Friday, September 12, 2008
We don’t know, and of course and don’t want to imply that Minister Kudrin is an avid reader of our daily commentary, but as we predicted, the markets took his commentary concerning not lowering energy taxes too severely. Kudrin just announced he might be willing to compromise on oil company taxation. The translation is someone must have mentioned to him to stop rattling the markets and get with the program.
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RTS lost 43% since its peak on 5.19.08. You can’t even imagine if Dow would have slimmed almost half within 4 months from 11500 to 6000.
There are a few reasons for this:
1. Mortgage crises in US
2. Russian-Georgian war
3. Corp wars in Russia and Kremlin’s involvement
4. Overestimation of attractiveness of Russian economy by many investors
Treasury Secretary Kudrin is trying to stabilize RTS by buying some troubling stocks. Almost as President Bush is bailing out Freddies.
Will collapse of LB push RTS even lower? Doubt. It's time to buy again
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