Update: And just to make sure Russia has a catalyst:

UKRAINE FORCES ATTACK EASTERN CITY OF SLOVYANSK, INTERFAX SAYS

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With the US having voiced its support for Ukraine's "anti-terrorist" operations, and Russia strongly supportive of pro-Russian people's decisions to regional self-determination, the threats coming from the newly independent regions are a concern (that markets clearly do not care about):

DONETSK ARMY SAYS WILL FIGHT UKRAINE FORCES IF DEADLINE IGNORED

Ukrainian military forces have 48 hours to leave the region or Donetsk own "anti-terrorist" forces will fight. Of course, with the US already saying the referendums are illegal and not recognizing them, we suspect it will be time for more sanctions soon (despite the lessons below).

Insurgent group army of so-called Donetsk People’s Republic “will start its own anti-terrorist operation in Donetsk region” against Ukrainian military forces if they don’t heed seperatist army chief Igor Girkin’s 48-hour ultimatum to leave or obey him, head of seperatist group, Denis Pushilin, says by phone.

So... buy stocks?

And a different perspective on which the western approach to resolving the Ukraine crisis may not be exactly "working."

Lessons on Sanctions Based on Past Experience (via PIIE)



1. Don’t overreach. Policymakers should avoid inflated expectations of what sanctions can accomplish. Sanctions seldom impair the military potential or change the policies of an important targeted power. Modest goals contribute to successful outcomes. Thus it may make more sense to achieve the modest goal of thwarting an impending invasion of Eastern Ukraine than to try to reverse the fait accompli of Russia’s annexation of Crimea.



2. Russian economic integration with the West is an advantage. Economic sanctions are most effective when aimed against close trading partners with more to lose.



3. Don’t count on Russian public opinion. It is hard to “bully a bully” with economic measures. Democratic regimes are more susceptible to economic pressure than autocratic regimes like Russia.



4. Slam the hammer; don’t turn the screw. Economic sanctions are best deployed with maximum impact. Gradually imposed steps may simply strengthen the target national government’s resolve. In the present case, threatening very heavy sanctions if Russian armed forces cross the Ukrainian border has the best chance of deterrence.



5. International cooperation is not always essential, but in the case of Russia, it probably is. A large coalition of sanctioning countries does not necessarily make the sanctions highly likely to succeed. Financial sanctions against Iran, on the other hand, succeeded in large part because they were backed by an international coalition of countries willing to forgo Iranian oil imports and dealings with Iranian banks. To be sure, the effort to gain international support can dilute their scope. But the United States has little choice but to gain the cooperation of Western Europe in this case.



6. Choose the right tool. Sanctions deployed in conjunction with other measures, such as covert action or military operations, increase chances of success. So far, the United States has been reluctant to provide substantial military assistance to Ukraine, out of concern that Russia will escalate its own intervention. Instead, the military dimension of US support has been limited to greater assistance to NATO allies in the region, especially Poland.



7. Don’t be a cheapskate or spendthrift. Sanctioning governments must balance the benefits against the costs borne domestically to sustain public support at home. At present, the United States, but especially Europe, are facing the resistance of major business firms over the possibility of severe energy and financial sanctions.



8. Look before you leap. Sanctioning governments should weigh their means and objectives against unintended costs and consequences. In the Ukrainian case, all signs indicate that President Obama and his European counterparts (especially Chancellor Angela Merkel of Germany) are giving each step of the sanctions regime their carefully guarded attention.