Global Stock Market Rout Continues, Russian Government Hikes Rates from 10.5% to 17%!

European stocks started strong, but ended the day in another carnage as oil prices continued its free fall. European Brent oil sunk 1.03% as US WTIC collapsed 3.62%!

The table from Bloomberg says it all

UK’s FTSE now at October levels, the French CAC just a few points away from the same area, the German and the European Stoxx600 likewise in a steep fall.

Interestingly, in order to stem capital flight and the collapse of her currency the ruble Russia’s central bank stunningly hikes official policy rates from 10.5% to 17%!

From the Bloomberg:

Russia’s central bank raised its benchmark interest rate the most since the nation’s 1998 default, making the announcement in the middle of the night in Moscow as policy makers seek to douse investor panic and stem a ruble rout.

The central bank increased the key rate to 17 percent from 10.5 percent effective today, it said in a statement on its website. Policy makers gathered for an unscheduled meeting after a one-point increase on Dec. 11.

“This decision is aimed at limiting substantially increased ruble depreciation risks and inflation risks,” the bank said in the statement.

Russia’s central bank raised interest rates for the sixth time in 2014 after more than $80 billion spent from its reserves failed to stop a 49 percent selloff of the ruble, the world’s worst-performing currency this year. President Vladimir Putin, whose incursion into Ukraine’s Crimea peninsula in March prompted the U.S. and its allies to strike back with sanctions, this month called for “harsh” measures to deter currency speculators.

The chart above of the USD Russian (RUB) gives an idea of how the ruble has recently been smashed from collapsing oil prices exacerbated by economic sanctions imposed against Russia  by Western political economies.

The stunning rate hikes will hurt domestic debt holders!

Oh by the way, speaking of crashing currencies, neighboring Indonesia’s currency the rupiah has now reached record lows. Or alternatively said the USD- Indonesia IDR is at record highs!

The USD Malaysian ringgit (MYR) seems headed that way too!

Financial pressures have reared their ugly heads in ASEAN financial markets

Meanwhile US stocks was partly affected by the European stock selloff…

Oh don’t worry be happy. Philippine stocks will rise forever!

Middle East employers of OFWs will NOT be affected by the current financial market crash. Shrinking global trade will NOT impact demand for local goods. Slowing GDP has been an ANOMALY which means harried consumers (from BSP's inflationism), declining investments and slowing output have signified as aberrations or temporary dislocations. Debt can perpetually rise WITHOUT consequence of impairing balance sheets of the consumer and mostly of the highly levered supply side firms (mostly owned by domestic plutocrats). Falling peso and regional currencies will hardly will affect decisions of foreigners on their portfolio holdings of Philippine stocks, bonds, properties and currency, or simply stated, profits and losses or economic calculation have now been VANQUISHED! BSP actions of two interest rates and, SDA hikes and requirements to raise bank capital plus the ongoing depletion of GIRs (combined with the other flows that didn’t appear in the GIRs) to defend the Peso will have NO impact on liquidity conditions. Property prices can only rise forever WITHOUT real economic dislocation where the law of demand has been REPEALED!

Don’t you see we have reached economic nirvana! No amount of global meltdown will stop the domestic stock market boom. That’s what stock market operators, who has been rigging the markets with impunity, wanted to show!