They leave the West behind
--The Beatles
After Russia's invasion of Ukraine over the weekend, the Russian ruble hit multi-year lows vs the USD. Capital is flowing out of the country.
Today, the Russian central bank hiked interest rates 150 bps in attempts to quell currency collapse and capital flight.
In a leveraged, rate suppressed world, however, such a move sets other dominos in motion. Russia stocks are down 11% in response to the events. Russian banks have been hit particularly hard--intuitive as that's where lots of leverage is.
No telling what other paths the dominos take. EU stocks closed lower. Domestics markets are down a percent or so at midday.
It does bring to mind Long Term Capital Management's leveraged episode with Russian bonds...
position in SPX
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Each generation should be made to bear the burden of its own wars, instead of carrying them on, at the expense of other generations.
~James Madison
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