Posted on 10/18/2008 1:32:39 PM PDT by Jim Robinson
MOSCOW — Are the Russian oligarchs going bust?
In the current global financial crisis, perhaps no community of the superaffluent has fallen as hard, or as fast, as the brash Kremlin-connected insiders whose wealth was tied up in the overlapping bubbles of the Russian stock market, commodity prices and easy credit.
Already, Russia’s richest man, Oleg V. Deripaska, the nuclear physicist turned post-Soviet corporate raider, has ceded more than a billion dollars in assets to jittery creditors as his aluminum-to-automobile empire reels.
“Half the Russians could fall off the Forbes list” by next year, Maxim V. Kashulinsky, the editor of the Russian edition of the magazine, said in an interview.
Those most in favor with the Kremlin — who expanded fastest and ran up the largest debts — are most at risk now as borrowing costs soar.
Most of the ultrawealthy have large stakes in the mining and petroleum behemoths of the Russian economy, stakes gained through the legally questionable privatizations of the 1990s. A decade later, company ownership has still not spread to a broad shareholder base as in the West. Without a broad base of potential customers, the stock market here has tanked even faster than exchanges in the United States.
In America, toxic mortgage-backed securities sank mighty investment banks. In Russia, it is the empires of the oligarchs and the loans they took out from Western banks, using shares in their companies as collateral, that are at risk.
In a number of cases the value of shares pledged by Russia’s rich has fallen below the value of the loans, an ominous sign for the market here, where the benchmark RTS index is already down 71 percent from its peak in May.
(Excerpt) Read more at nytimes.com:80 ...
Never fear, they borrowed from Western banks, so Western taxpayers will bail them out!
Washington, D.C. would have to be out of its mind to bail out Russia. The Russians haven’t been all that friendly to us lately.
I expect Washington to bail them out.
Geez, the Bolsheviks at NY Slimes are still pining for Uncle Joe and Karl Lenin ... but all they're getting is Groucho instead
/laughs
I wonder how much they paid Rudy Giuliani to give his pep talk to the Russian Oligarchs? When is the bad debt in Asia, especially China, going to kick the economic crisis into really high gear?
I must have missed the part where Russia tried capitalism. Wholesale government sponsored theft of entire industries by thugs isn't what one would ordinarily consider 'capitalism'.
But, that's what will get the blame....
L
There is an old Hindi/Buddhist saying “how many grains of rice for the Raj’s ruby?”
Russia has replayed the tyranny in an industrial age.
How long before Putin officially declares himself the Czar
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