In addition to sending out a warning to both the U.S. and England recently, admonishing both countries to beware Marxist tendencies (you’re more than welcome to laugh at the irony if you’d like), Russia is also issuing its analysis of the financial crisis
President Dmitry Medvedev said earlier today that the world economy has hit the bottom and risen from it. And then he said something truly shocking…
He admitted that Russia had a problem and admitted that things could get worse… all in the same speech. I honestly wasn’t sure that either Medvedev or his predecessor Putin were capable of saying anything negative about mother Russia, though they’ve both proven very capable of bashing everybody else, including the U.S., England, Georgia, Europe, and anybody else who gets in their way.
The thing is that Russia has proved to be a liability unto itself. While oil prices rose, the country did phenomenally and investors clambered on board almost as quickly as they did to China. But then oil started falling and so did the emerging economy. Though there were numerous other problems - which mainly boiled down to the controlling, narcissistic and therefore naturally unreasonable government - the commodity bust sent investors jumping off willy-nilly.
Medvedev and his administration did their best to impersonate ostriches for a while, maintaining the stance that the country was fine and dandy, but it looks like he finally got the message that everybody else realized a long time ago: nobody is buying his bluster.
Today, he went for a modicum of the truth instead. Declaring that it was too early “to crack open the champagne, nonetheless, I believe we have avoided the worst case scenario.” Still, he cautioned, Russia ran a risk of stumbling again if it didn’t find ways to wean itself off of oil dependency.
Shockingly enough, the president even went so far as to admit that he failed to do enough to diversify the economy during better times.
So is the meeker tone enough to tempt investors back into Russian markets?
Possibly a few, but I hope that the majority will be smart enough not to buy Medvedev’s sweet talk without some proof to back it up. Russia has proven itself too volatile too many times and in too many ways to stand as a solid investment at this point.
Let it walk the walk it’s talking, and then we’ll see.
Jeannette Di Louie
Disclosure: No positions