In many ways, this is worse.
September can often be a quietish month as people trickle back from their summer holidays. Bankers rely on a busy January to start their years off with a bang. But last month was horrifically bad in virtually every market, product and geography, says one senior capital markets banker.
Why? Bankers need flat markets to get their deals away. If prices are plunging, buyers start worrying that they're going to get stiffed; if they're soaring, sellers get cold feet. But helpful equanimity has been conspicuous by its absence so far this year. Markets have either been falling aggressively or rallying hard.
It is against this backdrop that Vladimir Putin has summoned the heads of a number of Russian state-owned assets to discuss privatisation plans. Good luck with that, Mr President.
It is understandable that desperate times might cause Putin to consider desperate measures. The plunging oil price is really beginning to bite. Saudi Arabia is considering huge cuts to government largesse. Last month, the kingdom's deputy crown prince, Muhammad bin Salman, said he was considering an IPO of Saudi Aramco, the world's biggest (and most secretive) oil company.
There wasn't a single initial public offering in the United States in the whole of January.
Prince Muhammad said such a listing would bolster the Saudi stock market, bring transparency to the company and drive out corruption. All of which might well be true. But the privatisation of the company, which owns eight of its own jets, would also raise a huge amount of much-needed cash. This fact cannot be incidental.
Other Gulf countries are raiding their sovereign wealth funds to prop up ailing economies. Malaysia's state development fund, which is in the grips of a financial scandal, is attempting to sell off property developments. Drip-drip disposals have depleted the assets of Kazakhstan's sovereign fund by over a sixth since August 2014.
There is a worrying feedback loop at work here. The slowdown in the Chinese economy has put big dents in the finances of many developing nations, especially those that produce commodities. Their governments are now desperately trying to raise cash by selling assets, which, almost by definition, have been badly hit by the slowdown in China and consequent market rout.
Just look at the companies Putin is thinking of privatising: Rosneft, Bashneft, Alrosa, VTB, Sovcomflot, Aeroflot and the Russian Railways. What do those companies do? Rosneft and Bashneft are both oil companies; Alrosa is a diamond miner; VTB is a bank; Sovocomflot builds ships; Aeroflot is an airline; and the Russian Railways does what it says on the tin. These are not the hottest sectors in the world right now.
There might, in theory, be buyers for those transport assets (although, having flown on Aeroflot, I'm personally sceptical), but the others operate in exactly the areas that are most at risk from the potential slowdown in the global economy. Emerging market governments and sovereign wealth funds have become "forced sellers" looking at selling off the family silver right at the bottom of the market.
This has very real implications for investors of all stripes. For years now, global sovereign wealth funds have been using their vast stashes of petrodollars to buy assets -- from US bonds to London property -- around the world. Sovereign wealth funds owned 9 per cent of all global equities and bonds last year, according to Capital Economics. Now they've switched from buying to selling. JP Morgan has predicted that sovereign wealth funds could try and offload up to US$80 billion of equities this year alone. Gulp.
But, while many commodity-producing economies are feeling the pain, some are in a worse position than others. Putin may want to sell Russian state-owned companies to raise money. But who, pray, will buy them? There are, broadly speaking, four possible routes to market. These companies could be sold to a small number of rich Russians, a large number of not so rich Russians, international investors or international companies.
Memories of the botched privatisations of the early 1990s, where Russian assets were sold on the cheap to a small number of soon-to-be oligarchs, still linger. But the country doesn't have the large pools of funds -- in the form of pension schemes and insurance companies -- either. Foreign investors will naturally be put off by European Union and US sanctions against Russia and the notorious disdain with which minority shareholders can be treated there.
As one senior investment banker says, if a large Russian company came to him and said it wanted to raise billions of dollars from the international markets this year, he would have to say it couldn't be done. There just aren't many willing buyers of Russian assets in the world right now. And with the markets in their current tizz? Forget it, Mr Putin.
