Summit Notebook

Exclusive outtakes from industry leaders

A philosophical look at the habits of the super-rich

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rtx8vgi.jpgThe credit crisis may be hitting the man on the street hard, but spending by the “other half” on the latest super yacht or Damien Hirst work of art looks set to carry on relatively unaffected.

Super-wealthy individuals in commodity-rich areas such as Russia and the Middle East are reaping the benefits of a five-year boom in oil and other commodity prices.

Even though oil and commodity prices are now coming off sharply, the boom is still feeding through into their spending power, provided they haven’t done anything too risky with their cash in the meantime.

And it’s happening just when everyone else is cutting back on non-essentials.

Video – Car makers speed into Russia

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U.S. and Asian automakers are rushing to lure Russian consumers to offset declining sales in the U.S., Europe and Asia.

U.S. and Asian automakers, facing declining sales in almost every market around the world, are speeding into Russia to try and gain market share as the growing middle-class expands and car sales appear set double in the next three years.

AUDIO: Capital flight to cure what ails

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pankin1.jpgSoaring oil prices have helped make Russia rich, but the flood of petrodollars means Russians face double digit price inflation. Dmitry Pankin, Russia’s deputy finance minister, sees a trade off in a recent market selloff: Russian companies might have trouble raising capital, but billions of dollars in capital outflows may be just the thing to help cool inflation. 

AUDIO – Fannie, Freddie favour Russia

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Russia’s Finance Ministry and central bank have been put on the defensive for investing the national reserves in U.S. mortgage agency debt. Deputy Finance Minister Dmitry Pankin tells the Reuters Russia Investment Summit that Fannie Mae and Freddie Mac were propping up Russia’s finances, not the other way around.

AUDIO – Gazprom: “We are mutually dependent”

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GazpromA quarter of the gas that heats European homes and powers European industry is piped in thousands of kilometres from the Russian tundra. By 2015, Russia’s share of European gas supplies will rise to at least one third. That powerful lever of influence over Europe’s economy raises the stakes in its confrontation with Russia over its invasion of Georgia.

But Alexander Medvedev, deputy chief executive of Russia’s state gas export monopoly Gazprom, opened the Reuters Russia Investment Summit on Monday with a reminder that even the mighty Gazprom is not invulnerable to Europe and the West, relying as it does on foreign revenue and capital.

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