As an ex-cold war kid, there still not much about the former Soviet Union that I find appealing.
Sure, the missiles aren’t much of a threat anymore, but the truth is the country has been has been run by gangsters ever since Gorbachev decided to tear down that wall.
So as a potential investment, I never bought into the idea that Russia was a place that I wanted to put my money. That to me was as crazy as hiding under my desk when the bombs started falling.
Properly functioning markets, after all, are largely based on stability and trust. Without them, investing simply becomes too risky. And in my mind Russia had neither.
And while we have certainly had our own trust and stability issues lately, they pale in comparison to those that can be found in “emerging” markets in times of crisis.
That’s where Russia find itself today since a crash has closed the markets for the better part of two days now.
Where she stops nobody knows.
Here’s the skinny from Bloomberg.
It’s in an article by Alex Nicholson and William Mauldin entitled: Russian Markets Halted as Emergency Funding Fails to Halt Rout
“Russian markets stopped trading for a second day after emergency funding measures by the government failed to halt the biggest stock rout since the country’s debt default and currency devaluation a decade ago.
The ruble-denominated Micex Stock Exchange suspended trading indefinitely at 12:10 p.m. after its index erased a 7.6 percent gain and plunged as much as 10 percent within an hour. The benchmark fell 17 percent yesterday, the biggest drop since Bloomberg started tracking the gauge in May 2001. The dollar- denominated RTS halted trading after similar declines.
The government yesterday injected $20 billion into the interbank lending market via central bank and Finance Ministry auctions in a bid to contain soaring borrowing rates as credit dried up in the wake of the Lehman Brothers Holdings Inc. bankruptcy. The one-day MosPrime overnight rate, a gauge for monitoring liquidity demand, leapt 25 basis points to a record 11.08 percent today”
So here’s my sliver lining for a day when the Dow lost 451 points.
It could be worse.
