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).