Jay Carney is a stock market soothsayer.
Carney, then the White House press secretary, said in March that the only thing to do as an investor in Russia was to short stocks, or bet that the price of stocks would fall.
Here’s the exchange, via the White House:
Q: The Russian stock market is soaring the last couple days. Is this a sign that the sanctions that we’ve taken are ineffective if they’re not really paying a cost? In reality, it’s up about 8, 9% in the last couple days, their main stock exchange.
MR. CARNEY: I think it’s down for the year and I think the ruble has lost value. And I think that the long-term effect of actions taken by the Russian government … will have an impact on their economy all by themselves. They will also incur costs because of the sanctions that we and the EU have imposed, and there will be more actions taken under the authorities that exist with the two executive orders that the president has signed. So I wouldn’t, if I were you, invest in Russian equities right now — unless you’re going short.
In June, we pilloried Carney for his call, which looked terrible at the time.
But now Carney looks like a genius.
Earlier this month, we noted that Carney’s call had completely turned around, with the ruble and the Russian stock market collapsing through the summer as the price of oil cratered.
At that time, WTI crude oil was around $US68 a barrel, and the “RSX” ETF that tracks the Russian stock market was down about 18% from the time of Carney’s call.
And now it looks even better for Carney and even worse for Russia.
On Monday, WTI was below $US58, and the RSX was down more than 34% from the time of Carney’s call. On Monday alone, the RSX dropped more than 8%.
Meanwhile, the ruble was down more than 8% on Monday, with one US dollar buying more than 63 rubles. Earlier this year, one dollar bought about 35 rubles.
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