From Anders Aslund in the Daily Star:
Putin continues to deny that Russia’s financial problems were caused by his war in Georgia, and it took the Central Bank more than a month to provide substantial liquidity injections. But it was already too late, as the liquidity problem had become a matter of solidity. Overtly, Russian stock valuations look attractive, but by heaping abuse on foreigners, Putin has scared the foreigners away, while Russian investors have no money at hand. With every statement, Putin erodes Russia’s political risk profile. As is customary, many Russian businessmen pledged their shares to borrow money for stock purchases. As the stock market dives, they receive margin calls and are being forced to sell their shares at ever-lower prices, causing the stock market’s downward spiral to accelerate. In Soviet fashion, the Moscow stock exchanges closed for four days in a row in the week of September 15, because stocks plunged too fast. By denying the problem, the authorities have aggravated the lack of confidence.