By Anna Raff

        Tom Bentz, an energy analyst, remembers the Aug. 19, 1991, coup all too well. It cut short his vacation.

"I was in a hotel room in Pennsylvania talking to clients who found themselves on the wrong side of the market," said Bentz, who worked for United Energy Inc. and is now is a senior energy analyst at BNP Paribas Commodity Futures in New York.

"Mostly it was damage control," he said.

When world markets caught drift of the attempted coup by hard-line Communists, shares from Kuala Lumpur to Frankfurt went berserk. Investors, worried about loans from German banks to Moscow, sent the German stock market into a tailspin, while major indices elsewhere fell to year lows. The dollar surged along with oil prices, while grain prices dived.

The panic, however, was short-lived. Within a day, market players like Bentz managed to convince investors that the world was not going to end and markets rebounded.

"Markets normalized within 24 hours," said David Longmuir, who was selling European equities at HSBC James Capel at the time. Longmuir is now director of equity sales at Renaissance Capital.

The coup leaders, operating under the auspices of the Committee on a State of Emergency, unleashed their plan in the wee hours of Monday morning Moscow time.

The Australian and Japanese stock markets were opening just as two tractors were moved to block Mikhail Gorbachev's plane from leaving the runway in Belbek, Crimea. However, trading in Asia wasn't hurt until late morning Tokyo time when it was officially announced that Gorbachev had been relieved of his duties.

The Nikkei index in Tokyo plummeted to 10-month lows, while the relatively smaller Malaysian market shed 5.27 percent.

Then the real bloodshed started as major indices opened in Europe and the United States. Financial institutions across the world ditched their buy orders. Frantic small investors began dumping their stock for whatever prices they could get.

"The market feels like this is like something out of a Tom Clancy novel," a Barings securities broker told Reuters at the time. "No one knows what's going on, so when in doubt, sell."

Kenneth Courtis, then at Deutsche Bank, took a broader view. Before the coup, Courtis had traveled to Russia and spoken with many people about the economic and political situation under Gorbachev. He came away with the impression that the country would never step back from perestroika.

"From the beginning, I had the feeling that the coup couldn't last," said Courtis, now Goldman Sachs vice chairman in Tokyo. "It couldn't stand up to the overall tendency for change."

The market's emotional reaction was understandable, he said.

"I remember working 24 hours, 36 hours, 48 hours," he said. "Advising my clients that this was not going to be a prolonged situation.

"And I was right, but in this business, you don't have a lot of time for self-congratulation," he added.

What investors sold most of all was local currencies to buy dollars, the traditional safe haven in times of trouble. The dollar surged but later abated as central banks stepped in.

As investors woke up to news of the coup on Red Monday — as the day was coined after the fact — the contagion spread from east to west. German stocks and the mark were especially hard hit.

Many brokers assumed that German banks were exposed to Soviet Union risk because they had lent hundreds of millions of marks to Moscow. Today, many see the deep drop of German stocks as an overreaction.

"I remember thinking, 'What on earth is happening with Germany?'" Longmuir said. "Perhaps it made sense what happened to the stock of German banks. But everything else?"

At the time, the pain felt in German markets was explained by the Soviet Union's crucial strategic, political and economic importance to the unified country.

The sense of the unknown wasn't the only fear that permeated the markets. Some drops — and rises — were underpinned by the fate of commodities such as crude oil, wheat and gold.

The Soviet Union was the world's biggest producer of oil at the time of the coup. That fact — coupled with the "geopolitical uncertainty favors higher oil prices" adage — caused prices on the spot and futures markets to skyrocket.

During London's early Monday trading, oil prices jumped about 10 percent to their highest point since the Gulf War, fought between the United States and Iraq earlier that year. Prices of refined oil products on European spot markets surged by up to 25 percent.

New York trading mimicked that of London, as the Brent benchmark blend shot up to $20.62 from $19.45 on the spot market.

However, high volumes of trade abated later on in the day as everyone realized that oil tankers at Soviet ports were being filled on time and that Russia didn't intend to renege on any of its contracts. To some observers, it seemed that Russia didn't have any choice — crude exports were one of the Soviet Union's few sources of hard-currency earnings.

"It was a Russian sideshow," Longmuir said. "Somehow the political commentators got it all wrong. Oil exports didn't stop."

The dollar's surge was stopped by Tuesday as European central banks coordinated their selling of the U.S. currency to drive the exchange rate back down.

Throughout the crisis, the price of gold remained a wild card. Gold — also a seen as a shelter during uncertain times — failed to surge because many investors were worried that Russia would dump its gold reserves to pay for imports.

The short-lived coup was a nightmare for grain traders, who saw their prices fall. Dealers were concerned that a $1.5 billion credit the United States had extended to the Soviet Union for grain imports would be withdrawn. The official Soviet statistics agency Goskomstat was already predicting a weak harvest for 1991, and the Soviet Union was then the world's largest importer of grain.

Meanwhile, as the markets were going haywire, AT&T was having trouble connecting calls between the United States and the Soviet Union, according to AT&T. On that Monday, call volumes reached levels 100 times higher than normal, and the long-distance service provider was forced to reroute calls through third countries and direct satellites.

But investor fears were never to be realized. Market volatility that lingered after Boris Yeltsin's tanktop denouncement of the coup at about noon Monday was dismissed by most of the market as speculation.

By the time Gorbachev arrived in Moscow on Aug. 22, global markets had regained all their losses incurred in Monday's panic, and the economic boom of the 1990s — which later enveloped the transition Russian economy along the way — continued its course.

"More than anything, we were struck by a feeling of bemusement," Longmuir said. "A blip is all it really was."

Courtis of Goldman Sachs said he was deeply moved by the coup's failure and, later, the demise of communism.

"In 500 years, historians will look back down on this in awe," he said. "I remember every second of it. It was amazing."