Reginald

Fixed-Income: Options to Low Money Market Rates

To quote you Mr. Keith:

<p><i>"Moo... Investor Service recently affirmed the sovereign credit strength of the United States at “Aaa”. This should quell, at least for the time being, the concern that our country’s financial position has been substantially weakened"</p><...

<p>Forgive my sarcasm, Mr. Keith, but what planet do you live on?

<p>I suggest you find out how Lehman Brothers was rated the day before they filed for bankruptcy. I think you will be in for a shock.

<p>Credit rating agencies also assign investment grade ratings to rogue sovereign states, such as the People's Republic of China or the Russian Federation, who although solvent notoriously remain in a state of unresolved default to hundreds of thousands of bondholders worldwide by actively hiding behind sovereign immunity to avoid their valid repayment obligations. But I expect you wouldn't know...

<p>Come visit the earth when you have an idle moment!

Investing in Russia: A Nation of Contrasts

The Russian state has a proven track record of borrowing abroad and then actively avoiding repayment by seeking protection through sovereign immunity.

The Russian Federation is de facto in an unresolved default situation today, since it is actively avoiding its repayment obligation to hundreds of thousands of private investors throughout the world, including 316.000 French citizens according to a 1999 French government census, an obligation which it inherited from the USSR and the Imperial regime before that by virtue of the successor government doctrine of settled international law.

The main credit rating agencies have assigned knowingly false investment grade ratings to that sovereign in much the same way they have been shown to assign knowingly false investment grade ratings to structured products, and for the very same reasons: to protect their revenue.

The European Parliament has recently voted a Regulation for credit rating agencies. It is aware of the flaws affecting the sovereign ratings and it has asked the European Commission for a preliminary enquiry on the matter of misleading investment grade ratings assigned to the many sovereigns who remain in a state of unresolved default today: such as the Russian Federation of course, but also the People’s Republic of China, Poland, Hungary, Turkey, Greece, and others. Please see the press release at the following link:
www.archive-host.com/c...

Investors need to pay attention to this issue: if defaulted bond holders have their way contemporary Russian debt whether public or private will need to be rated in default and institutional investors will be under the obligationn to sell current holdings, resulting in powerful downward pressure on prices.

China's Negative Economic Outlook

To James V:

Important reserves may give the Chinese government an ABILITY to avoid default. But that does not mean they have the WILLINGNESS TO PAY, which indeed they have effectively PROVED they do not have.

An established FACT is that the Chinese governement is ALREADY in default to a great number of US citizens (and also maybe to the US govenment who I believe holds a considerable number of defaulted chinese bonds without enforcing payment, in which case it would be to the prejudice of all and any US taxpayer).

Have a good day.

Countrywide Financial, VTB Group: Why Are Analysts So Screwy About Sells?

RUSSIAN IPO INVESTOR ALERT


French holders of Russian government bonds remind investors that the Russian Federation is still in default today (July 2007) on their estimate of some US$ 90 billion owed to them since the Bolshevik, then the Soviet, and now the Russian Federation governments have all unilaterally repudiated Tsarist debt and refused any form of contact or dialogue with their legitimate bona fide creditors.

They also remind investors that in its Sep. 15th 2006 report entitled "Governance matters: a decade of measuring the quality of governance", the WORLD BANK has rated Russia's governance comparable to that of Swaziland, Zambia and Kazakhstan. Russia came 151st out of 208 countries in terms of (...) accountability, quality of regulatory bodies, and rule of law, (...). In particular, rule of law (i.e. the courts and the quality of contract enforcement) was judged as effective in Russia as it is in Ecuador, Indonesia, and Bangladesh. Nicaragua, East Timor, and China's ability to control corruption was judged similar to Russia's.

On February 26th 2007 the St. Petersburg Times, quoting a report from Vedomosti, wrote that "Surgutneftegaz managers covertly hold 72 % of the secretive oil firm" and that Deutsche UFG analysts had had to "raise its estimate number of outstanding shares from less than 26 billion to (...) 43 billion" which "implies a 40% dilution in the value of the stock".

In Paris on April 3rd 2007 to launch the merged NYSE-EURONEXT entity Mr. John Thain, the New York Stock Exchange CEO, warned that he was "very concerned about the quality of corporate governance, the transparency of company financials and the protection of minority shareholders. A number of Russian companies raise serious questions around these issues."

Despite these findings, and the main rating agencies' knowledge that Russia is in default on US$ 90 billion of Tsarist debt, Russia is rated "INVESTMENT GRADE" whereas it should clearly be in "SELECTIVE DEFAULT".

French bondholders intend to pursue their claim until full settlement at present value, by any legal means and in any jurisdiction they deem appropriate.

EVERY POTENTIAL INVESTOR IN RUSSIA MUST BE MADE AWARE OF THESE RISKS.

FRENCH CREDITORS OF THE RUSSIAN FEDERATION STRONGLY ADVISE AGAINST ANY FORM OF INVESTMENT IN A COUNTRY WHOSE SOLVENT GOVERNMENT HAS IN THEIR VIEW SYTEMATICALLY REFUSED TO FULFIL ITS NATIONAL AND INTERNATIONAL CONTRACTUAL OBLIGATIONS, REFUSES ALL CONTACT AND DIALOGUE WITH ITS LEGITIMATE BONA FIDE CREDITORS, AND REFUSES TO DISCLOSE LIABILITIES WORTH US$ 90 BILLION.
July 2007