Thursday, December 19, 2013

Voices and Visions:Russia and the Sochi Olympics;Fed Tapering

Russia's Deputy Economy Minister Sergei Belyakov has been commenting on the effect of the Sochi Winter Olympics on his nation.Speaking on Bloomeberg TV,he said the main question is,what does it mean for us?We had to create new conditions for life in the whole country.We have a lot of new facilities.It was very important for us.We're speaking about new living standards.The Olympics and the World Championships-all these events are not Putin's project;they are a project to create new ideas,new technology.
Visit Russia and see what's the reality here,the difference between perception and reality,Mr.Belyakov urged.Can Russia afford the 15 billion dollar fund for Ukraine?Please don't be worried.Everything's OK.Our economic situation is not very good.That's why the business environment here is the highest priority of the Russian government.It's not as bad as people think;but we want to make it much better than it is now.We have not only goals;but we have achievements.*
Mr.Belyakov declined to comment on how the Federal Reserve's decision to begin tapering its asset purchases in support of the US economy would effect the emerging markets.Simon Goodfellow,CEO of Harlyn Research,said there will be a spike in volatility.At some stage,that has to go up,and when it does,markets will sell off.Somewhere along the line,investors will have to react.Bond market investors will cause a spike in equity volatility.There was an initial positive response to the Fed holding off on hiking interest rates.Just understand that that will reverse sharply sometime in 2014,Mr.Goodfellow cautioned.*
Tapering doesn't mean tightening,outgoing Fed Chairman Ben Bernanke said in his last press briefing.The Fed will keep tightening until unemployment drops below 6.5%.
The process will be deliberate and data-dependent.Asset purchases will not be on a pre-set course,Mr.Bernanke explained.*
Janet Yellen will succeed Mr.Bernanke in January.

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