Excellent analysis by the Streetwise Professor:
I have often written that Russia is a natural state, a cartel of violence specialists that is held together by economic rents, primarily generated by natural resources. As I have noted, such states/cartels are fragile, and subject to collapse. Collapse occurs when (a) the rents dissipate, or (b) the time horizons of the colluding parties shorten. Natural states look strong pendant les bon temps roulez, but have a tendency to implode once the music stops.
The crash–crashes plural, actually–of the Russian stock market, the gridlock in the money/banking markets, and the decline in oil prices, are dissipating rents, and arguably convincing the various clans that the game will soon be up. Moreover, the financial crisis has weakened some players (Deripaska is a well-publicized example), which could tempt others to exploit this weakness and grab what they have left. This could induce a breakdown in the uneasy peace between competing factions of violence specialists.
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