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BLOOMBERG Bloomberg Business ... Saturday, October 1st, 2022 Original article: Peter Burgess COMMENTARY Peter Burgess | ||
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Bloomberg Business
How Truss’s ‘Reagan Moment’ Upended Global Markets
It’s a radical policy change and investors are going to have to get used to it, Evercore ISI’s Emanuel says.
Liz Truss
Liz TrussPhotographer: Hollie Adams/Bloomberg
ByMichael P. Regan and Vildana Hajric
September 30, 2022 at 4:00 AM EDT
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UK Prime Minister Liz Truss triggered the latest wave of turbulence in global markets after announcing economic plans that include unfunded tax cuts. The move crushed the value of the pound while sending the already struggling country’s borrowing costs soaring.
To Julian Emanuel, chief equity and quantitative strategist at Evercore ISI, the move was reminiscent of US tax cuts imposed under Ronald Reagan in the 1980s, what came to be known as “Reaganomics.” In both cases, the policy was at odds with moves by other nations’ efforts to combat high inflation. Emanuel joined this week’s What Goes Up podcast to discuss the latest bout of volatility across asset classes, and the role the new Tory leader has played in causing it.
“It does represent a radical change in policy that is more evocative of Reagan,” he says. “And investors are going to have to get used to it.”
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------------------------------------- Russia-Ukraine Latest News: October 1, 2022 Have a confidential tip for our reporters? Get in touch Before it's here, it's on the Bloomberg Terminal Learn more LIVE ON BLOOMBERG Watch Live TV Listen to Live Radio Most Read Technology Meta to Cut Headcount for First Time, Slash Budgets Across Teams Markets Runaway Bear Market Blows Past Everything Meant to Slow It Down Business Walmart, CVS Face Suits Blaming Common Painkiller for Autism Markets S&P 500 Closes Quarter at Lowest in Two Years: Markets Wrap Markets BofA Strategists See Wall Street Rout Forcing Asset Sales Politics Ukraine Latest: Gazprom Cuts Off Italy; Kyiv Troops Enter Lyman 0:29 US Sanctions Russia's Top Central Banker Unmute US Sanctions Russia's Top Central Banker Bloomberg News October 1, 2022 at 3:03 AM EDTUpdated onOctober 1, 2022 at 10:08 AM EDT Share this article In this article GAZP GAZPROM 216.11RUB-1.15-0.53% TWTR TWITTER INC 43.84USD+1.10+2.57% ENI ENI SPA 10.91EUR+0.11+1.00% NG1 Generic 1st 'NG' Future 6.77USD/MMBtu-0.11-1.57% CL1 WTI Crude 79.49USD/bbl.-1.74-2.14% ------------------------------------- Ukrainian forces on Saturday entered a strategic town in the country’s east after encircling Russian troops there, challenging President Vladimir Putin’s claim to have annexed the area the day before. Putin said Moscow was annexing four occupied Ukrainian regions “forever” and repeated warnings that he’d use all available means to defend the territories. The US and European Union members denounced the move. The US sanctioned hundreds of Russians, including central bank head Elvira Nabiullina and Deputy Prime Minister Alexander Novak, a key figure in Russian dealings with OPEC. Russia’s state-controlled Gazprom suspended natural gas deliveries to Italy on Saturday, escalating the energy crisis in Europe. Ukraine’s atomic power provider accused Russian troops of detaining the head of the occupied Zaporizhizhia nuclear plant and appealed to international authorities for help. (See RSAN on the Bloomberg Terminal for the Russian Sanctions Dashboard.) Key Developments
------------------------------------- Russia’s Gazprom Cuts Off Supplies of Gas to Italy (3:40 p.m.) Russia’s state-controlled Gazprom PJSC suspended natural gas deliveries to Italy on Saturday, escalating the energy crisis in Europe. “As of today Gazprom is no longer delivering gas to Eni,” said a spokesman for Eni SpA, Italy’s largest oil company. Gazprom supplies Italy with gas through a pipeline that passes through Austria. The cutoff appeared to target just Italy, with Austria continuing to receive gas. Higher volumes of Russian gas were allocated to OMV than had been recently, a company spokesman said. Gazprom already slashed gas exports to Europe to bare minimum France Prepares New Caesar Cannons for Ukraine: Le Monde (3 p.m.) France is preparing to deliver as many as 12 new Caesar cannons to Ukraine’s force, the French daily reported on Saturday, without saying how it obtained the information. The weapons were initially destined to Denmark. Technical talks are still ongoing, though an agreement in principle has been found between the French, Ukrainian and Danish governments. An official at the French Ministry of Armed Forces declined to confirm the details of the report, beyond saying that France has supported Ukraine from the first days of Russia’s invasion. Russian Rapper ‘Walkie’ Commits Suicide (2:54 p.m.) The Russian who rapped under the name “Walkie” killed himself rather than risk being drafted to fight in Ukraine, after recording an online video telling fans of his decision, according to Russian media reports on Saturday. Ivan Petunin, 27, said he had an exemption to the call-up because of psychological problems but feared the authorities’ mobilization order would ultimately affect all draft-age men. Ukraine’s Foreign Ministry Demands Return of Atomic Plant Official (1:46 p.m.) Ukraine’s foreign affairs ministry called on the international community -- including the United Nations and its nuclear agency, as well as the Group of Seven nations -- to help secure the release of Zaporizhzhia nuclear power plant director Ihor Murashov. A Russian patrol seized Murashov on Friday afternoon and took him to an undisclosed location, Ukraine’s state nuclear company Energoatom said in a Telegram post. Russian officials haven’t commented on the claim. Poland Cracks Down on Russian Guest Workers (1:28 p.m.) Poland plans to end simplified work permits for Russian citizens on the heels of its recent travel-visa ban, according to a draft law. About 35,000 Russians used the simplified procedure last year, typically to take up seasonal jobs. Poland’s government says Russia’s invasion of requires stricter rules to avoid the risk of hybrid attacks by those allowed easy access to the country. ------------------------------------- Russian Troops Said to be Encircled in Lyman (10:08 a.m.) Some 5,000 Russian troops are said to be surrounded around Lyman as Kyiv’s forces push to recapture the strategic rail hub in Ukraine’s east, a day after Russian President Vladimir Putin said he’d annexed the region. The Moscow-backed forces have no way of leaving the town beyond “trying to escape, die or surrender,” Luhansk Governor Serhiy Haidai said on Facebook. If Lyman is liberated, Ukraine’s army may press east toward Kreminna, he said. Five nearby settlements were liberated on Saturday, a military spokesman said. Ukraine Surrounds Lyman, a Key Hub in Region Annexed by Russia “Ukraine is about to capture Lyman and it shows its military prowess again by humiliating the Russian army,” Mick Ryan, a defense analyst and retired Australian general, said on Twitter. Ukraine’s Zelenskiy Thanks Biden for Signing Bipartisan Aid Bill (9:54 a.m.) Ukraine Atomic Plant Chief Said to be Detained by Russia (9 a.m.) Moscow’s troops detained the head of the Zaporizhzhia nuclear power plant as he was driving to the nearby city of Energodar, the Ukrainian state nuclear company Energoatom said in a Telegram post. A Russian patrol seized Ihor Murashov, the plant’s director-general, on Friday afternoon, stopping his car and blindfolding him before taking him to an undisclosed location, according to the post. Russian officials haven’t commented on the claim. Energoatom President Petro Kotin demanded Murashov’s immediate release and urged the UN’s International Atomic Energy Agency to intervene. “His detention by (Russia) jeopardizes the safety of Ukraine and Europe’s largest nuclear power plant,” Kotin said. Black Sea Grain Initiative Has Shipped 5.5M Tns So Far, Minister Says (8:30 a.m.) A total of 5.5 million tons of agricultural products were shipped from three Black Sea ports in Aug-Sep under the safe-transit agreement brokered by Turkey and the UN, Ukraine’s infrastructure minister said. “This is important not only for countries facing hunger but for the entire world,” Oleksandr Kubrakov said on Twitter. “Such export volumes positively affect the dynamics of food prices.” Zaporizhzhia Strike Likely a ‘Long-Range Air Defense Missile,’ UK Says (8 a.m.) The munition involved in Friday’s strike on a civilian convoy southeast of Zaporizhzhia “was likely a Russian long-range air defence missile being used in a ground attack role,” the UK defence ministry said. “Russia’s stock of such missiles is highly likely limited and is a high-value resource designed to shoot down modern aircraft and incoming missiles,” the UK said. Moscow is “killing civilians it now claims are its own citizens.” At least 25 people were killed in the strike, including two children, Ukrainian authorities said. The people were preparing to travel into occupied areas to rescue relatives or deliver aid. ------------------------------------- Putin’s Funding Unscathed by Latest US Sanctions (8 a.m.) The latest measures taken by the US to sanction Russian officials, their families, and others appear likely to have little practical effect on President Vladimir Putin’s ability to sustain his country’s economy with oil and gas revenue. “To further isolate Russia, there needs to be a serious look at deploying secondary sanctions, rather than just threatening,” said Daniel Tannebaum, a former Treasury Department official. “Secondary sanctions force countries to choose between doing business with the target of sanctions, or those imposing sanctions.” Ukraine War Hurts Party Back by Russians in Latvian Vote (6 a.m.) Latvian voters are poised on Saturday to knock a party appealing to the nation’s Russian population from the top political spot for the first time in more than a decade, weakening a former ally of Moscow in the NATO member state. Polls suggest Krisjanis Karins, Latvia’s US-born, center-right prime minister, will defeat Harmony, a Social Democratic party that represents much of the Baltic nation’s Russian-speaking minority. Putin’s Invasion Hurts Party Backed by Russians in Latvian Vote Latvia elects a new parliament An election poster featuring Krisjanis Karins on a wall in the capital Riga, in September. Source: picture alliance No Sign Putin Has Decided on Using Nuclear Weapons, US Says (4:10 a.m.) US Secretary of Defense Lloyd Austin says he hasn’t seen any sign that Putin has made a decision on using nuclear weapons in the war on Ukraine. Speaking to CNN’s Fareed Zakaria, Austin reiterated US condemnation of Russian threats to use nuclear weapons, calling it “irresponsible behavior,” according to excerpts provided by the television network ahead of the interview which airs Sunday. He said the decision will be made by one man -- Putin -- and there are “no checks” on the Russian president, but added he hasn’t seen anything that would lead him to believe that a decision on using nuclear weapons has been made. ------------------------------------- Russia Blocks UN Vote Condemning Annexation (9:57 p.m.) A United Nations Security Council resolution condemning Russia’s annexation of Ukrainian territory failed Friday after Russia exercised its veto as a permanent member of the council. Vassily Nebenzia, the Russian envoy to the UN, blasted the resolution and accused other council members of provoking Russia into vetoing it. The resolution, introduced by the US and Albania, gained the backing of 10 council members. China, India, Brazil and Gabon abstained. Adding Ukraine to NATO Is for a ‘Different Time’: US (9:33 p.m.) US National Security Adviser Jake Sullivan reaffirmed the Biden administration’s position that Ukraine’s request to join NATO should be considered “at a different time.” Ukrainian President Volodymyr Zelenskiy said earlier Friday that his country would make an accelerated bid to join the alliance after Russia formally annexed areas of Ukraine. “The best way for us to support Ukraine is through practical, on-the-ground support in Ukraine and that the process in Brussels should be taken up at a different time,” Sullivan said in response. — With assistance by Ros Krasny Up Next Russia Tells Workers at Zaporizhzhia Nuclear Plant to Re-apply Jobs With Rosatom Have a confidential tip for our reporters? Get in touch Before it's here, it's on the Bloomberg Terminal Learn more Most Read Technology Meta to Cut Headcount for First Time, Slash Budgets Across Teams Markets Runaway Bear Market Blows Past Everything Meant to Slow It Down Business Walmart, CVS Face Suits Blaming Common Painkiller for Autism Markets S&P 500 Closes Quarter at Lowest in Two Years: Markets Wrap Markets BofA Strategists See Wall Street Rout Forcing Asset Sales ------------------------------------- Politics Russia Forcing Ukraine Workers Into Rosatom After Nuclear Theft Russia claims Zaporizhzhia Nuclear Power Plant as war booty IAEA rejects Russian claim, Zaporizhzhia critical to Ukraine A Russian soldier guards Zaporizhzhia nuclear power station in southeastern Ukraine. A Russian soldier guards Zaporizhzhia nuclear power station in southeastern Ukraine.Source: AP Photo ByJonathan Tirone September 30, 2022 at 5:02 AM EDT Listen to this article 2:19 Share this article Follow the authors @virtualnomad + Get alerts forJonathan Tirone Ukraine said its workers at the Russian-occupied Zaporizhzhia Nuclear Power Plant were told they’ll need to re-apply with Rosatom to keep their jobs. President Vladimir Putin’s plan to recognize the Zaporizhzhia region of Ukraine as part of Russian territory is overshadowing international attempts to de-escalate fighting around Europe’s biggest nuclear power station. Kyiv’s ambassador told a meeting of the International Atomic Energy Agency on Thursday that Rosatom has sent more officials to Zaporizhzhia to enforce a change in ownership once the Kremlin annexes the territory. “These representatives of Rosatom stated that at that moment Zaporizhzhia Nuclear Power Plant will belong to Rosatom and therefore within two weeks all employees must write an application for Rosatom,” Ambassador Yevhenii Tsymbaliuk said. “We call on the IAEA to say a firm no.” Allowing Russia to claim ownership of Zaporizhzhia would represent the biggest nuclear theft in history. The plant, with six reactors that produce about a fifth of Ukraine’s electricity when operational, would cost at least $40 billion to replicate. Russian forces targeted the facility during the first week of the war and have been there ever since. Europe's Largest Nuclear Plant Under Attack Zaporizhzhia accounts for about 20% of Ukraine's electricity Source: World Nuclear Association Russia’s Ambassador to the IAEA, Mikhail Ulyanov, suggested that the plant’s transfer to Russian ownership will be beneficial to the employees. Russia and Rosatom had the right of reply on floor at IAEA after Ukraine divulged the news. Neither side used this opportunity. Russia is “treating Ukraine’s civilian infrastructure as a military trophy, seeking to deprive control over its own energy resources,” said US Ambassador to the IAEA Laura Holgate. All of Zaporizhzhia’s reactors are currently shut down, with cooling provided by grid connections to Ukraine’s electricity network. The plant “must remain connected to the Ukrainian electricity grid and is an integral part of the Ukrainian energy system,” said Canada’s IAEA Ambassador Troy Lulashnyk, speaking on behalf of more than a dozen countries. “Any sham referendum conducted by the Russian Federation within Ukraine’s internationally recognized borders has no political or legal effect on the status of the plant or the areas surrounding the facility,” he said. Putin on Friday signed decrees recognizing the “independence” of occupied Kherson and Zaporizhzhia in Ukraine as a prelude to absorbing those regions, as well as Donetsk and Luhansk, into Russia -- a move that’s expected later in the day. Up Next ------------------------------------- Putin Defends Annexation of Occupied Ukraine Lands Have a confidential tip for our reporters? Get in touch Before it's here, it's on the Bloomberg Terminal Learn more LIVE ON BLOOMBERG Watch Live TV Listen to Live Radio Most Read Technology Meta to Cut Headcount for First Time, Slash Budgets Across Teams Markets Runaway Bear Market Blows Past Everything Meant to Slow It Down Business Walmart, CVS Face Suits Blaming Common Painkiller for Autism Markets S&P 500 Closes Quarter at Lowest in Two Years: Markets Wrap Markets BofA Strategists See Wall Street Rout Forcing Asset Sales Politics
------------------------------------- Putin Won't Scare or Intimidate Us, Biden Says Unmute Putin Won't Scare or Intimidate Us, Biden Says ByDaniel Flatley September 30, 2022 at 5:39 PM EDTUpdated onSeptember 30, 2022 at 8:49 PM EDT Listen to this article 5:59 Share this article Follow the authors @DanielPFlatley + Get alerts forDaniel Flatley In this article CL1 WTI Crude 79.49USD/bbl.-1.74-2.14% 2057703D TREASURY Private Company The US sanctioned hundreds of Russian officials, lawmakers, family members and businesses Friday in what Treasury Secretary Janet Yellen called a “sweeping action,” but in reality the measures will have little practical effect on President Vladimir Putin’s ability to sustain his country’s economy with oil and gas revenue. That raises fundamental questions about the effectiveness of sanctions, despite how big it looks on paper for the Biden administration to go after Russia’s central banker, Elvira Nabiullina, and Alexander Novak, the deputy prime minister and a key figure in Russia’s energy sector. A raft of sanctions so far haven’t materially affected the war on the ground in Ukraine or dented Putin’s determination to pursue it despite repeated setbacks. Putin’s brazen annexation of regions in Ukraine -- and his threat to use nuclear weapons to defend his land grab -- required a response of some kind. For the Biden administration, it came down to the need to send a signal, to communicate to countries that may be inclined to support the Russian government and work with its key financial officials that they could eventually land on the wrong side of US sanctions policy. “I want to issue a clear warning to those who would think about providing political and economic support to these annexed territories or to Russia’s efforts to justify and defend the annexation: You can be subject to US sanctions as a result of those activities,” said US National Security Adviser Jake Sullivan. ------------------------------------- Read More: Biden Says Nord Stream Leak Was ‘Deliberate Act of Sabotage’ But it’s not clear that this talk of secondary sanctions is enough. “To further isolate Russia, there needs to be a serious look at deploying secondary sanctions, rather than just threatening,” said Daniel Tannebaum, a former Treasury Department official who is a partner at Oliver Wyman. “Secondary sanctions force countries to choose between doing business with the target of sanctions or those imposing sanctions. In this instance, you could carve out energy, agricultural, food and medicine-related transactions but more broadly ban additional sectoral trade.” US agencies came up with the long list of new sanctions targets after Putin announced the annexation based on sham referendums in areas of Ukraine. President Joe Biden said this week that the US would “never, never, never recognize Russia’s claim on Ukraine sovereign territory.” On Friday, Biden declared that a massive leak from the Nord Stream gas pipeline system in the Baltic Sea was an intentional act, and that Russian statements about the incident shouldn’t be trusted. “It was a deliberate act of sabotage. And now the Russians are pumping out disinformation and lies,” he told reporters at the White House. Biden: Nord Stream Leak Was Act of Sabotage Play0:21 President Biden calls blasts in the Nord Stream pipeline system a “deliberate act of sabotage.” Speaking at the White House, he said, “we’re working with our allies to get to the bottom exactly, what precisely, what happened.”Source: Bloomberg Yellen said in a statement that Friday’s moves were meant to “further weaken Russia’s already degraded military industrial complex” and that the US was taking specific aim at Russia’s “financial architecture” to limit its ability to prop up its economy. But the Treasury also said it would continue to allow people other than Americans to buy Russian oil and gas, which critics of the US response have cited as a weakness in the sanctions regime. “There’s been a paradox in these sanctions,” Senator Bill Cassidy, a Louisiana Republican said in an interview on Bloomberg Television’s “Balance of Power With David Westin.” “As the international price of oil has gone up, Russia has had increased revenue from selling oil and natural gas.” Assistant Treasury Secretary Elizabeth Rosenberg told the Senate Foreign Relations Committee on Wednesday that imposing financial costs on Russia while mitigating the effects of its actions has required “extraordinary planning, coordination, economic analysis, diplomacy, and creative policy making.” She pointed to a 35% drop in Russia’s stock market since the start of the war and said its economy was expected to contract over the next two years. She told senators that Russia has had to turn to Iran and North Korea for weapons because of the export controls imposed by the US and its allies. The Treasury Department has been working with European allies to impose a cap on the price of Russian oil. The proposal would let oil flow from the country to buyers in the developing world provided the insurers and finance companies that facilitate the transport attest that it’s sold below a pre-set cap. The Treasury has said it anticipates the cap will be “well above” the cost of production. When the new US sanctions were announced, attention turned immediately to Nabiullina. She has served as Russia’s central bank governor since 2013 and was appointed to a new five-year term in March. Before that, she served as Putin’s economic adviser. She has managed the economic fallout from international sanctions, quickly adjusting to a wartime policy when the ruble tumbled 30%. Elvira Nabiullina Elvira NabiullinaSource: Bloomberg “I don’t think that sanctioning Governor Nabiullina itself is going to make that much difference, I think it’s more symbolic,” said Rachel Ziemba, a fellow at the Center for a New American Security. “The big question and step is about the price cap and what happens with the energy markets. That’s the piece that’s still not been addressed. So while it’s a very long list, I’m not sure it’s a full game-changer.” A bipartisan pair of senators -- Chris Van Hollen, a Maryland Democrat, and Pat Toomey, a Pennsylvania Republican -- have introduced legislation that would impose secondary sanctions on countries such as India and China that purchase Russian oil at prices above the cap. The Treasury Department has shied away from using secondary sanctions to enforce the cap out of fear the measures would drive important allies like India away from the West. Read more: Senators Seek Secondary Sanctions on Russian Oil Purchases Beyond the energy sector, there’s a question around how porous US sanctions on prominent Russian officials and citizens may prove to be. Russian Oligarch Oleg Deripaska evaded sanctions to fly his girlfriend to the US in 2020 to ensure that their child was born on American soil. A second attempt was halted by authorities earlier this year, according to the Justice Department. Tannebaum and Ziemba said the most effective part of the US actions was restrictions on certain exports to Russia, including critical technology. More significant still is the threat of penalties for third countries who sell those items to Russia, they said. Deripaska Violated Sanctions to Have US-Born Kids, DOJ Says The effectiveness of the package lies in the additional entries on the Commerce Department’s Entity List, Tannebaum said. “That will make it harder for Russia to import the goods needed to keep their war in Ukraine going.” — With assistance by Justin Sink (Updates with Senate testimony, starting in paragraph.) Up Next Russia’s Reservists Stock Up for Battlefield, Fearing Army Lacks Supplies Have a confidential tip for our reporters? Get in touch Before it's here, it's on the Bloomberg Terminal Learn more Most Read Technology Meta to Cut Headcount for First Time, Slash Budgets Across Teams Markets Runaway Bear Market Blows Past Everything Meant to Slow It Down Business Walmart, CVS Face Suits Blaming Common Painkiller for Autism Markets S&P 500 Closes Quarter at Lowest in Two Years: Markets Wrap Markets BofA Strategists See Wall Street Rout Forcing Asset Sales Politics
------------------------------------- Up Next Ukraine Advance Near Key Donbas Town Tests Putin’s Land Grab Have a confidential tip for our reporters? Get in touch Before it's here, it's on the Bloomberg Terminal Learn more LIVE ON BLOOMBERG Watch Live TV Listen to Live Radio Most Read Technology Meta to Cut Headcount for First Time, Slash Budgets Across Teams Markets Runaway Bear Market Blows Past Everything Meant to Slow It Down Business Walmart, CVS Face Suits Blaming Common Painkiller for Autism Markets S&P 500 Closes Quarter at Lowest in Two Years: Markets Wrap Markets BofA Strategists See Wall Street Rout Forcing Asset Sales Politics
------------------------------------- More US Artillery Prized by Ukrainians Won’t Arrive for Years Ukraine’s President Volodymyr Zelenskiy called a meeting of his security council for Friday, likely to consider a response to the attempted annexations. Lyman is of military significance because it has acted as a launch point for Russian assaults on Slovyansk, one of the last Donbas population centers still under Ukrainian control, following the loss of Donetsk and Luhansk in 2014 and of Mariupol earlier this year. Once again in Ukrainian hands it could provide a base for attacks toward the twin cities of Sievierodonetsk and Lysychansk about 60 km (37 miles) east, seized by Russia earlier this year in fierce attritional battles. The pressure is on for Ukrainian forces to make more territorial gains, before winter rains and a wave of new Russian conscripts makes that harder. Ukraine’s Plea for Tanks Bogs Down as US, Germany Confront Risks “The collapse of the Lyman pocket will likely be highly consequential to the Russian grouping in northern Donetsk and western Luhansk oblasts and may allow Ukrainian troops to threaten Russian positions along the western Luhansk Oblast border and in the Severodonetsk-Lysychansk area,” said the Institute for the Study of War, a Washington think tank that monitors the war daily. Ukrainian and Western military analysts saw the fall of Lyman as just a matter of time on Thursday, based on unverified reports that the last remaining road for Russian troops to escape from the pocket had come under Ukrainian artillery fire. — With assistance by Daryna Krasnolutska (Adds observation that Lyman likely to fall within days) Up Next Russia-Ukraine Latest News: September 30, 2022 Have a confidential tip for our reporters? Get in touch Before it's here, it's on the Bloomberg Terminal Learn more LIVE ON BLOOMBERG Watch Live TV Listen to Live Radio Most Read Technology Meta to Cut Headcount for First Time, Slash Budgets Across Teams Markets Runaway Bear Market Blows Past Everything Meant to Slow It Down Business Walmart, CVS Face Suits Blaming Common Painkiller for Autism Markets S&P 500 Closes Quarter at Lowest in Two Years: Markets Wrap Markets BofA Strategists See Wall Street Rout Forcing Asset Sales Politics Ukraine Latest: Putin Says Four Regions’ Annexation Is ‘Forever’ Play VideoPlay Unmute Current Time 0:00 / Duration 0:00 Share Fullscreen Russia's Putin Annexes Four Ukrainian Territories Unmute Russia's Putin Annexes Four Ukrainian Territories Bloomberg News September 30, 2022 at 2:48 AM EDTUpdated onSeptember 30, 2022 at 10:58 PM EDT Share this article In this article CL1 WTI Crude 79.49USD/bbl.-1.74-2.14% 2140864D UNITED NATIONS Private Company 2201564Z MOVE ON Private Company TWTR TWITTER INC 43.84USD+1.10+2.57% ------------------------------------- Open President Vladimir Putin on Friday said that Russia is annexing four occupied regions in Ukraine “forever” and repeated warnings that Moscow will use all available means to defend the territories. The US and European Union members denounced the move, with President Joe Biden calling it a “flagrant violation of the UN Charter and the basic principles of sovereignty and territorial integrity.” The US sanctioned hundreds of Russians, including central bank head Elvira Nabiullina and Deputy Prime Minister Alexander Novak, a key figure in Russian dealings with OPEC. Biden also said that damage to the Nord Stream gas pipelines was a “deliberate act of sabotage.” Russia's Putin Annexes Four Ukrainian Territories Play0:50 Vladimir Putin formalized Europe’s biggest land grab since World War II and accused the West of trying to subjugate Russia. Putin told officials at the Kremlin “they will become our citizens forever.”Source: Bloomberg (See RSAN on the Bloomberg Terminal for the Russian Sanctions Dashboard.) Key Developments
------------------------------------- On the Ground Russia has launched multiple missile and air strikes, as well as more than 100 rocket attacks at almost 50 Ukrainian settlements, Ukraine’s General Staff said. Moscow’s troops shelled the southern cities of Mykolaiv and Odesa on Thursday night. Kyiv’s troops have likely nearly completed the encirclement of the Russian grouping in Lyman and cut critical ground lines of communication that support Russian troops in the Drobysheve-Lyman area, the US-based Institute for the Study of War said in an update. Seven months into the conflict, Belarus remains highly unlikely to become directly involved in the war in Ukraine on behalf of Russia, according to ISW. Assessed Control of Terrain in Ukraine Sources: Institute for the Study of War and the American Enterprise Institute’s Critical Threats Project Note: Map shows control areas as of September 22, 2022. All times CET: No Sign Putin Has Decided on Using Nuclear Weapons, Austin Says (4:10 a.m.) US Secretary of Defense Lloyd Austin says he hasn’t seen any sign that Putin has made a decision on using nuclear weapons in the war on Ukraine. Speaking to CNN’s Fareed Zakaria, Austin reiterated US condemnation of Russian threats to use nuclear weapons, calling it “irresponsible behavior,” according to excerpts provided by the television network ahead of the interview which airs Sunday. He said the decision will be made by one man -- Putin -- and there are “no checks” on the Russian president, but added he hasn’t seen anything that would lead him to believe that a decision on using nuclear weapons has been made. ------------------------------------- World Bank Makes $530 Million Available (4 a.m.) Another $530 million is available for Ukraine to meet urgent needs created by Russia’s invasion, according to the World Bank. The UK provided $500 million while Denmark provided the balance through loan guarantees, the World Bank said in an emailed statement. The bank has mobilized almost $13 billion in financing for Ukraine -- including commitments and pledges from donors -- of which $11 billion has been fully disbursed Russia Blocks UN Vote Condemning Annexation (9:57 p.m.) A United Nations Security Council resolution condemning Russia’s annexation of Ukrainian territory failed Friday after Russia exercised its veto as a permanent member of the council. Vassily Nebenzia, the Russian envoy to the UN, blasted the resolution as unprecedented and accused other council members of provoking Russia into vetoing it. The resolution, introduced by the US and Albania, gained the backing of 10 council members, while China, India, Brazil and Gabon abstained. Ruchira Kamboj, India’s permanent representative to the UN, said her government was committed to keeping open all diplomatic channels. China’s Ambassador Zhang Jun, cited Beijing’s commitment to the principles of sovereignty and territorial integrity. The resolution can still be submitted to the UN General Assembly but it lacks enforcement authority. ------------------------------------- Adding Ukraine to NATO Is for a ‘Different Time’: US (9:33 p.m.) US National Security Adviser Jake Sullivan reaffirmed the Biden administration’s position that Ukraine’s request to join NATO should be considered “at a different time.” Ukrainian President Volodymyr Zelenskiy said earlier Friday that his country would make an accelerated bid to join the alliance after Russia formally annexed areas of Ukraine. “The best way for us to support Ukraine is through practical, on-the-ground support in Ukraine and that the process in Brussels should be taken up at a different time,” Sullivan said in response. Asked about Ukrainian pleas for more tanks, Sullivan said, “we actually have facilitated the provision of tanks to Ukraine from some of our Eastern European partners who have provided the same type of Soviet-style tanks that the Ukrainian army trained on and is in possession of, and we will continue to do that.” ------------------------------------- Pentagon Officials Cite Push to Coordinate Arms Production for Ukraine (8:39 p.m.) Pentagon officials said arms directors from 45 countries, the EU and NATO that met in Brussels this week to support Ukraine focused in part on expanding NATO’s standard for “interoperability,”allowing countries to produce interchangeable systems and ammunition. Citing the example of howitzer ammunition, William LaPlante, the undersecretary of defense for acquisition, said when 155 mm rounds of ammunition produced in one country can be used in artillery made elsewhere, “the operator doesn’t need to worry about it. That’s a simple version of interchangeable and that’s where we need to go in lots of these systems. But what that also means is it means we’re going to have to agree on standards.” In the US, he said, that may require congressional support for procurement, development, contracting and production across multiple countries. Ukraine Says 30 Died in Russian Strike on Car Convoy (8:56 p.m.) The death toll in a Russian missile strike early Friday near the southeastern city of Zaporizhzhia has reached 30, including two children, according to National Police Chief Ihor Klymenko. The people were struck while standing in a line that was preparing to leave the city in a humanitarian convoy bound for nearby occupied areas. They planned to take their relatives to safety or to bring aid, Zaporizhzhia’s regional administration said on its Telegram channel. Biden Calls Pipeline Damage ‘Deliberate Act of Sabotage’ (8:17 p.m.) Biden said that damage to the Nord Stream gas pipeline system in the Baltic Sea was a “deliberate act of sabotage” and that Russian statements about the incident shouldn’t be trusted. “It was a deliberate act of sabotage. And now the Russians are pumping out disinformation and lies,” Biden told reporters Friday at the White House, without providing evidence for his conclusion. “We’re working with our allies to get to the bottom exactly what precisely happened and at my direction have already begun to help our allies enhance the protection of this critical infrastructure,” he added. ------------------------------------- Putin Won't Scare or Intimidate Us, Biden Says Play1:36 President Joe Biden says Vladimir Putin’s annexation of territory in Ukraine is a sham. He spoke at the White House.Source: Bloomberg Ukraine to Seek $1.3 Billion From IMF in October (8:11 p.m.) Ukraine plans to ask the International Monetary Fund for $1.3 billion under the IMF’s food aid program, National Bank Governor Kyrylo Shevchenko said. “We also hope to start working on a new full IMF program for Ukraine as soon as possible,” Shevchenko says in a statement online. “We are ready to implement such a program, regardless of uncertainties caused by military acts.” ------------------------------------- NATO Chief Says Allies Collecting Data on Pipeline Disruptions (6:46 p.m.) NATO allies have ships and planes in the Baltic Sea and North Sea to help prevent any more disruption to energy infrastructure after the Nord Stream incidents, according to Jens Stoltenberg, secretary general of the military alliance. The presence sends a message of “readiness to protect and defend each other, also critical infrastructure,” Stoltenberg told reporters in Brussels. “These allies, these capabilities, these planes, these ships are also collecting information, data which can be helpful both for the ongoing investigation but also to monitor these critical energy infrastructures.” ------------------------------------- US Sanctions 57 Entities Over Invasion (5:45 p.m.) American firms will be prohibited from doing business with the entities without first obtaining a US government license. A notice from the US Commerce Department’s Bureau of Industry and Security says 56 of the entities are listed under Russia and one under the Crimea region of Ukraine. ------------------------------------- Ukraine Vows to Keep ‘Liberating’ Land (5:30 p.m.) UK Sanctions Russia Central Bank Chief Elvira Nabiullina (4:45 p.m.) The UK government added Nabiullina to its sanctions list on Friday, according to a government statement. “Nabiullina is obtaining a benefit from or supporting the Government of Russia through working for the Government of Russia as Governor of the Central Bank of the Russian Federation,” it said. ------------------------------------- Italy’s Meloni Condemns Russian Annexation (4:30 p.m.) Giorgia Meloni -- whose right-wing bloc won recent elections and is likely Italy’s next prime minister -- said the move “had no juridical or political validity.” Meloni has vowed to maintain Prime Minister Mario Draghi’s policy of support for Ukraine, despite the past pro-Russia stances of some of her coalition allies, such as Matteo Salvini. ------------------------------------- Ukraine Applying for Fast-Track NATO Entry (4:20 p.m.) Zelenskiy announced the bid in a video address to the nation. Ukraine has already made its “path towards NATO,” demonstrating “compatibility with the alliance’s standards,” he said. “We trust each other, help each other and defend each other. We know it is possible.” All 30 members of NATO would have to unanimously agree to invite Ukraine to join, and the process can take years. Read More: Ukraine Bids to Join NATO Despite Long Odds Against Wartime Move ------------------------------------- EU Presents Tougher Security Rules for Visas for Russians (3:35 p.m.) The European Commission cited “an escalation of the security threat” by Moscow including alleged war crimes, partial mobilization and plans to annex Russian-occupied areas in Ukraine. Commissioner Ylva Johansson told reporters the updated guidelines include more thorough security assessments of applicants, and refusing visas to citizens who could stay longer than 90 days in the EU. She said about 190,000 Russians had entered bloc in September, around 10,000 to 20,000 more than usual for that month. The EU earlier this month adopted higher fees, the need for more documents, an increased processing time, and more restrictive rules for multiple-entry visas for Russians. ------------------------------------- Putin Says Russia Annexing Ukrainian Regions ‘Forever’ (3:00 p.m.) In a speech to officials at a Kremlin ceremony, Putin also called on Ukraine to halt fighting and begin negotiations. Ukraine has rejected negotiations until Russian forces have been pushed back at least to positions they held before the Feb. 24 invasion. Russia doesn’t control the territories in full that it’s seeking to absorb. The United Nations has condemned Russia’s seizure of the Ukrainian regions as illegal. Putin cited the UN Charter in his speech seeking to justify the annexation. ------------------------------------- TOPSHOT-RUSSIA-UKRAINE-CONFLICT-ANNEXATION Vladimir Putin gives a speech during a ceremony annexing four regions of Ukraine, in Moscow, on Sept. 30.Source: AFP EU Members Reject Russian Annexation (2:55 p.m.) “We do not and will never recognise the illegal ‘referenda’ that Russia has engineered as a pretext for this further violation of Ukraine’s independence, sovereignty and territorial integrity, nor their falsified and illegal results,” the EU said in a statement. “These decisions are null and void and cannot produce any legal effect whatsoever.” ------------------------------------- Work Continues on New EU Sanctions Package (1:55 p.m.) Negotiations among European Union ambassadors continues on the EU’s proposed eighth package, with talks expected to stretch into next week, according to people familiar with the matter. Read more: EU Plans Russia Import Bans, Tech Curbs Over Putin Land Grab ------------------------------------- Norway Tightens Controls Along Border With Russia (1:50 p.m.) A police helicopter equipped with sensors will be used to help detect any illegal crossings of the 19 kilometer-long border, the government said on Friday. The conscription of Russian troops and a possible travel ban for Russian citizens has increased the risk of illegal border crossing, it said. The government also said it is ready to shut border crossings to Russian tourists, like Finland has done, but will hold off on doing that for now. “We will close the border quickly if it becomes necessary, and changes can come at short notice,” Justice and Public Security Minister Emilie Enger Mehl said. There have been few arrivals in Norway compared to Finland. ------------------------------------- Ukraine Defense Minister Sees ‘Good News’ Coming After US Call (12:24 p.m.) Oleksii Reznikov, Ukraine’s defense minister, spoke by phone with US counterpart Lloyd Austin, he said on Twitter, adding that “good news” would be announced soon. — With assistance by Ros Krasny ------------------------------------- Up Next Russia Set to Annex Luhansk, Donetsk, Kherson, Zaporizhzhia Friday Most Read
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