%, in 2006 – 10%.

Against the loss of mortgage instruments, Merrill Lynch (MER), Morgan Stanley (MS), Citigroup (C), Bear Stearns (BSC) came to agreement to sell their holdings of shares to the amount of $20 billion. American Investment Bank Merrill Lynch carries on negotiations with Singapour State Investment Fund Temasek Holdings about possible purchase bank's shares to the amount of $5 billion.

American Investment Bank Morgan Stanley sold holdings of shares to the amount of $5 billion to the Chinese independent Fund China Investment Corp.

The Citigroup Bank agreed to sell holdings of 4,9% shares to the Company Abu Dhabito – the capital of The United Arab Emirates - to the sum of $7,5 billion. Foreign investors purchased points connected to American financial sector to the sum of $114 billion in October 2007, and this is the highest mark during last 5 months.

"Independent Funds are buying fell in price assets and it is noticeable", - Gerry Celaya is commenting, the main strategist of research company Redtower Ltd.

According to his projection US Dollar will be strengthened to the to the position of $1,23 for 1 Euro, and his mind is the most optimistic among analysts, polled by Bloomberg News. ”The USA Economics is stable, put the axe in the helve and will start to make a recovery, and Dollar will follow it”, - Gerry Celaya added.

“Asian and Middle East countries know, that they should help the Dollar to become strengthened, otherwise they all will get a bashing”, - Tony Morriss, the analyst of Australia & New Zealand Banking Group Ltd. is explaining and he predicts the euro-to-dollar rate at $1,39.
“I can’t expect the dollar weakening too more, - Richard Grace, the Senior Strategist in foreign exchange market of the Commonwealth Bank of Australia, - Account on-going operations deficit continues to reduce". American export increased to the record mark in October 2007. Account on-going operations deficit reduced to $178,5 billion in the III quarter, and this point was the lowest during last 2 years. Grace is predicting the euro-to-dollar rate at $1,32.

Otherwise export capacity increase can’t protect American economy from delay. As predicted of International Monetary Fund, the USA growth rate is 1.9% as compared with 2.1% in Europe and 4.8% in the world.

The abatement in American sector of real Estate caused Federal Reserve System to start the key interest rate decrease. Greg Gibbs, the Strategist of ABN Amro Holding NV (ABN) supposes, it will be difficult for the USA to attract the capital. The ABN Amro prediction is the most pessimistic for the American Currency (the euro-to-dollar rate $1.53).