Ukraine? Nah, I Ain't Worried
What, me worry?
RUSSIAN FINANCIAL MELTDOWN
Yes, I know. The bottom fell out of the Russian stock market and the Rouble (or rubble). Yet, in previous cases such as Argentina or Greece had, in the end, little international effect outside of much hand-wringing. Bad economic news for the citizens thereof certainly, but little else.
The original cause of the current crisis is that Ukraine is flat broke, and is about to default on $35B of paper. Yeah, debt holders are going to get one heckuva haircut, but this has happened before without causing international panic.
Yeah, I know: AK-47 rifles, T-90 tanks, and SU-35 fighters are currently being aimed at Ukrainian citizens. Still, Russia has done this before: 2008 Georgia (the country, not the state). For those who have forgotten, the Evil Empire invaded said country, occupied a small portion thereof, and forced a referendum to annex it. Using intimidation, the Evil Empire won (shades of the old Soviet Union). Much as I wanted to slap someone, it barely made a ripple in financial markets. Just this morning, Darth Putin has temporarily pulled in his horns.
EU GETS GASSY
The Evil Empire is one of the main sources of natural gas for the EU: about 1/3. Half of that traverses through Ukraine. You see the problem. NG prices spiked 10%. If this gets worse or lasts for any length of time, it could plunge the EU back into recession. That would be bad.
The reaction of equity and commodity markets has been downright placid.
In the end, the only actions I took was to give thumbs-down on a few Russian ETFs, as I think the Evil Empire's economy will suffer in the near term.