We are two days into the week and there is no obvious sign of the crises, I have been writing about. I had an event at the Ritz last night and we saw the usual suspects, but most of the bankers and lawyers were missing (in action). Obviously something is going on, but it seems to me that nobody really knows what is going to happen next. Most bankers expect a crises, a run on the savings accounts and cash machines, but its not happening. They expect most of the small Russian banks to get bankrupt.
Some of my friends speculate that nothing happened yet, because of the controlled media in Russia, which is avoiding to talk openly about the economy crises. Nevertheless, the crises is a big subject on the Russian Internet these days and its being discussed among livejournal bloggers and in forums. The interesting thing is also that the people around me, Russians as foreigners talk about the crises daily. Everybody expects it to hit and it should have, but again, it didn’t.
Well, there is a economy crises, but its not the extreme bank crises I have been talking about in my past article. Renaissance Capital downsized heavily last week. Other investment banks did the same. A car dealer we visited 2 weeks ago could still sell lots of cars, but 40% of its cars are sold on credit and while the banks are signing the credit contracts, the dealer doesn’t receive any money from them, so the cars stay on the lot. A big department store in the center of Moscow cannot buy clothes for next seasons collection, because the financing from the bank is missing. I could go on and on with examples. I meet and know a lot of people and there is not a day, where I am told one of these stories. Long term all of that means cutting staff and cost for companies. It also means that Moscovites as Russians will probably consume less in the upcoming months.
Lets hope it will stay like it is and get better again. I personally don’t need a banking and cash crises. I’d appreciate falling rents and prices (and better service!), but hopefully this shakeup will not be to violent and harmful.