While in Russia the state has become the managing and directing force in economy quite long ago, the rest of developing and developed countries have been dealing with such a metamorphosis for just a few weeks. Financial and other kinds of companies with century-long traditions and giant capitalization and crystal pure reputation are queuing for getting the emergency financial aid from their governments.      

The governments are competing in generosity, giving those suffering losses the credits for hundreds billion dollars or through taking the share in their capital (which is called nationalization). In this sense, Russia is no exception and is repeating in general the actions by the US and European countries.    

The Black Monday on our stock exchange (when the index fell in an unprecedented way) was a resonance reaction to the fact that the 700-billion salvation plan, approved of by the Congress, would not solve the system-making problems of the American economy, while the European governments will be saving the national financial institutions on their own and at their own expense, after which the investors lost their belief in the radiant future.  

Stopping biddings on Wednesday morning at least till Thursday - that was a no-confidence vote to the actions by Russian authorities in a form of another multi-billion credit injection given to the state-belonging banks.    

Now it’s hard even imagine what news might make the markets go backwards, I mean towards slow but stable growth. It’s obvious to everyone now that the financial infusions, whatever large-scaled it was, remind of attempt of inflating with helium the balloon with a gap. The stock of salvational helium being limited, the perspective of hard landing is much more probable than happy end. Thus, saving the stock exchange, i.e. capitalization of the companies, is a useless thing. The companies themselves, and not their market value, are to be saved.     

From this point of view, Russian authorities are doing everything correctly. Reminding, three banks – Sberbank, VTB and Gazprombank – received deposits for 1.5 trillion rubles. After extraordinary meeting with the president Sberbank received more over 500 billion rubles as a credit, and VTB and Rosselkhozbank received 200 and 25 billion rubles respectively. In its turn, the state-belonging Vnesheconombank will grant loans to non-financial companies for offsetting the debts to foreign creditors in the amount of $50 bn. On Tuesday there were already those willing to get it – Gazprom, Rosneft, LUKOIL, TNK BP.     

However, the Russian situation is featured with the fact that the state has been playing the key role in the economy since the pre-crisis period. Moreover, it’s exactly actions by the authorities – Prime Minister Putin in particular, with his reprimanding made on Mechel – that has initiated the signal for real crisis in Russia, not any American mortgage problems. Before that moment, our country according to all the statistic data really could be considered a “quiet harbor”. But after 24 July’s fall, our stock exchanges never returned to the previous level. It’s only under normal and stable conditions one may play with quotes like this: you reprimand YUKOS and the quotes fall, you support it and it returns back. As for the crisis periods, the fall even after a one careless remark causes the chain reaction: investors sell everything that falls and the more they sell the more everything falls.       

So the Russian authorities need to master anti-crisis management as soon as possible, as it’s only the state that is able to solve the problems in our economy, considering that it itself has created them to a great extent.

Reminding, the state has been closing major part of financial flows on itself during last 8 years, taking money away from the private sector and saving it for a black day. The huge foreign debts by our private sector is much related to the fact that our companies had to borrow money in the West, the money that they had given to the state in a form of taxes, especially high in the gas and petroleum sector.

All that was justified with necessity to protect the state budget against external impacts. May be that has been intended right, but at the moment that stash is being spent in the interests of other players in the market. After the special meeting President Medvedev must have reported the following:  

— We have calculated how much the budget would be short in case of possible maximum fall of the oil price, and in case of other global troubles. That amount has been reserved for thee years ahead, and it will not be touched anyway. So the budged-paid workers should not be worried.    

— The state guarantees payment of deposits to the citizens in commercial and state-belonging banks, even in case all of them go bankrupt. So the depositors should not be worried.  

— The rest of money we are spending on support of the banks and companies, private and state-belonging ones, at our own consideration. 

And in reality, realization of the first two clauses – salvation of the people’s life standards – will be done only with money remaining after salvation of the selected companies. One cannot affirm that it will not suffice, however, there is no confidence that it will suffice. 

And while the common people do not see the emergency measures by the Russian authorities, the reaction will be predictable – that’s all sort of rumors. For example, people in Moscow began to speak about possible denomination. And major part of people spreading that rumor, they have no idea of what denomination is and what it differs from default with. In such a situation, any public reassurance by politicians saying there will be no denomination would only convince people of the opposite. Everyone remembers well how Yeltsin spoke of some “devaluation” in August 1998 and what all that ended up in.  

Rumors are a true signal that people do not understand the actions by the government and do not believe those actions to be correct. Well, there are grounds for disbelief: it’s hard to explain in rational way why our country gives a credit to Iceland in the amount of €4 bn, when we are having problems ourselves. And mistrust is a really fertile ground where panic can grow fast. And the panic might be killing for our banking system, despite any pumping in.