Getting out of Russia?

[NW-Bound]

An article in BBC explains the financial situation of Russians.

The sanctions against some Russian banks include cutting them off from Visa and Mastercard, and consequently Apple Pay and Google Pay.

"If I could leave Russia right now, I would. But I can't quit my job," says Andrey.

"I am planning to find new customers abroad asap and move out of Russia with the money I was saving for the first instalment," says the 31-year-old industrial designer.

"I am scared here - people have been arrested for speaking against 'the party line'. I feel ashamed and I didn't even vote for those in power."

Daria, 35, a project manager in Moscow, said this meant he'd been unable to use the metro.

"I always pay with my phone but it simply didn't work. There were some other people with the same problem. It turned out that the barriers are operated by VTB bank which is under sanctions and cannot accept Google Pay and Apple Pay.

"I had to buy a metro card instead," he told the BBC. "I also couldn't pay in a shop today - for the same reason."

It is interesting that ATMs in Russia can dispense not just roubles but also dollars and euros. However, foreign currencies are now hard to get, even at the more expensive rate compared to roubles. And some ATMs are also out of roubles.

I have not seen ATMs in other countries dispensing non-local currencies. Usually, you have to go to a currency exchange window.

"There are no dollars, no roubles - nothing! Well, there are roubles but I am not interested in them," said Anton (name changed), who is in his late 20s and was queuing at an ATM in Moscow.

"I don't know what to do next. I am afraid we are turning into North Korea or Iran right now."

As soon as war was unleashed on Ukraine last week, Russians flocked to cashpoints, remembering lessons learnt in previous crises.

Ilya (name changed), who is in his early 30s, has just finished paying off his mortgage in Moscow. He says he is unable to relocate "any time soon".

"When the operation in Donbas started I went to the ATM and withdrew the savings I had in Sberbank in dollars. Now I literally keep them under my pillow.

"The rest of my savings are still in the banks: half in dollars and the rest in roubles. If things get worse, I'll withdraw the lot. I am scared because I expect a wave of burglaries. But it is what it is."

 

[rk911]

Asked the rep for retirement account company if it’s possible to divest from Russian holdings. She’s looking into it. Anyone else doing this? I’d appreciate learning what others may have learned about targeted divestments historically, too. I can’t sleep at night with the thought that I could be supporting Russia’s actions.

we just engaged a wealth mgr with instructions to not make any direct investments in China or Russia. we understand that indirect investments are impossible to avoid (Apple, etc).

 

[StillFiguringItOut]

Yet, somehow, I’m not feeling their pain. My sympathies lie with the Ukrainian people.

I should have been clearer. These people are not IN Russia, and though they have been cut off from their money, are not being bombed nor physically threatened. They will also be in danger upon returning because they are being fed “western” news which is very different than what the domestic Russian people are being fed. These tourists have avenues available to them.

My mother was a civilian child in occupied France during WW2. Many of her friends here in the States were also civilian children in different European countries, including one who was a 6 year old Berliner when the Allies were bombing Berlin. I grew up listening to a lot of their stories.

I am VERY sympathetic to civilians in war, and recognize who the bad guy is here. I apologize to anyone I offended.

 

[Sunset]

Pretty amazing to think of history, how repeatedly in history 1 or a few people can cause the death of thousands to millions of other people they never even met.

Yet most of those same thousands to millions of people, had they never had a war, would have pleasant/polite/happy to have met over dinner/coffee.

 

[HealthyFuture]

So all companies and citizens of Russia should be bankrupt and starved because of Putin? I guess ordinary Russians citizens shouldn't have food or gas or anything?

Ivinsfan - that is definitely not my perspective. I have deep empathy for ordinary Russian citizens, who have not asked for any of this. At the same time, it is my hope that with sufficient economic isolation, there comes enough pressure to stop the physical violence and destruction in/of Ukraine.

 

[Midpack]

I sincerely thank you for sharing a personal side of the headline. And those that don't feel any compassion for the average Russian citizen, well I hope you can find some in your heart. They are human just like we are.

Seriously? We all feel compassion for every day Russian citizens, they’re caught in the middle. But they aren’t being indiscriminately bombed and killed by an invading army. It doesn’t appear the Russians are targeting military, they’re hitting high population residential areas along with other buildings, just trying to intimidate all Ukrainians, those are widely considered war crimes. After killing women and children in residential areas, now they’re attacking a large nuclear plant - WTH? All I’m saying is I feel more compassion for Ukrainians…

Where’s your compassion for Ukrainians?

https://www.bbc.com/news/world-europe-60610840

 

[ivinsfan]

Seriously? We all feel compassion for every day Russian citizens, they’re caught in the middle. But they aren’t being indiscriminately bombed and killed by an invading army. It doesn’t appear the Russians are targeting military, they’re hitting high population residential areas along with other buildings, just trying to intimidate all Ukrainians, those are widely considered war crimes. After killing women and children in residential areas, now they’re attacking a large nuclear plant - WTH? All I’m saying is I feel more compassion for Ukrainians…

Where’s your compassion for Ukrainians?

https://www.bbc.com/news/world-europe-60610840

I thought I posted that everyone was human which would include Ukrainians...from my familiy's WW2 experiences I realize how much the average person can suffer in many ways. I was trying to preach compassion for everyone I'm sorry it didn't come across that way.

 

[yhoomajor]

Here is my unbiased perspective (given that I am an immigrant from Asia and I can see both sides of a story w.r.t. financial aspects (not the war itself which has lot of historical background/context)):

Weaponizing Oil/Gas: Russia has not stopped Gas/Oil flows to EU or any other country. Its the other way. Companies in Europe and all over word.. are self-sanctioning. Gas is still flowing to Europe.. to heat people's homes.

Weaponizing of Dollar/Euro: This has been done. By EU and US. We were lectured that emerging countries should invest in US dollars, foreign reserves because they are most liquid during tough times, especially when you need them most. This has proven to be false. If Russia ever needed foreign reserves this badly.. it would be now. And now they can't access their own money ($600Billions +) because their foreign reserves are seized(frozen) by US/EU.

As for long term repercussions, I see financial world being evolving into bi-polar spheres within next 10 years. One led by China and one by US.

I just hope we keep getting cheap Chinese junk via Amazon for foreseeable future.

 

[Midpack]

I thought I posted that everyone was human which would include Ukrainians...from my familiy's WW2 experiences I realize how much the average person can suffer in many ways. I was trying to preach compassion for everyone I'm sorry it didn't come across that way.

Sorry if I missed your sympathy for Ukrainians. This is a horrible situation for all concerned, but I confess I have more sympathy for Ukraine. Russians aren't being bombed out of their homes, Ukrainians are - also through no fault of their own. Economic hardship (Russians) is not equal to being attacked militarily in your own country IMO. I am still hopeful that everyday Russians will stand up, evidently over 6000 already have and so have some oligarchs and celebs. They can detain 6,000, but they can't detain millions of angry Russians. I readily acknowledge it's a lot harder for Russians to "stand up" - they risk far more than any of us in the West. But having his own citizens against him, there's evidence some/many are including some troops, would do more to deter Putin than any of us can.

 

[Chuckanut]

Someone mentioned what would happen if they turned off the oil or gas...


First, I do not think Russia would turn off its main source of income...


But, I was watching congress asking questions today and one said that Europe had a trillion something (cannot remember what was said on amount) of gas in the ground but they do not want to drill to get it...


Not sure if true, but might be

I did hear that Europe has about 60 years worth of natural gas right on the continent itself. But, they have to use Fracking to get it.

Then there is Germany which is shutting down its nuclear plants. I wonder if these events will mark the turn around point for the nuclear power industry, assuming it can build reliable safe plants, and avoid the incompetence of the past.

War is possibly the most environmentally destructive thing humans can do.

 

[Turbo29]

Interesting discussion. I can't help but wonder whether these big Russian oil and gas companies will be back at some point. This war will end, one way or another. Russia will still have lots of oil and gas. Europe and China will still need it.

I have no intention of buying any Russian stocks at pennies on the dollar. But isn't it possible some who do, will make some money in the long run?

Just think of Mitsubishi, Sumitomo, Panasonic (formerly known as Matsushita), and Volkswagen, all examples of large companies that survived although their countries lost a much larger conflict.

 

[ivinsfan]

Sorry if I missed your sympathy for Ukrainians. This is a horrible situation for all concerned, but I confess I have more sympathy for Ukraine. Russians aren't being bombed out of their homes, Ukrainians are - also through no fault of their own. Economic hardship (Russians) is not equal to being attacked militarily in your own country IMO. I am still hopeful that everyday Russians will stand up, evidently over 6000 already have and so have some oligarchs and celebs. They can detain 6,000, but they can't detain millions of angry Russians. I readily acknowledge it's a lot harder for Russians to "stand up" - they risk far more than any of us in the West. But having his own citizens against him, there's evidence some/many are including some troops, would do more to deter Putin than any of us can.

We live in country where civil unrest is equated with freedom. Yes we could get arrested..but who what might actually happen to protesters in Russia. And yes I am aware that people can be injured by authorities here but it's not the norm . The evilness of some people is beyond my understanding. I find it all heartbreaking.

 

[Midpack]

We live in country where civil unrest is equated with freedom. Yes we could get arrested..but who what might actually happen to protesters in Russia. And yes I am aware that people can be injured by authorities here but it's not the norm . The evilness of some people is beyond my understanding. I find it all heartbreaking.

I agree wholeheartedly. It’s heartbreaking. And as I noted the risks for Russians who stand up are far, far greater than those of us in “the West.” I may be naive but I don’t see how Putin can maintain this IF his large swaths of citizens don’t continue to support him. Eventually more and more ordinary Russians are going to know more about what’s really going on but it could take a long time. There are already Russians from all socioeconomic levels who know Ukraine is being attacked in their name, presumably a small minority so far.

 

[Chuckanut]

Shell bought 100,000 metric tons of Russia’s flagship Urals crude on Friday, according to people familiar with the transaction. It paid $28.50 a barrel below the price of international benchmark Brent crude, the widest discount on record.

Russian oil is purchased but at a significant below market price. According to the article Shell was the only buyer.

 

[foxfirev5]

Russian oil is purchased but at a significant below market price. According to the article Shell was the only buyer.

Well at least I know what gas station I will avoid. Along with Lukoil. And yes I understand that the US distribution is different. Bad luck for you.

 

[NW-Bound]

Lukoil management has cried out, "Uncle!".

The company stock price had lost 99% before trading on its shares was halted on every world stock exchange.

From: https://www.cnn.com/2022/03/04/business/lukoil-end-war/index.html

London CNN Business —

Russia’s second largest oil company has broken ranks with President Vladimir Putin.

Lukoil, which produces more than 2% of the world’s crude oil and employs over 100,000 people, has called for an end to Russia’s war in Ukraine.

The company’s board of directors said in a statement to shareholders, staff and customers that it was “calling for the soonest termination of the armed conflict.”

“We express our sincere empathy for all victims, who are affected by this tragedy. We strongly support a lasting ceasefire and a settlement of problems through serious negotiations and diplomacy,” the board added...

 

[foxfirev5]

Lukoil management has cried out, "Uncle!".

The company stock price had lost 99% before trading on its shares was halted on every world stock exchange.

From: https://www.cnn.com/2022/03/04/business/lukoil-end-war/index.html

Yes. Keep the pressure on.

 

[RobLJ]

Retch, I'm glad to hear your SIL apparently is out. Give us an update if she makes it out to the US.

For others, given the central bank freeze, etc, Russian stocks/bonds are uninvestible from almost any standpoint, unless you think Putin will pull out of Ukraine fairly soon. The most likely scenario is a Russian debt default within a month (or 2). I do not think Putin will pull out (if he did, it would be into Donbas and the other province) , but I cannot see ahead in time. The next week or two may tell.

Nonetheless, the Russian economy is essentially gone now, destroyed by Putin's actions, except the recent oil sale to China. I'd rather go to a Casino here in Reno and do max bets than invest in Russia; if you did in the past, it's almost worthless, so you might as well just hold onto your paper. I doubt anyone here has much directly in Russia, although I've seen articles plugging Gazprom as recently as a month or so ago on Seeking Alpha.


I'll note that with Western oil extraction technology and expertise withdrawn, even Russian oil and gas, particularly offshore, is also diminished in the future, even if they can sell it, although this will take a looong while to work out. The win is renewables and non-Russian producers.

 

[ivinsfan]

Yes. Keep the pressure on.

Hoping for a 100% loss then? The US oil supply come from several shady suppliers (think Saudis)..A better protest might be to park your car for a month and walk everywhere you go

 

[NW-Bound]

Does the world miss Russian oil more than Russia misses the oil income? That's what it comes down to.

Well, in a war if you lose less than your opponent, you win.

It's sad it has to end up this way. And we see it all the time. People somehow cannot structure a relationship where there's no loser and everybody wins.

 

[Midpack]

China can take more oil from Russia and reduce other country’s imports if they want to (along with Russias other allies?). So it may be largely a shell game, just rearranging imports, as always with worldwide commodities?

 

[OldShooter]

China can take more oil from Russia and reduce other country’s imports if they want to (along with Russias other allies?). So it may be largely a shell game, just rearranging imports, as always with worldwide commodities?

In the end, yes. Oil is easier than natural gas, for which Russia is building a new pipeline to China. Russia sees this as an alliance of equals, but certainly Xi doesn’t see it that way and the relative size of the economies means it never will be.

Re divesting in Russia, here is Vanguard’s take: https://www.reuters.com/markets/eur...-active-managers-decisions-russia-2022-03-05/ Their index funds have less than 1% NAV in Russia, so I feel that we are essentially divested. Market cap isn’t too big when the price multiplier is zero. As the index vendors continue kicking Russia out of the indexes, this 1% will even decline more.

 

[Markola]

To see where Russia ranked in relative stock market cap before the self-inflicted catastrophe of their invasion of Ukraine, I looked up the latest annual report of Vanguard Total World Stock Index Fund (VTWAX), dated 10/31/21. The fund’s allocation to Russia then was a barely-noticeable .4%. I doubt the next report update, due 4/30/22, will even list Russia, but it will be interesting to see.

 

[ivinsfan]

China can take more oil from Russia and reduce other country’s imports if they want to (along with Russias other allies?). So it may be largely a shell game, just rearranging imports, as always with worldwide commodities?

Does anyone think it's a good idea for Russia and China to start working together? Remember the enemy of my enemy is my friend. Not liking that development

 

[Chuckanut]

Hoping for a 100% loss then? The US oil supply come from several shady suppliers (think Saudis)..A better protest might be to park your car for a month and walk everywhere you go

Oil is fungible. We may never buy another drop of Russian oil and all that does it move the accounting around so the Russian oil goes to Upper Ratsberg and more Kuwaiti oil goes to us. At least on paper if not reality.

Not consuming as much fossil fuel is the best choice for many reasons including not filling the pockets of certain authoritarian leaders.