Bad Idea?

Russia’s stock market has lost 46% of its value since May, with most of the loss coming on the heels of its war in Georgia, sez the New York Times. Russian officials are forecasting an anemic growth rate of 1.8% for next year, down from 13.8% forecast for this year.

In the midst of this, the Russian government is contemplating some heretofore unnecessary interventions in their domestic economy:

The finance minister, Aleksei L. Kudrin, who had opposed investing any of Russia’s $573 billion in hard currency reserves in the domestic market during a milder correction a year ago, this week approved of the idea. Mr. Kudrin added Thursday that the government might also tap money in the state pension fund to invest in equities.

Now it could be that the Russian finance minister thinks equities are currently undervalued due to geopolitical shocks and hence a good buy for the state pension fund. Or it could be that powerful business interests are leaning on their buddies inside government to bail them out using the public’s money.

If it’s the latter and the Russian people wake up one morning to find themselves de-pantsed yet again, it might mean the end of the Putin era. One hopes it is not replaced by something worse.