For whatever reason the Russians are sort of the of the suburban teenager of the ultra-rich age. They go absolutely crazy at the mall when they have a few bucks in their pocket, and melt down into a pile of sobbing Jell-o when the funds dry up. Russia is very much a bellwether of the luxury market with 18 month latency in this way. Their spending excess on last year's trend gives firms like Moët Hennessy - Louis Vuitton a perfect opportunity to dump two-season ago hot items that have backed up inventory and charge premium pricing to do so. The risk, of course, is getting stuck when the oligarchs start sucking wind. That would be circa now.
Moscow had 74 billionaires a year ago, more than any other city in the world. Now it has 27, according to Forbes magazine. The 25 richest Russians lost a combined $230 billion during six months last year as the value of their companies plunged along with commodity prices, according to Bloomberg calculations.
As if this were not enough, the degree to which the Muscovite oligarch depends on the acquiescence of the Kremlin in all of his affairs makes the cross attention of Putin an experience that makes being a bailout spending, private jet flying Big Auto executive look tame. After all, Obama, for all his bluster, was never a member of the KGB. (We're pretty sure on this one).
Sounds like it might be time for Western consultants to hire a pair of AK toting "guides" and head over to draw some consulting fees again. Who's in?
Party Ends for Russian Rich After $230 Billion Losses [Bloomberg]