Yeah, that data point was extremely surprising to me. On the surface, it seems to imply at least one of three things:
Putin severely mispredicted the short-to-medium-term economic impact of the invasion
Investors are severely mispredicting the short-to-medium-term economic impact of the invasion
Putin thinks the invasion is worthwhile (at least for himself) even if it results in the sort of short-to-medium-term economic trainwreck which knocks stocks down by 50%.
I’d have considered all three of these quite improbable beforehand.
On the other hand, it could just be a short-term liquidity phenomenon, e.g. there was a bunch of foreign money invested in Moscow’s markets which had to exit due to Western sanctions (or expected to need to exit due to Western sanctions). If that’s the main driver, then now’s a good time to buy for anybody who has access to Moscow’s financial markets.
Yeah, that data point was extremely surprising to me. On the surface, it seems to imply at least one of three things:
Putin severely mispredicted the short-to-medium-term economic impact of the invasion
Investors are severely mispredicting the short-to-medium-term economic impact of the invasion
Putin thinks the invasion is worthwhile (at least for himself) even if it results in the sort of short-to-medium-term economic trainwreck which knocks stocks down by 50%.
I’d have considered all three of these quite improbable beforehand.
On the other hand, it could just be a short-term liquidity phenomenon, e.g. there was a bunch of foreign money invested in Moscow’s markets which had to exit due to Western sanctions (or expected to need to exit due to Western sanctions). If that’s the main driver, then now’s a good time to buy for anybody who has access to Moscow’s financial markets.