File under pathetic: Goldman CEO apologizes for sell rating

wall street is littered with the tombstones of geniuses

I spent 20+ years as a Supervisory Analyst on Wall Street. Before 2000, this would never have happened. Analysts were highly discouraged from EVER putting a sell rating on any stock, and to do so for an Investment Banking client would get you fired and end your career.

I once refused to approve an analyst's report on Tyco, one that sang its praises. Once look at the financials showed anyone with two grains of sense it was all smoke and mirrors, another Enron-type pyramid scheme just waiting to happen. My boss, a Director of Research at a Top 10 firm, ordered me to approve it because we wanted Tyco's Corporate Finance business.

Just protesting that Buy rating got my name on the short list of people in line for the next layoff. Sure enough, two days after the Enron collapse, I found myself with ten minutes' notice after 12 years with my company -- making me the second most senior person in the department.

In the long run, they did me a favor -- because that job made it hard to sleep at night many times. I'm glad to see Wall Street analysts giving independent advice, although my experience still tells me to be wary and do my own homework.

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

Russia going communist? 90% chance it does.....and default is a very big concern.