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The market is getting smacked around again. As I write this, the Dow is off over 300 points and we're below 10,000. This takes us back to the beginning of 1999. The good news is that commodities are also down, so at least investors aren't seeking refuge there.

Things are even worse in Russia where the stock market was shut down for the second time. The MICEX plunged 16.7% before trading was halted.

In September, growing financial turmoil in the United States and a wave of margin calls sent the Russian stock markets into their biggest downward spiral since 1998. The MICEX lost 25 percent in just three days, and prompted regulators to shut down the markets to stem the decline. They have since used that tool on several occasions when drops have become severe - to lesser effect.

Russia's stock market in recent years has boomed amid high prices for oil and natural gas. But it began falling sharply in midsummer amid concerns about government interference with businesses, and the drop accelerated as the global economic crisis intensified. Oil prices, the backbone of Russia's economy, have been sharply down in recent days - dropping to $90 a barrel - and investors have also been spooked by August's five-day war between Russia and Georgia. The RTS is now down by 62 percent from its May peak.

Posted by edelfenbein at October 6, 2008 10:01 AM