Special Extra: Potemkin Russia, Gone Haywire

It’s hard to say which bit of news is more revolting — that the venal, spineless terrorist who broke into Sarah Palin’s e-mail and published messages from and pictures of her children is the son of an important Democratic politician (and the Obama campaign is silent about the atrocity), or that the horizontal line on the RTS index from Wednesday and Thursday has turned into a vertical line today, as shown in the above chart.

As of noon Moscow time the RTS was up nearly 16% as a single buyer, the government of Russia, suddenly became wildly interested in purchasing Russian stock, with price no object given the country’s vast oil windfall profits.  As if Stalin had ordered it, the market simply made a U-turn after being shut down for a day and a half (given Putin’s KGB team, one can’t exclude the possibility that large number of threats of physical violence have also been made against sellers). A foreign broker stated: “At this stage, we’re just telling clients to sit aside and watch. Any market that can fall so far so fast deserves a higher risk premium.”  Another stated: “The deleveraging of the market will no doubt continue to be a painful exercise, soothed only by the possibility of government intervention to restore confidence.”  No sooner had they said so than the Russian market was shut down again, the Kremlin apparently realizing it had gone just a wee bit too far.

If things go on this way, the Kremlin will be the sole owner of Russian equities, buying from and selling to itself to create a Potemkin stock market, secure in the belief that the innately superior cleverness of the Russian mind will pull the wool over the eyes of the world.  The USSR always exhibited a similar confidence, and history shows how very right it was to do so.  Because, sooner or later, the money for doing stuff like this tends to run out (otherwise, you know, everybody would do it).

6 responses to “Special Extra: Potemkin Russia, Gone Haywire

  1. Umm…when was this posted? RTS is currently up above 20% and ММВБ is up over 25%. The market had to stop twice because the its so hot. Why do you keep creating the illusion that this is somehow solely a Russian problem. This is a global financial crisis. If anyone is responsible its the US, which is suffering more than anyone. You might say that percentage-wise US is doing better then Russia, but the fact is, that mentally US took a larger hit. Russians are no strangers to hardships, Americans were “fat and comfortable” for too long, and psychologically such shock is much harder to bear. Russia is no stranger to government involvment in business, US on the other hand is about to go down the socialist road for the first time (not sure New Deal was anything compared to what is coming), nationalizing huge banks and financial institutions. Wait until Obama wins, maybe not this year, but certainly the next. Its inevitable with the demographic trends in US.

    LA RUSSOPHOBE RESPONDS: Ummm . . . it says noon Moscow time, you illiterate baboon.


    Dude, you’re freakisly idiotic and embarrasing yourself. Wake up please. The market is “so hot” because THE RUSSIAN GOVERNMENT IS MAKING THE MARKET. Which is why the stock brokers say to keep away from it, because as our headline reads it has gone haywire. It’s a Potemkin illusion. The Russian government is giving away the Russian people’s future to prevent further humiliation, and you are celebrating it. How can you possibly hate the people of Russia that much?

  2. Do you have a single piece of evidence that the Russian goverment was a “single buyer” of stocks?


    Yes, and we’ve linked to it repeatedly in prior posts. If you don’t have the courtesy to actually read our blog before commenting, don’t waste your time doing so. Next time, we’ll just delete your comment. The government has publicly announced it would enter the market to stabilize it, you illiterate ape.

    Meanwhile, do you have a single piece of evidence that it wasn’t? You sure don’t mention any, nor did you read this post, which quotes stock market experts.

  3. Business as usual?

    The Index growth of today (19.09.08) seems to depend overwhelmingly on the trade of shares of two major Russian companies: Gazprom and SBER bank. And guess what? Who is the biggest shareholder in both? Yes Sir… Russian state. So RTS index “grows” as Russian state buys its own shares!

    “Market” info from http://www.rts.ru/
    Sectoral Indices
    RTS – Oil & Gas 183.99 +24.82%
    RTS – Consumer & Retail 218.27 +0.70%
    RTS – Metals & Mining 191.48 -3.63%
    RTS – Industry 248.10 +0.80%
    RTS – Telecom 161.25 +1.81%
    RTS – Electric Utilities 172.20 +1.34%
    RTS – Financials 371.13 +19.96%

    Current Value 1272.46 16:43 19.09.08
    Opening Value 1064.02 10:30 19.09.08

    Ticker Influence on Index, pts
    GAZP 55.568
    SBER 48.766
    LKOH 45.310
    ROSN 36.969
    VTBR 12.659

    LA RUSSOPHOBE RESPONDS: Very excellent addition of value to our blog! We thank you very kindly. If only all our readers were as industrious and insightful! This is what blogging is all about.

  4. Well, Novaya Gazeta reported that billions of dollars worth of shares from GAZPROM disappeared long before the market crashed, and likely given to friends of the regime. The state must now step in and make sure these friends get a bigger return on the shared that were “gifted” to them ;) I am sure these shares that are now being bought by the state will disappear once again off the books. How does it go: “the gift that keeps on giving.” The Russian state is making sure that billions get into the “right” hands.

  5. Let’s see, if the government tells me ahead of time that it is going to pump HUGE amount of money into the market that is essential saying that the government is going to prop up or guarantee the price. Of course, if I am savvy I will buy right away. I’ll take that bet. That is what you are seeing. These are not investors. These are speculators hoping to make a quick kill. It is happening in Wall Street and it is happening in Russia. The main difference is that Wall Streets fundamentals are much stronger than Russia’s. By next week you will see another large drop in the market, when the speculators cash out. The roller coaster is far from over. You have to hope Putin has enough Ruble Juice to ride it out.

  6. News flash…

    With these moves being made you can bet that Putin has added another pipeline. This one starts at the Russian treasury and is ending in his labyrinth of Cayman accouts , flowing max output, my guess is now he has over $100 billion dollars all thanks to the russian population.

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