The Parallax Brief

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Unrepentant Subjectivity on Economics, Politics, Defence, Foreign Policy, and Russia

Can Lasers Rescue Moscow’s Pedestrians?

Traffic in Moscow is appalling. Jams clog every main road during rush hour like fatty deposits in a 60-a-day smoker’s arteries. Famously, traffic from one of Moscow’s main airports, Sheremetyevo, is so bad that the car journey from terminal to city centre can take anywhere from forty minutes to eternity.

All this is true, and widely reported, but a worse problem, in the Parallax Brief’s view, is the average Moscow driver’s complete disregard for any traffic law. Not only does this mean that unnecessary jams are caused by drivers’ refusal to follow rules in place to ensure the smooth flow of traffic, but it makes crossing roads incredibly dangerous for pedestrians.

For instance, just the other day the Parallax Brief was crossing at a pedestrian crossing when the light was on green (red for the cars), only to reach the middle of the road and find cars whizzing infront and behind him at about 60 mph, accompanied by much angry horn honking. The Parallax Brief would like to take this opportunity to apologize to the drivers for putting their cars at risk by foolishly expecting them to stop at a red light, because the fact of the matter is that in Moscow zebra crossings are completely ignored and traffic lights at pedestrian crossings are treated as a kind of ‘suggested guideline’, rather than sacrosanct.

This, as any Moscow resident will be aware, creates a certain frisson every time a busy junction is crossed, and while this may be good for thrill seeking adrenaline junkies, the Parallax Brief is of a more sedate disposition and would prefer something to be done.

Perhaps Korean designer Hanyoung Lee has the solution: lasers that will vaporise offending drivers. Well, not really. The concept involves a (non-lethal) red ‘laser wall’ which will project the silhouettes of pedestrians and make drivers more aware of both the red light and where their space ends and the pedestrian space starts.

Of course, the Parallax Brief would prefer something that could atomize transgressing cars, but this is a fabulous concept nonetheless.

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Filed under: Russia, , , , , ,

The Mean Streets of Moscow

It is a cliché of epic proportions to say Moscow is a city of contrasts, but it’s a cliché because it’s true. Nowhere else in Europe, and I suspect nowhere in the world since the American Gilded Age went pop in 1929, can one see poverty so starkly juxtaposed with screamingly conspicuous wealth. (In fact, the Parallax Brief sees plenty of parallels between the Gilded Age and the Russia of today, but that’s a story for another day.)

And it’s not just the gap between rich and poor which provides the contrasts – often nothing here feels congruous.

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Paradox of Thrift Hits Moscow

Thrift, as my grandmother always reminds me, a good thing. If I save money, rather than spending it on electronic gadgets, more wine than I can really afford, and eating in restaurants five days a week, I build a safety cushion for rainy days and emergencies, and, hopefully, get richer, because the money I save pays me interest, or is in the form of investments that promise to pay a return.

Thrift is even good for the economy, because even though Moscow’s restaurateurs don’t benefit quite as much from my patronage, the bank at which I deposit my money will then loan it out to businesses, which can then invest to expand, and people, who are then able to buy things like cars or houses. My money still stimulates the economy, even when saved.

But there is one problem with thrift: the moment when businesses and people are frightened into becoming thrifty suddenly and all at once.

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Filed under: Economics, Russia, , , , , , , , , ,

Moscow on Ice

Moscow’s refusal to use salt or chemicals on the pavements in winter to aid deicing and snow melting is crazy. These proven and safe methods would make a huge difference to the walking conditions in Moscow, which have at times this winter become so impassable that good old treacherous becomes a halcyon memory.

Yet despite knowing that each year the streets will be covered in snow and ice for a large portion of the six-month Russian winter, and that only a very small number of days will be too cold for salt and chemicals to work, the city still refuses to bow to common sense. Why? Well, of course, because salt damages shoes.

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Filed under: Politics, Russia, , , , , , , , , ,

Standing Room Only an Alien Concept in Russia

Everyone has indulged in a clichéd joke at the expense of another culture’s habits. But sometimes a similar look at your own culture can help you better understand the trials of living abroad

A Russian friend today asked me why Portugal was so popular with British people. He described a town (the name of which I forget) that he said was so full of Brits he could only ever hear English on the streets. The aspect that amused him the most, though, was that every single bar – despite doing a roaring trade – was an ocean of empty seats because all the Brits were either standing at the bar drinking and chatting, or standing outside doing likewise. He just didn’t get it.

Conversely, one thing that irritates and puzzles me here in Moscow is that for a great many bars and ‘pubs’ it is necessary to book a table. It’s near impossible just to walk into a bar on a Friday night.  Sometimes I arrive at the chosen drinking venue to be told by the hostess (the Moscow bar equivalent of a Maitre’d) that there are no tables. When I ask if it is possible to sit or stand at the bar, which is usally empty, oftentimes a facial expression shoots back at me that I would usually only expect to see if I had said I would sit next to the urinals in the men’s room.

Now I know why. Standing and drinking in a place that isn’t a nightclub is obviously viewed with the kind of mirth we reserve for German sun-lounger behaviour, or fiery, emotional Italian lotharios. I mean, why would you want to drink without waitress service and a reserved place, anyway?

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Mayor of Moscow the King Canute of Real Estate

I had an argument lively discussion with my landlord on Sunday. I was pitching for a rent reduction because (1) I pay in euros, meaning that in only a few months my rent has increased by 30% in ruble terms, and (2) this significant increase has happened in the face of a steep decline in Moscow real estate value; she was resisting in the strongest terms.

Her response to my forex argument was predictable:  something to the effect of, “It’s not my problem you agreed to pay in euros and the ruble has crashed.” But her second rebuttal was quite a shock (and I quote) “I know you think that property prices should go down with this economy, but it isn’t and won’t. This is Moscow.”

A-ha! So this is what happened to all those bankers who believed bets on sub-prime mortgages would pay a return because real estate values would appreciate in perpetuity.

But joking aside, what kind person would believe that real estate values will stay at current levels when this view flies in the face of common sense and a stack of cold, hard evidence that is telling us that Moscow real estate is, in fact, doing exactly what common sense tells us?

Why, Moscow Mayor Yuri Luzhkov, of course. “No matter how much we would like [for apartment prices to fall], we need to look truth and reality in the face. Right now, it is impossible,” Luzkov told ITAR-Tass, according to a story in the Moscow Times.

The argument Luzhkov and my landlady would probably make is that supply still has a long way to go to catch up with demand in a city simply not designed for its post-soviet population explosion.

But this ignores a salient fact: I might want to buy a new house, but if I can’t get a mortgage or don’t have a job, I can’t buy one. With the mortgage market frozen and jobs simply evaporating, supply and demand becomes irrelevant.

And sure enough, prices are plummeting.

According to Bloomberg:

“Moscow residential property prices fell 2.3 percent to $5,972 a square meter in November. By December 15, prices had dropped another 6.9 percent to $5,558 a square meter, according to data compiled by Bloomberg.”

The Moscow Times ran a story January 21 said:

“Rental prices have fallen off, with apartments plummeting in cost from 20 percent to 30 percent since July, depending on the class of apartment, according to Penny Lane Realty”

Apparently, prices fell by just under a 1% in the first week of January alone this year.

The market has passed its judgment on the conditions real estate firms are operating in, savaging their stock prices by 90% since last summer.

Of course, like my landlord, Luzhkov (allegedly) has a fairly large incentive for maintaining high property prices. Certainly, there must be some motivation for making such an absurd statement when evidence to the contrary is slapping him in the face, and for the asinine accusation made by two of Luzhkov’s deputies that media “disinformation about the fall in prices is inciting people not to buy apartments.”

As a deeply religious man, perhaps Luzhkov should learn the lesson of the pious king of Denmark, Norwary and much of the British Isles, Canute the Great, who, after failing to turn back the prevailing tide, said: “Let all men know how empty and worthless is the power of kings, for there is none worthy of the name, but He whom heaven, earth, and sea obey by eternal laws.”

Filed under: Economics, Russia, , , , , , , , , , ,

Can a Moscow Steak House Cut the Mustard in London?

Moscow is not quite what you’d call a garden epicurean delights. Prices are tear jerking and choice is limited; restaurants are mostly either pitiably retarded or risibly pretentious, and value is rare at both ends of the spectrum. Food is a favourite grumble for us chronically peevish expats, but one restaurant which manages to garner virtually universal approval is Goodman, a chain of steak houses.

A steak is like a tuxedo: indivisibly simple, timeless, and unsurpassable, yet fucked up with an incomprehensible regularity. Goodman, however, in a sea of post-communist mediocrity and expense, cooks the best and simplest of foods consistently well and at a fair price.

And now, after a fifteen-year rip tide of western brand colonization of Russia, Goodman leading the ebb back and is opening a restaurant in London.

Below is a review by AA Gill – in my view, the finest non-fiction writer in the world. A bit off my usual beat, but I assume there must be someone out there who likes current affairs, politics, economics, steak and the English language. If you fall into either of the last two categories, Gill’s ode to steak is essential reading.

Goodman Review, Steak soliloquy, AA Gill

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Icy Moscow Streets Cause Break in Coverage

Readers of the Parallax Brief may have noticed that there have been no updates since Thursday night. Alas, my beloved slipped on ice near our apartment in Moscow and fractured her right fibula in three places, so I’m sure you’ll all understand if I confess that my priorities lay elsewhere over the weekend.

Ironically, I was actually considering writing about the situation on the pavements (sidewalks) here in Moscow, which of late have left treacherous a distant speck in the rear view mirror on their remorseless drive toward impassable.

Moscow seems to have entered a climatic netherworld too cold to melt the ice and snow completely, but not cold enough to keep it frozen all day. We have a slow, incomplete melt during the day, exposing a core of perma-ice made diamond tough by four months of compacting, which is then lubricated with a thin film of water from the day’s melt.

Walking becomes an exacting challenge, to say the least.

Yet shockingly for a country where this happens every year, the authorities – certainly in Moscow – refuse to put salt on the ground. Salt would allow the ice to melt at temperatures below freezing. Mixed with grit, it would provide grip, too. But instead, the Moscow City Government has an army of workers put down grit only, along with the occasional blob of what looks like wet aggregate, to provide grip. Of course, even in the center, it’s woefully inadequate.

Why no salt, I hear you ask?

Unbelievable as it may be, the Moscow City Government does not salt the pavements because it believes salting would ruin shoes.

As reasoning goes, that is one of the most risible lines of thought I’ve heard in a while – even by the standards of Russian bureaucracy – but it seems the authorities actually wear their refusal to put salt on the streets as a badge of pride. If you shoes get spoiled, a Moscow official apparently told the Moscow Times last year, bring them to us and we’ll replace them.

So, hey, you may need to have a gymnast’s balance and the reactions of a mongoose to escape the Russian winter without a tumble or seven, but at least the damage to your shoes will be restricted to that caused by water, grit, and massive amounts of slush and mud.

Are they insane? Have they never heard that a spoon of vinegar in a cup of water removes salt stains from leather? And quite apart from the whys and wherefores of old wives’ tales about shoe care, surely public wellbeing takes priority over shoes?

When my girlfriend was admitted to hospital, she was told by an administrator that already that day that one facility had administered treatment for over 160 fractures – and it was only 3pm. Imagine how much it costs for the x-rays, bandages, casts, beds, hospital utilities, and staff wages to cope with that volume of traffic.

Even if one is immoral enough to believe that shoes are more important than the misery, pain and suffering caused by slipping over, surely the cost to every tax payer of treating all those fractures (and probably strains, sprains, bone chips, bruises, cuts and ligament damage, too) that would be prevented had pavements been salted is greater than the cost to the same taxpayers of replacing the shoes that wouldn’t have had to have been replaced without the supposed salt damage.

It’s a simple equation: cost of treatment minus cost of shoe replacement equals START SALTING THE STREETS, LUZHKOV.

Filed under: Russia, , , , , , , , , , , ,

Another Good Guy Slain: Why don’t Russians Care?

Yesterday, Stanislav Markelov, a human rights activist and lawyer for a Chechen woman who was murdered by a Russian Army colonel, was shot dead in broad daylight on a busy street in the center of Moscow.

Markelov, 34, represented the family of Kheda Kungayeva, an 18 year old Chechen who in 2000 was snatched from her house and taken to the tent of Yuri Budanov, a colonel in the Russian Army, where she was strangled to death and, according to some reports, raped.

Budanov was acquitted in a 2002 trail, when the court concluded that brain injuries he sustained during the second Chechnya war meant he was not criminally responsible for his actions (but apparently still well enough to be a colonel in the Russian Army).

However, the Russian Supreme Court overturned the decision in 2003. Budanov argued that he thought Kungayeva was a sniper, and killed her in a fit of rage; and has since claimed that the Supreme Court decision was an effort to appease the Chechen leadership (because, obviously, a fit of rage is a perfectly reasonable excuse for extra-judicial killing). Budanov has become, according to the Moscow Times, “a rallying figure for Russian nationalists.”

Last week Budanov was released from prison 18 months early for good behaviour, sparking outrage among Chechen officials and Kungayeva’s family. Markelov, who prosecuted the original case, had called Kungayeva’s father Visa and, according to Russia Today, said he was receiving death threats:

“He told me Thursday night, he said ‘Visa, I’m getting threats.’ What kind of threats, I asked him. ‘If I don’t drop this case, I’ll get killed.’ Who are these threats from, I asked. ‘I’m getting anonymous text messages,’ he answered. Right away, I said to him that maybe I should get a new lawyer, and he said ‘No, I’m going to persevere.’”

Yesterday, Tuesday January 20, Markelov held a press conference in the International Press Center in central Moscow to condemn the decision. Shortly after, while walking in the street with a female freelance journalist, Anastasia Baburova, a man in a green ski mask walked up behind him and shot him dead with a silenced pistol. Baburova tried to pursue the gunman, but was shot in the head herself and later died of her injuries.

This killing is an outrage. It was brazen act committed in an almost cocksure manner. It was in the middle of central Moscow, in broad daylight, right in front of potentially thousands of witnesses. After the shooting, the assassin ran into Krapotkinskaya metro station, which like all Moscow Metro stations has a heavy police presence and is dripping with CCTV cameras.

Imagine if something like this had happened on Oxford Street in London. There would be fury. It would make all the main news shows on television. Newspapers would rage. People would be appalled. It would be the topic of conversation at every office ever watercooler and pub across the land. Boris Johnson, the London Mayor, and Gordon Brown would likely get onto the streets and decry the killers. Action would be demanded. Independent investigations would be arranged. Heads would roll. Hell, if the police or security services thought foreigners were involved, diplomatic relations might even be threatened.

But in Russia, a whimper. When one braoches the subject, the response is not outrage but a melancholic shrug of the shoulders, as if to say, “ahh, that’s Russia.” Politicians ignore it. The story is buried on the middle pages in the main press.

I simply don’t understand this reaction. This isn’t the killing of a businessman who had got involved with the wrong guys, or had threatened a business deal. This is a lawyer who defended the family of a girl who was brutally killed by a man who believes “I got angry” and “I got her confused for someone else” is a defense.

It’s as if the whole country has an On The Waterfront style case of the D and Ds. The silence is deafening. So why don’t Russians care? I would love to know.

Filed under: Russia, , , , , , , ,

City of Moscow Bond Auction Fails

News emerged this week that a City of Moscow bond auction raised only RUB1.5 bn of the total RUB15 bn offered. For the uninitiated, that’s flirting uncomfortably close to levels where the entire auction would be declared null as a complete failure (usually set at 10%). However, what’s surprising about this news, in my view, isn’t the paucity of investor interest, but that Moscow City managed to sell any at all.

Last week, the world was dealt an arresting reminder of just how cautious investors have become, when a German Sovereign bond auction failed to garner bids for the full amount offered. German bunds are among the safest, most liquid securities in the world, so covering only 87% of the EUR6 bn the German government hoped to raise is a shocking, once-a-decade rarity.

It is clear then, that the investor flight to safety has gone supersonic. When investors eschew even uber-safe securities guaranteed by the Bundesbank, what chance does the City of Moscow have? Certainly, Moscow’s credit image isn’t going to be helped by the revelations that the Moscow Oblast Government (a separate entity not related to Moscow City) looks as though it will liquidate its huge quasi-sovereign subsidiary companies MOITK and MOIA due to “mismanagement” (a codeword for “endemic corruption”) at those companies, and possibly within (code for “definitely within”) the Oblast government itself. Both MOITK and MOIA are fully owned by Moscow Oblast, are major players in the Russian capital market, and have bond issues outstanding.

And all this doesn’t account for the currently devaluing ruble in which the bonds are denominated.

The interest rate for the bonds the city government did manage to sell was set at 15%. Considering it would not be a surprise – by some estimates – for inflation to run as high as 20% this year in Russia, and that most analysts expect the government to allow the ruble to devalue by at least another 15%, investing in the Moscow City bonds at 15% interest means one will likely be left with a hefty loss – even excluding from the equation the default risk spread over AAA securities such as bunds, T-bonds or British gilts.

Where do I sign up?

I asked a contact with more knowledge of capital markets than I (not difficult), and he admitted that there was no fundamental justification to buy these bonds. He claimed, however, that they do make sense as a method of managing ruble liquidity – people need somewhere to park their cash, and if one needs to hold significant quantities of rubles the Moscow City bonds at least offer some return, even if it is negative.

What’s really funny, he said, is that after the auction Moscow City claimed it expected to sell only RUB4-5 bn (about 30% of the total), but were surprised that it did even worse than expected. I think I covered above the reasons why the issue was blatantly going to struggle, but why on God’s green Earth would one try to issue RUB15 bn if at best one expects to sell RUB5 bn?

It’s a crazy world.

Filed under: Economics, Russia, , , , , ,