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Strategies & Market Trends : Investment in Russia and Eastern Europe
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To: CIMA who wrote (722)10/3/1998 3:28:00 AM
From: Real Man  Read Replies (1) of 1301
 
This seems almost certain right now. Will it cause a further drop
in the western markets, or is it priced in already? Somehow, I doubt it. As for Russia, the situation is pretty bad, and can be summarized
as follows:
1) A lot of banks are bankrupt
2) The ruble stays where it is now only because the government
essentially limited currency exchange
3) Politically it looks like the current government is not the
best choice.
4) Lots of wealthy people have gone to the poor house
5) Stocks are down 94% from the peak, setting new all-time
lows every day. The market cap is below Yahoo.
6) The social situation is potentially explosive.
7) Western banks/IMF are not giving more aid, and are unlikely
to help in future.
8) Hard currency reserves are low, and 180 bln loans are there to be
paid.

Way out?

1) Default on the loans, as soon as they fully realise that
the western banks are not going to give more money (it seems,
they have not yet for some reason).
2) Enjoy the ride in commodities, which is just starting
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