Russian Stock Market Crash Continues, Trading Halted Again
Submitted by
CalculatedRisk on Wed, 09/17/2008 - 4:55am (103 comments)
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Again???
This is good news. I mean the index can only drop to zero right? After that its all upside...
Money has been trying to leave RUSSIA ever since Georgia, and now the bureaucrats can't find ways of keeping investors from pulling.
We'll see how decoupling works for a country dependent upon oil and authoritarian rule.
So maybe Putin should've shown more restraint in Georgia. That was the trigger, right?
We are all Georgians now!
Яичница!
blackhat writes:
We'll see how decoupling works for a country dependent upon oil and authoritarian rule.
Which country are we talking about again?
Comrades,
Wow, markets are allowed to fall in Russia.
Hoocoodanode!
Nostrovia,
But hey, what's a quarter between friends?
This is the silver lining in the cloud. The Russian crooks are taking it in the shorts!
NickFury writes:
So maybe Putin should've shown more restraint in Georgia. That was the trigger, right?
Clearly a miscalculation. Putin should have annexed Georgia, invaded Ukraine, and cut Europe off for a month as soon as they saw things Russia's way. Don't worry, they'll get it right next time.
/eff
A band called the Exploited sang a song called "Let's Start a War". Someone's gonna do something to get oil back up.
Dumb question: Why is the Russian stock market falling?
Is it possible that US/CIA might be orchestrating this rout in Russia as payback for Georgia - to illustrate to Putin that he MUST play nicely?
I don't know. I wouldn't put it past this administration in terms of wanting/deciding to do it - just don't know whether they would be able to.
/conspiracy
Let that be a lesson to anyone who thinks turning their back on communism will not go unpunished.
dr munch writes:
A band called the Exploited sang a song called "Let's Start a War". Someone's gonna do something to get oil back up.
Oil is back up already, lets wait for the inventory report and see how much demand destruction there really is.
Russian citizens have lower entitlement expectations than American consumers, they always 'weather' downturns better & easier. It's us American consumers who freak out quicker & easier despite what our ego-stroking press tells us. We believed the good times would last forever...not a common belief in poorer or less-democratic states.
Putin & Co. can out-wait a global recession & credit crunch, and still play havoc with Europe's energy.
Schadenfraude's fun and all, but do we really want a nuclear-armed Russia melting down right on schedule with a nuclear-armed Pakistan?
The New Cold War: Black Commie vs. White Commie!
Comrades,
TED Spread....Whoa Nelly!
http://www.bloomberg.com/apps/quote?ticker=.TEDSP%3AIND
Nostrovia,
Dumb question: Why is the Russian stock market falling?
The world economy is linked together. As America crashes, so too does the world.
I live in Australia. The market hasn't been so bad here... yet.
Entitled servitude is not an oxymoron.
So, we now can talk about the BIC countries?
Who's next!
Paka,
Rossichka
OT to CR:
Very nice job on the late night post re the overview. I'm telling my wife to read it...
And if in Vancouver 2010, spend teh money and stay at the Pan Pacific.
Primo.
This is going to be a very bumpy day.
BTW what we're seeing here is the reverse side of the carry trade.
These sort of things always happen when hot money flows dry up.
We're just seeing a larger version of the Asian Financial Crisis now because the bailouts at the time (notably LTCM) provided the vehicle for these ideas to spread to other markets.
Comrade Beach (aka Mr.) writes:
This is going to be a very bumpy day.
Second that. If they don't defend yesterdays levels.. am afraid it will get bumpier down the road.
NickFury writes:
So maybe Putin should've shown more restraint in Georgia. That was the trigger, right?
No, the RTS started cliff-diving in May or thereabouts.
The Russian economy is anemic save for oil, right? So does this raise geopolitical concerns with the pipeline that runs through Georgia? Question for Daily Kos, I suppose.
"Dumb question: Why is the Russian stock market falling?"
The world economy is linked together. As America crashes, so too does the world.
Again, I would argue more dryly that it's simply a reversal of the hot money flows.
We've seen the same phenomenon before.
Bubbles are bad. They have a nasty way of popping.
I guess there is a tiny chance that Morgan Stanley will cease to be in 100 hours.
dr munch-
i prefer FEAR's version to the Exploited
karelian writes:
I guess there is a tiny chance that Morgan Stanley will cease to be in 100 hours.
So how much was your put?
It is a teeny tiny chance... hardly worth gambling on...
Dow down 200 already!
Oil prices decline=russian stocks decline--not unexpected.
AIG DOWN 32%
The most important event IMHO is the freezing up of the money markets. 3-month TBill at 0.23%. Libor over 3%, and some banks not lending lower than 4% and most not at all.
errr.. MS isn't doing too well down 17%
Comrades,
Financials getting pounded. THAT'S moral hazard for ya!
Nostrovia,
Sorry if already digested ...
Money Market breaks the buck.
Link to Bloomberg story:
Reserve Primary Money Fund Falls Below $1 a Share (Update4) - Bloomberg.com
Lehman fallout. And this one may bother some people.
Um...
13-week T-bill yielding 0.2% !?
"Oh well, over one fourth of the markets value gone in two days ... "
There's an old Russian saying that comes to mind.
"Eees no prrroblem!"
Don't forget the continuing de-facto renationalization of various energy projects. The Georgia escapade probably just triggered existing inclinations to exit.
Wa Mu up 2%
Freddie up 8%
hmmm
Comrade threetorches writes:
Lehman fallout. And this one may bother some people.
This is real scary.. thanks for the article.
The Russian economy is anemic save for oil, right? So does this raise geopolitical concerns with the pipeline that runs through Georgia? Question for Daily Kos, I suppose.
Yeah. As some of us here argued repeatedly in the past (I won't mention names) a lot of these economies ran the risk of crashing the second the commodity bubble popped. Try to picture the impact on your finances if your income suddenly dropped 35% or more and you'd made all these spending plans based on having an income much higher than that. This is the kind of situation these economies are facing now.
Bubbles are bad.
They're catastrophic when your entire economy depends on one.
^IRX\t9:17AM ET\t0.17\tDown 0.69\tDown 80.23%
That's what my (delayed) Yahoo ticker is telling me.
GS down 10%, hmmmmm.
"Financials getting pounded. THAT'S moral hazard for ya!"
Nope this is like duck hunting and the season just opened. Everyone of these guy are a target now that rules of that game have been printed.
Here is the bloomberg story:
Treasury 3-Month Bill Rates Drop to Lowest Since at Least 1954
The brightest light of the past week has been seeing Tovarisch Putin and the Russian Oligarchs finally get theirs. They're diplomatically isolated and in store for economic ruin.
Mel and ac are on the right track. Russia has a couple of added problems. Investors have in front of them the example of how much can be lost when an asset bubble pops, so when sky-high Russian shares begin to fall, why wait around? In addition, financial market troubles in the US have consequences for global credit markets, and that means Russian firms are going to have trouble, right along with the rest. Three strikes, without thinking that anybody is putting honor above profit. Tack on the pure risk implications from Georgia, and there are 4 strikes.
Treasury 3-Month Bill Rates Drop to Lowest Since at Least 1954
Every day we have another funeral for the treasury bears it seems.
SEC imposing naked short ban for all public companies, starting tomorrow.
Comrade Beach (aka Mr.) writes:
Here is the bloomberg story:
Treasury 3-Month Bill Rates Drop to Lowest Since at Least 1954
From the article :-
The AIG rescue smacks of sweeping the problem under the carpet rather than solving it in a structural sense,'' said Padhraic Garvey, head of investment-grade debt strategy at ING Bank NV in Amsterdam, in a note to clients.At least the Lehman saga has gone some way toward a clean-up. We are still in the midst of the flight-to-quality environment.'
SEC imposing naked short ban for all public companies, starting tomorrow.
I hereby promise to get dressed before I short the bejezus out of insolvent financial companies.
"Treasury 3-Month Bill Rates Drop to Lowest Since at Least 1954"
Treasuries are the last bubble. when it blows don't get none on you shoes.
Talk about opening the door and rolling out the red carpet for communism to come back....
A 20% loss in two days will undermine the capitalists there.
damn bear
credit repair
Come on over to My Blog anytime thanks
"Bubbles are bad.
They're catastrophic when your entire economy depends on one."
Which economy are we talking about again?
I think J6P is paying attention today.
Anyone noticing delays in page-load times at Marketwatch/Bloomberg/Yahoo Finance?
JP writes:
I hereby promise to get dressed before I short the bejezus out of insolvent financial companies.
Good one.
What will they threaten next? blur out your 'sell' button?
Talk about opening the door and rolling out the red carpet for communism to come back....
Tovarisch Putin has successfully managed to completely marginalize the communists. There is a relatively robust opposition composed of social democrats and liberals, though. Inasmuch as Russia is looking increasingly fascist under Putin, any breakup of the Putin "personality cult" could be good thing.
Gold's shooting up. What next?
It looks as if there won't be any safe havens in this financial crisis. Heck, even the Chinese and Indian stock markets have taken a beating this year.
Anyone still thinking they can ride this out by putting their money abroad will be hurting. I wonder how Peter Schiff is feeling these days?
So much for the de-coupling theory...
SEC issues rules aimed at protecting investors against naked short selling abuses; says rules will apply to securities of all public companies effective Thursday
oh shi- someone woke up Chris Cox?
pardon me for being even the slightest bit conspiratorial, but...
some of you all are probably aware of the role western banking played in the dying days of the USSR to pull the financial plug and force collapse.
foreign markets like russia are filled with hot money, of course, much of it intermediated by investment banks.
now maybe this is a simply flight to quality. but western banking took national direction in 1991 to help end the soviet union. i would not at all be surprised to hear someday down the road how a bush administration unwilling to risk military retribution over georgia instead engaged in a bit of financial warfare.
If the rubble was the world currency reserve then they could print and bailout just like us and keep our economy robust and market from collapse.
Who can we buy next? Bring em on!
Yay, the sec will save the World...
I wonder if any fincial stocks will be above $10 soon. All my google recent quotes are red.
I have a sea of red on my screen, interestingly enough, the only two green spots are two penny stocks I used to trade...go figure.
Flight to Quality in penny stocks
Re the russian bear crawling into a cave to die, I don't think so.
Putin strikes me as smart, savvy, ruthless and far less dependant on public opinion than any western politician. What's more, his people may look at him with hope that he will fix problems, militarily or otherwise.
Europe is going to need Russia's natural gas this winter. A market crash by itself will hurt, but as was noted above, Russia is historically resiliant to hardship.
What shockingly bad news will be released Thursday that needs an extra cushion ?
Ha comrade mike, sad isn't it?
treasury will raise cash from auction of tbills
marketwatch ticker
"chophouse writes:
Is it possible that US/CIA might be orchestrating this rout in Russia "
The real story, Russia has experienced a capital flight in the last two weeks, however the above could be the media story in there....
I'm not sure that this is bad news for Cde Putindeyev. If share prices collapse, the SWF that's stuffed with cash at the moment can renationalise everything that the oligarchs looted back in the 1990s.
This removes a concentration of economic power that could stand in his way.
I do not believe a word about the Georgia crap. All emerging markets are failing, blogger Brad Sester pointed out that US net sell of foreign assets is $32b in July. It is just those big banks and funds need cash to save their own ***. So sell everthing that still has some value to pay for your debt. This is liquidity crunch.
CR,
.
Wasn't Russia's central bank buying (or holding) loads of agency debt? Any guess on fallout? I should have kept up with Brad Setzer Setser
Thanks
Putin strikes me as smart, savvy, ruthless and far less dependant on public opinion than any western politician. What's more, his people may look at him with hope that he will fix problems, militarily or otherwise.
As intelligent and ruthless as Putin may be, he still does not completely rule the country. He's gone a long way towards weakening the oligarchs, who have thus far tolerated him because it was good for business, but if they start to lose their taste for his leadership, he could be taken down.
Russia is a lot more fragile than it appears. Putin's folly will ultimately be overestimating his own popularity and/or military strength.
Yawn, good morning, so I understand from the paper than I have a 1/300,000,000th share in 85% of AIG. Cool, what's the dividend for that?
What will they threaten next? blur out your 'sell' button?
Remember that Web joke going around where you chase a button around the screen with your mouse and can't ever click it? Ameritrade is looking into that technology.
How much of the Russian story is PE and hedge funds running for the hills after redemptions? I don't think it has anything to do with Georgia--the world recognized Saakivilli? is a tool a month ago.
I'm sure glad I'm not looking for a bank loan for anything....
Wow...what a week to be at the beach!
I left a few GTCs sitting out there just in case, and EEV has delivered very nicely (thank you Russia!).
I just couldn't take it - didn't bring the laptop and no WiFi anyway, but I just had to run down to the library here.
Nostrovia Indeed!
Scott
Russia's drop = Georgian intervention
Is one big NOTHINGBURGER!!!!
Windowdog writes:
Yawn, good morning, so I understand from the paper than I have a 1/300,000,000th share in 85% of AIG. Cool, what's the dividend for that?
may i be the first pedant to point out you only have 79.9% of what you just referred to
so div down, not up
@nobody. I don't know. History will tell. But oligarchs looking to take that one down better check their rear view for assasins or police.
Again, natural gas is real leverage against Europe.
Darn Communists, intervening in the functioning of the free markets!
Russia today does not resemble the country that was crumbling apart and going hungry in 1998. There was open speculation in those days whether places like Sakhalin island and the Caucasus states bordering Chechnya would even remain in Russia.
Russians like strong leaders to "put things in order". It's quite possible that Russians would support amending their constitution to allow Putin to be president again, and just get Medvev out of the way.
Just a guess, but I bet there is not widespread public participation by Russian citizens in the Russian stock market. The herd is smaller so the panic spreads faster.
Could it happen here. Of course!
The Russians just need to get the with the program and use crony socialism like we do in the USSA! Just bailout the companies in trouble, spend lots of money to reward idiots, and jam the market up with the PPT. Hey, it works in Amerika, so it can work in Russia, right? Hahaha!
The sad part is that letting the market crash is more capitalist than bailing people out at a rate of $50 billion a day or whatever we're up to at this point.
"Ban on naked shorting"
Well, there go the last profitable IB's now.
This is not the first time in recent years that Russian markets plunge. During a mini-crisis in May 2006 the markets fell by about a quarter in the space of a couple of weeks. They climbed back of course but that taught me a lesson: foreign capital inflows really can and do turn on a dime. To be fair, this time the fall started before the Georgian war but was accelerated by it.
The other thing is Russians themselves learned the hard way the dangers of investment in the 90s. It appears that recent confidence was pretty fragile, everyone must have panicked and rushed for the exits like they did in 1998.
What I'm curious about is the ruble. So far it's been holding up, and Russia has built really massive reserves. But will it hold? Again, Russians have been taught to desert the ruble at the first sign of trouble. Those quickest came out bruised, others saw their savings wiped out several times in the 90s.
thread music - probably every thread
YouTube - Nursery Rhymes - Humpty Dumpty
"Ban on naked shorting"
For every action there is a reaction and it's not going to be the one they want. The more these ass-hats do to try and stop this the worse this will get.
Ross wrote, "So, we now can talk about the BIC countries?"
Are you serious? Have you seen what's happened to the Shanghai market? Russia is a safe haven compared to China.
U.S. Government Debt Risk Jumps to Record After AIG Bailout
U.S. Government Debt Risk Jumps to Record After AIG Bailout - Bloomberg.com
Triple AAA all the way.
Treasury to Sell Bills to Bolster Fed Balance Sheet
U.S. to Sell $100 Billion in Bills to Fund Fed Moves (Update2) - Bloomberg.com
Printing presses in high gear. Whirrrrrrrrrr
It is amazing to me that a poplation as well educated as Russia, and as historicaly educated, can't see beyond it's own goventment's retoric. The Russian invasion of Georgia has devastated what little confidence the market had in it's backward ideology. Putin has only further condemed his people to undeserved misery.