Forbes: For Wall Street, Russia Has Become ‘Bulletproof’

Discussion in 'Europe' started by Stratford57, Nov 22, 2019.

  1. Stratford57
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    Stratford57 Diamond Member

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    Nov 18, 2019, Forbes:

    For all the talk about starving Vladimir Putin and, inevitably, Russia of financial resources with sanctions on major state-run companies, Russian bonds have become a must-have. Not only in Europe where yields are nearly zero, but also among American global bond fund managers that want to get paid for holding debt.

    Considering there is about $15 trillion worth of negative-yielding bonds out there, Russia’s 10-year sovereign looks great to everyone, except to the most scornful of the anti-Russia crowd, at around 6.4% in rubles.

    Russia’s 2027 dollar-bond pays 4.25% interest. Germany doesn’t pay at all, and instead yields -0.35%. The U.S. 10-year Treasury bond yields just 1.8%. Those countries also have debt burdens that can spook long-term investors. Russia has practically no debt at all.

    “They’ve made themselves bulletproof,” says James Barrineau, co-head of emerging-market debt for Schroders Investment in New York. “They can pay off all their foreign debts with their central bank reserves. Plus, they’re cutting interest rates. The currency is very stable. And they have room on the fiscal side to spend on their economy.”

    Russia has over $433 billion in foreign currency reserves and $107.9 million worth of gold. It is the largest reserves among the big emerging markets after China, which has more than $3 trillion.

    For Wall Street, Russia Has Become ‘Bulletproof’

    We've been to Russia in summer, Russia is doing just great. Sanctions backfire on those who keep imposing them.
     
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  2. gipper
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    gipper Libertarian/Anarchist

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    The US sanctions on Russia are ridiculous and should be removed.

    Problem is if Trump did remove them the Ds, deep state, and MSM would go ballistic. They would claim this proves him Putin’s puppet.

    We live in an age of ignorance.
     
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  3. Stratford57
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    Stratford57 Diamond Member

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    Dems are attacking Trump mainly for his intentions to cooperate with Russia and Putin. Why? Because Trump and Putin together could make Deep State and all their puppets a history pretty darn quickly.
     
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  4. Stratford57
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    Stratford57 Diamond Member

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    Daniel Petruzzi: Mr President, how do you improve relations with the United States, where is the common ground? And what are the prospects for reduction or reduced sanctions? Thank you.

    Vladimir Putin: Well, as for the sanctions and the prospects for lifting them – you need to ask the US Administration. We did not impose sanctions on ourselves, you know. The US Congress did it for us, so you had better ask them.

    But I would like to make a point in this connection. Firstly, the sanctions actually forced us to focus on import substitution, especially in industries we deemed critical for the country's security. This is a wide range of industries: agriculture, medicine, pharmaceuticals, and the defence industry. And in general, we have achieved very serious and positive results.

    But there is a downside of course, and that downside sours things for everyone. It cost billions of dollars. For example, for Europe, in my estimate, and according to the estimates of the Europeans themselves, their losses stand at about 50 billion. By the way, we have lost far less in our relations with Europe. The same holds true for the United States. The restrictions that the Administration has introduced in recent years, I don’t remember how many, more than a dozen restrictions have been introduced, affecting more than 400 companies and almost 300 individuals – you know, it had a boomerang effect. For example, they forced their companies to discontinue their participation in offshore projects. What for? These companies had invested certain funds in a particular project and were then forced to leave these projects and lose their money. Who was punished? They punished themselves, shot themselves in the foot, and that was it.
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    The United States is a great country, and we have always respected it. We were allies in two world wars. It is our common history, and it is a positive history. Of course, we also want to maintain cooperation with it in technology and the economy in general. However, under President Obama – I think I have mentioned this before – our trade plummeted to $20 billion. Over the first two years of President Trump’s term, it increased to $25 billion. Is this a lot or a little? Our trade with Turkey is $25 billion, and we have the same volume of trade with the United States. This is little, of course.

    We have common interests in the economy, not to mention energy. We have common interests in the field of international security, because Russia and the United States are the world’s largest nuclear powers. This is the case, for now. This factor must be taken into account. We are cooperating, one way or another, in the fight against terrorism, and we maintain operational interaction in Syria. The same is true about our fight against organised crime and in the field of environmental protection.

    But we see what is still going on there. Thank goodness we are no longer being accused of interfering in US elections; they are accusing Ukraine now. Let them settle this matter between them. However, the factor of internal political struggle is still having a negative effect on Russian-US relations. I hope this will end at some point. We are ready for this.

    Russia Calling! Investment Forum
     
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