I suspect interest rates in Russia will be heading higher not because something is fundamentally different in Russia from three months ago but because of the culmination of several things happening around the world. Lets assume the growth of Russia’s economy has been built upon a foundation of the following things-low interest rates in the U.S. and Europe (we’ve seen the subprime mess raise corporate rates in America almost overnight and the U.K. and E.U. have been raising and leaning towards raising their rates even more) people are becoming psychologically nervous, avoiding risk, and if they can get similar returns in developed markets they are going to. Additionally, there has been too much liquidity floating through the Russian system due to foreign investment and the rising of government revenues due to increasing prices for energy. If there is no hurricane soon in the U.S. many experts predict oil has reached its nadir while a retreat of 10-15 dollars a barrel would not be a disaster, it would be yet another piece of mildly negative news on the scale. Gazprom and Rosneft recently removed bond offerings that were ready to debut in London, possibly due to the fact of increasing rates in the U.S. and Europe and they could have had difficulty with the rate they wanted to sell them at, if Gazprom is having trouble, what about average companies? Remember, in Russia like any developed market only one percent of the securities are from quality companies that meet your investment goals. So if I seem a little happy about what is going on, it is because as I mentioned earlier in the article, nothing has changed in Russia from several months ago, I am still positive on the fundamentals. What I feel is happening is the wringing out of the excesses of the system and inevitably the weak and inefficiently run will fall by the wayside, as always we’ll show you where the opportunities are and what is to be avoided.