Russia Downgraded

When the world was partying hard and Russia's equity market was roaring to new highs we said that Russia's economy was in serious trouble. When the whole world was looking at the U.S. headed for the dumpster and expecting the BRIC countries would inherit the world, we wrote that Russia was likely to become the next crisis. And, some period of time later they were. Today, Russia's foreign and local currency issuer default rating was downgraded.

Similarly, for some time we have been watching the Euro with unease. There is little focus on the headwinds facing the currency union. And, any acknowledgement of those headwinds are generally trivialized for various reasons. The most recent appears to be that troubled member countries have seen only marginal ratings downgrades. A silly quantification-less understanding of risk.