Russia halts trading after 17% drop

[ben_meyers]

Source: Financial Times

Russia authorities halted trading on the country’s stock exchange on Tuesday after it plunged 17 per cent in a broad-based sell-off.

At 1700 local time, the rouble-denominated Micex index had fallen 17.5 per cent to 881.17 and the RTS index dropped 12 per cent to 1,131.120 as the falling oil price, margin calls on local investors and a broader sell-off in emerging markets stocks drove shares down.

Emerging market stocks take a dive - Sep-15.Pre-emerging economies grow increasingly attractive - Sep-07.Emerging market IPOs decline - Sep-04.The Short View: Emerging markets - Sep-03.Insight: There is still strong allure in emerging market equities - Sep-03.The Short View: Emerging market carry trade - Aug-06..“This is a good old-fashioned panic”, said Steven Dashevsky, head of research at Unicredit in Moscow. “It doesn’t feel like there is anyone domestically that can put the brakes on.”

Oil stocks tracked the price of Brent crude, used as a benchmark for Russian oil sales, as it sank below $90 a barrel. Gas giant Gazprom fell 8.3 per cent to Rbs98 and Lukoil dropped 12 per cent to Rbs1,355.51.

“The fundamental issue is oil. Russian oil companies are not producing more so their earnings are dependent on a rising oil price,” said Daniel Salter, analyst at ING. If the oil price falls, then earnings downgrades are in the pipeline for these stocks, he added.


Read more: http://www.ft.com/cms/s/0/6ff9306c-83f1-11dd-bf00-000077b07658.html?nclick_check=1

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Once again, the U.S. catches cold, and the rest of the world gets pneumonia.

When your entire economy is based on the production of oil you might have a problem.

[qanda]

1. I'm sure Palin saw that coming

[jakem]

11. I dont know.. she hasnt been home much lately...

[WriteDown]

2. Entire economy on oil?

I do wonder how Venezuela is doing.

edited for misreading one part.

[ben_meyers]

4. Maybe that's the message from the

"International Money Manipulators". Russia getting to big for its pants and Chavez getting too friendly with Russia. I wonder who Hugo can go to for a lifeline when he has to tell his people to eat oil?

[High Plains]

8. Chavez probably isn't sweating it too much...

...since Venezuela has more than $30 billion in foreign reserves.

http://www.latin-focus.com/latinfocus/countries/venezuela/venresv.htm

[High Plains]

7. Right. Poor Venezuela. Oil is only, what, $95 a barrel.

But your concern is noted.

[ben_meyers]

10. So do you see floor support at 95?

Maybe it's time to buy.

[unkachuck]

19. it might be time to buy....

....I drive around at 50-55 mph....all through the spring and summer people would line up behind me and stay there....during the last couple weeks I've noticed people flying past me again with no line behind me....anecdotal, but true....

....I also subscribe to the 'woolly-worm' theory of climatic change....I'll have to explain it someday; it's better than the Farmers Almanac....

[unkachuck]

20. self-delete....dupe

[Dogtown]

9. One trick pony

Apparently your handlers won't trust you with any more complex tasks.

Don't bother to answer. I finished with your prattle the other day.

[Xenotime]

3. Russia should never have tried capitalism. It has ruined that region.

[WriteDown]

5. Eh....

Wasn't too great under communism either. Maybe its the Russian people? :)

[JuniorPlankton]

14. I think it is the people

And I did live there for the first 24 years of my life, so I know :)

[cobalt1999]

16. To quote Robert Pirsig...

"If a revolution destroys a systematic government, but the systematic patterns of thought that produced that government are left intact, then those patterns will repeat themselves in the succeeding government."

[JuniorPlankton]

33. So true! Unbelievable! n/t

[Psephos]

6. You seem a bit under-read about the legacy of the 20th century in Russia n/t

[readmoreoften]

21. Guess you don't know much about how capitalism has devastated Russia.

Poverty, crime, alcoholism, violence are all much worse.

[WriteDown]

22. As opposed to the paradise....

under rulers like Stalin? :eyes:

[provis99]

26. I call Godwin's Law, Subclause A: Invoking Stalin in an Argument.

[Psephos]

34. With your logic, after 1865, former slaves should have expected no future social problems n/t

[benld74]

12. YA SEE FOLKS THIS IS IT,,,

With all the dumping of assets in the bankruptcies, alot of the assets are being purchased for alot less than they were bought for. This included OIL future contracts! This is what is dropping the price of OIL, and nothing else. Gas prices are high, oild prices should be high also, right! NOT if OIL FUTURES contracts were the real reason for the surge in OIL prices!

[ben_meyers]

13. It may have to do more with

Commodity Futures Modernization Act of 2000 that deregulated futures markets and allowed the big investment banks like the Lehmans etc. to get in. One of the worst provisions was the cutting of the margin requirements. Keep in mind that both oil and refined products are traded as future contracts.

[cobalt1999]

15. Putin and his buddies are draining that country dry.

Here is a fantastic set of videos (6) on youtube about Russia's future:

Death of a Nation
www.youtube.com/watch?v=jeK6spOIVro

[bertman]

17. Well, if Putin and his buddies are draining that country dry I guess it is true that when

Dubya looked into Putin's eyes he saw his soul brother.

Kinda like a mobster password or the mason's handshake. You got to be one to know one.

[cobalt1999]

18. Definitely kindred spirits.

Both Russia and the US could use some honest leadership right now. We've at least got a chance. Russian is doomed.

[WriteDown]

23. Putin is going to be in power...

until he is room temperature. Man I miss Yeltsin.

[cobalt1999]

24. It's tough when your high water mark in leadership is Yeltsin

When a drunk and incompetent is the best you can hope for...wait, that sounds like the leadership we have.

[MattSh]

25. Miss Yeltsin??

Hmm, people living in poverty went from 2 million under the Soviet system to over 70 million under Yeltsin.

You may miss him, but my guess is that around 70 million others don't.

[WriteDown]

27. You can't be serious....

if you are actually trusting the old Soviet numbers.

[MattSh]

29. WRONG !

Try Shock Doctrine.

If you have a problem with that, contact the author.

[WriteDown]

30. WRONG!

Try history. A good example would be how East Germany was portrayed before the fall of the wall and what was revealed afterwords. Try again.

[MattSh]

31. WRONG AGAIN.

According to the World Bank, whereas 1.5% of the population was living in poverty in the late Soviet era, by mid-1993 between 39% and 49% of the population was living in poverty.<74>

74. ^ a b Branko Milanovic (1998). Income, Inequality, and Poverty During the Transformation from Planned to Market Economy. The World Bank, 186–189.

MAYBE you have a source to rebut that?

Come back when you have a source.

[WriteDown]

32. Sure....

1930's, Great Purge. This is too easy. You may want to read this article with people who actually lived through it.

http://www.npr.org/templates/story/story.php?storyId=15881559

[TheLastMohican]

28. very general statement

Oil production is only 9% of Russia's GDP. You should check your stats.

[bemildred]

35. Russian stocks rally nearly 30% in dramatic session

NEW YORK (MarketWatch) -- Russian stocks rallied nearly 30% Friday, causing the markets' regulator to halt trading once again on the two main stock exchanges, as investor sentiment was boosted by a series of government measures aimed at stemming the country's financial turmoil.

The Russian markets joined a broad surge in global stock markets, which were buoyed by hopes that the U.S. government would hammer out a broad-ranging plan to fix the global financial crisis. See full story.

Emerging equity markets rallied around the world, but Russian markets posted the most dramatic gains. See Emerging Markets Report.

http://www.marketwatch.com/news/story/russian-stocks-rally-nearly-30/story.aspx?guid=%7B175F7991%2DF27D%2D46A4%2DA1D6%2D02F2D69C0F93%7D

[slackmaster]

36. Is it irrational exuberance yet?

:nuke:

[bemildred]

37. I don't see how you can get around that.

It's irrational, and it's exuberance.