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The Russian Revolution


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The Greatest Global Stock Market Boom rolls on unabated.

 

Vast fortunes being made, especially in the emerging or developed markets.

 

For example, another MarketWatch headline of a new all-time record close on the India Sensex, with many stocks up 6% and 7% on the day.

 

And of course, there is Russia, whose market is up some 700% off the 1998 lows, even after a big haircut the last month.

 

Combine booming stock markets and commodity bubbles, and you get the Ultimate in Wealth Generation in Russia.

 

As a result, the biggest yachts in the planet are being snapped up by these Russian billionaires.....

 

Excerpts from today's WSJ:

 

The Russians Are Coming -- at 40 Knots. Eyeing Record, Tycoon Builds a Bigger Yacht; Challenging the Saudis

 

January 12, 2007; Page W1

 

At a shipyard in Hamburg, Germany, on a construction dock hidden from public view, workers are toiling away on a special boat. It's called "Eclipse." And if all goes according to plan, it will become the largest privately owned yacht in the world.

 

Eclipse will have at least two helicopter pads, several hot tubs, one pool, three launch boats and a private submarine. For security, it will be fitted with motion sensors and a special missile-detection system.

 

According to several people involved in the project, Eclipse is the latest water toy for the new king of the seas -- Roman Abramovich.

 

Mr. Abramovich, the Russian oil magnate whom Forbes ranks as the 11th richest man in the world, with $18.2 billion, has an armada that would rival some national navies. In addition to Eclipse -- expected to measure more than 525 feet -- he owns three other mega-yachts, including the 377-foot Pelorus and the 282-foot Ecstasea. He used to own four but recently awarded one, the 370-foot Grand Bleu, to a close business associate.

 

With Eclipse, Mr. Abramovich is not only setting a new high-water mark in the "mine-is-bigger-than-yours" world of mega-yachting. He's also helping to solidify the reputation of the Russians as the new world leaders of global conspicuous consumption. The gusher of oil money and flood of cash from commodities like nickel and aluminum has created a steady stream of new oligarchs.

 

While the 40-year-old Mr. Abramovich now spends much of his time in London, he and other oligarchs are seen as symbols of a new Russian system that places huge riches in the hands of a few.

 

To companies that sell to the rich, this new wealth is a dream come true. Today's Russian Revolution is all about status, and the new Blingsheviks are young, supremely rich and eager to spend. There are at least two dozen Russians now worth at least $1 billion, according to private bankers, and thousands of new multimillionaires have been created in the past five years.

 

Russians are buying up castles in Germany, Warhol prints in New York and polo ponies in Argentina. An estimated one in five homes in London's posh Mayfair district is now owned by a Russian, according to real-estate agents. Sotheby's has noticed a surge in Russian buyers for jewelry, watches, fine art and antiques, says Richard Buckley, managing director for North America and South America for Sotheby's.

 

Russians, in short, are the new Saudis.

 

Especially when it comes to yachts. The Arabs entered the yachting world with a splash in the 1970s, during the last oil boom. They've held the crown for biggest boats ever since. Arab royals now own the four longest yachts in the world. Among private yachts not owned by heads of state, the Americans still have the lead, with Oracle Chief Larry Ellison's 454-foot Rising Sun and Microsoft co-founder Paul Allen's 416-foot Octopus ranking first and second.

 

Yacht broker Nigel Burgess says at least 20% of the business for new vessels over 200 feet is coming from Russians -- more than from any other single country, including the U.S. "They've really taken the yacht business by storm," says Jonathan Beckett, Nigel Burgess's president. "It's very much like the Saudis in the 1970s. Except that the Russians are perhaps more sophisticated."

 

Mr. Abramovich has made the biggest waves. Eclipse is designed expressly to overshadow Dubai, the 525-foot behemoth owned by Sheikh Mohammed bin Rashid Al Maktoum, ruler of Dubai.

 

When Eclipse launches, Mr. Abramovich will own more than 1,100 feet of yacht -- the approximate length of the Queen Mary 2. Exact prices for his boats aren't known, but industry experts estimate they range from about $25 million for his smallest to more than $300 million for Eclipse. Annual overhead for the boats is more than $20 million, industry experts say, and it costs him $120,000 just to fill up the tanks of his current largest boat, Pelorus.

 

Each vessel serves a different purpose. For entertaining, Mr. Abramovich prefers Pelorus, the 377-footer originally built for a Saudi sheikh. It has bulletproof glass, two helipads, an indoor pool, a steam room and accommodations for 22 guests and more than 40 staff. For cruising, he likes Ecstasea, with a Chinese-themed interior and a top speed of more than 40 knots. The 161-foot Sussurro is mainly used as a loaner or "tag along" yacht for friends during large parties.

 

 

Wanna see some closeup photos?

 

You won't believe it.

 

The Pelorus

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To date, this has been the most depressing start of the year for bears yet. Even the most honest and well-grounded permabear in the media, Bill Fleckenstein, is starting to enter a state of denial. Last week, he commented on how the market action at the beginning of the year was the weakest he'd seen, or something lame like that. (No doubt, he won't be repeating that this week.)

 

But take heart! Today, we saw a substantial rally in the gold & silver market, while the dollar AND bond market took a hit. I literally cannot remember the last time that happened in the same day. Plus, the trading season for the stock market doesn't REALLY begin until next week, when yearnings season begins; the past week and a half was merely an extension of the same nonsense we've been seeing anywhere from last July to as far back as Oct '02 (depending on when you start counting). This could be the end of all that. Then again, maybe it's not. But, from a contrarian standpoint, this is the best time to get on the other side of the boat, 'cause the whole thing looks like it might tip over. And if you need a reminder on just how strong contrarian opinion can be, just look at those old posts from October '02, and see the kind of things everyone was writing. Just make sure you have a box of tissues nearby, in case it brings back any painful memories of what happened shortly thereafter......

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To date, this has been the most depressing start of the year for bears yet.  Even the most honest and well-grounded permabear in the media, Bill Fleckenstein, is starting to enter a state of denial.  Last week, he commented on how the market action at the beginning of the year was the weakest he'd seen, or something lame like that.  (No doubt, he won't be repeating that this week.)

 

But take heart!  Today, we saw a substantial rally in the gold & silver market, while the dollar AND bond market took a hit.  I literally cannot remember the last time that happened in the same day.  Plus, the trading season for the stock market doesn't REALLY begin until next week, when yearnings season begins; the past week and a half was merely an extension of the same nonsense we've been seeing anywhere from last July to as far back as Oct '02 (depending on when you start counting).  This could be the end of all that.  Then again, maybe it's not.  But, from a contrarian standpoint, this is the best time to get on the other side of the boat, 'cause the whole thing looks like it might tip over.  And if you need a reminder on just how strong contrarian opinion can be, just look at those old posts from October '02, and see the kind of things everyone was writing.  Just make sure you have a box of tissues nearby, in case it brings back any painful memories of what happened shortly thereafter......

 

Top pick'n, a dangerous that bitch she is. Driving many stoolers on a diarrhea run. If you're gonna do it, just control your risk in some way.

 

I'd hardly call gold a rally. It's still in the wedgie, and nothing meaningful I can see since its market high.

 

LT Treasuries are flirting with the 200 day MA, but who cares. They do that all the time until they cross decisively.

 

Market breadth is slowing and that is the major sign. Sudaca posted some good charts yesterday on the NYSE and SPX. Everything for the next few weeksis bullshit, with people willing to put even less money down than that fake-o run since August.

 

I got a few LEAPs, but I'm just not willing to lay some serious bread on this bad boy until the PigMen show me their real hand.

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Do you see what I see?

 

Yes, but I have no clue how the congress stuff works with the shennanigans there. News debate stuff should be prevelant this weekend probably. I guess this stuff has loopholes and those loopholes could blast the thing off. I wonder what the short interest looks like in general on these stocks.

Sucked losing all my gains on STEM. I thought I had an entry that would stick....oh well. DNA looks low risk short but they could shank us with some pre-market gapup on some breakthru in the loophole industry.

Time for the tax cut chess game as well on the general market. I can guess how that is pumped on the media.

My WFMI gap fill play options will finally get their 100% losses off my port after next week.

 

OIH looks like people are gaming it for "protection" afterhours against losing out on the Iraq takeover during the 3 day weekend while everyone is at home watching tv and gossiping with friends.....Where is McCarther? Product placement alert warning

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The Greatest Global Stock Market Boom rolls on unabated.

 

Vast fortunes being made, especially in the emerging or developed markets.

 

For example, another MarketWatch headline of a new all-time record close on the India Sensex, with many stocks up 6% and 7% on the day.

 

And of course, there is Russia, whose market is up some 700% off the 1998 lows, even after a big haircut the last month.

 

Combine booming stock markets and commodity bubbles, and you get the Ultimate in Wealth Generation in Russia.

 

As a result, the biggest yachts in the planet are being snapped up by these Russian billionaires.....

 

Excerpts from today's WSJ:

 

The Russians Are Coming -- at 40 Knots.  Eyeing Record, Tycoon Builds a Bigger Yacht; Challenging the Saudis

 

January 12, 2007; Page W1

 

At a shipyard in Hamburg, Germany, on a construction dock hidden from public view, workers are toiling away on a special boat. It's called "Eclipse." And if all goes according to plan, it will become the largest privately owned yacht in the world.

 

Eclipse will have at least two helicopter pads, several hot tubs, one pool, three launch boats and a private submarine. For security, it will be fitted with motion sensors and a special missile-detection system.

 

According to several people involved in the project, Eclipse is the latest water toy for the new king of the seas -- Roman Abramovich.

 

Mr. Abramovich, the Russian oil magnate whom Forbes ranks as the 11th richest man in the world, with $18.2 billion, has an armada that would rival some national navies. In addition to Eclipse -- expected to measure more than 525 feet -- he owns three other mega-yachts, including the 377-foot Pelorus and the 282-foot Ecstasea. He used to own four but recently awarded one, the 370-foot Grand Bleu, to a close business associate.

 

With Eclipse, Mr. Abramovich is not only setting a new high-water mark in the "mine-is-bigger-than-yours" world of mega-yachting. He's also helping to solidify the reputation of the Russians as the new world leaders of global conspicuous consumption. The gusher of oil money and flood of cash from commodities like nickel and aluminum has created a steady stream of new oligarchs.

 

While the 40-year-old Mr. Abramovich now spends much of his time in London, he and other oligarchs are seen as symbols of a new Russian system that places huge riches in the hands of a few.

 

To companies that sell to the rich, this new wealth is a dream come true. Today's Russian Revolution is all about status, and the new Blingsheviks are young, supremely rich and eager to spend. There are at least two dozen Russians now worth at least $1 billion, according to private bankers, and thousands of new multimillionaires have been created in the past five years.

 

Russians are buying up castles in Germany, Warhol prints in New York and polo ponies in Argentina. An estimated one in five homes in London's posh Mayfair district is now owned by a Russian, according to real-estate agents. Sotheby's has noticed a surge in Russian buyers for jewelry, watches, fine art and antiques, says Richard Buckley, managing director for North America and South America for Sotheby's.

 

Russians, in short, are the new Saudis.

 

Especially when it comes to yachts. The Arabs entered the yachting world with a splash in the 1970s, during the last oil boom. They've held the crown for biggest boats ever since. Arab royals now own the four longest yachts in the world. Among private yachts not owned by heads of state, the Americans still have the lead, with Oracle Chief Larry Ellison's 454-foot Rising Sun and Microsoft co-founder Paul Allen's 416-foot Octopus ranking first and second.

 

Yacht broker Nigel Burgess says at least 20% of the business for new vessels over 200 feet is coming from Russians -- more than from any other single country, including the U.S. "They've really taken the yacht business by storm," says Jonathan Beckett, Nigel Burgess's president. "It's very much like the Saudis in the 1970s. Except that the Russians are perhaps more sophisticated."

 

Mr. Abramovich has made the biggest waves. Eclipse is designed expressly to overshadow Dubai, the 525-foot behemoth owned by Sheikh Mohammed bin Rashid Al Maktoum, ruler of Dubai.

 

When Eclipse launches, Mr. Abramovich will own more than 1,100 feet of yacht -- the approximate length of the Queen Mary 2. Exact prices for his boats aren't known, but industry experts estimate they range from about $25 million for his smallest to more than $300 million for Eclipse. Annual overhead for the boats is more than $20 million, industry experts say, and it costs him $120,000 just to fill up the tanks of his current largest boat, Pelorus.

 

Each vessel serves a different purpose. For entertaining, Mr. Abramovich prefers Pelorus, the 377-footer originally built for a Saudi sheikh. It has bulletproof glass, two helipads, an indoor pool, a steam room and accommodations for 22 guests and more than 40 staff. For cruising, he likes Ecstasea, with a Chinese-themed interior and a top speed of more than 40 knots. The 161-foot Sussurro is mainly used as a loaner or "tag along" yacht for friends during large parties.

 

 

Wanna see some closeup photos?

 

You won't believe it.

 

The Pelorus

 

I think the inclusion of a private sub and anti-missile devices is very telling. This guy Abramovich knows he has a target on his back. And well he should.

 

This "new breed" of Russky kleptocrat is a short-term phenomenon borne from the chaotic dissolution of the Soviet Union, when a relative handful of clever chaps were able to get their mitts on most of Russia's biggest enterprises. In the decade-and-a-half since the fall of the Evil Empire, guys like Abramovich have lived large thanks in no small part to the aid and abettance of global finaglers like Goldman Sachs and the rest of Da Boyz.

 

This too shall pass. And probably rather soon. No doubt that's why Abramovich makes sure he has a getaway submarine and an anti-missile launcher on his toy boat.

 

History has a way of dealing with grandiose kleptos like Abramovich with extreme prejudice, especially ones who flaunt their ill-gotten gains so extravagantly. I have a feeling that Abramovich and his cronies innately know this and are just obeying the maxim, "Live fast, die young and leave a beautiful corpse."

 

I imagine they will get their wish. All except for the "beautiful corpse" part.

 

Just as an aside, Russia now ranks number two in the world in terms of the number of billionaires, behind the U.S., of course. Nothing wrong with that. Someone's gotta be number two.

 

But last year, Russia only ranked 16th in the world in terms of GDP and a woeful 97th in the world in terms of per capita income. This certainly shows just how kleptomaniacal these Russky kleptocrats have become.

 

It's only been sixteen years since the Soviet Union broke apart. Given the way the cookie crumbled, no surprise that a handful of enterprising crooks would take the opportunity to snatch the goods and live the life of Rilsky. For a time, at least.

 

How much longer they can do it is another story, especially given the way they appear to be conducting themselves. It may not be many years before it will take a lot more than a private submarine and a missile launcher to keep the wolves at bay.

 

At that point, all that can be said will be: Fare thee well, fair kleptocrats. We hardly knew ye.

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