Russia what?

With the collapse of Washington Mutual, the impending failure of Bush's bank bailout, and the purchase of AIG by the US federal government, not many people have heard anything about the current financial crisis in Russia. It seems most Westerners are nervously discussing the possibility of the return of an antagonistic and imperialistic Russia rather than the return of an impotent, imploding Russia. But all is not well in Putin's playground, despite his best attempts to keep us looking the other way.

A fair chunk of the Russian crisis is a side-effect from the American crisis. Some Russian banks have billions invested in Fannie Mae and Freddie Mac. Oil and other natural resources have also been trading for much less than earlier in the year. But then a lot of this insecurity comes from the neo-autocrats themselves. Take this for example: Putin's silly criticism of the steel company Mechel dropped it's stock by 38%. This in turn weakend market confidence, with foreign investment taking the worst hit. And then Putin criticized Mechel again, and after a slight rebound of 15%, its stock dropped a further 33%.

As of today, Russian markets are at the point of collapse. The federal government has injected $44 billion into the three largest Russian banks. Trading has been suspended several times. Things are not looking good at all. Just thought you'd like to know.