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Giant Sucking Sound: Russian Money Yanked From US Banks

Tyler Durden's picture




 

Via TestosteronePit blog,

US Banks enjoyed more or less steadily climbing, or rather soaring, deposits by Russian institutions and individuals, having tripled in just two years to $21.6 billion by February, according to the US Treasury.

It may seem a bit counterintuitive that in times of ZIRP anyone would put any money in any US banks, and it may seem even more counterintuitive that Russians who have other opportunities with their money would voluntarily subject themselves to the Fed’s financial repression.

But from the Russian point of view, earning near-zero interest on their deposits in the US and losing money slowly to inflation must have seemed preferable to what they thought might happen to their money in Mother Russia. Money that isn’t nailed down has been fleeing Russia for years, even if it ends up in places like Cyprus where much of it sank into the cesspool of corruption that were the Cypriot banks, which finally collapsed and took that Russian money down with them. By comparison, the US must have seemed like a decent place to stash some liquid billions.

But in March, the Ukrainian debacle burst into the foreground with Russia’s annexation of Crimea, which wasn’t very well received in the West. The US and European governments rallied to the cause, and after vociferously clamoring for a sanction spiral, they actually imposed some sanctions, ineffectual or not, that included blacklisting some Russian oligarchs and their moolah.

So in March, without waiting for the sanction spiral to kick in, Russians yanked their moolah out of US banks. Deposits by Russians in US banks suddenly plunged from $21.6 billion to $8.4 billion. They yanked out 61% of their deposits in just one month! They'd learned their lesson in Cyprus the hard way: get your money out while you still can before it gets confiscated.

They certainly didn’t wait long to move the bulk of their money to other jurisdictions, those they believe perhaps erroneously to be beyond the reach of the long and sinewy arm of the US government.

Will Russians bring their deposits in US banks to zero? The Treasury will publish the April numbers in a few weeks, but zero seems unlikely because they’ll need some pocket money to operate in the US.

Is this Russian run on American banks going to cause the collapse of the US financial system? Or at least of a bank? Or at the very least make that bank shudder at its foundations? Um.... These $21.6 billion in deposits represent about 1% of the nearly $2 trillion in foreign non-negotiable deposits at US banks and an even more minuscule share of domestic deposits, some of which end up parked at the Fed as excess reserves. Heck, the Fed, in its infinite wisdom, printed $4 trillion over the last five years, so that measly $21.6 billion isn’t even a rounding error on that scale.

Not that these sanctions are working all that well. Despite moves by the West to isolate Russia, ExxonMobil, BP, Total, and other oil majors are doubling down in Russia; they just signed mega-contracts with state-owned Russian oil companies – sanctions be damned. Read.... Exxon, BP Defy Obama; Extend Partnership with Russia

 

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Fri, 06/06/2014 - 19:51 | 4831590 JuliaS
JuliaS's picture

So, the total number of Russian deposits is equal to a week worth of QE. You're saying it's going to have an impact?

Fri, 06/06/2014 - 19:54 | 4831597 ebworthen
ebworthen's picture

My exact thought.  It would be nice if people making choices had an effect on banks, or the economy.

Fri, 06/06/2014 - 20:18 | 4831638 disabledvet
disabledvet's picture

Looks like we're down to 4995 oligarchs instead of our usual complement of 5000.  Someone better call Treasury.

Fri, 06/06/2014 - 20:28 | 4831654 Pure Evil
Pure Evil's picture

I thought that giant sucking sound was coming from one of Obama's orifices.

Fri, 06/06/2014 - 21:53 | 4831774 Son of Loki
Son of Loki's picture

'taint nothing yet. Wait until the Chinese pull their money out of USA housing market. You will be sure to hear alot of sucking then.

Fri, 06/06/2014 - 22:36 | 4831844 MontgomeryScott
MontgomeryScott's picture

I'm still trying to work the propaganda/facts regarding 'Russia's annexation of Crimea' (at least, accoring to the Western banking-owned media arm of the Oligarchy).

The people in Crimea seem to have voted for re-unification with the Russian Republic (the numbers reported are 92% pro, 8% con). I can't blame them, because since their 'supposed' decision by the POLITICIANS (the western-installed 'public servants' of the Western Oligarchy) to join the E.U. and NATO, the people (PEOPLE, mind you) seem to have been saddled with hypothecated DEBTS that can't possibly be repaid, and they see no way out of this madness and usury EXCEPT to try to ally with the OTHER SIDE of the Banking OLIGARCHY (the 'left side' as it were).

The CHINESE aren't going to pull out of buying the CONUS. Why SHOULD they? They are using worthless, fiat currency that the CONUS printed, like shiny paper strips that 'promise' value. It's NOT 'THEIR' money. It's OURS. WE printed it, and WE think it's worth something (but WE AREN'T WORTH ANYTHING., so the REST OF THE FUCKING WORLD is going to LEVERAGE our stupid greed and avarice, using worthless FEDRES notes to get us to give over all our land and everything else, while Russia and China have ammassed an estimated 50,000 METRIC TONS of shiny gold metal).

On the BRIGHTER side, I understand that the Chinese race has smaller sexual organs, so I won't be choked as I am forced to perform oral (unless they are cruel, and try to 'choke the chicken' with me).

You're fucking KIDDING, I suppose, 'LOKI'.

Either that, or you are deluded.

 

 

Sat, 06/07/2014 - 15:26 | 4832925 Billy O'Naire
Billy O'Naire's picture

I thought that giant sucking sound was coming from one of Clinton's offices.

Sat, 06/07/2014 - 03:09 | 4832079 ...out of space
...out of space's picture

russian didnt learn nothing in cyprus. they had open branch office in london to pick up the money.

Sat, 06/07/2014 - 06:06 | 4832134 Anasteus
Anasteus's picture

The number itself is not interesting. What is interesting is the trend.

Fri, 06/06/2014 - 19:54 | 4831599 Anusocracy
Anusocracy's picture

Fiatus Interruptus?

Fri, 06/06/2014 - 23:21 | 4831898 MontgomeryScott
MontgomeryScott's picture

Seguay to the 1930's.

The 'Three Stooges' short where Curly is shouting, in the Roman Senate, against a progenitor of the devaluation of currency, Couitus Areoleous. Moe slaps him on the head, and declares, "Hey, you maroon, don't interrupt Coitus. He's a lot smarter than you, and you need to listen!" Moe gives Curly a nurkle, and Curly shouts in pain, and then suddenly laughs.

"Hey, what's so funny, wise guy?", Moe says as he smacks him on the head again.

Curly replies, Hey Moe, you just made a JOKE!"

Moe, taken aback, smiles his evil smile. "I did, did I?"

"SURE, Moe!" Curly retorts. "I know LATIN, after all. I was in the middle of COITUS INTERRUPTUS!"

(The women in the audience start laughing, as they are recipients of 'premeture ejaculation' [and have to clean up, despite the fact that they didn't get it the way they wanted it, after all], and the men begin to get pissed off, except for a few REAL men who understand the joke and have the ability to laugh at their own weaknesses)

Fri, 06/06/2014 - 19:57 | 4831603 MrTouchdown
MrTouchdown's picture

Yellen will be asking, "Is it in yet?" when that impact comes.

Fri, 06/06/2014 - 21:06 | 4831708 Postal
Postal's picture

Not exactly the mental image I wanted, but a green arrow just the same...

Fri, 06/06/2014 - 19:53 | 4831595 knukles
knukles's picture

Lemme see here.  Now who was it not confiscating shit that they're chasing away because of land of all the good shit in life and welcoming all the sick fucks to our shores?  So they're taking their money to deposit in the Giant Rat of Sumatra Saving and Loan.
How to create a bank run on your very own
As they all are, anyhow.
Great, just fucking great.
Now, about that Belgian EuroClear account ...

Fri, 06/06/2014 - 20:07 | 4831622 logicalman
logicalman's picture

I bet you could go off on a rant!

 

Fri, 06/06/2014 - 23:35 | 4831914 MontgomeryScott
MontgomeryScott's picture

Isn't it strange that the volcanic islands of Java and Sumatra are next to each other; and smarmy people like to call Coffee 'Java'? SUMATRA was the island that blew up in the 1860's, causing what was called (by the presstitutes of the time) the 'Mini Ice Age', after all.

Well, MY broker is E.F. Hutton, and E.F Hutton says... buy COFFEE STOCKS. They have nowhere to go but UP. In fact, they might even EXPLODE... the ticker symbol is 'JVA'...

http://www.youtube.com/watch?v=orZvzTwD_C0

 

Sat, 06/07/2014 - 08:15 | 4832197 Hey Assholes
Hey Assholes's picture

Ahhh The Giant Rat of Sumatra

Hemlock Stones I recall.

Love the FS Theatre

Fri, 06/06/2014 - 20:02 | 4831607 F0ster
F0ster's picture

You need to multiply ~$14B in cash (liquid capital reserves) by the typical average US bank capital reserve ratios mark to market i.e. 100 to 1 so, ~$14B in CASH backstops ~$1.4 TRILLION. That is a problem for banks with high Russian cash savings concentration.

Fri, 06/06/2014 - 20:19 | 4831641 JuliaS
JuliaS's picture

Correct, but if we are to consider the amount of USD being symmetrically withdrawn from the Russian banks due to freshly introduced sanctions, then we're just about even.

Fri, 06/06/2014 - 20:01 | 4831608 kaiserhoff
kaiserhoff's picture

Careful knucks,

  Thou shalt not speak ill of the waffle house..., er Belgium,  cough, the black budget.

  Whatevuh.

Fri, 06/06/2014 - 20:07 | 4831618 knukles
knukles's picture

Oh, I'm sorry kaiser.  Please don't take my Freedom Fries away.

 

BTW, in an effort to mitigate deleterious meanderings about the land of stompy feet's spy activities, reference hereafter with the term "Black Budget" are to be considered racist and politically incorrect.

Fri, 06/06/2014 - 20:06 | 4831619 asteroids
asteroids's picture

I wonder if they converted all that fiat to gold or silver.

Fri, 06/06/2014 - 20:55 | 4831686 logicalman
logicalman's picture

Rough calculations.

Total Au & Ag known, including a lot that's already pretty much lost to industrial use comes out at (remember, rough - 4 beers, but I was reasonably careful) around $7,458,829,964,640 at $1300 - $20

At last estimate, the total notional (love that word in things financial!) value of all the nasty bankster derivitives was about a quadrillion dollars.

1,000,000,000,000,000

7,458,829,964,640

I put one number under the other for easier comparison.

 

 

Fri, 06/06/2014 - 21:18 | 4831727 TheRideNeverEnds
TheRideNeverEnds's picture

t..that is bullish for equities right?  

Sat, 06/07/2014 - 02:08 | 4832058 matrix2012
matrix2012's picture

1,000,000,000,000,000

7,458,829,964,640

 

If I make some round-up and simplify it by removing the number of zeros, it now equals to:

10,000 / 7.5 = 1333...meaning the values of total Au & Ag known need to increase over 1000 times to cover all the nasty bankster derivatives :-)

i guess it's beyond Earth's own measurement, must resort to Solar System SI.

Fri, 06/06/2014 - 20:19 | 4831639 Atomizer
Atomizer's picture


Obama may need to release another 12 Gitmo prisoner releases. Bank of International and World Bank needs to release Bond funds. Hurray up Obama.


Get your Negro ass to the nearest Western Union exchange depot.

 

Fri, 06/06/2014 - 20:29 | 4831656 Atomizer
Atomizer's picture

See Obama, we actually know what’s happening in the economic market. Grow some dingle berries and tell your wife it’s healthy for Americans to ingest. New PR scope.

Sat, 06/07/2014 - 03:44 | 4832091 Gavrikon
Gavrikon's picture

" . . . tell you HUSBAND . . ."

Fixed it.

Fri, 06/06/2014 - 21:03 | 4831701 kchrisc
kchrisc's picture

DC US to the doctor: "I just don't know how it happened. I heard a my gun go off and then my foot hurt."

Fri, 06/06/2014 - 21:17 | 4831726 logicalman
logicalman's picture

I think they have special bullet-proof shoes.

The bullets just bounce off and hit innocent by-standers.

Fri, 06/06/2014 - 23:19 | 4831896 kchrisc
kchrisc's picture

"The bullets just bounce off and hit innocent by-standers."

Or if you are in NYC the gun and badge thugs shoot at someone that isn't even armed, wound two bystanders--sheeple--and then charge the poor guy they were shooting at for their crime of shooting the sheeple.

https://www.techdirt.com/articles/20131205/07061525466/unarmed-man-charg...

Fri, 06/06/2014 - 21:17 | 4831725 TheRideNeverEnds
TheRideNeverEnds's picture

Out of the banks and into the e-minis amirite? 

Fri, 06/06/2014 - 21:27 | 4831739 Oldwood
Oldwood's picture

There are too many bets on the table. they will NEVER turn off the lights in this casino. It will have to burn to the ground first.

Sat, 06/07/2014 - 04:00 | 4832096 SpanishGoop
SpanishGoop's picture

And they are playing whith a rigged wheel so they always win.

 

Fri, 06/06/2014 - 21:39 | 4831753 22winmag
22winmag's picture

If $20 billion is really just about 1 week of QE-geddon that should put things in perspective.

 

It's one big fat joke.

Fri, 06/06/2014 - 22:29 | 4831835 malek
malek's picture

 Cypriot banks, which finally collapsed and took that Russian money down with them.

Oh, you mean the London offices of those Cypriot banks, which were accidently (wink, wink) still left open when banks on Cyprus were closed, did not give most Russian big money the opportunity to get quickly withdrawn?
I would expect less officially-doctored "facts" in articles on ZH.

Fri, 06/06/2014 - 23:23 | 4831901 Hulk
Hulk's picture

Our system is going to die by the death of a thousand cuts...

Fri, 06/06/2014 - 23:33 | 4831912 edotabin
edotabin's picture

I figure we are at 3-400 cuts by now.

Sat, 06/07/2014 - 06:22 | 4832141 yrbmegr
yrbmegr's picture

Excellent.  Perhaps they might be interested in buying some Chinese gold-colored tungsten bars?

Sat, 06/07/2014 - 08:06 | 4832191 intric8
intric8's picture

So going forward, any country not lined up with u.s. interests can have their citizens u.s. based accounts frozen or seized? Awesome! That'll generate some much needed cash for our economic recovery.

MADNESS!!!

Sat, 06/07/2014 - 10:52 | 4832326 katchum
katchum's picture

And now the same is going to happen at European banks.

Sat, 06/07/2014 - 16:04 | 4832991 Pie rre
Pie rre's picture

After the largest ecological disaster in history occured in Alaska by the Exon Valdez Exon was fined billions of dollars for the cleanup and to pay claimants for their losses.  Their plan was to stall until all of the partys were dead.  I wonder if they ever paid.

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