Posted under Russia
From the BBC:
According to some estimates, more than two thirds of the oligarchs’ $300bn (£183bn) wealth mountain has evaporated, leaving them with a paltry $70bn to weather what could turn into a global recession.
In recent weeks, the high level of debt, or leverage, has blown up in the faces of many, including some of the high-flying oligarchs.
In this case, the Kremlin bail-out does two things. Firstly, it ensures that nationally strategic assets remain in Russian hands. Secondly, if Mr Deripaska is unable to pay back the government loan the state may take a stake in his operations.
Many oligarchs found themselves in a similar situation, facing a risk of losing their assets to creditors or getting money from the Kremlin in exchange for stakes in their companies.
But there are also those who say they have not been hit too hard. Mr Abramovich, for instance, points out that losses only become real once assets are sold, and he has no plans to sell his gold and mining shares.
During the 1990s, when Russia needed a cash injection, many oligarchs handed over money in return for stakes in state-owned firms.
This time around, it seems the shoe is on the other foot.
Russia’s economy is bound to recover as the price of increasingly scarce materials (incl. oil) recovers from the current global economic readjustment. America is undoubtedly headed for a depression, but the rest of the world will readjust provided there are no political or cultural crises. So it would appear just a question of whether the global economy will recover in time for the Oligarchs to reacquire their fortunes, or whether the readjustment drag on long enough for Putin to call in their bets.
Also interesting, Gorbachev is forming a new political party (his previous party was the Union of Social Democrats:
Billionaire Alexander Lebedev said the Independent Democratic Party will be a new opposition movement for economic and legal reform and independent media.
And Gorbachev bought a 49% stake in a leading Russian paper, while Alexander Lebedev is currently offering to buy a London paper.
I’m in no way an expert on Russian affairs, but I found the BBC’s latest reporting on them exciting.
Also interesting is the Putin-Timoshenko conflict over natural gas flowing from Russia through the Ukraine west through Europe.
roho on 15 Jan 2009 at 8:57 pm #
Great Links Weaver!………..Peter Schiff was really good, and RT is getting to be a very good source. Global Firepower.com is another good source on the world financial scene. Look at our gold reserves?
http://www.globalfirepower.com/reserves-of-foreign-exchange-and-gold.asp