Is this 'tough' ironic or are you kidding me? 2%? Of the luxury market, of London? Make it 20% and it still at most 0,1%something of the UK housing market alone...
Financial Times
@FT: 2% of London's luxury house buyers are Russian. So UK will find imposing sanctions tough: http://on.ft.com/1nFLV9e pic.twitter.com/infrAjTBwP
Last edited by Firn; 03-20-2014 at 07:00 PM.
... "We need officers capable of following systematically the path of logical argument to its conclusion, with disciplined intellect, strong in character and nerve to execute what the intellect dictates"
General Ludwig Beck (1880-1944);
Speech at the Kriegsakademie, 1935
Interesting Russian news take on the latest round of US sanctions from Interfax.com.
20:32
KREMLIN SAYS CAN'T ACCEPT SANCTIONS LIST PRACTICE IN PRINCIPLE
20:30
KREMLIN SAYS RUSSIA WON'T TAKE LONG TO REACT TO U.S. SANCTIONS
20:29
MOSCOW STUDYING U.S. SANCTIONS LISTS, BEWILDERED BY SEVERAL NAMES - PESKOV
20:26
NATION CLAIMING TO BE DEMOCRATIC IMPOSES SANCTIONS FOR HONEST POSITION, HONEST STATEMENTS - RZD CHIEF YAKUNIN
Firn---something that came out of the EU meeting yesterday night and I must thank Putin for it---the EU is starting the analysis on reducing Russian gas and oil purchases starting already in 2014.
They made that public enough for Russia to understand.
Putin got the EU to wake up and realize that if they shared their own gas/oil abilities across their individual borders which they can as they have built a massive distribution system since 2009 they could 1) reduce Russia purchases/dependency, and 2) actually reduce gas and oil prices for EU citizens across the board making it a win win thing.
Great that Putin is going to lower my yearly gas bill----
http://www.bruegel.org/nc/blog/detai...t-russian-gas/Can Europe survive without Russian gas?
- replacing 130 bcm of natural gas imports from Russia within a year would be a significant challenge, but not impossible
by Georg Zachmann on 21st March 2014
Firn---here is an indication that the sanctions are slowly winding it's way through the Russian economy when just one bank is initially hit.
Interfax:
21:27 Fitch revises Gazprom's, Russian Railways' issuer default rating to "negative"
Just a quick thought herein.
Vova doesn't give a Sierra about his own and anyone that has been to Moscow will immediately see that.
If we think he feels some remorse with Russian Railway ratings, then think again.
In 2007 he decided to show Estonia just how far he would go by shutting down rail transit to the Muuga Harbor. He can cut off 97% of all rail which will effectively slam shut business here and trash his profits.
Western mindset will not get the West anywhere.
If you want to blend in, take the bus
Stan---maybe this is something Firn will like---look at the bank that was hit with sanctions---Rossija Bank---held a large number of Gazprom accounts as well as the Rail company companies but I am assuming Gazprom fronted for a number of bank loans to the Rail company as that is a typical Russian mob move to scram money off of bank lines of credit.
On Interfax the initial Gazprom reaction to the bank being sanctioned indicated that nothing would effect their accounts.
If one understands that the US federal financial law now on the books literally dictates what US banks with federal sanctions notices have to do --they have honed their skills on Iranian banks. Anything or anyone tied to the bank and or the individuals named can be chased.
What the Russians initially assumed was that the sanctions would only affect one if the individual owned more the 30% of something---under US law that is not the case---thus the Fitch downgrading to negative which will hurt bank credit lines from foreign banks which is the center of gravity for Russian companies.
Rossija today made the announcement that recommended none of their clients should make or withdraw any foreign currency--think now they fully understand that the US banks will chase the money via the money trail.
Interfax: 12:44 Bank Rossiya asking clients to refrain from making foreign currency payments
Last edited by OUTLAW 09; 03-24-2014 at 09:03 PM.
@stan: I have no doubt that in Vladiromics great scheme the ratings of railway bonds count not that much. Still economic turmoil in Russia will get his attention.
Also, with all due respect to the Estonian port, it's economic impact pales with the numbers currently at stake.
@Outlaw09: We will have to see how deep and broad financial sanctions will become, but I'm sure that those are interesting days for wealth managers in Russia. Perhaps the Bank Rosija also wants to keep it's foreign reserves close at it doubt that it will be easy for it to get more.
This German interview with the vice CEO of the DHIK is in my opinion quite revealing about the mood of German investors in Russia. In the past it has almost always been 'business first', but now he talks rather resigned about the primacy of politics. I'm looks like that behind the scenes the German leaderhip has made it pretty clear to the business community that this time it is different. Investments have been delayed and some binned, partly because German banks see more risks. This means at best higher interests which will make some investments questionable and others less attractive. I'm pretty sure that most German investments are mostly financed by German not Russian banks.
An article with a handy graph about the companies with the highest percentage of their revenue coming from Russia.
The closer the ranks between the industrial powerhouses on sanctions are the more difficult it will to play, let us say Siemens against Bombardiers. Reducing the flow of knowhow and capital into the Russian economy will hurt a lot.
Last edited by Firn; 03-24-2014 at 09:49 PM.
... "We need officers capable of following systematically the path of logical argument to its conclusion, with disciplined intellect, strong in character and nerve to execute what the intellect dictates"
General Ludwig Beck (1880-1944);
Speech at the Kriegsakademie, 1935
Capital controls feared in Russia.
Capital controls are one of the last lines of defense for your foreign currency reserves and for very good reasons as the slap considerable costs on your economy. The more open the economy is, the higher they become. There are of course some situations were capital controls are a must, like in Iceland in it's banking meltdown.Capital flight from Russia has spiked dramatically since President Vladimir Putin first sent troops into Crimea and may reach $70bn (£42bn) over the first quarter of the year, prompting fears that the country may soon have to impose capital controls to stem the loss.
...
“It is shocking,” said Bartosz Pawlowski from BNP Paribas. “Markets have been extremely complacent, fooling themselves that Russia is invulnerable because it has almost half a trillion in foreign reserves. But reserves can become almost irrelevant in this sort of crisis.”
Lars Christensen from Danske Bank said the authorities may resort to some form of financial coercion to lock down funds in Russia. “Capital controls are a serious risk, and should not be discounted. Whatever now happens, there has been permanent damage to the Russian economy because investors are not going to forget this lightly.”
To get a grasp of the dimensions we are talking about it is important to remind us that Russia is a $ 2,000bn economy with a $ 200bn trade surplus in goods.
Keep the accounting logic in mind I explained before. I would not be surprised anyway that we will see a capital flight north of $ 150bn if the crisis continues.
I just quoted it because Mr Pawlowski repeats a key problem for Russia which I mentioned earlier. In normal times the central bank does it's monetary policy to help the economy. Now the economy has to suffer to help the central bank to defend it's reserves...The scale of capital outflows leaves the Russian government in a quandary. The central bank has already raised interest rates by 150 basis points to prevent a collapse of the rouble, but this is choking the economy.
“If rates stay this high for another two or three months, there will be serious trouble,” said Mr Pawlowski. “There is no free-lunch. You can defend your currency, but if you do that you wreck your economy,” said Mr Pawlowski.
... "We need officers capable of following systematically the path of logical argument to its conclusion, with disciplined intellect, strong in character and nerve to execute what the intellect dictates"
General Ludwig Beck (1880-1944);
Speech at the Kriegsakademie, 1935
Outlaw,Originally Posted by OUTLAW 09
Imagine who would want all those Rubles
Furthermore, according to this Reuters article:
Kovalchuk said in a television interview on Sunday the sanctions had backfired by helping him win new clients among patriotic Russians. Russian President Vladimir Putin said last week that he would open an account at the bank.Firn,
Russia has been buying up Europe and Africa for years. I've been here for 20 years and in Africa for 12 years.
Estonia is but a minuscule means of showing what Vova can do to tiny little countries that get in the way. But, chocking off these so-called countries is a mess for their economic development and an even bigger mess for the EU when it comes to supporting them.We are not talking big money. But very big money. None other than Putin’s Central Bank has estimated that two thirds of the $56 billion exiting Russia in 2012 might be traceable to illegal activities. Crimes like kickbacks, drug money or tax fraud. This is the money that posh English bankers are rolling out the red carpet for in London.
Regards, Stan
Last edited by Stan; 03-26-2014 at 06:46 PM.
If you want to blend in, take the bus
Stan
I agree with the article up to the final words. There is no doubt in my mind that this long experience and the 'business' interactions of all sorts helped to great a vision of the Western World which might at best bark a lot and do nothing which hampers it's monetary interests. Siemens CEO is a good example*. There is a lot of truth in that view but Putin might stepped a little too far with his annexion and the way he set it up. He might still think that he will get cheaply away with it, but I'm not that sure anymore. Time will tell.
Right now the Russians are almost all cheering for him and his noble deed. We will see how loud their voices will be in a couple of years and what they cry.
Regards, Firn
*I'm pretty sure it was never easier to get a meeting with Putin.
Last edited by Firn; 03-26-2014 at 08:26 PM.
... "We need officers capable of following systematically the path of logical argument to its conclusion, with disciplined intellect, strong in character and nerve to execute what the intellect dictates"
General Ludwig Beck (1880-1944);
Speech at the Kriegsakademie, 1935
This Interfax PR is showing all of a sudden Russian fears---namely that the EU could in fact draw gas from alternative sources until US gas came online coupled with green technologies will at some point replace Russian gas.
As a two raw resource country that is a nightmare long term.
The Russians somehow have not registered that the US has gained the edge as the leading gas producer for awhile to come---maybe that is why they are getting into fracking themselves.
March 26, 2014 21:58
"Gas war" from West regarding Russia is political fantasy - Russia's rep to EU Chizhov
MOSCOW/BRUSSELS. March 26 (Interfax) - The talks about a "gas war" the West declared regarding Russia are a political fantasy, Russia's Permanent Representative to the European Union, Vladimir Chizhov said.
"This is not even political 'horror stories,' this does not even reach a political 'horror story.' I would say that these are political fantasies," Chizhov told Interfax on Wednesday when commenting on the information that the United States is ready to permit natural gas exports in the volumes Europe consumes per day.
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