Russian Stock Market Crash Won't Mean Much to US

The Russian stock market suffered an 11% loss overnight in reaction to a run on bank deposits fed by rumors that the European Union and the United States would apply Cold War-type sanctions to punish Russia’s invasion of the Crimea. The price collapse was worst for bank stocks with the Sberbank (nation’s largest) falling 17% and VTB (second largest) falling 20%.  The turmoil caused stocks around the world to fall modestly, with markets in Europe falling 3% and American stocks falling 1% at openings.  The markets’ reaction so far seems similar to the effect of Russia’s 2008 invasion of the nation of Georgia. Despite threats of economic retaliation there is very little the U.S. and EU can do, because Russia will continue to be the main supplier to Europe’s for natural gas. Economists refer to modern bank runs as “capital flight,” because electronically billions of depositor’s dollars can be withdrawn on the internet in...(Read Full Post)