“ABNORMAL” PRESSURE HALTS TRADING ON MOSCOW BOURSE ON SEPT ...September 14, 2015
Explosions in Chinese chemical plants, explosions on US military bases in Japan, US claims of Chinese cyber-warfare and hacking of US systems, Chinese counter-claims to "put up or shut up," missing Chinese space mapping experts, and now, on Sept 8th, a "glitch" in the trading networks on Moscow's bourse used to execute and clear trades. All of this is, of course, marvellous coincidence and synchronicity, and there's absolutely no call for concern, alarm, or wild speculation. Nothing to see here, get your coffee and move along. That at least is how it's being handled publicly, but with a recent fourth explosion at a Chinese chemical plant - really, are the Chinese that chemically incompetent? - one begins to wonder.
Those "glitches" in electronic trading now also seem to have spread from Wall Street to Red Square, for the Moscow bourse is reporting a two hour suspension of trade occurred on Septh 8th, in this article shared by Mr. C.S. from Bloomberg:
The language here is the usual frustrating Russian mix of absolute candor and deliberate ambiguity:
Although there were no errors with the trading and clearing systems, customers had trouble connecting to the exchange because of "abnormal" pressure on the network, Moscow Exchange said in a statement in the evening.The halt is a setback for Russia’s biggest exchange as it seeks to lure foreign and local investors to the Moscow trading platform. The last interruption on the Moscow Exchange was on Aug. 12 when derivatives trading was halted. In March, the exchange stopped currency and precious-metals transactions for more than an hour.
“Had this been the first halt, that would’ve been tolerable, but this is not the first time a halt occurs this year,” Yaroslav Podsevatkin, head of trading at Aton in Moscow, said by e-mail. “These halts are turning into a statistic. I think many market players will start taking these risks seriously and considering the overall situation this could seriously decrease liquidity.” (Emphases added)
Granted, continued interruptions in trading would make any potential investor skittish, for even though the article indicates that no errors had occurred either with trades or clearing, the potential clearly is implied with repeated glitches, and that in turn, as Mr. Podsevatkin notes in the article, can lead to serious decreases in liquidity.
The real question is, is this normal, that is to say, is this merely and really a simple technical "glitch"? or is there something more sinister behind it? Is technological backwardness being masked by the phrase "abnormal pressure on the network", or are the Russians to be taken at their word that there was something genuinely abnormal about the pressures on the network.
Our trademark "high octane speculation" of the day would suggest that the peculiarity of the phrase indicates that the Russians suspect some sort of deliberate - though "abnormal" - pressure could have been exerted on their trading networks that prohibitted genuine traders from accessing the networks and hence the bourse. "Pressure" suggests that this may have come in the form of extremely high, and fast volumes of trade, that the system, in other words, was about to go into "flash crash" mode perhaps.
If that scenario is in play (and it's a mighty big if), and given the strange ambiguity of the phrase, then the real question becomes "Who" and "why"? Given the extraordinary tension between the West and the BRICSA bloc in the form of Russia and China, it strikes me as odd that Russia was not quick to suggest some western player was involved, and in the context of exploding Chinese chemical plants, disappearing Chinese space mappers, claim and counterclaim over cyber warfare between the USA and China, the silence here is peculiar to say the least. And there's another context to consider as well, and that is the "glitches" experienced recently in US markets. The sell-off on the Chinese stock exchange, mini-flash crashes on Wall Street, glitches from "abnormal pressure" on Moscow's stock market: in this context, to raise the speculative possibility that all this is somehow the result of deliberate action can be interpreted in only two ways: either there is a full scale "covert warfare" taking place between East and West between the usual state and corporate actors, or there is an altogether different and much more covert player (or players) on the block that are neither state nor corporate actors in any conventional sense, and that, perforce, has immense technological resources and cyber-warfare expertise. In that respect, if this wild and wooly scenario is in play at all, then Russia's strange choice of words, and hesitation to present any evidence it may have and point any fingers at "the usual suspects" - Russia's silence - is deafening.
See you on the flip side...