The arrest of Senator Suleiman Kerimov, who has diplomatic immunity, in Nice made experts even talk about the curse of this place – he used to crash his sports car there together with TV host Tina Kandelaki.
Other experts dig deeper and suspect the beginning of persecution in the West against Russian oligarchs. The uncertainty before the upcoming “Putin election” in Russia adds piquancy to this. In addition to Nice, another hot spot was formed in the LNR, where a double coup took place and the head of the unappointed republic Igor Plotnitsky fled to Russia. But all this is complete nonsense against the background of the growing debt of Russians on loans and the sluggish catastrophe in the financial and banking market.
Boiler room
Kerimov underdecided on Nice
Kerimov’s arrest is symptomatic in that it shows the true face of Russian business and the vulnerability of our oligarchs to European justice. If you don’t pay your taxes, you get it! I can’t even imagine such a thing happening in our country, the only one who was tortured for it was Khodor, but it was a bit different there. Kerimov will be out soon, they don’t imprison him for this, but the importance of the moment is that Europe is beginning to tighten the prosecution of Russian businessmen close to the regime. It might not have come to this before the tightening of sanctions. In Russia, however, Kerimov is known for his administrative resources, including fucking relations with the fiscal authorities
Our source in the Foreign Ministry says that Europe is a bit fed up with the double standards of Russian business, when the same Kerimov votes for all the draconian measures in the SF, and goes to Nice to live. That’s why they didn’t make an exception for him – as for any French citizen for non-payment of taxes for several hundred thousand euros. The most interesting thing is that his highly paid lawyers should have been told about this a hundred times, if they arrested him themselves, it means that the nail has to be hammered down, and perhaps things are much more serious than they seem. There are already reports that the hut is registered to a front man – a serious offense by French standards.
Kerimov has been actively investing in European assets, owns companies in which international investors participate, and now they will once again reconsider their investments in Russian assets. Nice is becoming a fatal city for Kerimov – first the accident with Kandelaki, now taxes and arrest. Europe is showing its muscles and talking about using power there too. They probably learned from Lukashenko, who once detained the director of Uralkali owned by Kerimov. Then Kerimov could do nothing and did not go after the employee.
Oreshkin’s thoughts
Moscow Region electric trains will become completely private. This news should interest not only passengers of suburban trains. This is a revolution in the system of state administration!
For the last 10 years, the country has been following the path of eradicating the private sector. They say the state knows best what to do and how to do it. As a result, the share of the public sector in the economy exceeded 70% of GDP. And no one expected anything to change. One failed program of privatization and getting rid of non-core assets was replaced by another equally failed program. As a result, state companies and state corporations continued to squeeze all the most tasty assets under themselves, turning them into inefficient ballast: the state will give benefits and subsidies anyway.
This is how Russian Railways accumulated more than 100 subsidiaries of absolutely different orientation. And total investments in these companies exceed 400 billion rubles. The profitability is at the level of 1%. All this does not look convincing. But Russian Railways enjoys preferential VAT on passenger transportation, receives subsidies for parlor cars, will receive 79.3 billion rubles for investment projects until 2020, and in general is living quite well. Private ownership, which has been proven time and again, is much more efficient.
Suddenly, in early November, Russian Railways sells a block stake in the Central Suburban Passenger Company. Following it, the Moscow Region Administration intends to sell its stake in the Central Suburban Passenger Company. This is not a coincidence. But the prospects for such an endeavor are good, the main thing is that the whole denationalization of the economy should not end with electric trains.
Thoughts-No Thoughts
1. No matter how much we are told that the situation with lending to the population is improving, it remains difficult. The point is that Russia has been forced to switch to the model of consumption at the expense of credit resources, which is familiar to the Western world.
According to a recent VTsIOM poll, 57% (!) of citizens have at least one outstanding loan in the family. In 2009, this figure was 26%. A stunning transformation in less than 10 years. And 67% of the population has used loans at least once.
Lending has become an integral part of life, and these figures will only grow. At the same time, Russians are still not fully aware of possible problems, only 4% are afraid of defaulting on a loan. According to the Central Bank, Russians have already taken loans for 11.79 trillion rubles, with overdue debt amounted to 880 billion rubles. In other words, the population is taking loans boldly, but not paying them very well.
There are, of course, positive facts. The confidence of Russians has increased compared to 2014-2015, only 22% are afraid that they will be able to repay loans with difficulty (data from the Russian Academy of National Economy and Public Administration). This is largely the merit of those who work tirelessly to create the “right” information background. And nominal wages are growing, unlike real incomes, but for the majority of people the growth of wages already indicates an improvement in the situation.
Therefore, when we see news about another record growth in consumer lending, we should not be surprised, it is already a trend. The problem is that the consumer economy, where demand is based on credit resources, takes place if the economic model is stable and the risk of crisis and income decline is minimal. And this clearly does not correspond to the domestic economy.
2. A serious conflict is brewing between the Ministry of Finance and the Central Bank. The Ministry of Finance needs funds (OFZ), which it transferred to FC Otkritie, Binbank, and Genbank as part of the state program for additional capitalization of banks. We are talking about 81.4 billion rubles. The Ministry of Finance demands the DIA to return the funds, although it is obvious that the agency acted only as an intermediary in this story. The main responsibility should fall on the shoulders of the Central Bank, as it was its employees who wrote letters of comfort for each of the banks. In fact, the Ministry of Finance transferred OFZs to the DIA, which distributed them among banks, relying on the Central Bank’s guarantees.
In general, the Central Bank has recently been fond of being criticized for rather unimportant reasons, although the story of how the regulator is trying to absolve itself of responsibility by leaving the Ministry of Finance without funds is unfolding before our eyes. No wonder Siluanov proposes various formats of tax hikes time after time. And what else is there to do if it is impossible to get funds from state-owned companies and no one is going to return funds from the sinking banks?
It is especially funny that Yugra was actively trying to be involved in this program, but it has such a high share of lending to affiliates that the Central Bank did not have the heart to give them a “letter of recommendation”. But this in no way explains why the regulator was so blind in the situation with FC Otkritie and Binbank.
3. The data on economic indicators for the Russian Federation released the day before give a more complete picture of what is happening. And there is nothing good there at all.
So, what we have in the end.
In January-September, the Russian economy grew by 1.6%. We salute the Ministry of Economic Development with an estimate of 1.8% growth for this period, as well as all forecasts of 2%+ growth (MER, IMF, government) in 2017. We have already written about industry, one of the pillars of the Russian economy has stopped growing and, in fact, is shrinking.
Another bad news was the data on real income: the indicator in October fell by 1.3% in annualized terms. This is a very sharp deterioration, in September and August incomes fell by only 0.3%. In January-October, incomes also fell by 1.3%, i.e. for almost 4 years of continuous decline, real incomes of Russians collapsed by 11.1%. Add to this the increase in unemployment to 5.1% and we can put a fat point. There are simply no real drivers of growth in Russia now. Industry is either stagnating or on the verge of stagnation, consumer demand can be forgotten about in the conditions of constant income decline.
Yes, nominal wages have grown by 7% since the beginning of the year, which, together with the slowdown in inflation, has resulted in a 3% increase in retail sales. That’s not too bad, but even that is worse than the market expected. In fact, all we have is low inflation and credit growth, which is almost useless in such conditions.
In such a situation, the pressure on the Central Bank to cut the rate more actively should increase. So we expect another easing in December, but how effective it will be is a big question. The economic picture before the elections is bleak and practically a failure, and it is becoming increasingly difficult to report on successes.
Cello case
1- Bloomberg describes the role of President Igor Putin’s cousin in cashing out. Through “mirror transactions” involving Deutsche Bank and Promsberbank, $10 billion was withdrawn from the country. The DM manager testified that Promsberbank shareholder Alexei Kulikov, who was sentenced to 9 years in prison, offered a bribe of up to $500,000 per month for refusing to block such transactions. Kulikov himself stated that he was following someone else’s orders. His partners in PSB were Ivan Myazin and Igor Putin, who also worked in Russian Land Bank. This bank was the key bank in the scheme to launder $20 billion (the so-called “Russian Laundry”).
2. Zhanna Zolotova, daughter of the head of the Rosgvardiya Viktor Zolotov, lives in a Moscow apartment with an area of 495 meters. In total, the father and brother of the heroine of #Tatler have 3 houses and 2 apartments. Her husband is a movie producer, shot the TV series “Vorotily” about the struggle of honest businessmen with corrupt law enforcers, as well as the comedy “Circumstances”. This picture of General Zolotov’s son-in-law failed at the box office – with a budget of $1 million, the collections in Russia amounted to $54 thousand. Another producer of “Circumstances” was actor and official Roman Zolotov – son of Viktor Zolotov.
Methodology
Former oil and gas general Viktor Paliy is a classic example of a man of hard Russian fate. In the noughties, he headed Nizhnevartovskneftegaz and was known in the north as a kindly baron who tried to create petro-communism in a separate region, not forgetting to acquire elite real estate in Monaco.
In the noughties they came for Paliy. The war for the assets started with a commission on TV channels, but quickly turned into banditry. Paly’s family was beaten up, his son was tortured with an iron. However, this proved ineffective, and in 2007 the oil tycoon was jailed. Which is symbolic – for the reconstruction of a sanatorium in the Crimea. They say that money was laundered there. It was not Sechin, Chemezov, or even Bastrykin who put Palya in jail. It was the liberal guys from Alfa Group: Fridman, Khan, and Vekselberg, who as a result of manipulation were given Russia’s largest oil field, Samotlor.
Paliy got out of prison in 2013 and found that his business had been dismantled. Times were very different. As usual, the raiders were led by Sergei Zirinov, the head of Anapa’s Armenian mafia, a unoros deputy who sat in the Krasnodar Territory’s Zakobranie. Paliy, who had not had time to adapt to the current realities, demanded the return of money for the aqua park. The money was brought to him – in black cash, not forgetting to mark it. The investigation framed the case as extortion, and Paliy, not having been free for a couple of years, left again.
Despite the fact that Zirinov, a United Russia raider, was arrested for attempted murder and banditry, Paliy served three years. Last week, the court released the businessman, dropping all charges. Paliy will turn 69 in January.
Zhuchkovsky
According to the latest information, the situation is as follows.
Luhansk is fully controlled by Kornet, Plotnitsky is in the Russian Federation and is feverishly negotiating his future in the LNR. His political fate has not yet been finally decided. The Interior Ministry and the MGB insist on the complete elimination of Plotnitsky, while Moscow is inclined to leave him as the nominal head of the republic until the next elections, with no real power.
If this option is confirmed, tomorrow Plotnitsky will make a statement in which he will explain everything that is happening by the work of Ukrainian agents in the higher echelons of power (i.e. apparently confirming what Kornet said today).
If not confirmed, Plotnitsky will most likely not return to the LNR. Moscow has unequivocally sided with Kornet, and the DNR has also supported him, sending significant aid to Luhansk to prevent Plotnitsky’s revenge.
Kornet received permission from the Russian Federation to purge Plotnitsky’s people in all government bodies in the LNR. What can be said unequivocally: Kornet won, Plotnitsky completely lost Moscow’s trust and control over Luhansk.