Russia is tanking. Care of Bloomie:
Sept. 17 (Bloomberg) — Russia poured $44 billion into its three largest banks and halted stock trading for a second day in a bid to stem the worst financial crisis since the devaluation and default a decade ago.
The Finance Ministry extended the repayment period on loans available to OAO Sberbank, VTB Group and OAO Gazprombank to three months from one week. The benchmark Micex stock index plunged as much as 10 percent, bringing its three-day decline to 25 percent. The KIT Finance brokerage said it’s in talks with investors to sell a stake after failing to meet obligations.
Russia’s markets are facing the biggest test since the government defaulted in 1998. The decade-long economic boom is fading, foreign investors have pulled at least $35 billion from the nation’s stocks and bonds since the five-day war in Georgia last month, and the collapse this week of Lehman Brothers Holdings Inc. and American International Group Inc. prompted a flight from emerging markets.
They’ve halted trading because it is so bad…. At least our markets are still functioning. If you recall Long Term Capital Management, this situation looks to be the opposite- instead of a Russian default spelling the death of an enormous American financial institution (LTCM) we have the failure of American financial institutions spelling the massive sufferring of the Russian economy.