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How Russian Investors Made $90 Billion After US Sanctions

Tyler Durden's picture




 

We have discussed the "costs" associated with US sanctions on Russia previously and while economic growth expectations have slowed - just as they have slowed for the entire world - despite the common knowledge meme being propogandzied across the mainstream media, as Bloomberg notes, the Russian Ruble is now notably stronger than before the sanctions and for those who ignored US sanctions and bought Russian stocks - the MSCI Russia Index has gained $90 billion since Jay Carney said "sell" as the sanctions hit.

 

As Bloomberg notes, investors who have ignored international sanctions against Russia are being rewarded.

The chart below shows Russian Ruble has strengthened notably since the US sanctions were unveiled...

 

 

And stocks are winning...

 

 

MSCI Russia has gained 22 percent, adding about $90 billion in market value since March 17, when the U.S. banned President Vladimir Putin’s business allies in response to his annexation of Crimea. MSCI’s emerging-market gauge jumped 10 percent during the period, while the Standard & Poor’s 500 Index rose 2.9 percent.

...

“There was a significant amount of fear in the market, but it is clear that the actual sanctions were nothing very dramatic,” Ian Hague, founding partner of New York-based Firebird Management LLC, which manages $1.1 billion of assets.

"Costs" indeed...

 

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Fri, 05/23/2014 - 14:36 | 4789380 AmericasCicero
AmericasCicero's picture

Sanctions correlating with economic success...maybe Obama should place sanctions on the US economy?

Fri, 05/23/2014 - 14:46 | 4789406 maskone909
maskone909's picture

scary because as an american, its obvious where the smart money is going.  and its not here.  writing is on the wall

edit

if the .gov pulled a stunt like this 20 years ago, the ruble along with the ruskie economy would see a mass exodus.  its pretty clear that now, the politicians are just laughed at. 

Fri, 05/23/2014 - 14:56 | 4789427 freewolf7
freewolf7's picture

US sanctions remind me of an old Steve Martin bit, describing police in London, chasing criminals: "Stop, or I'll say stop again!"

Fri, 05/23/2014 - 15:25 | 4789515 Bankster Kibble
Bankster Kibble's picture

A p'leesman's lot is not a 'appy one.

Fri, 05/23/2014 - 15:42 | 4789551 LawsofPhysics
LawsofPhysics's picture

For me, the situation seems more like the Sherif hostage scene from blazing saddles.

Fri, 05/23/2014 - 16:32 | 4789697 Bokkenrijder
Bokkenrijder's picture

hmmm, could this perhaps be caused by Russia selling 26 billion of US Treasuries in order to prop up the Ruble?

http://www.zerohedge.com/news/2014-05-21/russia-dumps-record-amount-us-t...

Could it be that the biggest thing Russia has been buying is Russian Rubles?

Fri, 05/23/2014 - 14:37 | 4789383 PartysOver
PartysOver's picture

Speculator:  An individual that can recognize government stupdity and profits nicely from it.   Thank you "O"

Fri, 05/23/2014 - 14:55 | 4789431 williambanzai7
williambanzai7's picture

When a community organizing moron says everyone should go short, what should everyone do?

Fri, 05/23/2014 - 15:09 | 4789461 dontgoforit
dontgoforit's picture

Yeah, he's in over his debth and there's no water in this puddle.

Fri, 05/23/2014 - 15:07 | 4789456 Volkodav
Volkodav's picture

off topic

Fri, 05/23/2014 - 14:39 | 4789389 Relentless101
Relentless101's picture

Just another fucking moral hazard. Now everyone is going to want sanctions.

Fri, 05/23/2014 - 15:50 | 4789575 kchrisc
kchrisc's picture

Greece or Cyprus to the DC US: "Sanctions please."

Fri, 05/23/2014 - 14:39 | 4789390 disabledvet
disabledvet's picture

The Carnies did not say "sell" but "sell short."

You'd think he'd no an inflation when he saw one. (Created one here...how hard can it be to create one in Russia?) So indeed..."confetti all around."

http://www.youtube.com/watch?v=AcwYEGdKto8&feature=kp

Fri, 05/23/2014 - 14:45 | 4789409 SmittyinLA
SmittyinLA's picture

Funny the biggest Russian "investor" was some beards for the US treasury. 

Lying is profitable particularly on a state level.

How else does a political hack like Carol M Browner get voted onto board of directors of Agribusiness giant Bunge? http://phx.corporate-ir.net/phoenix.zhtml?c=130024&p=irol-newsArticle&ID...

What's to stop a criminal govt from printing up trillions of dollars, lying about it, and buying up everything? 

NOTHING 

Fri, 05/23/2014 - 15:01 | 4789439 overexposed
overexposed's picture

WTF???

As if it weren't painfully obvious that we're living under a Soviet regime, the shameless graft just makes it that much more.

Where's Russia's Ronald Reagan when we need him?  LOL

Fri, 05/23/2014 - 16:06 | 4789621 sessinpo
sessinpo's picture

overexposed         Where's Russia's Ronald Reagan when we need him?  LOL

---

No, where is the public when we need it.

Fri, 05/23/2014 - 15:44 | 4789560 LawsofPhysics
LawsofPhysics's picture

"What's to stop a criminal govt from printing up trillions of dollars, lying about it, and buying up everything? "  -

 

Loss of faith in the underlying currency.  history is very clear on that.

Fri, 05/23/2014 - 14:46 | 4789416 no1wonder
no1wonder's picture

Visa, MasterCard want to create politics-free business in Russia

"Visa and MasterCard proposed during our meeting, which was also attended by Finance Minister Anton Siluanov, to deploy basic infrastructure in Russia and create a business that would not depend on decisions made by foreign governments," Igor Shuvalov, Russian First Deputy Prime Minister, told the Rossiya-24 television on the sidelines of the St. Petersburg International Economic Forum.

Shuvalov confirmed that Visa and MasterCard did not want to lose their business in Russia.

"They want to develop their business in Russia. They don’t want to lose it. They stated that they didn't want any political risks to affect their activities in the future," he said.

The companies understand their responsibility for what happened to some Russian banks which were denied Visa and MasterCard services due to US sanctions over Ukraine, Shuvalov added.

 

Fri, 05/23/2014 - 17:19 | 4789799 daveO
daveO's picture

Russia would be absolutley stupid to allow them back in.

Fri, 05/23/2014 - 14:50 | 4789420 One And Only
One And Only's picture

Bitcoin up since Russian sanctions too.

Fri, 05/23/2014 - 14:53 | 4789425 CHX
CHX's picture

Do as they say at your own financial peril.

Fri, 05/23/2014 - 14:55 | 4789429 no1wonder
no1wonder's picture

In other news:

Two days before the presidential election in Ukraine scheduled for May 25, the CyberBerkut hackers group, which has repeatedly posted on the Internet documents incriminating the new Kiev authorities, stated that they had destroyed the electronic system of the Ukraine's Central Election Commission.

"We, CyberBerkut, in protest against legitimization of crimes of the Kiev junta, have completely destroyed the network and computer infrastructure of the Central Election Commission of Ukraine. Taking on full responsibility we declare that the united informational and analytical system "Vibory" (”Election”) created under the complete control of the United States has ceased to exist," the website of the CyberBerkut activists says.

Here's the original communique, on CyberBerkut website.

Fri, 05/23/2014 - 15:52 | 4789580 Wahooo
Wahooo's picture

Now it works just like our election infrastructure.

Fri, 05/23/2014 - 14:55 | 4789430 Al Huxley
Al Huxley's picture

Ive decided to start getting all my news from the MSM, which compels me to call bullshit on this article.  I was reading in Forbes

http://www.forbes.com/sites/nathanvardi/2014/04/22/vladimir-putin-is-kaput/

that Putin's done for - thanks to the prudent and enlightened sanction policies of President Obama.  In case you don't want to read the article, the gist of it is that Putin's only in power at the pleasure of the Russian Oligarchy, who will only allow him to stay if he makes them money.  And this little Ukraine fiasco and the resulting sanctions have cost them big-time. 

 

Ignore the chart above, who are you going to believe, the actual numbers or the wise council of Forbes magazine?  I know Forbes is telling the truth because it's written by rich people, for rich people.  I feel lucky and privileged to have a chance to benefit from their wisdom.

Fri, 05/23/2014 - 15:15 | 4789484 crazybob369
crazybob369's picture

Al, please tell me you forgot the /sarc after your first sentence.

Fri, 05/23/2014 - 15:39 | 4789545 Al Huxley
Al Huxley's picture

I feel like using sarc indicators dilutes the comment.

Fri, 05/23/2014 - 16:02 | 4789614 bonin006
bonin006's picture

It's not just a feeling, it's the truth.

Fri, 05/23/2014 - 16:10 | 4789638 crazybob369
crazybob369's picture

Duly noted.

Fri, 05/23/2014 - 14:58 | 4789434 overexposed
overexposed's picture

HA HA HA HA HA HA HA HA HA

Buying OGZPY when Carney screamed "sell" was perhaps the smartest investment decision I've made in a long while.  Loving these easy gains!

Fri, 05/23/2014 - 15:12 | 4789476 crazybob369
crazybob369's picture

Couldn't agree more.  One of the easiest trades I ever made.

Fri, 05/23/2014 - 17:37 | 4789770 Big Brother
Big Brother's picture

Yeah- That trade didn't occur to me until one of my friends who works in the Canary Warf district suggested it.  By then it was too late.

If it drops back to $7.00 / share, I'll buy.  Gotta like the 2.5 P/E ratio.

Fri, 05/23/2014 - 15:04 | 4789448 orangegeek
orangegeek's picture

Putin the trader - that sounds more like it.

Fri, 05/23/2014 - 15:22 | 4789497 falak pema
falak pema's picture

..

Fri, 05/23/2014 - 15:30 | 4789500 falak pema
falak pema's picture

chess player, strategist and profiteer.

I calculated that that gas deal works out to 9.6 $/million btu (350 $/ 1000 cu M) sold to China.

Whereas gas in pipeline from US fracking is roughly 50% of that price; aka 4.6 $/ mill btu in Usa.

So he is laughing to the bank AND he gets paid 25 billion up front by China for an ESTIMATED price of Russian investment of 55 billion (highly over estimated).

If you take into account the "oligarchy skimming" in that number you can be sure his Oligarchy will cream HALF of that as their fee for an investment that comes on stream in 2018 !

So getting 25 billion upfront means his TRUE investment is covered and he makes 27.5 billion in the bank from that official number from state coffers to Oligarchy accounts.

Thanks to US bumbled "sanction" shenanigans, he has now  made more! All up front!

And he will win in Crimea its off shore reserves and strategic port; whatever happens in Donbass!

Well played chess player!

Don Corleone of Siberia and Donbass! 

Fri, 05/23/2014 - 15:50 | 4789577 Wahooo
Wahooo's picture

The Era of Oligarchs.  That's the future, young man!

Fri, 05/23/2014 - 15:11 | 4789463 intric8
intric8's picture

Well mcsi russia broke out of that descending channel like a fucking boss

Fri, 05/23/2014 - 15:39 | 4789549 Grouchy Marx
Grouchy Marx's picture

It's really like this: if the White House says invest one way, choose the other. Green industries, solar, GM, etc. The only trendlines going up under this admin, are M3, U6, (real) CPI, and their opinions of themselves.

Fri, 05/23/2014 - 16:05 | 4789620 IndianaJohn
IndianaJohn's picture

Fuk EU Nuland wants her cut.

Fri, 05/23/2014 - 17:00 | 4789766 SharkBit
SharkBit's picture

Carney the Clown, ring master of the Obozo Circus.  It's showtime folks.

Fri, 05/23/2014 - 22:14 | 4790400 The Blank Stare
The Blank Stare's picture

I went to see a fight and hockey game broke out. Something like that?

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