Understanding international finance and the Russian stock market is above my pay grade, but it appears that Putin’s decision to invade Crimea had an immediate and brutal effect on the Russian economy which forced him to make some less bellicose and somewhat conciliatory remarks today. The result is a partial recovery of the massive losses experienced yesterday.
A salesman at a Russian investment company said institutional investors still expected a wave of outflows from Russia and the region this week.
He said “the market is pricing a completely different valuation range for Russia as a consequence of recent events” because of the increased risk caused by Putin’s unpredictability and economic difficulties that Russia may experience for an extended period.
“When the further development of events becomes more-or-less clear then it would be worth taking a look at murdered liquid Russian stocks,” said Vladislav Silaev, trader at Alfa Capital.
It must be nice to have the kind of cash you need to play in that casino. Russia may have oil and natural gas, but that doesn’t mean that the West can’t wipe our their wealth in a few hours if they are displeased. It’s a different kind of mutually-assured destruction than we’re used to, but it might be just as effective in preventing a major shooting war with potentially apocalyptic consequences.
