Three points:
1) Of course Grant was right about Russia in 1997, big time.
2) It is my understanding that part of Soros's deal in Russia was to get an oil company on the cheap. Might prove to be a good deal, but certainly risky for reasons already discussed. (BTW, I fully agree with everybody that Soros is not taking serious personal risks in any of this.)
3) As was noted over on m-i, Soros actually plays a rather curious role. He has been quite critical of the IMF and some of the standard policy prescriptions. Although he is very anti-communist and ultimately pro-market capitalist, he is very heterodox in a lot of ways and kind of goes counter to a lot of standard views. Of course, this sometimes makes him mucho money, but not always. Barkley Rosser On Fri, 12 Jun 1998 21:30:40 -0400 Doug Henwood <dhenwood at panix.com> wrote:
> Rosser Jr, John Barkley wrote:
>
> > 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.
>
> I'm talking about a sovereign loan to the government of Russia. Yeltsin
> would never stiff Soros on one of those. Sure thing that many investors are
> taking big baths in Russia.
>
> Curiously, former perma-bear James Grant, publisher of Grant's Interest
> Rate Observer, resolved in 1996 or early 1997 to try to be bullish about
> something in every issue. Grant's recommendations? Korean and Russian
> stocks.
>
> Doug
>
>
>
-- Rosser Jr, John Barkley rosserjb at jmu.edu