Strongly worded statements, threats of travel restrictions, and summit no-shows. So far, these are the relatively mild diplomatic implications for Russia of its incursion into Ukraine, as few in the West can stomach an open military confrontation with Moscow over its apparent occupation of Crimea.

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But the markets are punishing Russia much more swiftly than the diplomats. A wide range of Russian assets—stocks, bonds, and the ruble—plunged in value today. To shore up the ruble, which is plumbing record depths, Russia’s central bank unexpectedly hiked interest rates today. It ratcheted up the benchmark one-week rate from 5.5% to 7%, and traders report that the central bank has also been spending billions of dollars in currency markets to stem the fall in the value of the ruble.

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The two main Moscow stock markets, the Micex and the RTS, have fallen by more than 10% at the time of writing, in a broad-based selloff. Big Russian companies like Gazprom and Sberbank saw their share prices plunge as traders dumped their shares.

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For its part, Gazprom said today that it would reconsider the gas price discount it extended to Ukraine only a few months ago. Of course, Russia has not hesitated to punish Ukraine by restricting its energy supply in the past, with reverberations felt throughout Western Europe. These trade links—Western Europe gets about aquarter of its natural gas from Gazprom—make strict economic sanctions against Russia, like the ones imposed by the West on Iran or Syria, impractical. After all, the international opprobrium that met Russia’s invasion of Georgia in 2008 was never backed with serious action.

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As we have written before, Putin takes great pleasure in ”delivering a bloody nose” to his perceived enemies, even when it risks harming his standing on the international stage. Indeed, after speaking with Putin yesterday, German chancellor Angela Merkel reportedly told US president Barack Obama that the Russian leader seemed out of touch with reality—”in another world.”

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Economically speaking, the reality for Russia is not nearly as robust as the image projected by its officials’ belligerent rhetoric or its fast-moving military. Its growth has lagged emerging-market rivals like China and India for some time.

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What’s more, Russia only recently vanquished double-digit inflation. An extended fall in the value of the ruble could push inflation back up, further denting the country’s economic prospects.

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And so, perhaps for the first time since unrest broke out in Ukraine, Putin may be finding that his actions have costs—not the costs that world leaders threaten to impose in vague communiqués, but the pain that results from thousands of nameless, faceless transactions in stock, bond, and currency markets as investors flee the uncertainty and instability sown by Moscow’s unpredictable intentions in Ukraine. These are attacks that cannot be repelled by troops and tanks, but the damage they cause is every bit as real.

Commie bastards. I knows a commie when I sees one!

I'm Senator Cruz and I approve this message.

lol

An interesting read. I like what former world chess champion and current Russian opposition leader Garry Kasparov said about Father Vlad:

Kasparov on the current dilemma... pretty pointed at current administration.

Garry Kasparov: This isn't Cold War chess, chess has rules – Putin doesn't care about rules

(CNN) - There is much debate now over whether Russian President Vladimir Putin's military moves in Crimea are just a show of force, or whether he seeks to reclaim that part of southern Ukraine.

To Garry Kasparov, a former world chess champion from the Soviet era and now a pro-democracy activist, it is "quite obvious" that Russia is serious. "I don't think Crimea's the end of the story."

Kasparov, in an interview with CNN’s “The Lead with Jake Tapper,” said Putin “clearly has an appetite to – at least in his mind – to go after restoration of the great Russian empire. As much as he can grab, he would."

Kasparov, a council member of The Human Rights Foundation, left Russia last year.

He agrees with President Barack Obama’s assessment that the current standoff with Moscow is not "some Cold War chessboard."

"In chess we have rules, and clearly Putin doesn't care about rules," said Kasparov. "What he has been doing now in Ukraine – it violates international law, and international treaties Russia has signed before."

Obama said Monday the United States is examining a series of economic and diplomatic steps to "isolate Russia," and he called on Congress to work with his administration on an economic assistance package for Ukraine.

Obama: U.S. weighing steps to 'isolate Russia' over Ukraine crisis

But Kasparov says the United States and European leaders need to do more, saying diplomatic threats will not halt Putin's geopolitical ambitions.

"It's very unfortunate that now (Putin) is facing very weak leadership of the West, Europe and the United States. Simple words will not stop him from moving in this direction," he said.

Several other countries, including Japan, France, Germany, Italy, Britain, and Canada, are contemplating isolating Russia economically and diplomatically.

But Kasparov says that is not enough, and blames Obama's failure to follow through on his threat against Syria as one reason Putin does not fear real consequences.

"When Obama blinked on this red line, I warned that losing credibility of (the) U.S. presidency may have dramatic consequences," said Kasparov. "Unfortunately now Putin doesn't believe in any words, which means that the cost of containing (this) Russian dictator is growing."

If the international community waits to act, "the price will go up," says the activist.

"We just have to read history books to understand that (the) later we confront dictators, the higher the price the whole human race pays," said Kasparov.

But there no enthusiasm from the United States and Europe to send ground troops into the Ukraine. Kasparov said one way to weaken Putin, is to go after those who surround him.

The "most important target" of economic sanctions is the Russian ruling elite, which "cannot afford to lose access to Western markets, to Western capitals, to fortunes they have been amassing in the free world," said Kasparov.

"Let's hope it will be a Cold War with economic sanctions, and it will not go further."

Today some commie or whatever russians call themselves said they could turn our country into "radioactive ash." What a blubbering slob. Like if these f***ers are so flipped out to they think we wouldn't unleash on them. God*** irresponsible, gross people.
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Edited by: tyrone, Mar 16th, 2014 @ 8:56 pm

Disagree, every race, gender, religion, county club, etc. has its share of gross people. I have been in Russia and been warmly welcomed... they aren't different from us. They watch their leaders fail to lead just like we do.

The problem is that every demographic has its own fair share of flotsam