As shown above (click the chart to see it full size), the dollar-denominated RTSI stock index plunged below 1300 today, a level it has not seen in a year. It began 2013 above 1600, and has now lost a full 20% of its value as the second quarter of the year comes to a close. One again, Russian equities are in free fall. The bear market is devouring them.
This can surprise nobody. Russia’s overall economic picture is an exceedingly bleak one: economic growth has slowed to a trickle and inflation is soaring, a clear harbinger of absolute disaster.
Each day, the news brings word of another Russian who has decided to flee the country for greener pastures. First it was the renowned economist Sergei Guriev, and then it was national treasure and chess grandmaster Gary Kasparov. In the words of former political firebrand Irina Khakamada, who has also given up on her country: “It looks like it’s time for all honest and principled professionals to pack their bags. A sad outcome.”
Putin has failed, and his failure has been exposed. He was buoyed for a while by world oil prices, but now they have dissipated and the entire world can see a naked emperor, clueless as to how to proceed, driving the ship of state onto the shoals.