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Russia: Last Capitalist (Pig) Standing
While most of the western developed economies become more and more centrally planned and creative destruction is avoided at all costs (for fear it will be the straw that breaks the fractionally-reserved, rehypothecated camel's back of the financial system - and therefore sovereign financing); it appears ironic that Russia is playing capitalist hardball with the losers from the Cyprus 'solution'. Russia's First Deputy Prime Minister Igor Shuvalov, announced this weekend, that "if someone gets stuck and loses money in those two biggest banks, that’s really too bad, but the Russian government isn’t planning to do anything in this case."
As Bloomberg reports, Shuvalov told reporters last month that Russia may ultimately benefit from Europe’s decision to target deposit holders. By setting that precedent, Europe has cast doubt on the reliability of its banks and makes Russia’s financial system look comparatively more attractive - but is "closely monitoring" the situation around Russian Commercial Bank, a Cypriot unit of state-run lender VTB Group, adding that VTB's exposure in Cyprus is "absolutely manageable.
So, in the new normal, the USA socializes losses but the ex-USSR sticks to its new capitalist roots?
Russia won’t bail out people or companies that stand to lose money held at Cyprus’s two largest banks, First Deputy Prime Minister Igor Shuvalov said.
“If someone gets stuck and loses money in those two biggest banks, that’s really too bad,” Shuvalov said in an interview late yesterday on Russian state television. “But the Russian government isn’t planning to do anything in this case.”
Russia turned away requests from Cyprus for additional financial assistance last month after criticizing plans that would have forced losses on insured deposits.
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Russia’s government bristled at suggestions that it was responsible for bailing out the euro member as politicians from states including Germany alleged that Cyprus was used to launder illegal Russian money. Funds held by Russians on the island aren’t all illegal, Shuvalov said.
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‘Closely Following’
The government is “closely following” the situation around Russian Commercial Bank, a Cypriot unit of state-run lender VTB Group, as it determines what further support may be offered, Natalya Timakova, a spokeswoman for Prime Minister Dmitry Medvedev, said in an e-mailed statement today. VTB had the “most exposure” to the unfolding crisis of any Russian bank, Standard & Poor’s said March 27.
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VTB Group’s exposure in Cyprus is “absolutely manageable,” First Deputy President Yuri Soloviev said in an interview with Bloomberg Television’s Guy Johnson and Francine Lacqua on March 28. The company’s assets in Cyprus are an “integral part” of VTB Group, he said.
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Russia’s Stance
Russia would be willing to discuss “specific instances,” where companies partly owned by the state or individuals are facing “serious losses,” from deposits held at Bank of Cyprus Plc or Cyprus Popular Bank Pcl (CPB), according to Shuvalov.
“We’re prepared to consider it, publicly, transparently, and here in Russia,” he said. “But that absolutely doesn’t require any assistance to Cyprus.”
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Little Impact
“We believe the majority of Russian money in Cyprus belongs to private individuals and small and medium-sized companies, while large Russian entities are unlikely to be deeply affected,” she said in a note today. The “majority” of those deposits are above the protected limit, she said.
Shuvalov told reporters last month that Russia may ultimately benefit from Europe’s decision to target deposit holders. By setting that precedent, Europe has cast doubt on the reliability of its banks and makes Russia’s financial system look comparatively more attractive, he said.
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The irony must have Lenin spinning in that mausoleum.
my new retreat location: Siberia
Galt's Gulch == Putingrad???
No such thing could survive anywhere given the US's military and intelligence departments. Besides, it'd be taken out as an anti-terrorism manuever.
My banking system is safer than others, My banking system is safer than others, My banking system is WAY safer than others!
Meanwhile US Money Funds are coming back to europe...
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"So, in the new normal, the USA socializes losses but the ex-USSR sticks to its new capitalist roots?"
TBTF status has some impact, too...
That is an odd name for Bernanke's swaps.
ah, the swaps... and how do swaps work? it's a zero-game after all, one that shifts maturity. Who helps who? The USD the EUR? Other way round? Depends?
The Yanks and Limeys crush the Euro (PIIGS are slaughtered) and Yen, as and when needed, to cover the American and British money printing and prop the Petrol Dollar. The Krauts and the Nips don't mind too much (subsidizing Greeks, glowing coastlines, etc.) because they were created post war as export economies and taught that it is a good thing to have a weak currency and turn your nation into a giant fucking factory (wars have consequences).
The Yanks prop the GBP with the swaps, as and when needed, to keep that stinkin' pile of shit known as the British economy afloat.
North Sea Brent priced in USD setting the standard for Middle Eastern crude stolen at gunpoint...it is a fugly thing to behold. Coalition Forces, FTMFW. Without the swaps, could the Limeys really afford these fun little excursions in the sun and sand? Where did a country as small as Airstrip One get the finances for so many big tanks?
We all know that Cyprus didn't really need to go down, except to crush the Euro to prop the GBP and keep oil, and now LNG, affordable for the Limeys and Yanks.
Happy Motoring!
...or I could be totally wrong, and it all is really just about the Rule of Law, free markets, and bringing liberty and democracy to poor heathens living under (different) tyranny in foreign lands. Anything is possible.
Regardless, Russia is sitting pretty on a pile of natural resources surrounded by a bunch of pussies, except for Israel, which will probably do a merger with Russia within the next 20 years and soon be running the whole shooting match.
The spice must flow.
This photo essay alone was worth more than anything I've created. Not meant to bolster your ego, or deride others.
Merely stating that i viewed this post of yours as art. And i feel am better for it.
Although doubting your own understanding is the beginning of a new thought, sometimes, mosttimes, it's better to run with what you've got.
No one else to blame.
Sorry for the rainbow star psa, but seriously, believe in yourself.
Let it ride.
Classic!
Ah, Merdekel, that communist sow.
Che Guevara must hate that his image is sold as merchandize by filthy capitalist pigs.
Didn't Marx believe a country had to be capitalistic before it could be communist?
Russia ... http://www.youtube.com/watch?v=kx1RjjWXSwQ
Why is this a surprise? All my unbiased news comes from RT.
As a foreigner living in Russia for quite some time, I must admit that Russian economy is more free and capitalist than any european economy.
The only problem in Russia is the huge amount of beaurocracy involved in anything.
In Soviet America, there's bureaucratic red tape for everything. It's getting to where you practically need a permit to rearrange the furniture in your living room.
If a handicapped public servant came to inspect your premises he/she might trip on a non-standard furniture arrangement.
Don't give the control freaks any ideas!
If you want the Old Far West, then you'll find it in the new Far East
Russia is currently the freest country of the world for certain things... Including owning your own tank
I recently read here that Russia is banning all cash transactions over 10K
How is it with bribes to "accelerate" the bureaucrats?
They even take plastic now I've heard.
Hookers, blow and bribes all on one statement.
That's easier for tax purposes.
" I must break you"
So your choices are, Vito or Yuri...choose wisely ;-)
the bernank blows billionaires, in russia they break billionaire testicles
MF Global account holders got to experience this form of capitalism too. No need to move to Russia yet
jon corzine would be found hanging in his cell by now if this were russia
The Chinese would have whacked that ass hole, too.
The people that would try on his life would find themselves in the same fate as the Russians - executed by the government.
Followed by the execution of those who took out the hit on Corzine as a warning against messing with such folk.
Except that nobody died for the US bailout.
And the band played "The World Turned Upside Down".
In chaos there is opportunity. Putin's been doing the "we're all business friendly here!" thing for a few years now. Even did a trip to Silicon Valley a while back to try to lure some investment over there.
The OTHER reason their stance on this is not surprising is easy to see, I think. Why would rich Russians be trying to find a place to put their wealth OUTSIDE of Russia, in Cyprus, for instance? Because they obviously didn't think it's a good idea to keep it INSIDE Russia. That money was there for a reason. Now the calculus of where rich Russians keep their money is more complicated. It drives perhaps some of that money back home, and Putin gets to crow about from the highest peak of the Kremlin while further consolidating his power. It serves multiple purposes from his perspective.
Russia will not bailout anyone, just Putin's friends. So really it is pretty much the same form of capitalism that we have here in America.
Do they still have a flat tax in Russia?
Yes, 13%.
Thanks. Imagine how many fat bureaucrats we could get rid of at the IRS if we had such a thing as a flat tax. A pipe dream, for sure, as Steve Forbes knows.
You are more than welcome to emigrate to Russia...
In fact, it could well be that both places, here and there, will be better off....
That's as stupid as when George W. Bush said, "U're either with us or against us". U're a statist. My government, right or wrong?
Nope... not at all...
Perhaps it was too subtle for you...
I do suppose that Russian is the posterchild for Laissez Faire capitalism nowadays... You know the form, no real rules and simply take whatever you can grab and hold on to....
I was wondering where you had gotten off to.
Wow - would not have seen that headline in 1989. Now it almost makes sense.....
i guess kruschev was clairvoyant. vietnam taught my young mind all was bullshit from kumbaya to the king of the world. all things must pass. i never thought. however, that the yuan and ruble would be the most stable currencies underlying the most competitive free economies in the world burying the usa(and europe) in it's own suicidal hubris.
All the Russians I know moved back. They have a flat tax & a more pro-business friendly government. They actually make most of their own products and Putin spends Russia's income...ON RUSSIA! What a novel idea!
Who'd have ever thought Russia would be lecturing the USA about freedom & central planning? Then again, it appears their leaders learned from their collapse. Why do I suspect the USA's leaders will not learn a damn thing?
Business friendliness only if you forget the necessity of bribery, something not generally used in the First World. That, and it doesn't help that individuals are considered chattel unless well-connected. Finally, their products are shoddy copies of Western products or exotics that the nomenklatura are only allowed to own (by their exorbitant expense).
It is Russia that must learn - that it must clean up its corruption and not deify businesses at the literal expense of its own. Good riddance to those criminals, since their departure will most certainly cause a net benefit from their departure.
Russia and China represent the most corrupt and non-capitalistic governments. They'll still bail out people well-connected enough and ensure that any threats die (unlike the US).
But that wouldn't be convenient for your bash-the-US model.
It's amazing someone as stupid as U can't see shit clearly when U have your head buried that far up your own ass.
Having done business in Russia for some 20+ years, I am pretty sure John Corzine would have had an accident some time ago. The only difference in Russia is that the sword of power cuts both ways, unlike in the U.S..
Thanks for proving my point correct about Russian and their corruption.
give us a beer drenched round of the star spangled banner. maybe you can find a few brits to sing a back up chorus of rule brittania.
the late great usa is ragged crack whore only good for blow jobs because she lost all her teeth. it is all about tight chinese twat, now. even your little pecker can get some friction.
So you hate Rome and love its enemies because it's trendy. What did the United States do to turn you against it?
If China and Russia want to join the 21st century where the First World is - with all the technological progress - perhaps those two would do well to stop thinking that they can beat the US. Those Second(or by their condition, Third) World countries deny freedoms to their own people unless very well-connected; they execute those who try to deviate from that.
April fools?
The international banksters beat the shit out of Russia throughout the 20th Century. However, now Russia potentially stands as one of the only powers able to resist those banksters being able to consolidate their global hegemony?
Personally, I find it extremely bizarre that when I listen to the speeches of the political "leaders" in North America they sound like nothing but lies, parroted by political puppets. Of course, I do not think Putin is a "good guy," but his speeches actually make some sense to me, while the speeches delivered by the public "leaders" of all the NATO countries appear to me as nonsensical bullshit.
It is tragic that the societies controlled by the banksters have become utterly dominated by runaway frauds, and therefore, their mass media, and their political processes, are almost completely corrupted. Too bad, so sad, that North American mass media are the "best" professional liars, and immaculate hypocrites, while some shreds of possible alternative perspectives are presented by RT:
http://www.youtube.com/watch?v=6oSB9LaRJ1c
Sleeping prophet relies on RussiaYet Russia has the problem of being corrupt in ways that the First World has yet to visit. Your survival is not directly linked to your bank account, political alignment, or ability to handle radiation poisoning.
That country is quite easily captured by the bankers for that reason. You just simply have to be on the right person's side at the right time.
Yeah, sethstorm, I have no doubt that Moscow is a tangled up crazy house of corruption, that I would not want to have to deal directly with! Still, it is surreal how that old spinning wheel appears to go around, and therefore, as this article above pointed out, the West is totally controlled by banksters, so that the people pay for the bankers' losses with their perpetual taxation, to pay unrepayable debts, while Russia is saying that it will not do that? It does appear to me to be a mad merry-go-round or see-saw, where things go up and down, while our enemies become our friends, and our friends become our enemies ... again and again ...
Billionaires run Russia, too.......it's just they are calm and cooler.....however the military is more dirtier......which in a sense leads to a more honest balance in their (crony) capitalism.
We have power mongers here in USSA.......in Russia, they just want to be rich, screw girls, and live their lives (a Communist post-sowing, if you will).
Except that you don't have a pervasive bribery culture in the US as one does in Russia - and defend businesses at the expense of regular people (literally).
i don't know what usa you are talking about. once you reach a certain level it is all about pay to play in the usa. in fact, the game is protected in large part because only those who understand the pay to play game and shut up and go along with it can get to the next level. even ben and jerry had to succumb to the corporamob. it is no different anywhere else except that the chinese and russians are not afraid to put your life on the table where the usa talks about too big to fail and prosecute, miniscule fines and selective prosecution. in that respect the chinese and russians and much of the rest of the world are much more honest even though they may still be the power hungry, greedy, criminal bastards all men can be.
your view of the usa is delusional. the only thing that made it great was the constitution as an explicit warning about the dangers of .gov and the provision of the barriers and means to the people to protect themselves. that is no longer true. american exceptionalism is done. there are a lot of other much more desirable places to live in the world for economic, cultural and social reasons not to mention less onorous .govs.
No bribery, eh? What's the difference between bribery and influence buying which happens each day and night in DC?
was listening to fox radio one time and Trump was talking to Hennedy about tenure of Arnold as governor of california.
Trump: "yea, it was disappointing. I gave him a call and was asking to get some things done and they.. just never got done.. just disappointing.. " concluded Donald.
when government talks to me, they ask me for my social security number before they even ask for my name.
Bribery is in the 100's column,
Influence in the 1000's column.
FYI