6 ms·
What does this mean, practically? Market paralysis -- 0 volume, but the "buy price" maintained?
by azalemeth 5y ago
What does this mean, practically? Market paralysis -- 0 volume, but the "buy price" maintained?
- throwawayay02 5y agoI get it's like the freezing of ~40% of Russia's foreign reserves the US announced. So still the property of their owners - not seized - but cannot be moved either.
- londons_explore 5y agoThis is seizure in all but name. By 'freezing' US dollars indefinitely, you effectively take them out of circulation, allowing you to print the same number of new dollars for yourself without causing inflation.
- spacemanmatt 5y agoI don't think there's a guarantee the price will be maintained.
- woodruffw 5y agoI'd also like to understand this: how does Russia intend to prevent foreign clients from making direct sales of securities to other foreign (or even domestic) clients? Are they saying that they just won't honor those sales? This sounds like a terrific way to have foreign companies value their Russian assets at near-zero, since it's not clear whether they're actually still securities at that point.
- unfocussed_mike 5y ago> This sounds like a terrific way to have foreign companies value their Russian assets at near-zero, since it's not clear whether they're actually still securities at that point. This is my take -- I'm confused by it because I can't believe this is actually it. But it could be that the central bank is implementing the only token measures it actually can take, to be seen to attempt to satisfy an otherwise impossible, maybe even deranged demand for wish-fulfilment from the Kremlin. I feel that not enough time is yet being spent asking the question: what if this is all not just figuratively the work of an insane person, but actually the work of an insane person?
- eropple 5y agoThis strikes me as a prelude to seizure of foreign-owned assets. In that light, locking trades seems obvious.
- woodruffw 5y agoMaybe, but I think that's pretty unlikely at this juncture: not only are there not a lot of assets they could seize punitively (I assume the Kremlin is not looking to make enemies out of hitherto neutral countries like India), but any seizure would take Russia's financial status from "pariah, but quantifiably risky" to "unquantifiably risky."
- eropple 5y agoInvading neighbors and rattling your nuclear saber in a world with MAD probably ought to take you to "unquantifiably risky" already.
- gitfan86 5y agoRight, if France takes an oligarch's house and boat in Nice, why not take a French billionaire's assets in Russia and give them to that Oligarch? Stock in a gas company may not make up for the loss of a house and yacht but it is something.
- eropple 5y agoI suspect it's more of a closed-economy, fortress-Russia mindset we'll see, not compensating some oligarchs.
- fmajid 5y agoI doubt there are many French billionaires with personal assets in Russia. Their companies may have some capital in the form of Louis Vuitton shops in Moscow, but that is peanuts in the grand scheme of things. The only really valuable assets are shares in resource extraction companies since that's essentially what Russia's economy is based upon.
- cm2187 5y agoIf it is a security you still need to clear the sale with the exchange within a short period of time, even if you made the sale off market.
- trhway 5y agoLooks like the Moscow stock exchange will continue working, while the foreigners wouldn't be able to sell through the accredited brokers. I don't think the direct sales are possible without actual stock certificates, and most stock is traded through the broker accounts without clients getting the certificates.
- woodruffw 5y agoFor some definition of working, I suppose -- having a large portion of your capital base unable to exercise trades fundamentally undermines trust in the exchange itself.