> Nancy Lazar of ISI - Ed Hyman's consulting shop - has a report out
> today on Russia. Headline: "Russia in severe recession." GDP could be
> contracting at a near-19% annual rate, which is huge. With the EU sinking,
> much of Asia sinking, and now Russia sinking, Dennis Redmond may have to
> revise his worldview...
Nah, Russia has almost no foreign debt and $386 billion in (reasonably diversified) forex reserves, plus another $90 billion stashed in the state-owned banking system. Basically, the crisis is going to accelerate Russia's transition to a full-fledged welfare state.
I wrote last October that the semi-peripheries (Russia, China, sovereign wealth funds) were going to wait and see if Obama won, and then the haggling for the post-American bailout would begin. But here's the snag: the haggling can't begin until the US nationalizes its insolvent banks. The semi-peripheries are NOT going to invest in a bailout which allows the US Empire to loot their $7 trillion in hard-earned savings. (Remember how CIC got burned on its Morgan Stanley investment.)
This is why Geithner's dithering scares the hell out of me. I thought the Obama people would have the sense to understand you need a systemic intervention to fix a systemic banking crisis. Fix the banks, erase the bad debts, and the semi-peripheries will be happy to purchase the US Treasuries necessary to finance the cleanup.
-- DRR