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You are here: Home / Economics / C.R.E.A.M. / Asset Seizure Open Thread: Just Wait Till the Privateers Show Up

Asset Seizure Open Thread: Just Wait Till the Privateers Show Up

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Looks official:



Somebody got advance notice, looks like…

Skunk at the garden party:


Professor Krugman:

… Everyone has heard about giant oligarch-owned yachts, sports franchises and incredibly expensive homes in multiple countries; there’s so much highly visible Russian money in Britain that some people talk about “Londongrad.” Well, these aren’t just isolated stories.

Filip Novokmet, Thomas Piketty and Gabriel Zucman have pointed out that Russia has run huge trade surpluses every year since the early 1990s, which should have led to a large accumulation of overseas assets. Yet official statistics show Russia with only moderately more assets than liabilities abroad. How is that possible? The obvious explanation is that wealthy Russians have been skimming off large sums and parking them abroad.

The sums involved are mind-boggling. Novokmet et al. estimate that in 2015 the hidden foreign wealth of rich Russians amounted to around 85 percent of Russia’s G.D.P. To give you some perspective, this is as if a U.S. president’s cronies had managed to hide $20 trillion in overseas accounts. Another paper co-written by Zucman found that in Russia, “the vast majority of wealth at the top is held offshore.” As far as I can tell, the overseas exposure of Russia’s elite has no precedent in history — and it creates a huge vulnerability that the West can exploit…

There are two uncomfortable facts here. First, a number of influential people, both in business and in politics, are deeply financially enmeshed with Russian kleptocrats. This is especially true in Britain. Second, it will be hard to go after laundered Russian money without making life harder for all money launderers, wherever they come from — and while Russian plutocrats may be the world champions in that sport, they’re hardly unique: Ultrawealthy people all over the world have money hidden in offshore accounts.

What this means is that taking effective action against Putin’s greatest vulnerability will require facing up to and overcoming the West’s own corruption…

Reader Interactions

97Comments

  5. 5.

    MikeBoyScout

    The headline didn’t really get expanded upon.
    Unverified reports today spoke of Syrians looking to join the fight.
    There will be a non insignificant amount of Chechen separatists joining as this conflict elongates.

  9. 9.

    Anne Laurie

    @Starboard Tack: How long before Trump comes up? Soon, please.

    TFG’s at CPAC this weekend… where the attendees are torn between blaming it all on Biden, and denying they’d ever heard of this ‘Poodin’ fella, before now.

    The crowd’s kinda dispirited.  All the fun pols were at Friday’s AFPAC [American Nazi] convention on Friday, and now the Lamestream Media is wagging fingers about ‘applauding genocide’ like that was a *bad* thing!

  10. 10.

    dmsilev

    Maybe we should take inspiration from the SCOTUS-approved Texas abortion law and allow private citizens to initiate seizure actions in the courts.

    I’m not sure what I’d do with a yacht, but I’d welcome the chance to find out.

  11. 11.

    Kent

    @Calouste: 
    +1

    It’s going to take billions of dollars and a Marshall Plan to rebuild Ukraine. The west needs to capture about $50 billion in Russian assets to fund it all.

  12. 12.

    Ken

    @dmsilev: Isn’t there a danger that all those yachts suddenly entering the market will depress prices, making the non-Russian millionaires regret their decision to buy one?

    Or even worse, what if it drops the assessed value of someone’s yacht below what they still owe for it, and draws the bank’s attention?

  13. 13.

    Jim, Foolish Literalist

    The current round of sanctions is designed to get Putin murdered

    Your proposal is acceptable

  15. 15.

    dmsilev

    @Ken: Yes, but think of all the people waiting to buy a starter yacht on the used market. They count for something as well.

  16. 16.

    Kent

    @Ken:

    @dmsilev: Isn’t there a danger that all those yachts suddenly entering the market will depress prices, making the non-Russian millionaires regret their decision to buy one?

    Or even worse, what if it drops the assessed value of someone’s yacht below what they still owe for it, and draws the bank’s attention?

    So, you saying Jeff Bezos and Larry Ellison are going to take a bath on their superyachts?   Boo hoo.

    On the other hand, there are probably plenty of new tech billionaires in the US who might want to pick up their own yachts at fire sale prices.

  17. 17.

    Gin & Tonic

    For those who are awake and watching SNL, a Ukrainian choral group (that my dear wife sang in *many* years ago) will be opening, singing a traditional Ukrainian religious song, basically “O Great God”

  21. 21.

    Gin & Tonic

    @eclare: Every region has its own distinctive style, colors, etc. – I’m talking about the embroidery. My dear wife knows an awful lot about this, takes one look at a shirt or blouse and says, oh that’s from [wherever.] I suspect we have every book on embroidery designs published in Ukraine in the 20th Century. And pillows, tablecloths, ornamental “towels”, shirts, blouses, dresses, belts, you name it.

  22. 22.

    Suzanne

    The current round of sanctions is designed to get Putin murdered

    So this is a dark thought I’ve been having: if it does end this way, I hope there’s video proof. Hitler killed himself in his bunker and many people didn’t believe it. But the people of the world need to believe it. I know there are always dead-enders, but they don’t matter.

    I didn’t think this was going to be the incident that finally — FINALLY — made TFG look undeniably bad to even some of his supporters, but silver linings.

  23. 23.

    delk

    Those yachts would make swell off shore housing for gay seniors. As a gay senior I know what I’m talking about! ?

  24. 24.

    Mallard Filmore

    @Kent: 

    It’s going to take billions of dollars and a Marshall Plan to rebuild Ukraine. The west needs to capture about $50 billion in Russian assets to fund it all.

    Lordy, please send SOME of it back to help the looted Russians. And this time, don’t spend it on American consultants in Moscow explaining how to correctly do Capitalism.

  29. 29.

    Splitting Image

    One possible outcome of a mass takedown of Russian oligarchs is that the ordinary brand of American plutocrat (and Rupert Murdoch) may turn out to be far less powerful than they have appeared to be.

    Not to suggest that people like the Koch brothers are harmless, but I think it’s possible that their power has been bolstered by large infusions of money from fun-loving Russians for the past decade or so, especially since Citizens United made political contributions harder to trace. Taking down some of the wealthier and more evil Russian oligarchs may turn off the spigot that has been supporting the Right Wing Noise Machine for awhile, as well as exposing many of the bad actors.

    Hope springs eternal perhaps.

  30. 30.

    Wapiti

    Regarding sanctions – I use Steam to buy games and I wonder how many Russian developers are going to be impacted by no money transfers. (Not that I care, I just wonder.)

  33. 33.

    Gin & Tonic

    @HumboldtBlue: Some people wonder about the morale and spirit of the Ukrainians – the first words of the national anthem are “Ще не вмерла Україна” – Ukraine has not yet perished. It dates from the 1860’s.

  37. 37.

    Nelle

    My husband reminded me that, when we lived in New Zealand, he went up to do some field work at someone’s house (he’s a hydrogeologist).  It was an estate, not a house.  Turns out to be a Russian oligarch and it was a rather stunning bit of New Zealand that the man had bought.  They used to be connected on Linkedin but probably not anymore.  Since he retired, he doesn’t even like to look at Linkedin.

  46. 46.

    Kent

    @Mallard Filmore:Lordy, please send SOME of it back to help the looted Russians. And this time, don’t spend it on American consultants in Moscow explaining how to correctly do Capitalism.

    Well, Russia isn’t getting destroyed by this war.  But nationalization of the assets of these oligarchs and reinvesting oil revenues back in the country instead of in Miami and London banks and real estate will do a lot of good in Russia going forwards.

  48. 48.

    Kent

    I’ve been rather pleasantly surprised at the speed and ferocity of the western response to this invasion, both in terms of sanctions and in terms of providing arms to Ukraine.  It might be too little too late.  But for anyone paying any attention to Europe over the past several decades, the speed and unity at which they are acting is pretty impressive.

    It strikes me that this is all chickens coming home to roost.  Putin’s Russia has been a rogue state for decades and I suspect he just has no friends left anywhere in the world outside of client states like Belarus who he has under his thumb.  And even that might be up in the air after this.

    There are serious geopolitical lessons here.

  51. 51.

    Kayla Rudbek

    @Wapiti: Good question. I use Ravelry to buy knitting patterns, and I have saved a search to deliberately exclude Russian designers from the library of patterns that I own. I can do similar limitations for buying patterns as well.

    And I really want the Virginia state liquor stores to pull out the Russian vodka as well…(Virginia requires hard liquor to be sold at state liquor stores, the ABC stores as they are called)

  54. 54.

    Steeplejack

    @Lum’s Better Half:

    With the apostrophe in your nym, every one of your comments is going to have to be approved by a front-pager. Remove it or replace it with, say, an asterisk, get approved once and comment at will.

  58. 58.

    CaseyL

    @Jim, Foolish Literalist: Wendy Deng was married to Murdoch at one point, and dated Putin.  She was also friends with Ivanka and Jared.  There is a whole web of connections that goes through her.  I believe the compelling interest is accumulating all the money in the world, and political power as a means to that end.

  60. 60.

    Steeplejack

    @zhena gogolia:

    Recent pictures of her on the Google (last month or so) have her hair much darker—which could be changed, of course—and I agree with you about her body shape.

    I think the “fog of war” around news and hot takes this week has made people a little giddy.

  61. 61.

    HumboldtBlue

    I just did some searching for photos of Sarah Huckabee at CPAC and I am not sure at all the link above is a picture of her either. The sentiment stands for the young woman, but I’m sensing that’s not Sanders.

  66. 66.

    Quiltingfool

    @Quinerly: Very interesting article about scarves.  In the photos of Ukrainian clothing, I noticed one outfit had beadwork similar to that we see in Native American clothing.  Coincidence?  Nah, I just think that embellishing clothing with beads, embroidery and the like was the way women could express their creativity and artistry; there is beauty everywhere.

  67. 67.

    patrick Il

    I would Confiscate russian money, keep half of it right away, and then 5% a day until the end of either the war or Putin.

  69. 69.

    Geoduck

    @CaseyL: It’s my understanding that the whole “Wendy Deng dated Putin” thing has been offered up without any actual evidence. She hangs out with terrible people, but we should stick to facts.

  71. 71.

    Kent

    Now THIS is how you manage the twitter feed of a head of state.  I have no idea if Zelensky manages his own twitter feed.  But talk about hitting exactly the right tone when your nation is at risk of annihilation.

    https://twitter.com/ZelenskyyU

    I feel like we are seeing the 2022 version of Churchill during the darkest hour in real time right before our eyes.

  73. 73.

    CaseyL

    @Geoduck: I didn’t know the Deng-Putin romance was never more than a rumor.  Sorry ’bout that! – But, yes, all these absolute wastes of protoplasm all seem to socialize together.

  76. 76.

    Kent

    @Ksmiami:@debbie: hmm. Me, I prefer either the Ceacescu or Mussolini ending.

    How about the Saddam Hussein ending?   Digging the dirty motherfucker out of a dirt spider hole where he has been hiding for the past week before stringing up his ass?

  77. 77.

    JML

    Anything that involves seizure of assets from rich fucks makes me happy. They get no mercy, they deserve no sympathy, and it serves them right.

    I’ve also decided that the only person related to Rupert Murdoch that shouldn’t be set adrift on a raft in the artic ocean is Anna Torv.

  78. 78.

    Martin

    Huh. It’s almost like if you cracked down on the money laundering before the invasions, maybe that would eliminate some of the incentives behind the invasions?

  79. 79.

    Yutsano

    The First Lady of Ukraine is cute as a button. I hope and pray she and the young ones are okay.

    During his inaugural address in 2019, Zelensky told lawmakers: “I do not want my picture in your offices: the President is not an icon, an idol or a portrait. Hang your kids' photos instead, and look at them each time you are making a decision.” pic.twitter.com/fjsHudv7FV— Benjamin Ramm (@BenjaminRamm) February 26, 2022

  83. 83.

    Dan B

    @delk: Yep!  My partner sorta grew up on huge wooden schooners, the Adventuress and the Schooner Zodiac, plus many other “metal buckets” and “plastic boats”.  They smelled like diesel to me but to him they smell like youth.

  85. 85.

    Kattails

    @Quiltingfool: WOW, those head dresses are stunning, and must weigh a ton.  I had to pay attention to notice the embroidered clothing also on exhibit. Thanks for that link!

    A magazine from many years ago, American Home Crafts,  featured Ukrainian embroidery in one issue.  Majorcan embroidery in another. (I’ve hung on to the issues I have for maybe 40 years, all really fine quality stuff.) And are you familiar with Folkwear patterns, which have been around, like, forever?  They do some  fun historical patterns but also a specific subset of patterns from around the world, from shirts of Russia and Ukraine, to traditional Japanese, Mexico, Gaza, with traditional embroidery patterns included.

  88. 88.

    Sebastian

    Here is a very good summary of economic sanctions and targets.

    Will sanctions be enough to stop wealthy Russian oligarchs? (news.com.au Murdoch site?)

     

    Two names stuck out:

    Oleg Deripaska … Hi Mitch McConnell! Can you explain the deal you did recently with Uncle Oleg?

    and

    Alisher Usmanov

    Remember this name, he’s Putin’s guy in Facebook (Meta).

    “A vicious thug, criminal, racketeer, heroin trafficker, and accused rapist”

    When Zuck fucked up FB and was about to go bankrupt, Usmanov bailed him out with a $200m Series D  (= a loan to meet payroll) and invested an additional $700m until the eventual IPO, where everyone made out like fucking gangsters.

    Let this sink in, jackals.

    Here is a super quick&dirty primer on startups:

    1. You start with an idea and no income. You find an angel investor who is willing to fund you with say $1m in exchange for 25% of the company.
    2. You start developing a product, testing, getting customers, etc. You hire people, very good people, the best people, to make a revolutionary product faster than the other college dropouts with angel investors.
    3. You are burning money so fast there is a whole discipline around “burn rate”.
    4. You receive money via Funding Rounds called Series A, B, C, D, … until you go public in an IPO and sell shares on the open market, settle your considerable loans, and make out like a bandit.

    That is the dream of Silicon Valley.

    Here is Zuck’s journey:

    2004-09-01 Angel $500,000
    2005-05-01 Series A $12,700,000 (Silicon Valley big shots)
    2006-04-01 Series B $27,500,000 (Silicon Valley Institutional Venture Capitalists)
    2007-10-24 Series C $240,000,000 (Microsoft)
    2007-11-30 Series C $60,000,000 (Li Ka-shing, Richest dude in Asia. Name’s real, I swear)
    2008-01-28 Series C $15,000,000 (European Funds)
    2008-03-27 Series C $60,000,000 (Rich Asian dude again)

    You have to understand, one doesn’t take on funding unless you need the money or want to artificially balloon the (perceived) valuation of the company = small funding is to boost, large funding is to meet payroll or pay bills.

    Zuck is still more than four years away from his IPO, he is bleeding cash like crazy. A month after getting $60m from his Asian sugar daddy, he takes a loan of $100m.

    2008-05-01 Debt Financing $100,000,000

    A year later Usmanov offers $200m, silent investor, doesn’t want any votes. Zuck accepts.

    2009-05-26 Series D $200,000,000 (Usmanov)
    2009-06-28 Secondary Market $120,000,000 (Californian Fat Cats getting in on the ride)
    2011-01-21 Private Equity $1,500,000,000 (Usmanov and Goldman Sachs)

    Zuck doesn’t need to be told what to do, he does it in anticipative obedience to his masters.

  89. 89.

    dr. luba

    @Quiltingfool: Beadwork on shirts is a fairly recent (20th century) development, something we picked up from next door Romania. It is mostly found in Bukovyna, but has become quite popular in the Hutsul regions (Carpathian highlanders) for weddings.

  91. 91.

    dr. luba

    @Quiltingfool: Floral headdresses were  worn for weddings in the past, and could be quite elaborate.  Some of those in that article are over-the-top and inauthentic–all that grain sticking out?  Didn’t happen.

    The wedding season was usually late fall and winter, after summer farmwork and the harvest were over, so fresh flowers weren’t available.  Silk and dried flowers, plus all sorts of ribbons, beads, etc. could also be incorporated.

    Unmarried women wore simple headdresses or flowers; after marriage they wore an ochipok or namytka, often made of lengths of cloth and folded and tied. In modern times those have largely been replaced by simple scarves, brightly colored, which are what the Ukrainian settlers on the western plains of Canda shared with the Cree women.

  96. 96.

    Chris Johnson

    That’s interesting, Sebastian: so Facebook has been the Russian Mob from the very beginning. Explains a lot. Glad I got off it :P

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