August 19, 2012
Weekly Market Outlook
By Keith Schneider
In Moscow this week, the all-female Russian rock band "Pussy Riot" was convicted of "hooliganism" and sentenced to two years in prison. The heinous crime was staging a forty second event last February, protesting the Russian church's support of the Kremlin. Russian President Putin weighed in on the case by pleading for the courts to be lenient on the young ladies and viola; the three were spared summary executions and sentenced to a forced vacation in a Siberian Gulag. This crafty response by the Kremlin was designed to scare Putin opponents but not foreign investors which are sorely needed to grow the stalled Russian economy.
We don't think it accomplished either, as the Russian stock market is one of the worst performing markets and this mock trial raised more questions about legitimacy of the Russian legal system which is a non-starter for savvy foreign investors.
Furthermore, the young women rolled their eyes as the judge issued its verdict and just released a new record ridiculing the current state of affairs in Russia. All the worlds a stage and everyone is watching so it's not surprising that former Kremlin Finance Minister Kudrin regarded the sentences as chilling to foreign investment. It's quite amazing that three young women under the age of 30 can place Putin in the crosshairs.
It's also not surprising that old cold war themes are coming back to the fore as the Chinese and Russian stock markets are languishing while dealing with the cross currents of corruption, open societies and a global economy. Iran, led by the Ayatollahs, has threatened to disconnect the internet, while its economy implodes.
As gridlocked as things are here, the key US stock indexes are hovering at multi year highs and we still have an internet that's open with the exception of access to online poker. In this week's video, we cover the Russian and Chinese markets as well as our standard fare.
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