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Apple Stops Online Sales in Russia Over Ruble Fluctuations
- valgaze 12y agoHeard a story on the radio this morning about a couple in Argentina that cooks meals for tourists in their home. They stopped processing areservations in pesos b/c they couldn't confidently predict the price even two months out. Now they only deal in dollars These people: http://www.npr.org/blogs/parallels/2014/12/16/370979773/argentinas-approach-to-inflation-ditch-the-peso-hoard-u-s-dollars http://www.npr.org/blogs/parallels/2014/12/16/370979773/arge...
- grecy 12y agoI spent 5 months in Argentina - this is extremely common practice. For anything of value (rent, cars, etc.) everyone uses dollars, because you wouldn't want to be stuck with mountains of pesos then have the value slashed in half again. Dollars are assumed to be much more stable.
- osipov 12y agoApparently bitcoin is very popular in Argentina for that exact reason: http://www.economist.com/blogs/schumpeter/2014/06/bitcoin-argentina http://www.economist.com/blogs/schumpeter/2014/06/bitcoin-ar...
- forgotpasswd3x 12y agoYou know your currency is fucked when Bitcoin is seen as the more stable option.
- techrat 12y agoYet... Bitcoin has performed worse than the Ruble. http://qz.com/312598/bitcoin-is-the-worst-investment-of-2014/ http://qz.com/312598/bitcoin-is-the-worst-investment-of-2014...
- oldspiceman 12y agoIt's not so much that they can't predict the price it's that every dollar is worth significantly more on the black market as the official market rate. Compare the dollar blue (Blue) row with the offical bank rate (Oficial). 13.19 vs 8.57. Many people change every peso they earn to dollars immediately. (www.dolarblue.net)
- Filligree 12y agoWhat's stopping them from arbitraging the price difference?
- wiredfool 12y agoI believe that the banks are mostly Dollar->peso conversions and are extremely supply limited or cutoff from going the other way, and the black market is a both ways market.
- speeder 12y agoPolice pointing guns at them?
- colinbartlett 12y agoIt's impossible to buy dollars at the official price. They are very tightly controlled.
- mikhailt 12y agoA company makes a smart decision to pause sales in order to ensure they're not selling their products at a loss due to the drop on the value of rubies.... One shouldn't expect otherwise.
- acchow 12y agoApple could purchase FX swaps and charge customers a "FX fluctuation surcharge". That's better than shutting down the store...
- joezydeco 12y agoOr they could charge customers in Euro and let the customers' banks handle the F/X rate.
- toyg 12y agoI would expect that to have legal implications, commerce in foreign currency is usually regulated in different ways.
- toomuchtodo 12y agoPossibly? I buy quite a bit of services from SaaS companies in foreign countries as a US citizen with my American Express, am charged in CAD and EUR without issue (converted to USD on my bill).
- bigdubs 12y agoAnother facet of this is an increase in buying in rubles to turn a cratering currency into real value before it's worthless.
- draugadrotten 12y agoYes, this is exactly what happened today. Many Russians were buying anything they could for their cash. http://www.cnbc.com/id/102273163 http://www.cnbc.com/id/102273163
- TorKlingberg 12y agoThere may be people buying iPhones for rubles, selling them online for other currencies, and then exchange it back to rubles for a profit. If that is indeed happening, I imagine apple would want to stop it before other markets are affected by side imports.
- pdabbadabba 12y agoYes, but there's a simpler explanation as well: they would probably rather not be paid in Rubles for concern that the Rubles will be worth significantly less by the time Apple is able to exchange them for USD (or whatever other currency) than the Rubles were when the price was set.
- Kadin 12y ago> There may be people buying iPhones for rubles, selling them online for other currencies, and then exchange it back to rubles for a profit. Why would you do that sort of roundabout route when you could just trade rubles for other currencies directly? Plus selling the phone back to get rubles doesn't seem like a smart move unless you think you've timed the bottom and the ruble isn't going to slip further against the dollar. Doesn't seem like people really think that. At the moment, people would rather hold iPhones than rubles. I don't think that's in an attempt to turn a profit, it's just because an iPhone (or a major appliance, or a computer) is perceived to be a better store of value than rubles. Which given how electronics depreciate, is a really bad sign.
- oldspiceman 12y agoIf Apple is slow to update its prices online you have a clear arbitrage opportunity.
- pkaye 12y agoI was reading an article that until recently, iPhones cost less in Russia vs the nearby EU countries so there were lots bought in Russia from other EU countries.
- deleted 12y ago[deleted]
- lelf 12y agoIf you missed this fun (or not) trivia fact: Apple is worth more than the entire Russian stock market (as of the middle of November) [http://www.bloomberg.com/news/2014-11-14/apple-could-swallow-whole-russian-stock-market.html http://www.bloomberg.com/news/2014-11-14/apple-could-swallow...]
- kunstmord 12y agoActually, Microsoft is now worth more than the entire Russian stock market, too.
- DMac87 12y agoThese comparisons are almost meaningless - e.g. Apple is worth about the same as Korea's stockmarket, almost as much as China's.
- oldspiceman 12y agoWhy is that meaningless?
- briandh 12y agoBecause, in addition to jhallenworld's point that not all economically relevant companies are publicly traded, not all publicly traded companies are listed on exchanges in their own countries.
- jhallenworld 12y agoAlso, some of the most valuable companies are not listed on any stock market, so the stock market is not necessarily any kind of full picture of the worth of the country. For example: http://www.ft.com/cms/s/2/5de6ef96-8b95-11db-a61f-0000779e2340.html http://www.ft.com/cms/s/2/5de6ef96-8b95-11db-a61f-0000779e23... Yeah, Saudi Aramco 2005 is still worth more than Apple right now.. but oil has fallen so maybe this has changed.
- adventured 12y agoRather than meaningless, it's amazing. Apple is not worth anywhere near as much as China's stock market however. The Shanghai Stock Exchange all by itself is worth several trillion dollars.
- deleted 12y ago[deleted]
- dang 12y agoWe changed the URL from http://www.bloomberg.com/news/2014-12-16/apple-stops-online-sales-in-russia-over-ruble-fluctuations.html?hootPostID=6d80e7f3350c6b65d4f4721218e9b939 http://www.bloomberg.com/news/2014-12-16/apple-stops-online-..., which is about a side effect (Apple halting online sales), to the more general article about the story, via https://news.ycombinator.com/item?id=8757165 https://news.ycombinator.com/item?id=8757165. Edit: Ok, we'll change it back. Sorry for the mistake.
- lmm 12y agoYou changed it to one with an obnoxious autoplaying video. Please add a [video] tag when you do this.
- manticore_alpha 12y agoGreat, now all the comments lost context. This is asinine. Don't modify the submissions, or titles.
- colinbartlett 12y agoIt drives me crazy. I know it's well intentioned, but this power in the hands of a few seems to do more harm than good. Why not just let the populous up/down vote things as they see fit? I wouldn't have upvoted an article about the general ruble decline (it's not news to me). I would (and did) upvote an article Apple halting Russian sales.
- davidw 12y ago> I know it's well intentioned, but this power in the hands of a few seems to do more harm than good. Why not just let the populous up/down vote things as they see fit? Err... this isn't a democracy and has never claimed to be one.
- dang 12y agoThis particular change was a mistake and we fixed it. > It drives me crazy. I can understand that, and it bothers me that even one user feels this way. Unfortunately, every time I sit down to reply, multiple paragraphs insist on coming out, and I haven't had time to edit them. I'll try to come back and post something later. (Edit: sorry, I guess it'll have to be another time.)
- guelo 12y agoBecause Apple products are expensive and are known to retain value over time they are a good place for people to dump their rubles knowing that they'll be able to sell the ipads and recoup their cash. But Apple doesn't want to be left holding the bag of rubles.
- oldspiceman 12y agoThey hedge their currency risk so it's unlikely they have much exposure to the Ruble.
- deleted 12y ago[deleted]
- DenisM 12y agoWhen a currency is devaluating but interest rates are low, the banks can borrow at low rate, sell rubles for dollars into sliding market, wait for ruble to slide more, then repay the loan with cheaper rubles and make a big profit. The trouble is they also accelerate the slide, courtesy of the low rates. The central bank rate increase was likely done to head off that particular danger. Of course there are many other factors pressing the ruble down as well, which central bank can't control, but at least they are trying to prevent worseing the situation with their own hands. Long term high interest rates plus high cost of import supplies will likely strangle the economy though. Increased demand for domestic goods due to higher import prices is a good thing, but one needs capital to operate most businesses. When interest rates are high you can't borrow, and when political situation is flaky fewer people will want to buy equity.
- vegabook 12y agoat 17% the interest rate paid by the RUB shorts amounts to 0.046% per day, whereas just today trough to peak USDRUB moved 35%. In this environment unless you "do a Sweden/Slovakia" and ramp rates to 1000% by preventing offshore banks from funding onshore (a form of capital controls), a measly 600bps hike is meaningless.
- imaginenore 12y agoSpot on. They now have two options 1) Increase the rate to something truly insane like 1000% 2) Introduce currency controls and force everyone to use Ruble Neither of these options are good, but #2 seems much more likely.
- chiph 12y agoBack in the Soviet days, it was illegal to take Rubles out of the country. It wouldn't surprise me to see that law reinstated.
- imaginenore 12y agoYeah, but back then they had two generations that never saw any dollars or iPhones or anything luxurious. It will be a bit more complicated this time. They might not have any other option though.
- deleted 12y ago[deleted]
- mrb 12y agoIt is interesting to watch the effect of the Russian ruble collapse on Bitcoin markets... It is causing an influx of Bitcoin buyers on Russian exchanges: over the last 14 days, BTC is up +11% from 19000 RUB to 21000 RUB with most of the uptick happening in the last 24 hours (https://bitcoinwisdom.com/markets/btce/btcrur https://bitcoinwisdom.com/markets/btce/btcrur) despite being down -13% from 380 to 330 USD on American markets (https://bitcoinwisdom.com/markets/bitstamp/btcusd https://bitcoinwisdom.com/markets/bitstamp/btcusd). There is an opportunity for arbitrage! The ruble is collapsing so fast that even buying at 21000 RUB is a steal (worth 310 USD as of Dec 16 21:00 UTC). And the collapse will likely continue in the next few days and weeks, so the arbitrage opportunity will grow bigger. Edit: @potench preev.com is an inaccurate indicator of the BTC/RUB rate because it is basing its calculation "based on the USD Bitcoin price" per its footnote, so of course it will never show a big deviation from the BTC/USD rate. For the true rate you need to look at the real-time bid/ask spread on a BTC/RUB exchange such as btc-e.com which is why I linked to https://bitcoinwisdom.com/markets/btce/btcrur https://bitcoinwisdom.com/markets/btce/btcrur or you can also look at https://btc-e.com/exchange/btc_rur https://btc-e.com/exchange/btc_rur: bid/ask is 20855/21099 RUB as of 22:09 UTC, so the arbitrage opportunity is approximately 2000 RUB.
- IgorPartola 12y agoFrom a 10k foot view, you know things are bad when BTC is your stable currency of choice.
- jordigh 12y agoHonestly, coming myself from a currency that had huge devaluations, the fluctuations of bitcoins' value are relatively minor in comparison.
- sillysaurus3 12y ago$1200 to $350 is minor? If people think such a scenario can't easily happen again, then they're wrong about that. A small number of major bitcoin holders mostly determine the price.
- bane 12y agoWhen I was younger, I took part in one of the first post-cold war student exchanges between the U.S. and Russia. A few days after I arrived there (during a very hot summer in the Eastern Urals), the Ruble (the version they were using at the time) collapsed from something like 1500:$1 to 5500:$1 and it became impossible to convert currency. It finally "stabilized" somewhere around 5500-6000:$1 but the exchange markets still wouldn't function. Finally, running out of currency, our hosts did the exchange with their personal funds, hoping that the dollars we were giving them would turn out to be a good investment later. I didn't really understand at the time what a huge risk they were taking, and how much money, relatively, they were converting for us. It's one of many generous things that happened during that exchange that's given me a perpetual fondness for the Russian people, even if sometimes I share in many of the grim feelings for the national politics.
- markcerqueira 12y ago"Our hosts did the exchange with their personal funds, hoping that the dollars we were giving them would turn out to be a good investment later." Sorry, but I got lost reading this. Mind explaining it a little more thoroughly? Your Russian hosts gave you Rubles for your dollars right?
- xom 12y agoI don't know what it was like then, but perhaps the idea is that if the Ruble were to recover, then the Russian hosts would lose out?
- listic 12y agoYes, that's the idea as far as I understand it, too: Rouble just dropped 4x, so it made sense that it might recover somewhat. That must have been in 1998 (I am Russian)
- Steko 12y agoI remember accounts of Westerners in Russia at the time. Supposdly the official exchange rates were rubbish and you could get 10 times as many rubles for your $ from most taxis.
- chvid 12y agoAround 1980 the USD central bank interest rates were raised to above 20%. In the end of the 80es when the Swedes had their big banking crisis, interbank rates were above 30% and the Swedish krona halved compared to the neighbouring Scandinavian countries. The late 90es had the Asian currency crisis where most South East Asian currencies where more than halved against the dollar. That crisis more or less led to the unfolding of the biggest hedge fund at that time (LCTM) which had to be bailed out by the FED. Thru the 90es the Russians defaulted and the ruble collapsed manifold. I am curious on how Russians sees the current situation? Is this the west/USA waging currency war against Russia? Is this a return to "normal" with things being like they were in the 90es? Or Russia being isolated as under the Soviet union? I met a few Russians on my travels. And I always enjoyed the company of those I got to know. My impression is that Russia has an young (age 20-30) emerging middle class who are smart, reasonable and completely unlike the image we have in the west of druken, violent crooks with bad taste. I would hate to see Russia return to isolation.