On Tuesday Russia cut off all natural gas to Ukraine, creating shortages in Europe that could spread across the continent as a cold snap grips the region, Bloomberg News reported.

Gas shortages were reported in Ukraine, the Balkans, Bulgaria, Poland, Italy, and Hungary.

The shortages were expected to extend to Germany, Austria and broader Europe, as a cold snap with temperatures below 20 F degrees is expected to increase demand for fuel in Eastern and Central Europe, The New York Times reported Tuesday. When the natural gas is flowing, Europe imports about 20% of its natural gas from Russia.

The current Russia natural gas cut-off has already lasted longer than the last Russian cut-off, in January 2006.

It's about price . . . and politics

The dispute pertains largely to price, but also involves geopolitics. Russia's oil and natural gas giant Gazprom is seeking to raise the price of natural gas to $450 per 1,000 cubic meters from $179.50 last year, and to collect fines for alleged late payments. The Times reported. However, analysts also believe Russia is upset with Ukraine's move to apply for North Atlantic Treaty Organization membership and the nation's closer ties with the United States and Europe. Ukraine is seeking to integrate more fully with the West, but Russia views Ukraine as part of its sphere of influence.

There are times when you need an archive of information and evidence to make an argument.

Then there are times when one simple fact or incident makes the case by itself. (Which, incidentally, may very well be the genesis of the adage "A picture says a thousand words.")

Evidence item of consequence: a lunch that global trade consultant Edward Goldberg, a colleague of New York Times columnist Thomas Friedman, had with a Russian trade attaché.

The Russian trade attaché, Friedman relates, years ago was delighted to hear from Goldberg that the Bush administration wanted to drill for oil in the Alaskan wilderness. The reason? The amount of oil derived would be negligible in terms of the U.S.'s needs, and it signaled that the Bush Administration was not planning to do anything to establish an alternative energy program, "which of course would threaten the economic growth of Russia."

Investment banks are beginning to rethink their commitments to doing business in Russia. The New York Times reports that many investors believe the risks of doing business in Russia are beginning to exceed the benefits. Maybe that is what Russia intends. Once western investors have put their money in, why not push them out and take their property?

Here are some examples:

• Mechel - The Times reports that Vladimir Putin's criticism of the CEO of Mechel, a coal mining and steel company, wiped out billions of dollars of its stock market value
• BP-TNK - The CEO and other western executives of BP-TNK, BP's (NYSE: BP) joint venture in Russia, were shoved out under pressure from the government and BP's Russian partners.
• Declining stock market - The Russian stock market is down 25% in the last two months, alone.
• Evaporating investment banking business - According to the Times, "Investment banking revenue from Russia was $148 million from mid-July to now. That is down from $260 million from mid-June to mid-July."

In a development likely to be warmly-received by international finance and stock markets, Russia announced Thursday it will buy Fannie Mae and Freddie Mac bonds through its sovereign wealth funds, Russia's Finance Ministry said and Bloomberg News reported.

Russia will invest money from its Reserve Fund and National Wellbeing Fund into 15 government bond funds in Europe and the United States, including those in Fannie Mae (NYSE: FNM) and Freddie Mac (NYSE: FRE). Russia will also purchase government bonds in the U.K., Germany, France, Austria, Canada, and the Netherlands, Bloomberg News reported.

Both Fannie, down 56 cents $29.27, and Freddie, down 80 cents to $27.94, moved lower Thursday afternoon; however it should be noted that the declines occurred during a broad market sell-off, with the Dow down 159 points to 12,267.

Why, amidst the re-emergence of Cold War tensions and the grinding down of individual liberties in Russia, was Putin named as Person of the Year? Read the article. But more than anything else, Time cites that Putin "stands, above all, for stability-stability before freedom, stability before choice, stability in a country that has hardly seen it for a hundred years."

Fine. But what does this mean for Russian markets?

Well, the FT article -- written by Douglas Helfer, manager of the HSBC GIF Russia Equity fund -- states that "Russian equities have underperformed most global emerging market peers by a wide margin this year due in large part to the uncertainty surrounding the current election cycle."

Russia is facing just the second transition of power since the Soviet Union fell more than 15 years ago, so investors have a reason to be skittish. That said, since Putin arrived in power, between January 2000 and March this year, the MSCI Russia index was up by 1,200%.

As my colleague Aaron Katsman is fond of saying, Giddyup.

Zack Miller is the managing editor of IsraelNewsletter.com and a former equity analyst for a leading multinational hedge fund.

"Analogous actions by the Soviet Union, when it deployed missiles in Cuba, prompted the 'Caribbean crisis,'" Russian President Vladimir Putin said Friday, using the Russian term for the Cuban Missile Crisis, in reference to the United States' Europe-based missile defense plan.

Putin's statement that U.S. plans to put a Europe missile defense system in Poland and the Czech Republic can perhaps be best interpreted as a rhetorical overstatement before Putin negotiates new economic and political agreements with the West, particularly with Europe.

Russia's oil and natural gas resources, foreign currency reserves, commercial development and +5% annual GDP growth rate have enhanced the nation's negotiating stance, on both economic and geostrategic issues. Sensing his stronger hand, Putin has used the increased leverage to propose, among other measures, European economic/commercial agreements that would be more favorable to Russia, while also making clear that international political agreements among the U.S., Europe and Russia on such issues as the Iraq War, Iran nuclear technology -- and a potential European missile shield -- would also reflect Russia's concerns.

As you may remember, at the end of June, I wrote piece about how Russia wanted to lay claim to a large section of the Arctic Circle. Well, yesterday the country definitely left no question as to its intention when it actually sent a submarine 4,200 meters below the surface at the site of the North Pole and physically planted a Russian flag to stake its claim.

The area under the North Pole has HUGE economic potential as it is loaded with precious natural resources, not the least of which is a large reserve of oil. Seeing the submarine plant the titanium Russian flag under the North Pole on the news last night brought to my mind images of America planting its flag on the moon. Does that really mean though that America has the unquestionable right to any resources that the moon could one day turn out to posses? Not in my book. Russian officials, however, seem to think that planting the Russian flag equals ownership.

So what exactly is at stake here? In simple terms ... A LOT! Gold, oil, aluminum, platinum just to name a few of the natural resources that the area has in abundance as well as shipping routes.