It’s difficult for one picture to fully encompass the horror of life in Vladimir Putin’s Russia, but these days the RTSI performance graph is doing the job.
At 11 am Moscow time on Wednesday the Russian stock markets were shut down by Kremlin order “until further notice” (it appears the markets will not open on Thursday at all). The RTSI (shown above) was down a shocking 11.25%, closing at a horrifying 761, more than twice as much as the American market had fallen the day before, and the Oil & Gas index was down even more, nearly 12%. The telecom index was also down double digits, while the financial index was down nearly 9%. Mighty Gazprom was down nearly 15%, and Sberbank 16%.
The MICEX ruble-based index of stocks, which has greater volumes than the RTS dollar index, performed even more appallingly, down 14% in just 30 minutes of trading before it too was shut down. The Russian markets have now lost more than two-thirds of the value they had five months ago, off their historic high in May by nearly 70%. It cannot be long now before the Russian stock market simply ceases to exist. It is learning to love the goose egg!
Public opinion polls are one thing, but when asked to put their money where their mouths are on their confidence in the Putin regime, Russians clearly have no interest in doing so. Now, KGB strongman Vladimir Putin can clearly see why the USSR never had a stock market! No matter how many strings Putin may try to pull, and no matter how many triggers, the market sees all and knows all. Putin’s relentless attempts, nearly a dozen times in the past month, to simply pull the plug on the market whenever it does something he doesn’t like speaks volumes for his ability to manage the country and inspire trust.
Putin is unmasked as an utter failure. Russia’s economy is totally dependent upon the vagaries of the price of crude oil and the fortunes of the U.S. economy, yet Putin’s policy has been to attack and undermine the U.S. economy and weaponize Russia’s oil resources, the worst thing possible for the nation. The Russian people can continue to embrace him or they can cause Russia to go the way of the USSR. It’s just that simple.