Special Extra — The Russian Stock Market, in Freefall

The Russian stock market is in freefall

The Russian stock market is in freefall

One picture truly is worth ten thousand screams as the Russian stock market closes this week.  The RTS index is down over 6.5% on Friday, just one day, barely above 1400, down one thousand points or an astonishing, appalling 40% down since its summer high of 2400.

Yes, you read it right. In just the last few months of truly crazed, epically barbaric “leadership” by Vladimir Putin (a proud KGB spy who has no economics training and has never run a business), the Russian stock market has lost nearly half its value even though the price of oil has spiked to record new levels.  Recently, though, the price of oil has receded significantly from its historic highs, and the burden of the increased price has dragged down Western markets (yesterday, the Dow Jones average took a significant hit, but far smaller than Russia’s).

Russian policy has clearly shown the world it is not a reliable source of fossil fuels; Russia has done nothing to try to control the price of oil — instead, it has repeatedly shown it intends to weaponize its natural resources — and in so doing has killed its golden goose, failing to realize how badly its economy needs foreign purchases to survive.  At the same time, the barbarically aggressive foreign policy of Vladimir Putin, combined with his draconian crackdown domestically (he continues to savage private business, following the Khodorkovsky precedent) serve to put the markets in a wicked vice.

If things are this shockingly bad now, do you dare imagine how bad they would be if Russia didn’t have its oil reserves?

This demonstrates how utterly false it is for Russians to claim they derive some sort of power from their oil resources or are somehow independent of the global economy. In fact, exactly the reverse is true.  Russia’s dependence on fossil fuel makes it weak, and its economy depends utterly upon the vicissitudes of the global market.

When Russia attacks America and the West, in other words, it attacks itself.  It’s just that simple, yet it’s something Russians will never understand as they plunge merrily into yet another neo-Soviet void.

8 responses to “Special Extra — The Russian Stock Market, in Freefall

  1. If I were you, I would just rush buying Russian stocks.
    After elections in the US, it will rise up again 30-40%
    Just take the good advice. We will discuss it in few month from now again, okay?


    Dima, if you really believed that, you’d keep the information to yourself and you’d do the buying you idiot. But you have no intention of doing that, do you?

    Moreover, you seem to forget about all the people who bought Russian stocks based on similar promises a few months ago. Even if the market does rise 40%, those people will only break even.

    Meanwhile, are you prepared to put up your personal assets to cover the losses of those who follow your advice if the market drops to zero when Putin goes for the next Mechel, the next Yukos, like a savage dog?

    It’s really quite sad: Every time Russia has an epic failure, its apologists claim final victory is right around the corner and no reform is needed. The Tsar said it, the USSR said it — and look where they are now.

  2. It looks like the West is sending a unified message to Russia after all. Yes, Mr. Mironov, if Russia begins to behave like a civilized country, and restores Georgian Territorial integrity; then Russian stocks will be a good buy.

  3. LR – are YOU willing to put your money where your mouth is and SHORT the Russian market?

    LA RUSSOPHOBE RESPONDS: You are a remarkably demented, illiterate and dishonest individual. In other words, a classic Russophile nut job!

    (a) Foreigners are not allowed into the Russian market in any genuine way, and it is fundamentally dishonest and routinely steals foreigners’ assets (see: William Browder). If you’d like to advise us on how we can short the market and be sure of getting our money out when we win, please do so! We will be delighted to profit from Russian stupidty and duplicity to the maximum extent of our resources! What are you proposing, that we send YOU a check? Ha-ha. That’s a funny one.

    (b) The market has already lost nearly half its value. What if the market was currently at zero — would you then suggest we still have to try to short it or shut up? Dude, you are one freakishly demented, totally detached from reality nitwit. Do you think even for a second before you attempt to publish on our blog?

    (c) If you cared to actually read our post, which you never do, you would have seen that we did not predict what the market WOULD do in the future, we reported what it IS DOING NOW and the horrific consequences for current investors. The commenter responded with an inane prediction that has nothing to do with the subject of the post and was stupid propaganda, just like yours. We exposed his dishonesty and stupidity.

    (d) You don’t see even the SLIGHTEST need to say what YOU would do, do you? Does your “brain” have actual fungus growing on it?

    (e) Correct us if we are wrong, but you’ve never once actually responded to the actual topic of one of our posts, have you? Do you really think this “change the subject” tactic of the Soviets can possibly work here? Can you be that impenetrably obtuse? Hundreds of billions of dollars have been lost by those who foolishly invested in the Russian markets, and by implication the Russian government. The market is down by nearly half. And all you can do is churn out more pro-Kremlin propaganda, thus helping the situation get even worse. Why do you hate Russians so much as to want to subject them to such torture?

  4. I simply asked whether you are sufficiently convinced that the Russian market is going to hell in a hand basket that you would be willing to short it.

    I take it the answer is No. I can accept that.

    If you want to get in on the action, I’ll be more than happy to provide you with the names of Moscow based stock brokers (affiliated with Western companies) who would be more than happy to have you short the market. Provided you have the assets to do so. Shorting is a risky thing to do and requires considerable funds.

    Oh, and it would require a real person, not an ephemeral collective to chicken to attach real identities with a real stake in anything to anything.

    LA RUSSOPHOBE RESPONDS: WHAT????????????? We specifically said if you can show us how to safely bet against the Russian market without having our funds stolen by the state, WE’D LOVE TO DO IT. Did you even read YOUR OWN COMMENT? Why in the world would you say you concluded we don’t want in and then offer to get us in?

    You are one sick mental case. PLEASE GIVE US THE NAMES!!!!!!!!!! WHAT ARE YOU WAITING FOR?????????? And give them yours, to guarantee that our profits will reach us when we earn them. You’ll be happy to do that, right, because you have so much confidence in your beloved country, right?

    But wait!!!!!!!! Now you are changing your “mind” AGAIN and telling us we CAN’T short the market unless we are rich.

    You are one twisted psychopath. You simply won’t discuss the actual issue at hand, will you, namely the PRESENT PERFORMANCE of the Russian market. This post isn’t about the Russian market GOING to hell, it’s about it BEING IN HELL RIGHT NOW YOU IGNORAMUS. Honestly, it’s like trying to have a conversation with a block of wood. A perfect illustration of why the USSR no longer exists! Thanks for that!

    PS: Is it your actual goal to have us rolling on the floor at your totally hilarious incompetence? Is that how you defend Russia, by killing your rivals with convulsive fits of laughter?

  5. The general asks a multiple choice question, and expects a true or false answer.

    In the words of Bugs Bunny, “What a Maroon”.

    With all of the human rights violations that I’ve pinned on the fake general, I’m in awe of how he can keep himself creditworthy.

    I guess russia has a low standard of conduct.

    That is what I guess.

  6. Actually, stock market has a very relative relation to real economy.


    (a) You are a Russophile, and wouldn’t say that if the market were booming. Then you’d strut and brag and say it proved Putin was great.

    (b) Tell that to the Americans of 1929 after the stock market crash, which triggered the Great Depression.

    (c) Tell that to those who have lost billions and billions of dollars in equity.

    (d) The stock market is a perfect indicator of how confident sophisticated investors are in the country’s future. Your attempt to deny that indicates that you haven’t got the slightest clue about facts and couldn’t care less, but rather only want to cover up for the Putin regime, just as was done in Stalin’s times, until the country is obliterated.

    (e) Thanks for the thoughtful links to source material supporting your “argument”!

  7. Dear La Russophobe,

    (a) Putin is great. I love him.

    (b) Russia alrady had Great Depression, which was much more depressive than american G. Depression.

    (c) I don’t care about Americans and Brits.

    (d) The crush on stock market and on exchange market, brought growth of dollar, and that’s a positive sign, because local production will get higher profits. The growth in local production – that’s what Russia needs.


    If you feel that growth in local production is what Russia needs, then your “love” for Putin is hilarious and quite insane. Was Putin driving “local production” when he crushed Mechel steel and YUKOS oil? His policies over the past eight years are responsible for Russia’s lack of “local production” and he has done nothing at all to encourage it. He can’t, because if he did that would allow the creation of independent centers of power that could challenge his dictatorial rule. The fact that you can “love” a leader who has bungled Russia’s foreign image so badly and driven its stock market into the ground shows clearly what a deluded neo-Soviet freak you are. You are helping Russia to repeat the failure that destroyed the USSR.

    Are you suggesting that because Russia had a depression, it can’t have another one? Is that the kind of “economics” they are teaching in Russia these days? If so, it would help to explain why Russia’s economy is such a mess.

  8. LR – are you to cowardly to admit that when the RSI grew like stupid, you yourself claimed it meant nothing, and was no indication of economic performance on the whole? What has changed since then? You little hypocritical fool.


    We never said the growth of the RSI meant nothing, and you are the coward for failing to post a link to any alleged post of ours you claim to be discussing. All we’ve ever said is that the growth in Russia’s market is small in marginal terms compared to America’s, since the market capitalization is so much tinier — and the same is true of Russia’s GDP growth. If you compare these figures to America’s on a per capita basis, they are minute. As an internal Russian matter, both the GDP and stock market growth have been used by Russophiles to argue that the Putin regime is a success. They now must admit defeat. It’s now clear that Russia can’t even maintain the illusion of success, and that’s a telling illumination of the Putin regime.

    By the way, are YOU admitting that Russia’s growth has been insignificant, so the losses are irrelevant? Why is it that you don’t state your position? Afraid to do so, little boy?

    We’ve also pointed out that the growth in Russia’s market, such as it is, is due largely to the accident of rising world oil prices — and this post clearly confirms we were right. The price of oil drops and the bottom falls out of Russia’s market. That’s not a real market, showing the productive efforts of the nation, it’s a gambling casino.

    If we, the bloggers, are “little” then what does that make you, who merely comment on our blog? Microscopic? Do you think at all before you write your drivel, you idiot? Instead of helping Russia to reform and succeed, you help it to continue the same mistakes and collapse. Why do you hate Russia so much?

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