The year 2008 was for the global equity markets the worst in history. Capital outflow reached record 14 trillion dollars. The crisis of the financial system and the worst recession since 1970, froze investor confidence. MSCI index of global shares in the year fell by a record 44%.br /br /One of the worst performance posted stock market in Russia. Benchmark RTS Index closed the year 72% lower. The second worst result in the world has seen China's stock index, the SSE Composite lost a record 65% after the boom in 2006 and 2007 brought the growth of over 300%.br /br /In the U.S., the Dow Jones index ended the last trading day a profit of 2.2% over the year but lost 34% of which was the worst loss since the Great Depression in 1931. Only two titles, retailers Wal-Mart Stores (WMT) and Mc Donalds (MCD), closed the ...

By Edward Hugh: Barcelonabr /br /Russia's foreign-exchange reserves have been now been declining very rapidly since mid August, and as the money goes so does the faith that the large stock of reserves the country built up during the boom times would be sufficient to see them through any downturn in energy prices. As the money leaves, so it seems does the decade of economic growth and stability which they symbolised. Indeed so rapid has been the decline that Russia's international reserves, which are the third-biggest after those of China and Japan, have now fallen $161 billion, or 27% percent, since 8 August last, and decreased by $17.9 billion to $437 billion in the week to 5 December. Investors have now pulled $211 billion out of the country since August, according to estimates by BNP Paribas.br /br /br /pa href="http://1.bp.blogspot.com/_ngczZkrw340/SUbQptNe4tI/AAAAAAAALyE/K0xlBOy3AlA/s1600-h/russia+GDP.png"img id="BLOGGER_PHOTO_ID_5280137028067844818" style="DISPLAY: block; MARGIN: 0px auto 10px; WIDTH: 320px; CURSOR: ...

 

Russian indexes, ETF soar despite downgrade

As MarketWatch's Polya Lesova notes, a downgrade by S&P of Russia's sovereign debt hasn't fazed investors. Following the recent rally, the Market Vectors Russia ETF (RSX) soard on Monday. So did the dollar-denominated RTS index and the ruble-based Micex index.

You can read the story here.

 

Metals, Basic Materials ETFs blast-off

At Investor's Business Daily, markets reporter Trang Ho  observes that Monday's rally resulted in basic materials and metals ETFs taking-off. That makes sense since markets were moved by optimism that a big bailout of Big Three automakers was in the works. 

As Ho notes, the auto industry is a big consumer of metals and basic materials. She also relates 10-week and 200-week moving averages and Relative Strength ratings in assessing the performance of some ETFs.

You can read the story here. 

 

The Smart Money's On Green

At least that's the headline of this interesting

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Russia's foreign-exchange reserves have been declining rapidly since mid August, and with the money which is flowing out may go almost a decade of economic stability which they brought. Russia's international reserves, which are the third-biggest after China's and Japan's, have now fallen $161 billion, or 27% percent, since 8 August, and decreased by $17.9 billion to $437 billion in the week to 5 December. Investors have pulled $211 billion out of the country since August, according to BNP Paribas.br /br /br /But just how difficult this is proving to be was illustrated only this morning as Russia’s central bank devalued the ruble for the second time in a only a week, and the ruble fell as much as 1.3 percent (to a four-year low of 37.5015 per euro) following the decision by Bank Rossii to widen the trading band against the basket of dollars and euros used by the ...

Financial News Jason Corcoran in Moscow10 November 2008 A merger of Micex and RTS is more likely following the exodus of €108bn in foreign capital since AugustRybnikov: suspensions must stop Moves to merge Moscow’s two stock exchanges, modernise market architecture and improve long-term liquidity have been given impetus following Russia’s worst trading collapse since the sovereign default in 1998. The frequent closures of Moscow’s two main trading platforms have led many investors to switch to trading Russian Global Depositary Receipts and Russian American Depositary Receipts in London and New York.Some 23 suspensions of trading on the rouble-denominated Micex since early September have contributed to a two-thirds slide in the volume of trading and an exodus of investors.Micex chief executive Alexei Rybnikov hopes the suspensions will become a ...

Russia's currency reserves, the third-biggest in the world, are falling steadily as tumbling oil prices and an exodus of capital are piling the pressure on the central bank and government policymakers to accept a devaluation in the ruble. Oil prices which are now down 60% from their july peak, slowing economic growth and increasing investor concern are steadily draining Russia's foreign exchange reserves, which fell 19 percent (to $484.6 billion) in the 12 weeks through Oct. 31. This is down from $598.1 billion in the week before the invasion of Southern Ossetia.Russia had been using the reserves to try and contain the upward movement in the ruble was thought to present a threat to the competitiveness of exports. But resistance is now becoming increasingly difficult in the fact of a 13 percent drop against the dollar since August 1.Bank Rossii began managing the ruble's exchange rate ...

In Argentina - where Contrarian Profits is based - falling commodity prices threaten to open a deep hole in the government’s budget. Martin Hutchinson says the county, and other ‘rebel’ states like Russia and Venezuela, has shown little regard for economic laws in recent years. That’s why all three will find it much harder to recover from this crisis.

More from Money Morning:

Four months ago, it appeared that three economic “bad actors” were triumphant in their disregard of economic laws and contempt for the United States: Russia, Venezuela and Argentina. Today, while the iron laws of economics have taken a bite out of all of us, they have taken an especially big chunk out of the economies of these bad actors. Unlike most of us, they will not be quick to recover.

That is good news – for U.S. foreign policy, and for those of us who hope that the

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Take our quiz: Is the market even close to normal anymore?… Credit freeze continues to thaw… Mayer and Denning on what companies need to rebound… Home prices fall again, consumer confidence crashes, but market rallies? … Eric Fry on when this global financial trauma will come to an end… Plus, want a DVD copy of I.O.U.S.A.? Get the details below…

Pop quiz: The biggest company in the world? Nope, not Exxon Mobil, not today anyway. Would you believe…

Oh, how twisted the markets have become.

In European trading this morning, shares of Volkswagen AG leapt 93% when word leaked that Porsche would be upping its stake from 49% to 75% — a controlling stake of the company. Buyers rushed in, short sellers were squeezed (big-time) and, for a

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Crude oil is now worth less than half its July value. But as central banks and consumers rejoice, socialist oil-exporters like Russia and Venezuela are in “dire straits”. Justice Litle says desperate times could prompt desperate measures from the firebrand leaders of these countries. And this “geopolitical time bomb” could send crude skyrocketing once again.

This from Taipan Daily:

The petrocrats were richly rewarded as crude oil climbed to new heights. Now a sharp decline in the price of oil threatens to tear their world apart. A time for drastic action could be at hand…

Today I want to talk about a situation that feels like a ticking time bomb - a time bomb that could go off sooner rather than later. It starts with this chart…

After climbing to nearly $150 a barrel earlier this year, the price of

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First, Russia's energy companies successfully lobbied for a bailout, now it is the airline industry. Amid economic woes, Sibir Energy announced it was moving beyond oil into real estate and leisure. Dmitry Medvedev has told his cabinet that their most urgent task was to repair "trust between creditor and debtor," as the RTS dropped 9.52% and Micex slipped 9.11% due to continuing capital flight. Some lending is still happening: Avtovaz, one of the country's largest automotive companies, is concluding negotiations with Vneshekonombank for a credit of $1 billion. In mining, Metalloinvest has ended merger talks with Kazakhmys, which could have created a $40bn (£20bn) metals group before commodities prices drove down the stock price by 25%. Alexei Kudrin announced that capital flight reached $33 billion for August.