Streetwise Professor

December 20, 2012

Don Vladimir Sends His Good Wishes. Be Afraid. Be Very Afraid.

Filed under: Energy,Politics,Russia — The Professor @ 9:33 am

One of the stock lines of a movie mafia don is the veiled threat, all wrapped up in an apparent expression of good will.  “Nice little business (or family) you have here.  Would be a tragedy if something happened to it.”

Don Vladimir played this role to the hilt in his End of the World press conference.  (When it got to the 3 hour mark, I imagine that most of the people in attendance were thinking the end of the world  sounded like a good idea.)

His first target: the AAR group of oligarchs, now flush with cash from their sale of  their stake in TNK-BP:

Putin said the TNK billionaires won’t be forced to invest the sale proceeds in Russia. “If we recognize the lawful, legitimate owners, if they earned their money legally, then it’s their business where they invest,” Putin said.

Government officials and executives from several Russian companies are in talks with “some participants in this deal” about investing the TNK-BP (TNBP) proceeds in the Russian economy, Putin said. “I hope they’ll decide in favor of investing in the Russian economy.”

If we [who is this we?] recognize”?  “If they earned their money legally”?  Had there been any previous suggestion of illegality?  These guys have been in business since the 90s, with virtually no interference from the government.  Only now is the legality of their previous activities is questionable?

No.  The message is clear.  Invest in Russia.  Or else.  The else being “we” (i.e., Putin and Sechin et al) will find some reason in Fridman et al‘s past conduct to take away their money.   The most likely something being traceable to “loans for shares” in the Yeltsin years.

But he promises these measures will be “careful, civilized.”  I’ll bet.  Like the measures used against Khodorkovsky.

Speaking of whom, Khodorkovsky was the “beneficiary” of a truly creepy expression of Putin’s “goodwill.”

President Vladimir Putin today wished Khodorkovsky “good health” after his release and said he hadn’t influenced the courts on the former billionaire Yukos Oil Co. owner’s case. Khodorkovsky and his business partner, Platon Lebedev, had their terms cut to 11 years from 13 years by the Moscow City Court.

I mean, that is right out of the mouth of a movie mafiosi.  Translation: if you want to keep your health, keep your mouth shut and your money out of politics.

It’s pathetic, really (though in a different way than Medvedev is pathetic).  Putin is becoming a self-caricature.   This is another symptom of stasis, Putin’s purgatory.

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    “One final point. The new report’s conclusions are based on mostly on publicly-available figures and easily-accessible international comparisons. Why didn’t the Russian authorities spot the problem? It would have been in Moscow’s interest to have pushed this debate into the open a long time ago.”

    Russia’s capital flight hasn’t been as bad as previously assumed, and Moscow, so desperate to show that their country is an investor’s paradise, is so incompetent it took major work with private consulting firms to point this out? Jesus.

    Comment by paul — December 20, 2012 @ 3:04 pm

  2. @paul. Jesus is right. I think this is EY’s way of buying an insurance policy. One good turn . . . . But it does strain credulity. Not like what EY did is rocket science.

    The ProfessorComment by The Professor — December 20, 2012 @ 3:48 pm

  3. The fact that their economics ministry is so incompetent that they can’t analyze public figures is an argument for capital flight!

    Comment by paul — December 20, 2012 @ 4:24 pm

  4. @paul. LOL. Totally. And Russians are supposedly gifted in math 😛

    The ProfessorComment by The Professor — December 20, 2012 @ 4:35 pm

  5. What makes Putin even more sinister is that he is only 45cm tall.

    Comment by Green as Grass — December 21, 2012 @ 3:55 am

  6. @Green. . . so you mean that wax figurine of Putin was life size?

    The ProfessorComment by The Professor — December 21, 2012 @ 8:41 am

  7. The issue about capital flight isn’t so much about competence but how one exactly measures it, the result being widely different figures.

    Incidentally, I don’t know why you’re hating on the “economics ministry” (that is, the Central Bank) so much seeing as their views I would wager are much closer to those of the SWP Hive, than that of the MGU/EY study.

    But the central bank isn’t rushing to rewrite its numbers. Central bank chairman Sergei Ignatiev said bluntly on Wednesday that Russia’s unfavorable investment climate was a major factor behind huge capital flight from the country in recent years.

    Comment by The Greatest Sublime — December 24, 2012 @ 2:35 pm

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