Barbarians at the Gate – In Russia and on Wall Street

[Gunnar Larson]

https://wallstreetonparade.com/2022/03/barbarians-at-the-gate-in-russia-and-on-wall-street/

This morning Kremlin spokesman Dmitry Peskov told reporters on a conference
call that the economic sanctions imposed on Russia by the West were
“absolutely unprecedented.” He went on to say that those sanctions made it
“very hard to forecast anything.”

Perhaps Putin should have thought about that before he invaded the
neighboring country of Ukraine and launched a barbaric bombing assault on
hospitals, schools, churches and apartment buildings.

There are a few things we can help Russia forecast. Given the fact that the
Russian currency, the Ruble, has plunged 40 percent against the U.S. Dollar
since Russia’s murderous assault on Ukraine began on February 24, and the
fact that the Ruble has continued to set lower lows against the U.S. Dollar
since then, it’s a pretty good bet that the Ruble is not going to find a
bottom. The Ruble is now trading at less than one cent to the U.S. Dollar,
trading at 9 a.m. in London at 121.68 Rubles to $1.00.

The plunging Ruble means that Putin is going to be dealing with soaring
inflation, capital flight (despite his capital controls), and the continued
inability to reopen the Moscow Stock Exchange. The Exchange, known as MOEX,
has been closed since Monday, February 28. Before they were suspended from
trading on the London Stock Exchange on March 3, major Russian corporations
were trading for pennies as a result of Western sanctions and the collapse
in the Ruble.

Even the Russian central bank doubling its interest rate benchmark from 9.5
percent to 20 percent did not shore up the Ruble. Preventing the Ruble from
finding a bottom is the fact that each day brings more major corporations
announcing that they are severing ties with Russia for its brutal and
illegal war. So far, more than five dozen famous brands have announced
plans to suspend store operations in Russia, or cease shipping products
there, or sever joint business operations. The wives and mistresses of the
billionaire Russian oligarchs will henceforth have to travel outside the
country to buy their Hermes Birkin handbags, their Apple iPhones, their
Starbucks’ lattes and their Cartier Love bracelets.

Interestingly, the names of major corporations severing ties with Russia do
not, as yet, include the big names on Wall Street. One day after Russia’s
invasion of Ukraine, *Wall Street On Parade* broke the news that one of the
four largest banks in the U.S., Citigroup’s Citibank, was servicing 500,000
customers in Russia and operating bank branches in 10 Russian cities:
Moscow, St. Petersburg, Yekaterinburg, Nizhny Novgorod, Samara, Sochi,
Rostov-on-Don, Volgograd, Ufa and Kazan. Citigroup, a multinational banking
behemoth, has never had the best interests of the United States as a
priority. After receiving the largest banking bailout in history from the
U.S. government and the Federal Reserve from December 2007 through mid-July
2010 (a cumulative $2.5 trillion in loans, $45 billion in equity infusions,
and more than $300 billion in asset guarantees) the bank went on its merry
way serially violating the laws of the United States, paying fines, and
then breaking more laws.

Yesterday, Citigroup released a statement
<https://blog.citigroup.com/2022/03/statement-from-edward-skyler-on-citis-operations-in-ukraine-and-russia/>
indicating
that instead of closing down its bank branches in Russia, or at least
stating that it will accept no new deposits, it is merely operating on an
undefined “more limited basis” while also “supporting our corporate clients
in Russia.”

While the clear goal of the joint economic sanctions of the European
Commission, U.S., U.K., and Canada is to wake Putin up to the reality that
his own country and his political future will take a serious hit from his
military aggressions, JPMorgan Chase and Goldman Sachs somehow interpreted
that to mean they should go out and buy up cheap Russian corporate debt
<https://www.inquirer.com/business/russia-wall-street-buys-bonds-goldman-20220307.html>
in
the hopes of making a killing if the sanctions are listed.

Now that we are seeing the shocking images daily on television news shows
of what unchecked authoritarianism looks like, it was particularly
appropriate that Senator Sherrod Brown, Chair of the U.S. Senate Banking
Committee, chose this week to hold a hearing
<https://www.banking.senate.gov/hearings/examining-mandatory-arbitration-in-financial-service-products>
on
another form of authoritarianism – Wall Street’s private justice system
that denies both workers and customers the ability to access the nation’s
courts for a claim against a Wall Street bank. One of the witnesses for the
hearing, Paul Bland, an attorney and Executive Director of the non-profit
group, Public Justice, said this:

“The vast majority of consumer financial services that are provided in
America are accompanied by to a forced arbitration provision – consumers
can’t go to court if they’re cheated or injured; they have to go to a
secretive, unreviewable system selected by the corporation that wrote the
contract. The use of forced arbitration clauses by lenders is grossly
unfair to consumers.”

Forced arbitration is also a violation of the Seventh Amendment to the U.S.
Constitution which reads:

“In Suits at common law, where the value in controversy shall exceed twenty
dollars, the right of trial by jury shall be preserved, and no fact tried
by a jury, shall be otherwise re-examined in any Court of the United
States, than according to the rules of the common law.”

Laws don’t matter to Putin and laws don’t matter to Wall Street – as its
banks have proven time and time and time again
<https://bettermarkets.org/wp-content/uploads/2021/07/Better-Markets-Wall-Streets-Six-Biggest-Bailed-Out-Banks-FINAL.pdf>.
The thing is, whether it’s a bully lacking a moral compass with 5,977
nuclear warheads in Russia <https://www.bbc.com/news/world-europe-60564123>,
or bullies on Wall Street whose attitude is “it’s legal if you can get away
with it,” very bad things happen when powerful people are not held to
account. Americans learned that the hard way in 2008 when Wall Street
collapsed the U.S. economy and brought on the worst economic downturn since
the Great Depression of the 1930s.

The tragic part about Paul Bland’s testimony this past Tuesday before the
Senate Banking Committee is that Mr. Bland and the Editor of this website
were delivering those same warnings more than two decades ago, as was the
non-profit Public Citizen, which also sent a witness, Remington Gregg, to
testify at the hearing.

Until there is meaningful campaign finance reform in the United States, and
members of Congress have to answer to the American people instead of their
wealthy campaign funders on Wall Street, private justice systems will
continue to make a joke of the promise of real democracy in the United
States.

The most gripping moment in this week’s rapidly moving kaleidoscope between
good and evil, courage and cowardice, involved a Disney film, a small
child, and an underground bunker in Kyiv, Ukraine.

On February 28, just four days after Russia invaded Ukraine, Disney released
a statement
<https://thewaltdisneycompany.com/statement-from-the-walt-disney-company-in-response-to-the-crisis-in-ukraine/>
which
said: “Given the unprovoked invasion of Ukraine and the tragic humanitarian
crisis, we are pausing the release of theatrical films in Russia, including
the upcoming *Turning Red* from Pixar.”

Disney’s stand became all the more poignant when a 7-year old girl, Amelia
Anisovych, who had taken shelter with her family in a Kyiv underground
bunker, was filmed on a cell phone video singing the uncannily appropriate
lyrics to “Let It Go,” from the Disney movie, *Frozen*. A mother of two,
Marta Smekhova, who was also in the bunker and filmed Amelia on her cell
phone, posted the video to her Facebook page. It went viral from there. On
Monday evening, Anderson Cooper played the video on his CNN news program.

The young child’s angelic voice and mastery of the challenging melody (see
video clip below) has become a sensation on Twitter. U.K. newspapers are
reporting that Amelia has now made it safely from the bunker to Poland with
other members of her family.

The story line to “Frozen” is about the fearless Anna attempting to save
her Kingdom of Arendelle from a spell that has cast it into a perpetual
cold, icy winter. The lyrics to “Let It Go” include the following:

Let it go, let it go
I am one with the wind and sky
Let it go, let it go
You’ll never see me cry
Here I stand and here I stay
Let the storm rage on

There’s a scene in the movie where Anna’s sister, Elsa, steps with
trepidation on a dangerous, icy bridge and then, through her touch,
magically melts the ice. One can only hope that little Amelia will melt the
hearts of the Russian people and make them hold Putin to account.

Putin’s barbaric assault on Ukraine is being compared to the massacres and
destruction he brought to Grozny
<https://www.wbur.org/onpoint/2022/03/02/putin-grozny-chechen-ukraine-russia-military-past>,
Chechnya in 1999 and 2000. Until now, Putin’s bombardment of Grozny was the
worst since the Nazi shelling during World War II. Just as he is doing now,
Putin also censored independent media reporting about Grozny from inside
Russia. Thousands of civilian lives were lost and tens of thousands more
were maimed and injured at the hands of Putin in Grozny.

As if to send a message that he plans a replay of his massacres of innocent
children and women in Grozny, just yesterday Putin’s military bombed a
maternity and children’s hospital in the city of Mariupol
<https://www.bbc.com/news/world-europe-60675599>. Retired U.S. military
officials appeared on U.S. television throughout yesterday, calling his
actions in Ukraine “war crimes.”

When will people of conscience around the world say “enough is enough,”
both to Putin and Wall Street.
-- 
*Gunnar Larson - xNY.io <http://www.xNY.io> | Bank.org <http://Bank.org>*
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+1-646-454-9107
New York, New York 10001
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