The nature of risk ...

Rosser Jr, John Barkley rosserjb at jmu.edu
Fri Jun 12 14:28:51 PDT 1998


Doug,

Probably Boris wouldn't stiff Soros. But plenty of big cheese foreign investors in Russia have been taken for a major ride, including most of the big US oil companies. And I am not just talking about the recent sharp declines in the stock market over there after last year's world-leading runup.

Part of the problem is that Boris is not really in control. In fact, nobody is. Thus when the oil majors have tried to cut deals (or have bought companies) they have encountered local governments at several levels attempting to tax them. In some cases the sum of all the taxes exceeds 100% of profits. Boris has been unable to rein in this kind of local power/revenue grabbing.

So, yes, Soros was most certainly taking a big risk when he lent the Russians all that money. Barkley Rosser On Fri, 12 Jun 1998 10:40:31 -0400 Doug Henwood <dhenwood at panix.com> wrote:


> Jordan Hayes wrote:
>
> >> Risktaking is a myth like Horatio Alger. They "externalize" costs
> >> and risks.
> >
> >Tell that to George Soros, who loaned Russia "several hundred
> >million" last summer. Now *that's* risk.
>
> Not if you get a sweet deal on an imminent privatization it isn't. And I
> doubt that Yeltsin would ever stiff George Soros.
>
> Doug
>
>
>

-- Rosser Jr, John Barkley rosserjb at jmu.edu



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