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euractiv | Russia's economic defences likely to crumble over time under sanctions ONSLAUGHT
"The view Russia will be unaffected is wrong. The negative effects may not be felt upfront, but sanctions will hobble Russia's potential in the longer run," said Christopher Granville, managing director at consultancy TS Lombard and a veteran Russia watcher.
[...]
Russia has dismissed sanctions as counter to the interests of those who imposed them. And they won't immediately dent an economy with $643 billion in [foreign] currency reserves and booming oil and gas revenues.
What was China's Foreign Exchange Reserves a/o Jan 2022? USD 3.2T. parity watch RUB:RMB,13.2:1; RMB:EUR, 1:0.75; EUR:USD, 1:11.
According to Granville, surging oil prices will offer Russia an extra 1.5 trillion rouble ($17.2 billion) windfall this year from taxes on energy companies' profits. But this kind of autarky [independence] has a price -- deepening isolation from ["]The World Economy["], markets, and investment, he noted.
[...]
Sergei Guriev, economics professor at France's Sciences Po and former European Bank for Reconstruction and Development chief economist, pointed out that Russian nominal per capita GDP, double China's in 2013, was now behind.

"In 2013 Russia was a high-income [GDP $2.2T? compared to KR $1.3? CN $9.6T? US $16.5T? EU $17.3T? ] country and was actively negotiating OECD accession recognition. Russia is now back to the middle-income [$5.00/day!] status," he said.

y'all tripping all over yer lies eight ways to Sunday school
Losing access to SWIFT would complicate export and import payments, and could even prevent paying bond coupons, triggering technical default. JPMorgan projects sanctions will slice up to 3.5 percentage points from GDP growth in the second half of 2022. Limited access to foreign capital denominated debt leaves oil companies reliant on prepayment deals and facing significantly higher cost of capital, the bank added.
by Cat on Sun Feb 27th, 2022 at 08:22:31 PM EST
[ Parent ]
EUR:USD, 1:1.11
by Cat on Sun Feb 27th, 2022 at 08:32:46 PM EST
[ Parent ]
More importantly :
  • The Norwegian sovereign fund will divest its Russian holdings (but it's only a couple of billion)
  • BP to divest its 20% of Rosneft (that is huge)


It is rightly acknowledged that people of faith have no monopoly of virtue - Queen Elizabeth II
by eurogreen on Sun Feb 27th, 2022 at 08:39:58 PM EST
[ Parent ]
How? and who will buy those bonds?
NATO has spoken. There will be no sWIft payments, yo.
by Cat on Sun Feb 27th, 2022 at 08:54:16 PM EST
[ Parent ]
A cheque? slower than SWIFT
or a shipment of bullion?

It is rightly acknowledged that people of faith have no monopoly of virtue - Queen Elizabeth II
by eurogreen on Sun Feb 27th, 2022 at 10:33:30 PM EST
[ Parent ]
"The value of the stake was estimated at $14bn (£10.4bn) at the end of last year. It is unclear who BP would sell it to."

alrighty then. Between Guardian's bleeding charity features and NY Post's "kremligarch"* silent auction of 19th-century tycoon mansions, I suspect that arms-length disposal of the WWII.000348 booty will be a tall order.

lemme tink... AHA!

  1. return of Bad Bank! custody of toxic assets;
  2. bundle into a REIT whose sole beneficiary is NATO;
  3. select trustee from ECB/FecNY primary dealers

* according to sources with knowledge of the matter, an oligarch who is not independent but may be linked to legit money-laundering by western industrialists
by Cat on Mon Feb 28th, 2022 at 12:11:56 AM EST
[ Parent ]

Anyone Selling Russian Assets Faces Few Options, Big Losses
, 28 Feb
Accelerated Offering?
Big investors and corporate shareholders often opt to sell a chunk of shares in an accelerated placement after markets close. These transactions are typically underwritten by banks, who buy the stake and offer it on the open market and take on the risk of the disposal.
Wholesale Buyers?
the crippling international sanctions are making Russian assets financially unattractive, even at steep discounts, meaning that Chinese investors may not want to risk the political headache
Daring Fund Managers?
"Institutional buyers, especially with ESG or sanction-related restrictions likely won't be able to buy and have no intention to do so"... There may be some buyers from small hedge funds or family offices, where time horizons are long enough
Russian Buyers?
Stock trading on the [Russian] bourse was canceled... This means buying global depositary receipts of Russian stocks being traded on exchanges such as [NYSE, LSE, NASDQ] has also become prohibitively expensive for Moscow-based portfolio managers
Take the L
"For now, a very hefty writedown is likely to remain the main course of action"
by Cat on Tue Mar 1st, 2022 at 02:43:57 AM EST
[ Parent ]
I wonder why he picked 2013 as a basis for comparison? Maybe this graph from the CEIC will help?

by gk (gk (gk quattro due due sette @gmail.com)) on Sun Feb 27th, 2022 at 09:03:01 PM EST
[ Parent ]
GDP per capita is the worst measure of HH income (average distro) irrespective of personal disposable income, liabilities, "off-shore" assets, price parity, etc.

"nominal" GDP simply is sum value of total economic activity in one nation. har. at the end of one reporting year.

yes, the only explanation for selection 2013 is to dramatize pirate penalties net effect on RU by 2014 FYE. I for one remain enchanted by IMF country income brackets and OECD criteria for membership, ie. EU, "spanning the globe" as it excludes 80% of UN nation-states who transfer wealth to the club.

by Cat on Sun Feb 27th, 2022 at 09:58:04 PM EST
[ Parent ]
personalized SWIFT sanctions cover story.

Turns out early this morning allies actually seized ("freezed") Central Bank of Russia (CBR) foreign currency held in EU, US banks. Reserve ratios of reported USD 643B value--domestic:external, currency basket--forfeiture risked as yet publicized, but notification out of UK is sufficient to trigger FX speculator short sale "attack", abrupt RUB devaluation, and explosion of civil disturbance in RU expected to depose Putin: to summarize alt-media hot takes and MSM triumph.

Russia Set for Currency Crisis as EU, US Limit Access to SWIFT, Freeze CBR Assets

There's really no other way to put it: the decision by the West to limit Russian banks' access to SWIFT and to freeze the assets of the Central Bank of Russia is equivalent to dropping a financial nuclear bomb on the Russian economy.
[...]
NO LIFELINES LEFT

The Russian economy is now isolated globally, with only China serving as a potential lifeline. But even then, the Chinese government has prohibited state banks from financing purchases of Russian commodities, a sign that China itself is not looking favorably at recent developments.

EUR/RUB [ORANGE] & USD/RUB[BLUE] TECHNICAL ANALYSIS: WEEKLY PRICE CHART (FEBRUARY 2012 TO FEBRUARY 2022) (CHART 2)

Reports have emerged over the weekend that, in response to the West's sanctions, bank runs have begun in Russia (as expected). Queues at banks and ATMs are widely reported in both traditional and social media, with Russian citizens no longer able to obtain foreign currencies. Russia's Tinkoff Bank, the world's largest digital bank and Russia's second largest credit card issuer, was quoting EUR/RUB at 163.00 and USD/RUB at 153.00-171.00 - that's effectively a 100% increase from where the market closed on Friday.

REUTERS | Sanctions shock-and-awe reverberates beyond Russia
"a large chunk of its foreign currency reserves"
ASEAN stops short of calling out Russia in delayed statement
by Cat on Mon Feb 28th, 2022 at 02:07:48 AM EST
[ Parent ]
Meanwhile, European cities, including mine, are fighting to get their share of Ukrainian refugees.

Yes, all this is grim for Putin... But there is nothing that nuclear weapons can't fix.

Of course, "don't be silly"; we were saying that this time last week too.

It is rightly acknowledged that people of faith have no monopoly of virtue - Queen Elizabeth II

by eurogreen on Mon Feb 28th, 2022 at 08:03:39 AM EST
[ Parent ]
Independent
If Johnson's Nationality and Borders Bill passes, however, any Ukrainian who arrives in Britain outside of official resettlement schemes will be treated as a criminal, receiving limited rights and risking imprisonment in processing centres thousands of miles from our shores.
by gk (gk (gk quattro due due sette @gmail.com)) on Mon Feb 28th, 2022 at 08:55:28 AM EST
[ Parent ]
Stocks decline amid Russia's invasion, sanctions escalation
The S&P 500, Dow and Nasdaq each opened lower. [WTI] crude oil prices (CL=F) soared to as much as $99.10 per barrel before paring some gains. Brent crude (BZ=F), the international standard, rose to a near seven-year high of more than $104 per barrel. Gold prices jumped while [US] Treasury yields slid as investors piled into [OECD] safe haven assets.
NO *flation-fighting rate hike for yous!
Capital Economics group chief economist Neil Shearing wrote in a note Monday. "So far at least the West has stopped short of a ban on energy imports from Russia, which would be the most powerful sanctions they could implement."

"At the same time, the US, European Union, UK and Canada have announced sanctions[freeze] on the Central Bank of Russia (CBR)," Shearing added. "This is perhaps a more significant move since it will substantially reduce the ability of the CBR to liquidate its foreign assets to support the ruble and help Russian firms service FX-denominated liabilities. Around 40% of Russia's international [FX] reserves are held in the financial systems of the countries that have signed up to these sanctions."

LOL
The ruble opened lower by about 30% against the dollar in offshore trading [Emerging Mrkt Economy [EME] currencies]
versus Advanced Economy (AE) currencies parity watch: USD:RUB, 1:99.53
and Russia's central bank more than doubled its benchmark interest rate to a near two-decade high of 20% in a move to try and help counter the currency's depreciation.

"While ["]market fundamentals["] in the U.S. [bull market] have seen very minimal deterioration, sentiment-driven concerns are unlikely to change anytime soon. From a market perspective, sanctions against Russia will likely have the largest impact on currency markets, including the ruble, the Euro and the dollar," David Bahnsen, chief investment officer of The Bahnsen Group, wrote in an email Monday morning.

by Cat on Mon Feb 28th, 2022 at 03:28:53 PM EST
[ Parent ]
RU is not NAZI Germany!

US Treasury Prohibits Transactions With Russia's Central Bank, Wealth Fund & Finance Ministry, 28 Feb

The US Department of the Treasury's Office of Foreign Assets Control (OFAC) has prohibited United States citizens from engaging in transactions with Russia's Central Bank, its National Wealth Fund, and the Ministry of Finance.
This action effectively immobilizes any assets of the Central Bank of the Russian Federation held in the United States or by U.S. persons, wherever located.
[...]
The United States has not taken this action alone. On February 26, 2022, partners and allies committed to imposing restrictive measures that will prevent the Central Bank of the Russian Federation from deploying its international reserves in ways that would undermine the impact of United States sanctions and the European Union followed up with their restrictions last night. Our actions demonstrate global support for Ukraine and the commitment to hold Russia's threatening, authoritarian rulers responsible for their HEINOUS actions.
[...]
Today's actions were taken pursuant to Executive Order (E.O.) 14024 [19 Apr 2021], which authorizes sanctions against Russia for its harmful foreign activities, including violating well-established principles of international law, such as respect for the sovereignty and territorial integrity of other states.
[...]
The Russia-related Sovereign Transactions Directive will disrupt Russia's attempts to prop up its rapidly depreciating currency by restricting global supplies of the ruble and access to reserves that Russia may try to exchange to support the ruble.  

Contemporaneously with the issuance of this directive, OFAC is issuing a general license to authorize certain energy-related transactions with the Central Bank of the Russian Federation and will follow with other authorizations and guidance as needed.

Yellen added that in coordination with partners and allies, the US was "following through on key commitments to restrict Russia's access to these its own valuable resources."
except gas and oil
by Cat on Mon Feb 28th, 2022 at 04:27:45 PM EST
[ Parent ]
by Cat on Mon Feb 28th, 2022 at 04:31:39 PM EST
[ Parent ]
OFF THE LOWS!
USD:UAH, 1:29.67
EUR:UAH, 1:33.47

by Cat on Mon Feb 28th, 2022 at 04:50:35 PM EST
[ Parent ]
True. Nazi germany didn't have nuclear weapons.
And the Swiss never turned on them

It is rightly acknowledged that people of faith have no monopoly of virtue - Queen Elizabeth II
by eurogreen on Mon Feb 28th, 2022 at 05:20:11 PM EST
[ Parent ]
before that, US industrialists were free to trade with the NAZI ray-geem AND the USSR
archived 1941 calling ..., legendary US profiteers
by Cat on Mon Feb 28th, 2022 at 05:40:43 PM EST
[ Parent ]
DW's Monday Morning press burst from the gates with a will to push RU collapse into existence.

Russia's economy in crisis as sanctions bite, beginning with RUB DEPRECIATION

Russia's currency, the ruble, fell by around 30% to record lows after the latest sanctions, although it did recover slightly in recent hours.
supra Understanding on-shore, off-shore FX demand
The currency collapse has led to long lines outside ATMs across Russia, with fears rising over further plunges in the value of the ruble. The below tweet shows a video of a line outside ATMs in Moscow at 5 a.m. On Monday, the central bank announced that the Moscow Stock Exchange would not open.
ATM? supra Understanding domestic and int'l intrabank payment networks; and customary EME (eg. GR, VZ, AR, BR, TR, CN, etc) central bank capital controls and "plunge protection teams"
CBR, Exporters to sell foreign currency revenues in all cases
CBR Operation of Moscow Exchange on 28 February 2022
SPFS/FMS
List of SPFS users of the Bank of Russia

However, if Russia struggles to buy rubles [?!] with its foreign reserves, pressure on the currency will intensify and long lines at ATMs could evolve into more panicked runs on banks. The exact details of how the central bank will be blocked are yet to be revealed.
wut. CBR exists to print RUB, finance domestic purchase of goods with FX reserves settled in foreign denominations; NATO external finTech obviate imported RU *flation.
Around 15% of its foreign reserves are held in China, and the Chinese government may be willing to help. Russia also holds one of the largest stockpiles of gold in the world, around 2,300 tons -- worth around $142 billion at current prices. However, Sergei Guriev [!], an economist [!] with Sciences Po university in Paris, told the Financial Times [!] that such options were fraught with uncertainty as well.

"Whoever says it will be easy to sell gold or yuans [sic] must be kidding. Chinese state banks are already blocking financing of Russian oil sales [?]. China is afraid [?] and rightly so of secondary sanctions.

supra first-order capital control: RMB instrument for FX instead of PBOC-issued yuan tender; "afraid" is an impolitic turn of phrase, considering relentless US "currency manipulator" charges, tariff retaliation, AND sordid "secondary sanctions" currently afflicting ASEAN members arising from specious JCPOA and WTO penalties primarily orchestrated by US to block IMF adding China to its SDR basket.
second-order currency control: Cross-Border Inter-Bank Payments System CBIBPS aka CIPS
However, until it is clear which banks will be hit, it is difficult to make a meaningful assessment of the impact. Russia has built its own alternative to SWIFT, known as SPFS. It already accounts for around 20% of domestic Russian transactions [sic; see SPFS/FMS], but it has struggled to attract overseas banks.
Russia Briefs
Russia's Alternative To SWIFT, 15 Dec 2021
Pakistan's Prime Minister Khan Meets Putin, Discusses Trade, 25 Feb 2022
by Cat on Mon Feb 28th, 2022 at 11:35:23 PM EST
[ Parent ]

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