Trading in Moscow was halted twice this week. Once because it dropped too much, too quickly and the second time after it reopened it increased too quickly. (The extreme movements up and down sound like Wall Street, to a degree and such extremes are signs of a troubled market.) So why does this matter to Americans or anyone else outside of Russia? Think back ten years ago when Russia had its last crash and was an basket case, looking for money from everywhere and looking for direction. Russia found its direction with Putin, with his hyper-macho attitude and dreams of returning Russia to its former glory as a world player.

To Russia’s credit, Russia now has a growing middle class and anyone in IT knows just how important St Petersburg (and to a lesser degree Moscow and beyond) has become. In addition to that IT middle class, Russia has brought a lot of manufacturing into St. Petersburg with automakers from around the world setting up shop there. (St. Petersburg just happens to be Putin’s home town, so it has profited enormously during the Putin years.) In recent years, Russians have become very visible in exclusive European places such as Monaco and the Alps, buying up property everywhere and driving their massive Rolls Royce’s, Benley’s, Maybach‘s and Mercedes Benz models that I never knew existed. The world luxury market (today) is highly geared towards the elite Russians who will pay whatever it costs, preferably at the highest possible price. This summer all the talk in the south (in France, not Alabama) was how the Russians owned the Riviera. One mansion was purchased for almost $800 million by a Russian billionaire but every exclusive house on the coast seemed to have been bought by a Russian. Obviously after the ’98 crash and years of Putin making or breaking business executives, the new billionaires have planted their cash reserves outside of Russia. These are the people who have profited under Putin and who brought a certain flash back to Russia.

As the price of oil falls to “only” $100 or less and the Russian stock market slides into chaos, where is Russia headed? Putin his number two, President Medvedev, are still eager to flex some of Russia’s former muscle though they may not have the money to do so. Re-building an old and creaky military, funding a failing banking system, handling a stock market that has lost half of its value in a few months, flexing muscle and keeping the dream of Russia’s return sounds less likely than it was a year ago. If nothing else, this will make Russia less stable on the world scene and that is not good for any of us.