For those of you who still think "it's global this time" and that free market capitalism is breaking out all over the world, think again...
That bullish narrative only exists when stock markets are going up, globally, not down. Pakistan has been one of those swooning markets, which went down 30% in a straight line since mid April of 2008.
Today, the Pakistani government said enough is enough and opted to enforce communist like market controls. This helped give the Karachi Index its biggest up day in 6 years, closing +8.6% on the day!
The new rules of the game go something like this:
1. the limit down move the market can have in one day is now -1% (it used to be -5%)
2. a "stabilization" fund was established with 30 billion rupees (that's $450M in buying power)
This is NOT capitalism. This form of intervention is plain scary.
KM
(Chart courtesy of stockcharts.com)
That bullish narrative only exists when stock markets are going up, globally, not down. Pakistan has been one of those swooning markets, which went down 30% in a straight line since mid April of 2008.
Today, the Pakistani government said enough is enough and opted to enforce communist like market controls. This helped give the Karachi Index its biggest up day in 6 years, closing +8.6% on the day!
The new rules of the game go something like this:
1. the limit down move the market can have in one day is now -1% (it used to be -5%)
2. a "stabilization" fund was established with 30 billion rupees (that's $450M in buying power)
This is NOT capitalism. This form of intervention is plain scary.
KM
(Chart courtesy of stockcharts.com)
