US senators seek to bar Russia selling gold to dodge sanctions — 9:05 a.m.
By Bloomberg News
A bipartisan group of US senators has introduced a bill to impose secondary sanctions to anyone buying or selling Russian gold in an effort to block one of Moscow’s remaining possible avenues for offsetting the collapse of its currency. Angus King of Maine — along with Republicans John Cornyn of Texas and Bill Hagerty of Tennessee and New Hampshire Democrat Maggie Hassan — launched the legislation to stop anyone transacting with or transporting gold from Russia’s central bank holdings or selling gold physically or electronically in Russia. Russia’s gold stockpile was valued at $132.3 billion as of the end January. “By sanctioning these reserves, we can further isolate Russia from the world’s economy and increase the difficulty of Putin’s increasingly-costly military campaign,” King said in a statement on the measure, first reported by Axios.
The move may deter banks in countries such as China and India from buying or lending against Russia’s sovereign gold stockpile, which is the fifth-biggest in the world. Western lenders are already barred from transacting with the central bank, effectively cutting its gold out of the biggest markets in New York and London.
The Bank of Russia spent six years relentlessly buying gold, doubling its holdings as part of an effort to reduce the proportion of dollars held in its reserves. It stopped in March 2020 as prices spiked at the onset of the COVID-19 pandemic and has largely kept its stockpile steady since. Last month it announced it would resume buying from domestic producers. While aid to Ukraine is set to be part of a must-pass spending bill congress is racing to finish ahead of a March 11 deadline, it is not yet clear if a ban on Russia oil or additional sanctions would be part of that measure.
LVIV, Ukraine — With Russia and Ukraine engaged in an information war that is at times as intense as the clashes on the battlefield, attempts to capture losses and victories by either side are obscured by the fog of conflict and the work of powerful propaganda machines.
Nearly two weeks into the war, it is clear that Russia has failed to seize and control almost any major cities or population centers — including the prize targets of Kyiv, in the center of the country, and Kharkiv in the northeast. Odessa, a vital port city in the south, is bracing for an assault but the Russian land advance in that direction has been thwarted repeatedly.
Still, the Ukrainian government is presenting a picture of Russian losses that is both staggering and hard to verify.
Since the start of the war, Ukraine’s military claims to have killed more than 12,000 Russian soldiers. In its latest daily update on Tuesday, the military said that it had shot down or destroyed 48 Russian airplanes and 80 helicopters; captured or destroyed 303 tanks and hundreds of mechanized vehicles and cars; taken out two Russian naval vessels, including a warship; and blown up dozens of fuel tanker and mobile missile launching systems.
“Russia has not lost as much aircraft in the past 30 years as in 13 days in Ukraine,” President Volodymyr Zelensky said in his daily address to the nation on Tuesday.
Satellite imagery analyzed by military analysts suggests that roughly 950 Russian vehicles, including 140 tanks, have been destroyed or damaged, according to Justin Bronk, a research fellow for air power and technology at the Royal United Services Institute, a London think tank that specializes in security issues. That represents only a fraction of the invasion force, but is still striking.
The intelligence arm of the Ukrainian Defense Ministry said on Tuesday that Maj. Gen. Vitaly Gerasimov, chief of staff of Russia’s 41st Army, had been killed outside the eastern Ukrainian city of Kharkiv, making him the second Russian general to die in the war. …
[Very kool article at the link below – if this post works – that tells the story of Richmond, VA, from the Voting Rights Act until blacks in RVA actually got fair and equal representation. It was what came after that struggle (nothing terrible despite reactionary fears) that brought RVA to the purple centrist place that it holds today.]
There is a known $41 billion in Credit Default Swaps (CDS) on Russian debt. There is likely many billions more in unknown amounts. There are also billions more in Credit Default Swaps on state-owned Russian corporate debt and non state-owned Russian corporate debt.
In addition to Wall Street not knowing which global banks and other financial institutions are on the hook to pay out on the Credit Default Swap protection they sold in case of a Russian sovereign debt default (or Russian corporate debt default), there is also approximately $100 billion of Russian sovereign debt (whose default is looking more and more likely) sitting on the balance sheets of foreign banks.
Put it all together and you have the makings of a replay of the 2008 banking crisis when banks backed away from lending to each other because they didn’t know who would fall next from toxic subprime exposure. That led to a liquidity crisis and the unprecedented involvement of the Federal Reserve secretly pumping trillions of dollars into the megabanks on Wall Street and their foreign derivative counterparties.
The cost of buying a five-year Credit Default Swap on Russian debt has spiked from 5 percent of the total value of the debt in early February to 46 percent last Friday to 58 percent this morning. The market has now priced in an 80 percent likelihood of default.
As the chart above indicates, the share prices of global banks with ties to Russia have been plunging since Russia began massive deployment of troops on the border of Ukraine and particularly since the invasion of Ukraine on February 24.
Reuters reported on February 28 that Citigroup has $10 billion in exposure to Russian loans and various other types of Russian exposure. Given Citigroup’s history of understating its subprime exposure during the financial crisis of 2008, that $10 billion may not be the whole story. On February 1, Citigroup closed the trading day at $66.56. It closed last Friday at $56.59 – a decline of 15 percent.
Citigroup’s commercial bank, Citibank, also has a significant commercial banking presence in Russia. Its website reports that it is “a key banking partner for about 3000 corporate clients including more than 600 global subsidiaries (virtually all of 500 Fortune companies), leading Russian companies and mid-sized clientele.” Its website notes further that it has branches servicing approximately 500,000 individual customers in 10 major cities in Russia, including: Moscow, St. Petersburg, Yekaterinburg, Nizhny Novgorod, Samara, Sochi, Rostov-on-Don, Volgograd, Ufa and Kazan. Its operations center is located in Ryazan. The bank’s Russian website lists the following services to Russian clients: “…cash management, trade finance, investment banking, corporate finance, lending, FX [foreign exchange] and hedging services, securities services, issuer services and retail banking solutions, including wealth management, credit cards and personal loans.”
US senators seek to bar Russia selling gold to dodge sanctions
Battlefield reports are murky, but signs of Ukraine’s successes emerge
NY Times – March 8
[Very kool article at the link below – if this post works – that tells the story of Richmond, VA, from the Voting Rights Act until blacks in RVA actually got fair and equal representation. It was what came after that struggle (nothing terrible despite reactionary fears) that brought RVA to the purple centrist place that it holds today.]
https://scholarship.richmond.edu/cgi/viewcontent.cgi?article=1145&context=jepson-faculty-publications
I clicked the link and it works. Here is the title –
From Intent to Effect: Richmond, Virginia, and the
Protracted Struggle for Voting Rights, 1965–1977
Julian Maxwell Hayter
University of Richmond
I went looking with Google for something to tell our story, one that I lived through here, and found better than I had hoped.
Vladimir Putin ‘dying in agony from terminal cancer’ and pics show his pain, say sources
“If you’re on these drugs, this gives you this face.
“It reduces your immunity and makes you more vulnerable to Covid.
“This man has been in complete isolation, quite extraordinary, won’t see anybody, stays miles away, tremendous pressures.”
https://www.dailystar.co.uk/news/world-news/vladimir-putin-dying-agony-terminal-26395464
with the financial sanctions on Russia come back and bite Wall Street?