19 ms·

> This sounds like a terrific way to have foreign companies value their Russian assets at near-zero, since it's not clear whether they're actually still securit

> This sounds like a terrific way to have foreign companies value their Russian assets at near-zero, since it's not clear whether they're actually still securities at that point. This is my take -- I'm confused by it because I can't believe this is actually it. But it could be that the central bank is implementing the only token measures it actually can take, to be seen to attempt to satisfy an otherwise impossible, maybe even deranged demand for wish-fulfilment from the Kremlin. I feel that not enough time is yet being spent asking the question: what if this is all not just figuratively the work of an insane person, but actually the work of an insane person?

eropple 5y ago
This strikes me as a prelude to seizure of foreign-owned assets. In that light, locking trades seems obvious.
- woodruffw 5y ago
  Maybe, but I think that's pretty unlikely at this juncture: not only are there not a lot of assets they could seize punitively (I assume the Kremlin is not looking to make enemies out of hitherto neutral countries like India), but any seizure would take Russia's financial status from "pariah, but quantifiably risky" to "unquantifiably risky."
  - eropple 5y ago
    Invading neighbors and rattling your nuclear saber in a world with MAD probably ought to take you to "unquantifiably risky" already.
- gitfan86 5y ago
  Right, if France takes an oligarch's house and boat in Nice, why not take a French billionaire's assets in Russia and give them to that Oligarch? Stock in a gas company may not make up for the loss of a house and yacht but it is something.
  - eropple 5y ago
    I suspect it's more of a closed-economy, fortress-Russia mindset we'll see, not compensating some oligarchs.
  - fmajid 5y ago
    I doubt there are many French billionaires with personal assets in Russia. Their companies may have some capital in the form of Louis Vuitton shops in Moscow, but that is peanuts in the grand scheme of things. The only really valuable assets are shares in resource extraction companies since that's essentially what Russia's economy is based upon.
- forum_ghost 5y ago
  I believe you are absolutely correct. BP's 25 billion stake in Rosneft will most likely be nationalized. https://www.forbes.com/sites/masonbissada/2022/02/27/bp-drops-nearly-20-stake-in-russian-owned-oil-firm-after-invasion-of-ukraine https://www.forbes.com/sites/masonbissada/2022/02/27/bp-drop... There are probably others I don't know about, as Russia received 30 billion in FDI just in 2019 alone. I presume all foreign Russian sovereign bond holders are going to be wiped out also? I don't know what else can one expect after freezing central bank reserves to the tune of half a trillion dollars. Hopefully not a nuclear war.
RealityVoid 5y ago
The corner Russia is being pushed in looks incredibly dangerous. I agree with this tweet: https://twitter.com/PaulSonne/status/1498075412194332673?t=y4OeudQJu7OE50JlnIRjsA&s=19 https://twitter.com/PaulSonne/status/1498075412194332673?t=y... The consequences of this could severely go out of hand and the chance of nuclear encounter is non-zero at this point.
- chasd00 5y ago
  Nukes will launch before the Putin regime falls. The world needs to punish Russia but not back it into an existential crisis.
  - RealityVoid 5y ago
    That's the scarry thing. What if these thing are already out of control and we pushed the pieces that makes the whole domino chain fail. We wouldn't see it until it's too late. Jesus, this is scary.
    - jrs235 5y ago
      I hope and pray that Russia's nuclear arsenal and delivery systems aren't as operational as everyone, including Putin thinks. I'm hoping the yes men and corruption has led to a system that isn't able to actually launch or detonate anymore. I know it's a stretch, but I'll continue to hope it's so.
- prewett 5y ago
  The chance of a nuclear encounter is always non-zero. There could always be someone who instead of shooting up a school or church decides to shoot up the world. Or someone sell a nuke to terrorist. If you want to talk probabilities, well, what is the new probability? The answer is that no one has any clue how to even evaluate the probability. And what if the worst happens: Putin says "I'm going to nuke somebody unless you give me Ukraine"? Or he feels like he's losing and just unilaterally decides to take the world down with him? You can't really do anything about those scenarios, so you pretty much have to just assume he won't do that and act accordingly and try not to push him into a scenario where that looks like a good option.

eropple 5y ago

This strikes me as a prelude to seizure of foreign-owned assets. In that light, locking trades seems obvious.

woodruffw 5y ago
Maybe, but I think that's pretty unlikely at this juncture: not only are there not a lot of assets they could seize punitively (I assume the Kremlin is not looking to make enemies out of hitherto neutral countries like India), but any seizure would take Russia's financial status from "pariah, but quantifiably risky" to "unquantifiably risky."
- eropple 5y ago
  Invading neighbors and rattling your nuclear saber in a world with MAD probably ought to take you to "unquantifiably risky" already.
gitfan86 5y ago
Right, if France takes an oligarch's house and boat in Nice, why not take a French billionaire's assets in Russia and give them to that Oligarch? Stock in a gas company may not make up for the loss of a house and yacht but it is something.
- eropple 5y ago
  I suspect it's more of a closed-economy, fortress-Russia mindset we'll see, not compensating some oligarchs.
- fmajid 5y ago
  I doubt there are many French billionaires with personal assets in Russia. Their companies may have some capital in the form of Louis Vuitton shops in Moscow, but that is peanuts in the grand scheme of things. The only really valuable assets are shares in resource extraction companies since that's essentially what Russia's economy is based upon.
forum_ghost 5y ago
I believe you are absolutely correct. BP's 25 billion stake in Rosneft will most likely be nationalized. https://www.forbes.com/sites/masonbissada/2022/02/27/bp-drops-nearly-20-stake-in-russian-owned-oil-firm-after-invasion-of-ukraine https://www.forbes.com/sites/masonbissada/2022/02/27/bp-drop... There are probably others I don't know about, as Russia received 30 billion in FDI just in 2019 alone. I presume all foreign Russian sovereign bond holders are going to be wiped out also? I don't know what else can one expect after freezing central bank reserves to the tune of half a trillion dollars. Hopefully not a nuclear war.

RealityVoid 5y ago

The corner Russia is being pushed in looks incredibly dangerous. I agree with this tweet: https://twitter.com/PaulSonne/status/1498075412194332673?t=y4OeudQJu7OE50JlnIRjsA&s=19 https://twitter.com/PaulSonne/status/1498075412194332673?t=y... The consequences of this could severely go out of hand and the chance of nuclear encounter is non-zero at this point.

chasd00 5y ago
Nukes will launch before the Putin regime falls. The world needs to punish Russia but not back it into an existential crisis.
- RealityVoid 5y ago
  That's the scarry thing. What if these thing are already out of control and we pushed the pieces that makes the whole domino chain fail. We wouldn't see it until it's too late. Jesus, this is scary.
  - jrs235 5y ago
    I hope and pray that Russia's nuclear arsenal and delivery systems aren't as operational as everyone, including Putin thinks. I'm hoping the yes men and corruption has led to a system that isn't able to actually launch or detonate anymore. I know it's a stretch, but I'll continue to hope it's so.
prewett 5y ago
The chance of a nuclear encounter is always non-zero. There could always be someone who instead of shooting up a school or church decides to shoot up the world. Or someone sell a nuke to terrorist. If you want to talk probabilities, well, what is the new probability? The answer is that no one has any clue how to even evaluate the probability. And what if the worst happens: Putin says "I'm going to nuke somebody unless you give me Ukraine"? Or he feels like he's losing and just unilaterally decides to take the world down with him? You can't really do anything about those scenarios, so you pretty much have to just assume he won't do that and act accordingly and try not to push him into a scenario where that looks like a good option.