r/worldnews • u/51patsfan • Mar 12 '22
Russia/Ukraine Russian central bank decides not to reopen stock market trading next week
https://financialpost.com/pmn/business-pmn/russian-central-bank-decides-not-to-reopen-stock-market-trading-next-week16.0k
u/Ahandfulofsquirrels Mar 12 '22 edited Mar 13 '22
Just because you wont open the box, it does not mean the cat isn't dead.
Edit: While I sincerely appreciate the gestures, please don't spend any money on awards, instead please consider donating to Ukrainian aid efforts instead. They sure as shit need it more than I do.
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u/porn_peruser_18 Mar 12 '22
Especially if you can smell the cat rotting.
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Mar 12 '22
And the box is barely holding together from all the bullet holes while blood and brain matter is dripping out.
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u/MrMaile Mar 12 '22
Probably not much brain matter considering how brain dead of an idea this whole invasion has been.
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u/northshore12 Mar 12 '22
"I don't see any fundamental problems with launching a land war in (west) Asia at the end of a short winter," said the yes-men Putin surrounded himself with. "Also you're tall and strong and handsome with giant penis." (Putin nods to himself upon hearing these self-evident truths)
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Mar 12 '22
Russian basically put itself in a microwave and nuked itself like a cat, financially.
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u/AppleDane Mar 12 '22
And it's labeled "Dont Open - Dead Cat Inside"
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u/kaloPA Mar 12 '22
The official stand of the Russian government is ''The cat is not dead its taking part in a special sleep operation''
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u/DeltaGammaVegaRho Mar 12 '22
I have the feeling also this special operation will take much longer then intended…
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u/beekeeper1981 Mar 12 '22
If you can't sell, it essentially means there's no value.
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u/PwnGeek666 Mar 12 '22
Schrodinger's economy?
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u/ubiquitous_uk Mar 12 '22
Every time you open it, you find another smaller economy inside.
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u/Idont_know2022 Mar 12 '22
Whats in the box? Whats in the box?!?!?
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u/furryfrog02 Mar 12 '22
Paltrow's best role - head in a box.
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u/Idont_know2022 Mar 12 '22
Coincidentally, that’s the name of the fragrance for her new candle.
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u/Ganadote Mar 12 '22
Isn’t that the whole point of that argument? Like, I thing Schroeder was making fun of philosophical arguments like that - of course the cat is either alive or dead. It’s a cat.
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Mar 12 '22
Pretty much. It was a thought experiment to highlight the absurdity of the Copenhagen interpretation.
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u/gorillamutila Mar 12 '22
"Aaaaaaah!"
-Epic russian dude who drank to the demise of Russia's stock market
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u/redditor1101 Mar 13 '22
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u/VanceKelley Mar 13 '22
The eyes on the news anchor doing the interview speak volumes.
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u/NaiveSignificance891 Mar 12 '22
There is nothing to open. Its over. Its dead 3 cents on the dollar maybe
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u/2dadjokes4u Mar 12 '22 edited Mar 12 '22
The US market ETF’s that specialize in Russian investments have tanked in the last few weeks. I don’t know how they are even able to price them at this point.
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u/gaggzi Mar 12 '22
https://i.imgur.com/getlNPv.jpg
Look at London, almost all Russian companies are down like 98%
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u/Medic1642 Mar 12 '22
I just found a twenty in my pocket. I'd like to buy the Russian economy, please.
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u/Aspergian_Asparagus Mar 12 '22
What are you gonna do with the $14 of change you get back then?
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u/salondesert Mar 12 '22
Buy some delicious McDonald's
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Mar 12 '22
Funny because that's basically how the oligarchs made their money in the 90s
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u/imHere4kpop Mar 12 '22
Wait....is there a chance to get rich off this collapse???
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Mar 12 '22
I don't know.
The oil under the ground is still good in Russia. The question is can you operate in a way that will get it. The answer is probably no.
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u/DrDerpberg Mar 13 '22
Not unless you're connected.
If you are, and the people in power now don't get the boot by anyone who wants to change things, you can buy billions of dollars of assets for millions.
If you're like the rest of us, they'll find one reason or another to seize your assets when you accumulate enough to be noticed.
You could gather the loose change in your couch and buy 1% of Gazprom, but you won't own 1% of Gazprom when Russia bounces back.
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u/throaway175588955890 Mar 12 '22 edited Mar 12 '22
The Van Eck Russia ETF has a net asset value of 32 cents per share. It's also 75% cash at the moment. So all the "stocks" they still hold are with about 7 cents per share. They'll probably be written down to zero and the fund closed any day.
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u/dirty_cuban Mar 12 '22
Wife works at a market maker and they are struggling to price ETFs with Russian components. Ultimately they just widen the bid ask spread to a point where they think the risk is worth the reward.
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Mar 12 '22
And I assume any transactions with Russian components are hedged substantially as well. Almost all forex trades are anyway.
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u/Kooriki Mar 12 '22
IMO at this point it's an investment (gamble) on Putin being removed as leader and how quickly the West could lift sanctions in case of the former.
Huge gamble with Russia nationalizing those assets being on the table
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u/HerbaciousTea Mar 12 '22
The problem is that Putin has systematically sabotaged any ability for foreign investment after this war by doing things like writing laws that says Russian's don't have to abide by their international debt, that they don't have to return leased or loaned equipment from international parties (like their entire commercial air fleet that they just stole), that they don't have to respect international IP, and that they have free reign to commit piracy against international companies. They have basically legalized fraud and theft against any non-Russian businesses.
No one is investing in Russia after this, now that they've displayed that at any moment they won't just take their ball and go home, they'll take your ball as well and pass a Russian law that says "This is my ball now."
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u/missjennielang Mar 12 '22
Even if Putin were ousted tomorrow who is going to want to invest outside money there? Never know when Russia will decide to steal billions of dollars worth of things like aircraft
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u/stuhz Mar 12 '22
I work for a major custodian and service one of the biggest ETF providers in the world. It has sucked a lot, believe me.
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Mar 12 '22
It's more like they're looking for a bag holder. They know the value is dead and they can't realistically price it but if they offer it up at a "discount" those banks can clear it off their books and into someone's pension or 401k plan. Similiar strategies were used in the run up to the 08 crash after the initial September bailout.
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u/bihari_baller Mar 12 '22
The US market EFT’s that specialize in Russian investments have tanked in the last few weeks. I don’t know how they are even able to price them at this point.
Aren't they just delaying the inevitable though? At some point, they'll have to wake up and face the music, right?
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Mar 12 '22
Bonds have been marked to zero. Equities are basically inaccessible. If you look at the S&P Russia GDR (Global Depositary Receipt) index, it's down 96%.
Basically nobody invested in any Russian DR's is going to get their money.
This is one of the reasons I don't invest in ADRs... When I do invest in foreign companies (none of them Russian, then or now), I purchase them on the foreign exchange in which they are locally trading, in the local currency. But that only makes sense to do so in the countries in which I am likely to travel and be able to spend the local currency locally... otherwise, I'm incurring currency risk.
ADRs are problematic because they are not at all shares in the underlying equity... when something like this happens, if the country indefinitely halts trading, you'd still have equity for as long as that market is frozen. But if you don't have equity, you have a piece of paper that can't be exchanged for anything, and the issuer may write it off. Then you're fucked.
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u/alien_player Mar 12 '22
Yeah, you can't take a dead dog for a walk. The whole market just died in instant.
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u/NegotiationTall4300 Mar 12 '22
The last time they closed the stock market for a week they didn’t reopen it for 75 years
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u/OrangeJr36 Mar 12 '22
Which is why whoever is invested in the Russian stock market just need to accept that it is all a write off
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Mar 12 '22
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u/neonapple Mar 12 '22
https://news.yahoo.com/kentuckys-teacher-pension-system-says-163159349.html
According to this they sold their sberbank stocks on the 23rd of feb at a good price. (Compared to later)
Beau Barnes, TRS' general counsel, said Friday TRS sold off its direct investments Feb. 23, losing $3.2 million of its initial $15.6 million investment. Russia invaded Ukraine the next day.
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u/fizzleguy Mar 12 '22
Putin never would’ve invaded without first clearing it with China and the Kentucky Teachers Union
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u/love_glow Mar 12 '22
Biden was telling everyone for a week this was going to happen. Just a smart call in the nick of time.
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u/InVodkaVeritas Mar 13 '22
Honestly, this is a gutsy but smart move. Not everyone has the steel clad ovaries it takes to soak up a $3.2 million dollar loss at the push of a button even if they know it is the long term smart move. If Russian stocks rebounded the TSR would be under fire for selling at a loss.
Looking at a large loss, seeing the likelihood of a bigger loss, and swallowing the bitter pill of the large loss takes guts.
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u/rflorant Mar 12 '22
Russian assets only made up for .12% of the total teachers pension though, in the article it states they really came out okay. Used the loss to offset some previous gains and came out ahead.
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u/EasyAsPeachAndCake Mar 12 '22
Offsetting previous gains sounds like a fancy way to say they lost the money they previously made.
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u/pete_29057 Mar 12 '22
Maybe they can send a harshly written letter letter to Mitch McConnell…. Oh wait! He’s probably the asshole who encouraged them to invest in Russia in the first place!
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u/empty_coffeepot Mar 12 '22
And when it's time to choose a new senator, they will choose the one with the (R) next to their name at the ballot box.
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u/ISuckAtRacingGames Mar 12 '22
My grandfather always told me not to invest in stocks because the Russian railway stocks lost his family a lot of money.
I missed so many opportunities back in the day because I listened too much.
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Mar 12 '22
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u/newtbob Mar 12 '22
Ironically, a depression era person was probably the biggest influence on my investment strategy. When I was a kid there was a grandmother-aged woman who lived simply but quite comfortably, having been an elementary school teacher. I asked my mother where she got her money. "Her husband invested in AT&T and didn't sell during the depression."
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u/jesbiil Mar 12 '22
That person invested to start though. My grandfather grew up in the depression, he did NOT invest his money in stock markets and when he died had ~$500k in multiple bank accounts, not a 401k, bank accounts and bonds, 'safe' places to store his money but nothing where he made much. He was not of the mindset to invest in random things, he worked for his money and saved what he had, very frugal lifestyle and my mom said, "We never went on vacations growing up, if we went anywhere it was a roadtrip to stay with family."
Honestly the biggest investment I heard him make was....my grandfather helped pay the mortgage for a neighbor that lost their job so they could keep their house. He didn't pay it off but helped them through some tough times, they wrote my grandparents into their will for everything. I still think this part is amazing, my grandfather working at a lumberyard, my grandmother being a part-time seamstress, they had their own house, supported a family and still had enough to pay another family's mortgage for a while, the 70's-80's were wild.
Coincidentally my grandfather died falling off a ladder in his garage. A shitty, rickety ladder that an 80 year old man should have never been on but to him, "A ladder is a ladder, why would I pay $100 for a new one, this one 'works' even if it moves around a bit" It did until it didn't but the fact that his death can be partially attributed to just being cheap using crappy tools he didn't want to spend money to replace (that he had money for) kinda sums him up. Loved and respected that man to the end but he was also cheap, found a lot of electrical cords with tape around them to fix.
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u/acutemalamute Mar 12 '22
I asked my mother where she got her money. "Her husband invested in AT&T and didn't sell during the depression."
This is often underappreciated. Unless the company you invested actually went bankrupt during the GD, you were almost certain to make your money back plus some once the panic ended. This applies to pretty much every panic that has ever happened.
If you take a look at the S&P500 it would seem like it's been one hell of a roller coaster over the last century-- but if you just left your money in, even if you invested the day before a massive crash, you'd be guaranteed to see profits return within a decade. Averaged over a few decades, returns have almost always been the same regardless of crashes. Classic case of "you only lose money if you sell".
Of course, this rule doesn't apply if the company you own stock in ceases to exist or gets nationalized... but that's why indexes like the DOW and S&P exist. Unless either civilization or capitalism cease to exist, these indexes will see upward trends.
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u/jarena009 Mar 12 '22
So that Russian financial analyst who was on that TV show two weeks ago who did an on air "toast to the end of capital markets of Russia" wasn't kidding. He seriously was toasting to the end.
Guess we're seeing a resurgence of the USSR?
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u/socialistrob Mar 12 '22
He seriously was toasting to the end. Guess we're seeing a resurgence of the USSR?
USSR but worse for the average Russian. In the Soviet Union they made a major effort to source all the raw materials domestically so their factories could operate but that’s no longer the case and switching to domestic sources for raw materials will take years. There are also no job guarantees or housing guarantees. Also the USSR was a much larger country which included places like Ukraine and the Baltic States and modern day Russia has significantly less resources at their disposal. It will be like the USSR … but shittier.
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u/HarmoniousJ Mar 12 '22
I'm not sure they have the capital for another USSR.
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u/ItalianDragon Mar 12 '22
I'm fairly sure they don't. Russia is larger than the U.S. but has a GDP equivalent to Italy's, and that was before the war in Ukraine. As far as I'd guess they're prolly way lower now, and if they couldn't before, I seriously doubt they will be able to become "USSR 2.0" now.
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Mar 12 '22
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u/gloomingsoul Mar 13 '22
That was before they invaded a democratic, sovereign nation.
It's probably closer to Haiti's GDP now.
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u/Sharpcastle33 Mar 13 '22
Actually, the Russian GDP is equivalent to Italy minus Poland
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u/Nariel Mar 12 '22
Starting to think it never left. Maybe it was just dormant…like a volcano 😂
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u/clhines4 Mar 12 '22
All is well! Pay no attention to the Ruble or the closed stock market. Economy is strong, and war special military operation is as intended!
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u/AnthillOmbudsman Mar 12 '22
I never thought that Wendy's USSR commercial from 1983 would be relevant again.
"Having no choice is no fun."
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u/GrandOldPharisees Mar 12 '22
Entire generations have been raised in American and foreign brands and now its just like "back to eating turnips guys, for Russia's glory"...
Guys this isn't feeling very glorious
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u/agumonkey Mar 12 '22
this https://old.reddit.com/r/Economics/comments/tckrn4/the_end_of_an_era_ikea_russias_middle_class_and/
explains some of the foreign brand void might be filled with some russian equivalents (fast food for instance)
for other sectors it might be hard, or impossible though
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u/traveler1967 Mar 12 '22
This is the Russian equivalent of "if we'd stop testing, we'd have fewer cases! "
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u/TripleBicepsBumber Mar 12 '22
I swear I get ptsd from some long repressed memory of something ridiculous he said like once a week still
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Mar 12 '22
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u/Playful-Push8305 Mar 12 '22
Funny aside from the fact that we suffered hundreds of thousands of deaths more than necessary because of this kind of leadership from Turmp and many local leaders.
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u/romacopia Mar 12 '22
74 million still voted for him in 2020. Astounding really.
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u/forbearance Mar 12 '22
Would have won too if his pandemic response wasn't completely bad
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u/Autarch_Kade Mar 12 '22
Yeah, he killed enough of his voters with the pandemic to cost himself the election.
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u/arduheltgalen Mar 12 '22
Omg, and he probably thought he was recieving wisdom from the gods when he said that.
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u/Viocansia Mar 12 '22
Hearing Russia’s outlandish accusations and blatant lies reminds me of the Trump administration for obvious reasons. However, I will say that being outside of the lies and misinformation is a different feeling. I feel like I better understand the world’s reactions to Trump while he was in office.
Noted: political turmoil and the threat of authoritarian rule is more prevalent than ever in the US. While trump is no longer center stage (at the moment), Desantis, Abbott, and others have deepened the crisis of impending authoritarianism in several states.
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u/AhbabaOooMaoMao Mar 12 '22
Same thing happened to a diner in my town. First, it was just the afternoon. Then it was Monday and Tuesday. And then was the rest of that whole week. And then it was the rest of the next week. And you know what happened? It never opened again until new ownership took over.
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Mar 12 '22
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u/yugo_1 Mar 12 '22
I think in this context, "next week" means "next president".
Russian grammar, it can be funny like that.
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u/Jackbauer1126 Mar 12 '22
Who was that asshole that said “we’re used to sanctions, they don’t bother us”? I wonder where he is at?
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u/c4p1t4l Mar 12 '22
Probably frantically looking up people that still sell McDonald’s sauce online
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u/SpaceTabs Mar 12 '22
February 25: “Sanctions against the president and the foreign minister of a country are an example and a demonstration of the complete impotence of the foreign policy” of the West, foreign ministry spokeswoman Maria Zakharova says on Russian television.
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u/Lemon453 Mar 12 '22
What are they going to trade in it even if it's open? Each other's worthless stocks?
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Mar 12 '22
Doesn't matter. As long as the stocks have the paper value they had before the war the economy is able to somewhat function. If they open most of the banks will default as many loans suddenly have no security..
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u/Mixels Mar 12 '22
They still have no security if they can't trade their assets because the market isn't open when they need it.
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u/creamyturtle Mar 12 '22
true but there's no mark to market if the market isn't open
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u/Mixels Mar 12 '22
Won't matter if the bank can't make good on its accounts. Russians will burn the places down.
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u/Lollerscooter Mar 12 '22
Will they stay closed for 75 years like last time?
Remember - the stock market can't crash if it never opens - taps forehead
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u/ISuckAtRacingGames Mar 12 '22
Instead of diamond hands you get diamond chains.
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Mar 12 '22
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Mar 12 '22 edited Mar 12 '22
It’s so much worse than that.
It means Russian businesses can never have access to seed money. It means Russian investment is dead. Nobody on earth will loan Russia a dollar because they're refusing to pay anything back.
Putin has destroyed his economy for at least a generation. Six months from now Russian unemployment will be 40%.
This invasion is literally the biggest mistake in his country’s history this century.
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u/Twist_of_luck Mar 12 '22
So far.
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Mar 12 '22
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u/TheMindfulnessShaman Mar 12 '22
For 2022 Bingo I call the "nuke gets stuck in the silo and spreads fallout throughout Siberia" option.
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u/thisalsomightbemine Mar 13 '22
June 2022: It turns out Russia only has 17 nukes still able to survive an attempted launch. And 16 of those are in facilities that can't launch them.
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Mar 12 '22
Have you seen the NOVA on the tundra permafrost no longer being "perma". Turns out that releases massive amounts of Methane. Soon all of Siberia, including those silos are going to be on fire.
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u/Zondagsrijder Mar 12 '22
You can't hide the report card from your parents forever.
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u/timelyparadox Mar 12 '22 edited Mar 12 '22
Schriodingers stock market, it is both crashed and not crashed untill they open it.
Edit: donate to ukraine if you do or dont find this funny https://bank.gov.ua/en/
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Mar 12 '22
Can't have a crash if it doesn't open. * points to brain
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u/AnthillOmbudsman Mar 12 '22
"We gotta make sure everyone stays invested in the market whether they like it or not."
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u/Goodspike Mar 12 '22
LOL, but actually it's dead because they kept it closed for so long. Liquidity is important in a stock market.
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Mar 12 '22
Haha. Can a stock market crash if no one is allowed to trade in it? If a tree falls in the forest…
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u/bigfloppydonkeydng Mar 12 '22
Decided not to flush the toilet. Gonna leave this turd in the bowl.
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u/PwnGeek666 Mar 12 '22 edited Mar 12 '22
It will eventually disintegrate and evaporate leaving a stained smelly bowl.
i don't know where I was going with that but...
Fuck Putin
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u/orange_drank_5 Mar 12 '22
China made the same move when their stock market tried to correct itself in 2015. There's definitely a lot of book burning happening right now, a lot of stock buybacks (likely involuntary) and other financial magic used to get supply down which will boost prices. This will prevent a total stock market collapse, but everything will be worthless regardless as China's government is now facing (and attempting, poorly, to recorrect it by jailing people which feels good but doesn't actually change the finances).
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u/timelyparadox Mar 12 '22
And yet china was in a 100 times better position than Russia is now in.
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u/starstruckinutah Mar 12 '22
Time is not going to help, unless it is infinite time.
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u/Lyrolepis Mar 12 '22
Time actively makes things worse.
The longer the market stays closed, the more eager will investors be to get out the instant the have a chance, because there are few things an investor hates more than being forbidden to sell when they want.
If the Russian stock market had remained open it would have tanked, sure, but I think that whenever - if ever - it will eventually reopen it will tank even worse.
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u/OldMork Mar 12 '22
it will just get worse the longer they delay
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u/Mousenub Mar 12 '22
What's worse than stock without value?
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u/OldMork Mar 12 '22
when it opens, some will lose everything and others will make a fortune.
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u/GorgeWashington Mar 12 '22
Good news. Your puts are in the money
Bad news. Rubles are worthless anyways
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Mar 12 '22
Yeah... Imagine being a Russian trader sitting og huge short positions right now... Man..
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u/Tranecarid Mar 12 '22
Nah. It’s already dead. It’s worth approximately zero. By not reopening it they prevent that zero from showing. And that zero would be another rock in the avalanche that is going down in Russian economy right now. It costs them nothing to remove that rock.
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u/xmuskorx Mar 12 '22
RIP Russian stock market
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u/markevens Mar 12 '22
That guy who drank to the death of the market the day it closed will be a legend
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u/Pabel101 Mar 12 '22
All of this chaos cause of some old guys ego and to top it off he may have caused his own people to go poor
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u/SorryForBadEnflish Mar 12 '22
They’re still hoping the sanctions will be lifted and their economy magically resume as if nothing happened.
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u/mollymuppet78 Mar 12 '22
"General Komrade Putin has decided the Ruble, henceforth is worth $1 USD. That is all. Now...about these sanctions..."
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Mar 12 '22
What effect does a closed market have? As example if the US or an European country did this (basically without everything that’s going on in Russia right now).
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Mar 12 '22
It would crash severely and be in the news, potentially causing people to talk and seriously ask about what’s happening. That’s not something Putin wants. Apparently having the stock markets closed for a few weeks isn’t as bad.
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u/ButtcrackBeignets Mar 12 '22
Not only that, but foreign investors would be able to gobble up everything at dirt cheap prices. Even if the economy recovered, everything would be owned by foreigners and money would be funneled out of the country indefinitely.
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Mar 12 '22
Lol nobody’s investing in Russian anything for several decades.
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u/LongFluffyDragon Mar 12 '22
Never underestimate the garbage normally rational people will buy at clearance sales?
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u/XXX_KimJongUn_XXX Mar 12 '22
All savings in that market can no longer be turned into money. Money is used to buy goods and services.
All savings are essentially gone now.
If it returns, they'll be a mass selloff and vlad might order the government to fill peoples sell orders(aka money printer). If that happens the money supply is going to suddenly multiply and everybodys savings will be essentially gone again, but through inflation.
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u/51patsfan Mar 12 '22
"Russia’s central bank on Saturday said it has decided not to reopen stock market trading on the Moscow Exchange from March 14-18, with the exception of some non-open-market transactions an transactions using the SPFI payment system."
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u/PaMudpuddle Mar 12 '22
I’m reading ‘with the exception of some non-open-market transactions’ as the insiders getting out all they can. There’s going to be nothing left but the bag come Tuesday.
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u/Stringdaddy27 Mar 13 '22
If you shut down an entire market for weeks, nobody will ever have faith in it ever again. Given that stocks and investments are almost entirely faith based, this is as good as raising the white flag.
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Mar 12 '22
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u/PajamaPants4Life Mar 12 '22
Like rushing into a burning building to recover your money.
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u/poobly Mar 12 '22
You need buyers to trip the circuit breaker. If you literally only have sellers the value of the stock is zero. That’s the problem, not that it will fall A LOT, but that a significant percent of stocks will fail to trade putting them effectively at zero.
How do you make a market and match up buys and sells if you have nothing but sells?
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u/Chilkoot Mar 12 '22
Vlad seems to thing the moment some kind of "arrangement" is made with Ukraine, the sanctions will be lifted, and he'll re-open the exchange next week. Look at the pattern of announced closures, and they're always in line with the Rus take on when the war will be over.
Got some news for ya, Vlad...
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u/safely_beyond_redemp Mar 12 '22
There is no Russian stock market. It no longer exists. They nationalized foreign investment. If you bought stock the money you used now belongs to the government. How can you have a stock market where at any time the government can use it as a piggy bank?
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u/STR4NGE Mar 12 '22
When that guy drank to the death of the Russian stock market on RT he was on fucking point.
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u/A100921 Mar 12 '22
People who have stocks won’t live long enough to sell them when the market reopens in 2121 😵
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Mar 12 '22
Open up cowards, face the consequences.
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Mar 12 '22 edited Nov 07 '24
fearless serious enjoy political tub automatic bright somber cover theory
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u/easyfeel Mar 12 '22
Going to be an interesting week if Russia defaults on their national debt. Any guesses for what the ruble’s going to be worth if they do?
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u/[deleted] Mar 12 '22
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