Russia: Smashed Again, Halted Indefinately

On Tuesday Russia got pwned in One of the BRICs Just Bricked.
Yesterday it happened again. 10% down on top of a 17% decline the previous day.

This time markets were halted indefinitely…

Russian Exchanges Halt Trading for Second Day; VTB Declines: “Russia's Micex Stock Exchange and RTS Exchange halted trading for a second day as the Finance Ministry rushed to provide loans to the country's banking system and a Moscow brokerage sought to sell a stake to meet its financial commitments.

The Micex stopped trading indefinitely at 12:10 p.m. Moscow time, according to spokesman Alexei Gerasyuk. The RTS also halted trading on all stocks at 12:10 p.m. at the request of the Federal Financial Markets Service, it said in a statement. Regulators are looking for “stabilization measures” by 5 p.m. before any decision on resuming trading is made, RIA Novosti reported.”

How bad is it? The lack of liquidity spiked the overnight interbank lending rate… (Why does that seem familiar? Wait, don’t tell… Oh right: Fed Definitely Losing Control. Fed Funds Hits 6% and Losing Control? Fed Funds Climb to 6%)

“The Finance Ministry today pledged to lend 1.13 trillion rubles ($44 billion) for more than three months to boost liquidity in the banking system. The Mosprime rate, a measure of overnight interbank lending rates in Russia, jumped to a record high of 11.1 percent today from 5.7 percent a month earlier.”

These events will absolutely crater the Russian economy. I’m talking about the REAL economy here. Entire enterprises will get destroyed in this liquidity crunch, idling both machines and labor. This won’t become evident for months. But the damage has been done. Believe it.

Now, Russia hasn’t done anything completely stupid yet. Judging by what Pakistan and India have done, you just can’t rule out a giant brain fart:

India: Also Has Dumbest Idea, No More Commodity Futures
Pakistan: Has Dumbest Idea, Sets Floor for Stocks