Almost everyone in the West upon reading their financial papers knew Warren Buffett had invested 5 billion dollars in Goldman Sachs. Many people took this as a signal of a bottom, or at the very least of a great value in stocks that were down, but not out. Russian billionaire Mikhail Prokhorov is taking a 50% stake in Russian giant investment bank Renaissance Capital. This is a development that could have even more meaning to RecCap than Buffett’s investment in Goldman.

A kinder, gentler Kremlin. Perhaps or perhaps not, but sometimes symbolism does matter. In recent months Prime Minister Putin had stern words for the Russian metals company Mechel, causing its stock price to drop dramatically. On a recent trip to Kazakhstan, President Medvedev met with senior company officials and was very pleasant. Yes, a pleasant meeting really is something that can affect an industrial giant’s stock price. Stay tuned for more developments.

After a day and a half of suspended trading markets are set to reopen with the government injecting funds into the system and promising immediate tax reform. Among the changes are a drastic decrease in the large national VAT tax. A significant decrease in the export tax on oil will be enacted with more reductions promised in order to spur decreasing production. It seems drastic times are causing drastic measures to be taken that should have long-term positive results, long after the turbulent happenings of today become a footnote.

With world financial markets in turmoil and no end on the horizon, what is a savvy global investor to do? We’re advising many of our clients to park spare cash in short to medium term fixed income securities. This will enable you to take advantage of recently risen interest rates in Russia while choosing a financially solid company, of which there are many. You’ll still have the flexibility of not tying up your money so when the market does bottom, your ready to jump at the opportunities.

RTS fell to a record 1131 points today by 5 pm Moscow time. The exchange has been closed for an hour to prevent panic. Sberbank lost 20%, VTB – 30%, GazProm – 15%.The world crises affected all exchanges around the globe. We will monitor the situation and advise our customers what to expect…

Recent events in South Ossetia have delayed, but not derailed economic and political reforms championed by President Medvedev. In a recent speech he discussed the need for reforms to boost entrepreneurial efforts in the country and the need to encourage small and medium sized businesses as they are the future engine of growth. We find these words encouraging and although they were delayed by recent events, we will be watching for actions as the next phase from outlining the problems and issues.

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.

Two days ago the MICEX tumbled 9.1% and RTS fell over 7%. Part of the panic was due to comments by Finance Minister Kudrin stating oil taxes should and will not be rolled back. The market reacted negatively to these comments but please note, Kudrin while holding a high level office, does not determine what will happen, and Medvedev is on record as supporting these reductions in taxes for energy production.

More pain in Russian Financial markets as the RTS fell 3.76% today in heavy trading. Some of the hardest hit sectors were Consumer & Retail off 7.00%, Metals and Mining off 6.65%, and Financials off 6.54%. We won’t mention the bond market today, but you can imagine how it did. We’ll give advice now to two separate groups of investors. To those already in the market, don’t sell and especially don’t sell now. If you have chosen your securities well, they likely will come back, sooner rather than later. Remember you are in an emerging market and your horizons should not be for the short-term, and it might be cold comfort but you are still doing better than your peers who have invested in two of the other four emerging economies. To investors considering making a move, when there is blood in the streets you should be readying your research to make a move. It is not necessary to make a move immediately but significant market corrections do not happen every day and the serious investor cannot ignore the opportunities they present.

It appears the Russian markets are on the rebound, or at least have stabilized. Pursuing economic opportunities in Asia as a counterbalance to economic dependence, Prime Minister Putin is touring Central Asian countries and signing treaties ahead of an important regional economic summit. Starting in 2009, Russia will begin major oil shipments to the region.