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Sensemaker: The rough goodbye

Sensemaker: The rough goodbye

What just happened

Long stories short

  • The UN agreed to Russia’s request for a security council meeting on its baseless claim the US has been helping Ukraine develop biological weapons.
  • China acknowledged for the first time the invasion of Ukraine has started a “war”.
  • The UK government said it was preparing to allow Ukrainian refugees to stay in British homes provided they have visas (more below).

Invaded: Voicemails from Ukraine

“I know that a day will come when the Russians are no longer in Ukraine, and we will have to rethink, rebuild and revive our country.” Listen to Naliia and others today and every day in Invaded: Voicemails from Ukraine

The rough goodbye

Thirty years’ worth of commercial ties between Russia and the rest of the world are breaking like mooring lines in a storm. This is not the storm leaving mass graves in Mariupol and filling Europe with refugees, but it is collateral damage from the same war. 

Western capitalism’s panicked withdrawal from Russia could be temporary – but only if Russians topple Putin quickly. It’s more likely to mark the end of an age of globalisation whose twilight was announced by Trump and Covid.

Two groups are leaving as fast as their HR departments and credit cards can get them out:

The expats. Many left in 1998 when the first post-Communist whirlwind ended in tears, but those who stayed made their peace with Putinism, and a lot of money. That peace is now shattered.

  • Goldman Sachs yesterday became the first big western bank to pull out of Russia since the invasion. It has moved most of its Moscow-based staff to Dubai.
  • JP Morgan says it’s also winding down its Russian business, and Reuters reports that Austria’s Raiffeisen Bank, with a big retail presence and €23 billion in direct Russian exposure, is making plans to quit.
  • More than 300 other western companies and brands including Airbus, Boeing, Apple, Disney, Daimler, Deloitte, Exxon, EY, KPMG, Ikea, Microsoft, PwC, Rolls Royce, Netflix and McDonalds (but not Burger King) have pulled out, are pulling out or are drastically scaling back their Russian operations.

The other refugees. They don’t have or expect much sympathy, but tens of thousands of middle class Russian professionals – the class Stalin sent to the gulag – have fled rather than sit tight as their businesses collapse. Allowed to withdraw a maximum of $10,000 in hard currency, they have taken cars to Finland, buses to the Baltics and flights to Tashkent, Tbilisi, Yerevan and Istanbul. 

  • 25,000 Russians have arrived in Georgia since 24 February to stay or move on, depending on their means, according to the country’s economy minister. 
  • Tech and other entrepreneurs from Ukraine as well as Russia are arriving in Armenia at a rate of 6,000 a day, officials there say.
  • About 200,000 Russians in all have left since the invasion, according to one estimate, many of them ending up in Turkey.

“Russia can live like North Korea, but Russians don’t want to live like North Korea,” says a well-connected emigre in London. “They had too great a life for too long.”

More numbers:

  • 15 – expected contraction of the Russian economy this year, in percentage terms, down from a 3 per cent expansion forecast before the war.
  • 90 – billions of US dollars lost by Russia’s oligarchs in the past two weeks, according to Bloomberg.
  • 43 – percentage share of Russians aged 18-24 who already wanted to leave the country permanently before the war began.

Buying the dip. Distressed and abandoned Russian assets look like bargains to some investors, even if they’d prefer not to be identified.

  • Goldman and JP Morgan both reportedly bought cheap Russian debt in the first week after the invasion, before announcing exit plans in the second.
  • One Miami-based private equity firm identified as enquiring about Russian assets for sale in London promptly issued a statement saying it had no interest “in any investment opportunities that may arise as a result of the situation in Ukraine”.
  • That leaves Russia, which said yesterday it was considering legislation to allow the state to seize assets abandoned by western companies. Property left behind by Shell, VW, Porsche, Toyota, Ikea, IBM, Microsoft and others could be targeted for nationalisation.
  • … and China, which has ordered state-backed energy and metals companies to look into buying stakes in Gazprom and Rusal, the Russian aluminium giant. 

So Russia is pivoting to Asia as the US pivots back to Europe. And 1990s-style globalisation is leaving the stage to trading blocs defined by mutual ideological incompatibility. Where this leaves Global Britain remains to be seen.

On the road again

Liz Thomson

I don’t remember where I bought my Penguin edition of the Beat Generation Bible in the early 1970s. My copy of On The Road cost 75p, perhaps from the late-lamented Compendium Books in Camden Town. Its yellowing pages remained largely unread. English literature at school offered no context for such a novel, its style (autobiographical fiction), its milieu, its rawness. Or its jazz prosody: Bird and Parker meant nothing to me then: how could I possibly connect with a story about “the children of the American bop night”? 

And perhaps it’s true that you have to be barrelling across America, high on something, to get into the groove of Jack Kerouac’s plotless “spontaneous prose”. Cheap air travel to the United States was only just beginning when I first encountered it so Tulsa, Phoenix, San Francisco, and other waystations of so many hit songs could only be imagined. (When in 1982 I flew west for the first time I was disappointed to discover that Salinas, birthplace of John Steinbeck, and namechecked in Kris Kristofferson’s Me and Bobby McGee, was essentially a large salad bowl.)

Jean-Louis Lebris de Kerouac was born a hundred years ago tomorrow. In an essay published today online and available soon in the Tortoise Quarterly, Liz Thomson writes that his romantic image endures.


Nickel shorts
Shanghai’s commodities exchange has followed the London Metals Exchange in suspending trading in nickel futures after a record spike in nickel prices left one Chinese investor facing paper losses of up to $8 billion. The spike saw prices rise from $25,000 to $100,000 a ton and was caused by three things: surging demand, because nickel is used in electric cars’ batteries and motors; the war in Ukraine, because most of the world’s nickel comes from Russia and Russia is being cut off from the world economy (see above); and a short squeeze triggered by counter-intuitive bets on the part of investors like Xiang Guangda that, despite everything, nickel prices would go down, not up. Xiang has been telling his brokers and bankers these past 24 hours he wants to hold onto his short nickel positions rather than unwind them because he still thinks prices will fall. Is it not more likely he’s made a terrible mistake and can’t afford the 150,000 tons of nickel he’s pledged to buy at $100,000 a ton?


UK homestays for Ukraine
Not before time, the UK government will allow individuals, businesses, charities and communities groups to offer accommodation to Ukrainian refugees as part of a “sponsored” humanitarian visa scheme to be announced next week. This should enable refugees who don’t have family members already in the UK to come, work and access benefits. The scheme is in the hands of Michael Gove in his new role as levelling up minister. He is expected to announce details on Monday but in the meantime a Ukrainian Homestay website has already been set up on which volunteers willing to offer accommodation can register. Information submitted there will be added to a database made available to agencies matching homes with refugees on their arrival. There is still no visa-free travel to the UK for Ukrainian refugees.


Hey Google, pay for my parking
Google’s latest smartphone software includes a feature that lets you tell it to pay for your parking. Assuming you’ve preloaded your payment card details, it’s as simple as that. The phone knows where you are. All it has to do is ask how long you want to park for and whether you want reminders or top-ups as your time expires. No more fumbling for coins or cards, no more phone calls, no more wondering if you have this particular parking app on your phone. Two catches only: for now, you need an Android phone and you need to be in the US. But this will surely conquer the world.

The 100-year life health, education AND GOVERNMENT

Tavistock report
An interim report from the Cass Review of Gender Identity has found that the NHS’s current delivery of treatment and counselling for gender dysphoria in England is “not sustainable”, needs a “fundamentally different service model” and is undermined by a lack of consensus and good data on gender dysphoria itself. The service model at issue is the one provided by the Gender Identity Development Service (GIDS) at the Tavistock Clinic in London. The report’s author, the paediatrician Dr Hillary Cass, recommends a network of regional clinics instead of one central one; says demand for GIDS’ services now far outstrips supply; and worries that “diagnostic overshadowing” may mean complex needs including mental health issues get overlooked in young people diagnosed with gender-related distress. As the Guardian reports, referrals to GIDS rose from 138 in 2010-11 to 2,383 in 2020-21. Here is a link to the interim report.

covid by numbers

70 million… of over 310 million doses of the AstraZeneca Covid vaccine have been delivered to sub-Saharan Africa through Covax.

Our planet CLIMATE AND geopolitics

Hill’s horseshoe
A bat long thought extinct has been found alive in Rwanda. The Hill’s horseshoe bat has big ears and facial features including a U-shaped nose that are “exaggerated to the point of comical,” according to one of the scientists who found it in Rwanda’s mountainous Nyungwe National Park in 2019. It had not been seen in the wild for 40 years and has since been released back into the park. The Texas-based team that re-discovered it there has used echo-location to identify not one but several Hill’s horseshoe bats at eight different locations.

Thanks for reading. Please share this around and tell us what we’ve missed. News tips and story ideas are welcome. Email them to sensemaker@tortoisemedia.com.

Giles Whittell

Photographs Getty Images, Jon Flanders/Bat Conservation International

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