Russia made a second interest payment to its international creditors out of its frozen reserves on March 21. The $66 million payment was made in the same way as last week’s $116 million one: through the offices of JPMorgan and Citibank, using the U.S. Treasury Department loophole which allows such payments of sanctioned Russian assets until the end of May. Further Russian payments are scheduled for March 28 ($102 million); March 31 ($447 million); and then April 4 (a $2 billion repayment of principal coming due).
Many analysts have been wondering why the Treasury allowed such a loophole in its otherwise draconian sanctions. The reason is to let preferred speculators get the hell out of the ruble, while at the same time setting up the next round of financial warfare against Russia.
“TheStreet” reported yesterday that Goldman Sachs is taking advantage of the Treasury loopholes and has been buying up lots of “distressed” (i.e., heavily discounted) Russian bonds, and is then “transferring risk to clients better placed to manage such exposures,” according to a Goldman statement. Those clients are hedge funds – i.e., the same kind of vulture funds that moved in on the Argentine and other distressed debt years ago, buying it up for pennies on the dollar, and then turning around and unloading their full legal and international financial firepower to collect full face value. In the case of Argentina, these were predators such as NML capital (a subsidiary of Elliott Management, co-led by GOP sleazebag Paul Singer); Aurelius Capital Management; Dart Management; and others.
