Spectacular Fraud in the Russian Securities Markets
Well, let’s see now.
Last Friday, there was a horrifying bloodbath in in the Russian stock market, leading the market to be shut down not only for the remainder of the day but for the entire day on Monday.
And on Monday, the price of crude oil fell below $62 on world markets, stunningly far below the $75 baseline needed to preserve the Kremin’s budget. World stock markets plunged further.
And when the Russian stock market closed on Tuesday following its reopening that morning, six of the seven indices on the RTS index were in the red, half of them posting losses in excess of 3%.
Yet the RTS index itself was in the black, closing up nearly 5%. How is that possible, you may ask?
Fraud, dear reader, that is how.
You see, suddenly there was a spurt of interest in purchasing Russian oil and gas stocks. The oil & gas index on the RTS closed up over 8%. Gazprom was up a stunning 16%, and so was LukOil. Rosneft was up 5%.
Who was feverishly buying these shares even as the price of oil was plunging dramatically, ignoring an announced effort by the OPEC group to limit supply?
Only one investor would consider doing so, because it has a pile of ready cash on hand and motivations for buying that have nothing to do with business and everything to do with politics.
That investor, of course, is the Russian government. Killing two birds with one neo-Soviet stone, the Kremlin is socializing the national economic base and creating the illusion of economic stability — at the cost of the national rainy-day savings account.
We condemn this action by the Kremlin, which is so loathesome and irresponsible that words cannot be found to do it justice. If the people of Russia do not interrupt this pathological activity soon, they will find themselves living in a Communist state no different than the USSR except that its population is smaller and its bitter enemies are far more numerous.
It is suicide. But that seems to be the way of things in Vladimir Putin’s Russia.