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. Last Updated: 07/27/2016


Russia is recovering -- oops, no it's not. Whenever things seem to get going here, it always goes pear-shaped. But is it really all that bad?

It is easy to be taken in by all the hype, and you need a degree in Godelian number theory to follow all the statistics in the papers over the last weeks.

"The RTS Index has fallen 40 percent in the last month ... Goskomstat revised GDP growth up to 0.8 percent for 1997 but it will be negative for 1998 ... The asset-to-debt ratio has risen by blah percent and the hem-off-the-knee index has fallen for the third quarter in a row."

Hem-off-the-knee? What's that about? All these numbers are pretty meaningless at the end of the day -- or at least as good as each other. GDP changes are supposed to tell us how we are doing, but the idea of having one number that describes the entire economy is a bit rich.

It's all a scam set up by highly paid economists to keep them in work. There are some other perfectly good indices that never get any play, and let's face it: Interest rates are boring.

The hem-off-the-knee index was a serious survey done in Russia that compared the length of bank tellers' skirts with the reliability of the bank. The shorter the skirt, the more likely you are to lose your shirt.

Little quoted, but telling statistics give a clearer picture for the long term. The banana index has been growing steadily for almost six years. From a low of something like 0.06 kg/pleb in the 80s, the banana index has soared to a whopping 3.4 kg/pleb today -- a 5,600 percent increase. The banana index has consistently out-performed the Moscow Times Index for years, as has the Merc-Beemer index and the length-of-the-line-of-babushkas-selling- plastic-shoes-outside-the-metro index.

While the banana index disassociated itself from the Dow long before the MT Index did, the club index still mirrors the MT Index with an 18-month to two-year lag, in the same way that inflation follows interest rates. This is very worrying for expats arriving in the capital. After the bubble burst in 1996, the activity on the club exchange dwindled to tedious proportions because many of the manic-makers were overextending themselves on the bullish trends and were doing way too many drugs.

With improving fundamentals and a slew of new places opening weekly, the weekend rave volumes have been rising. The prognosis for the medium-term looks good due to many new players that are entering the fray but are too young to be able to afford the drugs. In a little reported move, Fitch IBCA upgraded Russia to a EEe+ grade -- still not quite a bibulous rating.

We should expect another two years of strong growth and a period of consolidation beginning around Rave-o-lution day next fall.

But the worst is yet to come. The erection index does not bode well for Russia's future. Historically, whenever the erection index breaks new records, the world markets crash. As the last touches were put on the Singer Tower (1906), the Chrysler Building (1929) and the World Trade Center (1966), the Dow crashed by 59 percent, 86 percent and 75 percent, respectively.

Here in the Cucumber, the biggest building on the drawing board is the new SBS-Agro headquarters in Luzhkov's stupidly named City Project, which will be the highest building in Moscow when completed. Happily, the bad omen for the market will not arrive until sometime in 2000.

Don't be put off by the hype. Things are still good around here. The biggest problem we are going to face in the next few months is how to get all that annoying white stuff floating around out of our hair.