The following is an exclusive translation of another article from RBK Daily - a pro-government press organ which sometimes provides a glimpse of Kremlin thinking. This latest piece explains that Vladimir Putin has finally discovered the reason for the persistent decline of Russia's equity markets: stock quotes. You see, if those foreigners who are so desperately trying to unload their Russian positions didn't know the current market price of their shares, then they wouldn't be able to accurately factor in the very real country risk associated with Russian equities by discounting the share price below the value of the underlying assets. Make sense? Doesn't to us either.
V.Putin: Current stock quotes - an ugly thing
The current stock quotes of Russian companies - "an ugly and unfair thing". With such a declaration on Monday appeared prime-minister Vladimir Putin. The head of the government noted that declining quotes of shares of Russian companies, as a rule, are a result of the fact that decisions about their purchase or sale are being adopted beyond the confines of the RF "on the basis of criteria, weakly connected with the real state of affairs".
In so doing, V.Putin added that current share quotes "are much lower than the real value of the business". In the words of the head of the government, today are known situations when the value of the assets of Russian companies on the exchange is lower than the volume of funds on the accounts of the enterprise.
"This is some kind of ugly thing, absolutely unfair", - noted the premier. V.Putin added that the leadership of the RF is not intending to restrict the activeness of foreign capital on domestic markets, however one of the priority tasks remains the formation of a truly mass class of Russian investors. We will add that as of 15:00 Moscow time, Russian stock indexes continue to be found in negative territory. The MICEX index dropped by 3.88% (587 points), while the RTS index fell by 3.55% (634 points). 01 December 2008
Photo: (AP Photo/RIA-Novosti, Alexei Nikolsky, Pool)
The MICEX closed Dec. 1 down 7.21% at 567, nearly double what RBK stated. Perhaps Putin's inane gibberish drove it down that extra 50% in the closing hours. Surely, it must be a bit unsettling to investors to realize that the ruler of the country is raving idiot with no more notion of how to run a free market, and no more intention of doing so, than a lemon.
One minute Russia is a self-sufficient nation able to directly confront the West in a new cold war (that's when Putin wants to buy weapons); the next, it's the helpless slave of Western powers (that's when Putin wants to avoid blame). This is psychosis. Russia is being run by a psychotic.
Just as in Soviet times. How can Russia's fate, then, be any different from the USSR's?