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To: goldsnow who wrote (14134)	7/5/1998 8:48:00 PM
From: Amelia Carhartt	Read Replies (3) \| Respond to of 116764

And, here I thought nobody wanted to live hear anymore!;) You are saying food is only getting more expensive in California? Does everyone else agree with this observation?

To: goldsnow who wrote (14134)	7/6/1998 5:19:00 AM
From: Alex	Read Replies (2) \| Respond to of 116764

Russian Central Bank Seeks to Educate Courts Investors in Russia who have seen share prices rise 105 per cent in 1997 and drop 64 per cent so far this year may regard the market as little more than a casino. The Russian courts have been inclined to agree. In April a Moscow court ruled that some forward contracts were best viewed as gambling contracts under chapter 58 of the Russian civil code, and were therefore not enforceable under local law. The court appeared to fear that Russia's new capitalists would turn into crazed Dostoevskian dissolutes who would wreck their lives betting on imponderables. Russian lawyers are not alone in questioning the complexities of derivatives trades. It was not so long ago in the UK that Hammersmith and Fulham council's foray into the swaps market was deemed ultra vires. But the Moscow court's decision has caused something of a headache for foreign investors anxious to hedge their rouble assets, and has deterred much-needed capital inflows. To help clarify the situation the central bank has stepped in to demystify capitalism for Russia's lawyers. It has written to the supreme arbitration court explaining why forward contracts are a legitimate part of the banking system. The bank has also instructed its branches to react to breaches of forward contracts as seriously as they would to non-fulfilment of any other contract. Offences could lead to on-site inspections and, in extreme cases, the revocation of banking licences. "We are demonstrating that we regard this market as a very important and integral part of the Russian financial system," said Denis Kisilyev, deputy chairman of the central bank. "I think as soon as we have got a proper ruling from the court it will improve the quality of the market itself and restore the confidence of investors that they can hedge rouble assets." Bruce Bean, a partner at the Moscow office of the Clifford Chance law firm, said the court's original decision related to "non-deliverable" forward contracts, which do not lead to any exchange of an underlying asset. "You and I can bet about what time Yeltsin comes out of the Kremlin. That is not deliverable. That is a bet," he said. "You can see the court's argument that forward contracts are a similar gamble. But they are done all over the world and they should be done in Russia. The central bank is absolutely right." How much the bank's actions will help salvage Russia's battered financial markets is another matter. Denis Smyslov, Russia investment director at Global Fund Management, said: "I do not think this will have a major impact on the markets, which are still afraid of a devaluation. But at least it shows the central bank is eager to develop the necessary infrastructure." Financial Times, July 6, 1998