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February 11, 2016

Russian Stock Market Up Despite Jay Carney ‘Short’ Talk

(Chip Somodevilla/Getty Images)

(Chip Somodevilla/Getty Images)

It’s been more than five months since CQ Roll Call asked Jay Carney about the stock market in Russia — and he talked about shorting it. You’d have lost a bundle if you followed that advice.

“I wouldn’t, if I were you, invest in Russian equities right now — unless you’re going short,” Carney responded to the question posed at his March 18 daily press briefing.

But despite incremental sanctions and new reports of Russian incursions into Ukraine, the Russian stock market is still up substantially since CQ Roll Call asked the question.

The MICEX, Russia’s leading stock market index, is at 1,421.31, per Bloomberg, despite falling 26.6 points today.

It closed March 18 at 1,335.86. That’s a gain of more than 6 percent.

Here’s the transcript from March 18:

Q    The Russian stock market is soaring the last couple days.  Is this a sign that the sanctions that we’ve taken are ineffective if they’re not really paying a cost?  In reality, it’s up about 8, 9 percent in the last couple days, their main stock exchange.

MR. CARNEY:  I think it’s down for the year and I think the ruble has lost value. And I think that the long-term effect of actions taken by the Russian government, in clear violation of the United Nations charter, in clear violation of its treaty commitments that are destabilizing and illegal, will have an impact on their economy all by themselves.  They will also incur costs because of the sanctions that we and the EU have imposed, and there will be more actions taken under the authorities that exist with the two executive orders that the President has signed.  So I wouldn’t, if I were you, invest in Russian equities right now — unless you’re going short.

The ruble also strengthened against the dollar in the months after Carney’s remarks before plummeting Thursday, with talk of new sanctions sure to return to the agenda.

The question now is whether the West will respond with far more painful sanctions than the targeted ones undertaken to date — ones that President Barack Obama has said he is reluctant to do because they could also hurt the world economy.


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  • Bill__Kennedy

    I’ve seen it estimated that about a quarter of a trillion dollars has been invested in Russia by the West, mostly from Europe. Globalists have always claimed that when the West invests in countries they are less likely to go to war because they depend on us financially, but the West is also dependent on them, so it is more difficult for us to influence them. At any rate sanctions are small potatoes compared to the size of the investments.

  • Bill__Kennedy

    My source. This is that wonderful globalization that everyone is selling so hard. Putin and his cronies thinks it’s wonderful, anyway.

    ‘MARCH 17, 2014, 9:09 PM

    Foreign Investors in Russia Vital to Sanctions Debate


    Over the last four years, big investors have sunk $325 billion into stocks and bonds issued by Russian companies and the country’s government, according to the research firm Thomson Reuters. Of that, $235 billion has been directed toward corporate borrowings by the likes of Gazprom and state-owned banks like Sberbank.

    But some are starting to sound the alarm. John-Paul Smith, an equity strategist at Deutsche Bank in London, is among the most vocal.

    In 2011, Mr. Smith published a report that criticized the heavy hand deployed by the Kremlin when it came to using the energy giant Gazprom and government-controlled banks such as Sberbank, one of the largest banks in Europe, to further its policy aims. No other government in emerging markets engaged in as much corporate meddling as Russia did, he said.’

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