December. Yulia asks if I’ve heard the following joke: “The whole world is celebrating our 1998 crisis by having a 10-year-anniversary party.”

A decade ago, many Russians lost their life savings after the ruble plunged 71 percent against the dollar. Since August 2008, the ruble has devalued from 25 to 29 percent against the dollar—in large part a result of the Georgian fiasco, when investors pulled $200 billion out of the country.

The “oligarchs” led the pack by buying up shares in Western companies.

In one of our early Saturday-morning lessons, I ask Valery how she sees herself in the current economic picture.

“You mean about my health?” she says. “I use …” She asks for the English words for “under-eye concealer.”

Valery is 23 and lives with her husband, his parents, and his three brothers in a three-room apartment. She works 9 to 7, attends university classes at night, and on weekends sells dog food to retailers.

She and her husband hope to buy their own apartment in the “Moscow Region” (the suburbs), where flats sell for 6 million rubles, about $150,000. They’ve managed to save 4 million rubles.

“But won’t the price of apartments go down?” I ask.

“No. The problem is the inflation, which will keep the prices high,” she says.

Inflation alone has made their earnings worth 20 percent less a year.

“To work all our weekends and lose all that money!” she says. “We don’t know whether it’s better to keep our money in rubles, dollars, or euros.”

She’s not alone in her attempt to keep the worth of her savings. But also since August the 15 percent of Russians who do have accounts have found withdrawal amounts limited or locked down entirely as their banks await a bailout. (Half the country earns only enough money to get through the month.)

I, too, have turned into a “ruble-watcher.” Back in the States, a real-estate venture finally fell apart after my buyer was “disqualified,” leaving me with a massive debt for the floors and bathroom and windows and roof I’d installed. To help make up the loss in my ruble earnings, I’ve taken on—besides my corporate classes—10 private students and am putting in a hundred hours a week. I wish I were kidding.

Most of my “privates” are university students arming themselves with English for the job market.

“I’m so tired of typing ‘refusing credit,’” says Marianna, who has asked me to help translate her class work.

I especially love this whopper from one of her papers: “In the near future, a certain financial newspaper even names the exact devaluation—40 rubles to the dollar.”

Some analysts say that if the ruble is allowed to float (as it did in 1998), it is likely to plummet further.

- - -

“What job market?” I want to ask my students but dare not.

“Here, at my work, everybody’s very spooked about the possibility of layoffs or a cut in salary,” my friend Tanya says.

Oddly, the crisis has not yet fully hit Russia. Rather, people talk of the “three waves”: (1) the freezing of credit to the construction industry, (2) the bankruptcies of smaller banks, and (3) the closing of companies, which is expected in the spring.

“No, it’ll be February, after companies look at their 2008 reports,” says Yulia, my JPMorgan student.

And what is Putin’s response? He claims that the reserves built up from the days of $140-a-barrel oil have been reduced by 28 percent—though analysts who add up bailout amounts figure the reserve has been cut by over half.

Putin’s chief achievement has been to build up huge opaque companies, in minerals, gas, and oil, that he pilfers from to help his cronies. And, as it turns out, those companies have financed themselves on foreign loans rather than on equity. Diversifying the economy has never been an option.

In anticipation of protest against Putinomics, two bills are going through final readings in the parliament. The first would extend the presidential term from four to six years—amid speculation that Medvedev may resign early, thus paving the way for Putin to return as president-dictator to rule as he sees fit.

“It seems to me that in today’s Russia five, six, or seven years would be acceptable,” Putin said in an interview last June.

“Why not 15?” said one deputy, Nikolai Kharitonov, sarcastically.

The second bill, the so-called treason bill, would make it illegal for anyone to speak about government abuses to nongovernmental organizations. (Formerly, treason was defined as passing state secrets to foreign organizations.)

The new legislation would allow the authorities to interpret virtually any form of dissent as a crime punishable by up to 20 years in prison.

Who needs a bill? A December 14 demonstration staged by Garry Kasparov’s Other Russia coalition resulted in the beating and detention of 90 protestors in Moscow, 60 in St. Petersburg.

The trial of three men accused of murdering journalist Anna Politkovskaya has been moved into a closed court, against the jurors’ wishes.

Suspects of ethnic killings (which spiked in 2008, to 85) elude arrest, even though in one case the Militant Organization of Russian Nationalists e-mailed prosecutors a photo of a severed head resting on a chopping block.

- - -

My deputy-executive student, Elena S., is back from scouring the globe for money—and has been promoted (in her telecommunications company) to a corner office, top floor.

But Shanghai was a “road show,” she says.

“So it didn’t work out?” I say.

“No, no. Asia is very strong. I think the government should make it easier for the Chinese to immigrate into Russia,” she says.

“Well … eastern Russia does seem underdeveloped.”

“No, the resources are there. We need the workers,” she says.

Elena should stop fooling around chasing money for her company and join Medvedev’s cabinet, I think.

As for her trip to the U.S., her first comment is “You have laws!”

But otherwise New York was “cold,” and people she met thought Hillary was too aggressive.

“I think a woman should use her feminine qualities,” she says.

I try to ignore that—and Elena’s blouse buttons popping over her bosom.

She’s also changed her tune about investing in dollars. “The U.S. printing more dollars to raise its value is a bad idea. Too many dollars will make it go down in value.”

She talks about the failure of the euro zone to come up with a good plan, and it doesn’t matter that Britain is keeping the pound. "The fluctuation of the pound is the same as the euro.

“But there are some very interesting short-term euro bonds offered in some banks here,” she adds.

I tell her that I have too much debt to invest in anything.

“Well, I’m keeping my debt in rubles,” she says.

“So by next summer—,” I start.

“My debt will be nothing,” she finishes.

We both laugh.

She picks up a dictionary, checks a word. “Ah, yes. From two evils, pick the least.”


“Meaning Russian saying. Meaning that, in any situation, you need to find something good. The good thing about the crisis is that people will focus on something other than war.”

She refills a crystal goblet with her double-filtered water.

“Well … yeah,” I say.

Then I tell her about my university students. All that studying—for what?

For once, she is silent.