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Taking Our Cues From Russia?

Whether or not you agree with the recent actions by the US Federal government, it's hard to argue with the statement that it is beginning to look a little like Russia. We all remember the headlines in 2004/2005 when the Russian government seized control of Yukos alleging that the company owed billions in back taxes. Then in July, BP had to pull out of its energy joint venture in Russia citing 'sustained harassment' on the part of Russian authorities. Just as Russia has been taking control of its energy companies, over the last two weeks the US government has taken over Fannie Mae (FNM) and Freddie Mac (FRE) in our nation's financial sector. And the similarities don't just end there.

Last Friday, the Russian government announced that it would buy $20 bln worth of equities for each of the next two years. Now less than three days later, we are seeing headlines that the US government will also take equity stakes as part of their 'compensation' for the $700 billion government bailout. Now we all remember when President Bush said he found Vladimir Putin to be a 'very straightforward and trustworthy' person who was 'deeply committed to his country and the best interests of his country.' But taking our cues from Russia? That may be taking it a little too far.