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Strategies & Market Trends : Russian Crisis - Is it a buying opportunity? -- Ignore unavailable to you. Want to Upgrade?

To: Dimitry A. Semenov who wrote (73)	8/31/1998 12:57:00 PM
From: Josef Svejk	Read Replies (1) \| Respond to of 175

Humbly report, Dimitry, the key to the problem in Russia, as I see it, is contained in this paragraph of the article: The problem is that in Russia, money does not turn into capital. All investments are hopelessly squandered through a combination of inefficiency and theft. For money to turn into capital, for investments to flourish, institutions must exist which guarantee such things as the lawful, predictable enforcement of contracts, reliable transportation of goods from one point to another, government neutrality in economic competition, and so on. None of those things exist in Russia. Contracts are unenforceable, basic reliable infrastructure is non-existent, and the government is not only unpredictable in its treatment of participants, but is at times deliberately destructive. I have a hard time imagining how this can be changed - from the inside, or the outside. Aid nor force from the outside will change it, and I haven't a clue what measures can be taken to change it internally. You? Cheers, Svejk abitare.it

To: Dimitry A. Semenov who wrote (73)	9/5/1998 9:33:00 PM
From: Jeffrey L. Henken	Respond to of 175

Yeltsin, Parliament Seek Compromise GREG MYRE Associated Press Writer MOSCOW (AP) - With Russia's economy crumbling by the day, President Boris Yeltsin's allies and opponents are scrambling to forge a weekend compromise that will install a prime minister to deal with the crisis. Yeltsin dismissed the previous government Aug. 23 as the economy began its latest nose dive, and acting Prime Minister Viktor Chernomyrdin has focused his energies on winning confirmation from a hostile parliament. The Communists and other hard-line opponents said Saturday they had as many as nine alternatives to Chernomyrdin for the prime minister's post, including several Soviet-era bureaucrats. Communist Party leaders plan face-to-face talks Monday with Yeltsin before parliament votes on Chernomyrdin's candidacy later in the day. ''I don't expect anything good from Mr. Yeltsin'' on Monday, Communist Party leader Gennady Zyuganov told The Associated Press on Saturday. ''He rarely meets (with lawmakers and) he doesn't know the situation. He is not governing.'' The Communist-dominated parliament overwhelmingly rejected Chernomyrdin last Monday and postponed a second vote on Friday. The move suggested the Communists were open to negotiations, though they maintained their tough rhetoric. Zyuganov and his hard-line allies blame Yeltsin and Chernomyrdin for creating Russia's current predicament. The Russian ruble, which was trading at about 6 to the dollar just last month, is down to around 18 to the dollar in street trading, and has yet to stabilize. The crisis has not sparked unrest, but prices have soared and some Russians are buying extra supplies out of fear that the prices will continue to skyrocket, as they did in the early 1990s. At one supermarket in central Moscow, shoppers were buying up coffee, spaghetti, flour and other food that can be stored for months. Most shelves were bare. ''I don't think everything will disappear, but stores will be out of one thing, then another,'' said Ivan Naumov, a travel agency manager. Because the ruble has been falling daily, Naumov was exchanging just enough dollars to cover his ruble purchases for the day. He didn't want any rubles left in his pocket because they are losing their value so quickly. Hoping to ease the crisis, Chernomyrdin outlined a vague and somewhat contradictory economic program Friday. He said he intended to let the ruble exchange rate float against the dollar, but also entertained the notion of a government currency board that would set the rate. He said the government might start printing more money to pay workers who have gone months without their salaries - but also said there would be tight controls on the money supply. ''This is a program which will require tight discipline and responsibility,'' Chernomyrdin said in an interview broadcast on Russian television Saturday. Chernomyrdin was prime minister for more than five years until he was dismissed in March, a period during which Russia suffered a wrenching economic decline as it moved to a market economy. Few Russians believe that he will fare better this time around. ''The Yeltsin-Chernomyrdin couple ... are distrusted by 9 out of 10 people now,'' Zyuganov said. ''By the end of September they will be distrusted by 98 out of 100 people.'' Meanwhile, the leader of the Communist-allied Agrarian Party said the opposition candidates for prime minister include Vladimir Gerashchenko, whose favorite response to economic problems as Central Bank chairman in the Soviet era was to print more money, and Yuri Maslyukov, former head of the Soviet state planning agency. But Yeltsin has said he will nominate no one other than Chernomyrdin. Under the constitution, Yeltsin has three chances to propose a prime ministerial candidate. If parliament votes ''no'' three times, the president must disband the legislature and call new elections, a development that add to the current turmoil. dailynews.yahoo.com Regards, Jeff