Stock Market Crash Watch: Russia, Day Two

Russian Markets Halted as Emergency Funding Fails to Halt Rout

Sept. 17 (Bloomberg) -- 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.

How many of you thought Lehman would affect Russia?

How many of you sit there smugly thinking Russia won't affect us?

Russia doesn't have to impact us directly. Russia can directly affect a country that directly affects another country, etc, until it leads to us.

If you haven't caught on by now, finance has become so tangled that pulling a string somewhere leads to some place you'd never expect. But ultimately, it's all one tangled web. One mutual noose -- that's now around all of our necks and which grows tighter with every government bailout (every one of which will ultimately fail!).

All those fraudulent mortgages marketed here in the U.S.? They've been broken up into financial packages and turned over (laundered!) so many times, I'm certain that no one company or group owns any single house here. Little bits of each house are scattered far and wide.

When it all collapses -- and it will -- there's no cleanup. It'd take a generation to sort it all out. Who has that long to live without food, without fuel, without the necessities?

When it collapses, they can call a do-over and then engage in the same greed and fraud.

Or it can collapse and everyone can demand a Fresh Deal.

Either way, the game is over.