Most of Russian new riches are losing wealth everyday. The richest businessman Oleg Deripaska might lose 25% of Norilsk Nickel, Roman Abramovitz’s Evraz Group shares dropped from $118 on a pick to $10-12. Will he sell Chelsea Soccer Club? Doubt. But fleet of private jets that belong to Russian oligarchs will be slimmer. Don’t forget, most of the assets have been leveraged and I won’t be surprised seeing a few big bankruptcies.

Dollar was almost 27 rubles on today’s MICEX trade. Russians are in panic again. They don’t trust a dollar but trust a ruble even less. There are lines of people converting to dollars. Why this is happening? Please read or order our special “crisis update newsletter”.

Russian real estate business has been growing 10-15 % a year until now. The financial crisis put a crunch on high margins and profits of developers and agents. 35% of Moscow RE is mortgaged and banks used to provide home equity loans for apartments based on the market price of 7-20 thousand dollars per sq. meter. Now market is down 20-40 % and banks are left with questionable loans. We will monitor the residential construction bonds and inform our clients on any developments.

Russian banks stopped lending to air carriers. What does it mean to the fastest growing industry in Russia? Russians would not longer enjoy relatively inexpensive tours oversees. The number of operators will be smaller and airfares will double or more. The biggest problem is fuel cost. Russia produces 9 mln tons jet fuel a year. 174 operators consumes only 5 mln tons. 1 mln tons gets burned by Russian Air Force. The remaining 3 mln tons gets exported. Since Russian airlines spend 60-65% of all costs on fuel and always leverage it, no more free lunch. Only smart, energetic, competitive airlines will survive.

Russian Fed Reserve bailed out a few Russian banks in the amount of 1 trl rubles. Including Sber - 500 bln, VTB - 200, Rosssel - 25. Most of the banks would be bailed out and no signs of favoritism or vice versa like Richard Fuld's.