Watching a French TV programme last week all about “the haves” and “the have nots” in Moscow, where a very wealthy woman was purchasing a punnet of six strawberries for the equivalent of $50, I was reminded of a story that was related to me a few weeks back…..
Two elegant Russian women arrived atÂ a Heathrow check-in desk at the same time,Â and were admiring each other’s Vuitton luggage, which was identical in every way: “$10.000 from Paris” the first one claimed, with considerable pride. “$17.000 from Moscow” the second retorted, almost disdainfully.
So there we have it, a perfect example of why Moscow is now, irrefutably, the most expensive (and vulgar)Â city in the world – the rich are getting richer and the poor areÂ looking on, in total disbelief.
Well the rich were getting richer, up until very recently, and I watched another superb French documentary this week aboutÂ Russian “oligarchs” (Don’t go thinking that I indulge myself in French television, it is not that good – just two hours this week, the rest was crap! – thank God for satellite dishes and the good old BBC)
Oligarchs? Here’s what Wikki has to say:
“Oligarchy (Greek á½ˆÎ»Î¹Î³Î±ÏÏ‡Î¯Î±, OligarkhÃa) is a form of government where political power effectively rests with a small elite segment of society distinguished by royalty, wealth, family, military powers or occult spiritual hegemony. The word oligarchy is from the Greek words for “few” (á½€Î»Î¯Î³ios olÃgios) and “rule” (á¼„ÏÏ‡eiv arkhein). Such states are often controlled by politically powerful families whose children were heavily conditioned and mentored to be heirs of the power of the oligarchy. This type of power by its very nature may not be exercised openly; the oligarchs preferring to remain “the power behind the throne”, exerting control through economic means. Oligarchies have been tyrannical throughout history, being completely reliant on public servitude to exist. Although Aristotle pioneered the use of the term as a synonym for rule by the rich, for which the exact term is plutocracy, oligarchy is not always a rule by wealth, as oligarchs can simply be a privileged group.”
Financial sources estimate Russia’s oligarchs have lost as much as $230 billion during the recent fall of the world’s stock markets – that’s almost $7 billion per oligarch.
“They should take us all off the Forbes list” of billionaires, said Alexander Lebedev, who owns 30 percent of the Russian airline Aeroflot and was ranked by Forbes Magazine as the world’s 358th richest man.
Lebedev said he may have lost nearly half of his estimated $3.1 billion stock portfolio, The Times of London reported Saturday.
“The bell has started to ring,” Lebedev said, noting the financial meltdown may bring some sanity to the lives of Russia’s big spenders, the Times reported.
It’s “reach for hankies time”
Roman Abramovich, a steel magnate who owns Britain’s Chelsea Football Club, (Now known in the UK as “Chelski”)Â is estimated to have lost more than $20 billion in recent market trading, while Oleg Deripaska, reportedly Russia’s richest man, has lost billions of his estimated $28 billion empire, the Times alsoÂ reported.Â
There were fewer than 150 billionaires put on the Forbes list twenty year ago. Nowadays things have changed. The 2006 Forbes list of billionaires contains 793 entrants. The computer genius Bill Gates has retained the title of the worldâ€™s richest man for the twelfth consecutive year. He added about $5 billion to his net worth this year.
There are 33 Russian billionaires on the latest list. Next to New York, Moscow has the biggest number of billionaires – and yet when it comes to “standard of living” Russia is 57th in the world?
Unsurprisingly, most Russian billionaires reject the Forbes ratings. Nearly all of them make statements claiming they cannot be that rich. Boris Berezovsky seems to be the only exception, he is still out of reach of the Russian Prosecutor Generalâ€™s Office. However, none of the tycoons has sued the magazine for libel.
Therefore, we can assume that the Forbes ratings are quite accurate.
One of the very few consolations of all this financial turmoil and chaos, is the daily dose of revelations.
Stories of even more obscene gluttony, greed and astonishing financial mis-management.
I watched Greenspan this week, looking totally bereft of an explanation, describing our current experience as a Tsunami, and that in itself, is probably the most pathetic and implausible utterance this once revered man has ever made: Note to AG.
For the record, a Tsunami is known for it’s suddenness; it strikes without warning and almost always leaves a path of total destruction in it’s wake.
The legacy you have left us with – conveniently stepping down just prior to it’s arrival- did not creep up on us: Most observers with an IQ higher that a gnat’s left testicle,Â recognised the signs years ago, how come you didn’t? Or maybe you did and choseÂ to ignore them? Why did you take a stand against regulation as long ago as 2004?
“Give me one example where regulatory control would have made a difference JF” I hear you say.
AG, I can give you hundreds, but here is just one:
Fannie Mae misstated earnings for three and a half years, leading to a $9 billion restatement that wiped out 40% of the supposed profits in the period – fair enough?
So many “why’s?” AG
Yours In Total Disbelief
It can only be hoped that in years to come, there will in fact be greater regulatory control and increased visibility. Our trust has been shattered, and as I survey the pieces scattered liberally around my feet, I remain unconvinced that recovery will be as swift as our over-optimistic political leaders would have us believe.
November 15th could represent Bretton Woods II – we wait and we wonder, but we no longer have faith.
Tomorrow: “India IsÂ A Very Poor Country – Oh No It Isn’t” – more revelations here on JF Uncut