WSJ : Sanctions Ensnare Roman Abramovich Rent Payments to Queen Elizabeth

Sanctions Ensnare Roman Abramovich Rent Payments to Queen Elizabeth
Land beneath the oligarch’s 1848-built mansion is owned by the Crown Estate, which oversees a roughly $18 billion portfolio of land and other assets on behalf of the British Crown

Roman Abramovich isn’t allowed to pay rent to Queen Elizabeth.

The U.K. has sanctioned nearly two dozen Russian oligarchs as well as a set of Russian banks and other companies tied to the Kremlin, and added Mr. Abramovich, the Russian billionaire owner of Chelsea Football Club, on Thursday.

These sanctions are designed to block oligarchs from making money in the West—to exact financial pain on those close to President Vladimir Putin. But they have also spawned a raft of rules that upend more routine transactions related to properties and businesses they own. These include ground rent payments to the monarchy.

Mr. Abramovich paid $140 million for a 15-bedroom home in 2011 just down the street from Kensington Palace, home to Prince William. While he owns the 1848-built mansion— complete with the skylit underground pool he built beneath expansive gardens—the land beneath is owned by the Crown Estate, an entity created by Parliament that oversees a roughly $18 billion portfolio of land and other assets on behalf of the British crown.

Under the terms of a 125-year ground lease, Mr. Abramovich must make modest lease payments—which start at £10,000 a year and go up to £160,000 over the term of the lease—to the Crown Estate, according to land records.

A spokeswoman for Crown Estates said the organization was examining its portfolio and doing all it can “to comply swiftly with the introduction of sanctions or other directions that may apply.” She declined to comment on specific properties or Mr. Abramovich.

A spokeswoman for Mr. Abramovich didn’t respond to requests for comment.

Sanctions under U.K. law bar any U.K. companies or individuals from receiving, paying or moving any money tied to a sanctioned individual. Based on the law, sanctioned oligarchs need to apply for exceptions for any payments in the form of special licenses from the Office of Financial Sanction Implementation.

That means that while sanctioned oligarchs would be able to keep their U.K. houses, without a license, they can’t pay gardeners, pay a utility bill or make pension payments for their staff, attorneys said. They can’t even pay lawyers to sort through the new sanctions bureaucracy, according to the Office of Financial Sanction Implementation, though the lawyers may provide legal advice and not be paid.

“It’s extremely restrictive,” said Paul Feldberg, a London-based partner at Jenner & Block who works on sanctions. While the government is likely to grant some leniency on basic expenses,” You’re not going to be able to get a license to increase your personal wealth.”


Under the terms of a 125-year ground lease, Roman Abramovich must make modest lease payments to the Crown Estate.
PHOTO: MARTIN MEISSNER/ASSOCIATED PRESS
The U.K. government was quick to offer Mr. Abramovich a license to allow his Chelsea Football Club to keep running, although it is highly restrictive, preventing the soccer team from basic business tasks like selling jerseys or burgers at games.

A U.K. Treasury spokesman said any payment outside of the Chelsea license would require a license of its own.

To keep his homes in good condition, Mr. Abramovich would likely need a “basic needs“ license, which would allow the sanctioned individual the right to make payments like mortgages, pensions for employees and insurance premiums. Sanctions attorneys said Mr. Abramovich should qualify for such a license, although processing can be lengthy—and just what is included is up to U.K. officials.

What happens if he isn’t able to pay or get a license for his rent? The Crown Estate spokeswoman declined to comment.

Shams Rahman, a litigator at law firm Edwin Coe, has worked on a case involving a neighboring property with a similar lease to Mr. Abramovich’s. He said that in theory, if the Crown Estate isn’t paid, it could begin the process of taking possession of the property.

But it would be a long road that could be contested, he said, adding that the rights given to property owners in the U.K. mean Mr. Abramovich and any other oligarchs are unlikely to see their real estate seized soon.

Corrections & Amplifications
Under the terms of a 125-year ground lease, Mr. Abramovich must make modest lease payments. An earlier version of this article misspelled Mr. Abramovich’s last name as Ambrovich.

WSJ : Forget 5G. Let’s Talk About 6G.

Forget 5G. Let’s Talk About 6G.
Computer scientists and engineers say the next generation will make cloud computing and the mobile internet globally ubiquitous

As wireless carriers jostle to see who can win the race to deliver 5G services to customers, planning is already well under way for what comes next.

Yes, we’re talking about 6G.

That might seem premature, since 5G has a long way to go before most consumers and businesses have it—let alone take advantage of it. But computer scientists and engineers say that 6G has the ability to take cloud computing and the mobile internet to true global ubiquity.

“High-speed services available anywhere, anytime,” says Thyaga Nandagopal, senior adviser for technology, innovation and partnerships at the National Science Foundation.

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Adds National Science Foundation Director Sethuraman Panchanathan : “This next generation will make societies more equitable by opening up opportunities to anyone, regardless of geography, class, race, gender, ethnicity or disability, and augment human lives in unimaginably positive ways.”

Around the world, governmental, scientific and commercial entities are working together to invest in and eventually standardize technologies that will accomplish the lofty goals of 6G. One of the biggest lessons learned from the rollouts of previous generations, says Dean Brenner, a former executive at Qualcomm, and chairman of the Federal Communications Commission’s Technological Advisory Council, is to involve all stakeholders early, including not just businesses developing new technologies but those industries that will be disrupted by them as well.

“There’s no law that says that my 5G phone has to work anywhere in the world,” says Mr. Brenner. “It requires collaboration and coordination at multiple levels globally.”

Once truly global, high-speed connectivity is achieved, 6G is expected to provide the structure necessary for “things that right now seem like science fiction,” says Theodore Rappaport, founding director of NYU Wireless, a New York University research center whose work encompasses wireless and electrical engineering, computer science and medicine. “Totally immersive, 3-D virtual reality on phone calls and on meetings over wireless, true remote surgery and remote monitoring, the idea of the metaverse—these kinds of things will start to emerge in 6G.”

Ranveer Chandra, head of networking research at Microsoft Research, Redmond, expects a jump in performance from 5G to 6G. Download speeds could jump to 100 gigabits per second from 10, he says, while latency, or lags behind between commands and responses, could be measured in microseconds rather than milliseconds. Network capacity will increase exponentially.

Andre Fuetsch, executive vice president and chief technology officer of network services at AT&T, says he is expecting a revolution in consumer devices in a 6G world.

“The smartphone of the future is really going to be more around glasses,” says Mr. Fuetsch. With processing and storage offloaded to the cloud and running at 6G speeds, he says, immersive experiences using lightweight smartglasses will be the new normal, rather than staring at the screen of a phone.

“Think of AR [augmented reality] glasses as having the capability to not just assist you as you’re walking around and looking at things, connecting you, augmenting the surroundings around you with valuable information,” Mr. Fuetsch says, “but it’s also going to be able to allow you to communicate.”

Significant changes could be ahead for education as well, both in terms of equality of access to the latest teaching methods across the country, and as a way of revolutionizing how lessons are taught. The NSF’s Dr. Panchanathan describes how technology using 6G is being developed that uses virtual-reality headsets to create immersive simulations of environments and places that for many students would be unreachable.

One possibility: headsets that immerse students in a simulated Arctic exploration. “Imagine that,” he says. It could look as if you’re actually in the Arctic “and you’re literally learning your chemistry, math and physics on demand, as you’re exploring.”

To Mr. Chandra, the most important change coming will be the breakthrough in being able to provide internet access to people who still lack it, whether for economic reasons or because service hasn’t even reached their part of the world yet. A report from the International Telecommunication Union last year noted that 37% of the world’s population did not have access to the internet.

With 6G, Mr. Chandra says, both obstacles—affordability and availability—would be overcome. The new technology addresses these issues, he says, by leveraging things like spectrum sharing, new antenna design, edge computing, AI-driven networks and use of cloud computing by networks.

“All of these things would help us redesign networks that will become much more flexible, much more affordable, much more pervasive,” he says.

Beyond households and consumers, he says, more-pervasive connectivity will mean that industries of all kinds can capture and analyze data to drive greater efficiency on farms, in warehouses and throughout supply chains.

Experts also believe that 6G networks will greatly improve location accuracy. In the home, Mr. Chandra says, this could mean that a robot will know exactly where the beverage is that you’ve asked it to get, and exactly where you are so it can bring it right next to your hand. This kind of technology could have a host of applications around accessibility, assisting people with vision or mobility issues and helping people age in place.

In agriculture, Mr. Fuetsch says, greater positioning accuracy will help farmers seed their crops more efficiently, with more density and increased yields.

Experts say that predictions made today just scratch the surface of what’s possible with 6G. Once the underlying technology is made available, they say, inventors and entrepreneurs will use it to develop new products and services.

“This will light up scenarios which none of us had thought about,” says Mr. Chandra. “We can’t always predict what these would be, but they will change our lives, mostly for the better.”

WSJ : Saudi Arabia Puts 81 People to Death in its Largest Execution Ever

Saudi Arabia Puts 81 People to Death in its Largest Execution Ever
The crown prince has said he would reduce the liberal use of the death penalty, as the kingdom tries to attract foreign tourists and investors

RIYAD—Saudi Arabia put to death 81 people who had been convicted of crimes including murders, rape, arms smuggling and links to terrorist groups, in the largest known mass execution in the history of the kingdom.

Most of those executed on Saturday were Saudis, according to the interior ministry. More than half were from the minority Shiite Muslim population, which has a history of militancy and protest against discrimination. Seven were Yemeni nationals and one was Syrian.

The interior ministry didn’t disclose how the men were killed. Executions in the past have involved beheading by sword in the kingdom, which remains among the world’s top executioners despite recent efforts to curb the use of the death penalty.

Rights groups have called on the Saudi leadership to end the death penalty and make improvements to the country’s justice system to provide for fair trials. Saudi authorities deny flaws in the system.

Saudi Arabia’s court of appeals and supreme court had heard cases for all those executed, and the sentences were sanctioned by royal decree, the interior ministry said.

“The interior ministry announces this to assure everyone that this country…won’t hesitate to deter anyone who threatens security or disrupts public life…” it said.

Saturday’s executions are the most in Saudi Arabia in a single day, surpassing the 63 people killed in January 1980 in connection with the takeover of Mecca’s Grand Mosque by a group of Saudi extremists who took hostages and held the holiest site in Islam for two weeks before security forces reclaimed it in a military operation.

The country has more recently suffered sporadic attacks by Islamic State-linked militants and confronts regular drone and missile attacks from the Houthi rebels, an Iran-backed group it has been fighting since it intervened in Yemen’s civil war in 2015. Seven of those executed were convicted of attacking a Shiite gathering in the city of Al Ahsa in 2014, and two brothers were sentenced for killing their mother and trying to kill their father, according to the interior ministry.

In 2019, Saudi Arabia trailed only China and Iran globally in executions. That year, some 37 men, mostly Shiite Muslims, were executed across the country on one day, while three years earlier the execution of a prominent Shiite cleric and dozens of al Qaeda members stirred sectarian tension in the region.

Last year the government said it had imposed a moratorium on capital punishment for drug-related offenses that led to an 85% reduction in executions in 2020, and said it would stop executing people who had committed crimes as minors.

Reprieve, an advocacy group in the U.K., called the executions a “brutal display of impunity” and said it fears for other people on death row in Saudi Arabia.

Crown Prince Mohammed bin Salman, the kingdom’s day-to-day ruler, has said he was working to change the law to reduce the punishment for some crimes from execution to life in prison. In keeping with Islamic law, he said, the death penalty would remain in place for murder. It has also been used against people convicted of rape, incest, apostasy and terrorism.

The kingdom faces intense scrutiny over its human-rights record that goes beyond the liberal use of the death penalty. It has drawn international condemnation for the murder of journalist Jamal Khashoggi and for detaining women’s rights activists as part of a crackdown on dissent.

In recent years, many executions have been moved from public squares into prisons, sidestepping the spectacle as the conservative Muslim kingdom seeks to soften its image to attract Western tourists and foreign investment.

WSJ : Russian Oligarch Roman Abramovich Attracts New Scrutiny in Portugal, as Ch

Russian Oligarch Roman Abramovich Attracts New Scrutiny in Portugal, as Chelsea Sale Stalls
The billionaire owner of Chelsea FC can’t pay his rent to Queen Elizabeth, and some of his U.S. funds are frozen

A global effort scrutinizing one of Russia’s richest men, Roman Abramovich, ricocheted outward, ensnaring a rabbi in Portugal, sowing confusion over the sales process of the billionaire’s British soccer team and freezing some of his U.S.-held funds.

Mr. Abramovich was sanctioned Thursday by U.K. authorities, who allege he received preferential treatment from Russian President Vladimir Putin. It was part of the latest salvo of restrictions and sanctions targeting Russian banks, exports and individuals in the wake of Russia’s invasion of Ukraine.

Representatives for Mr. Abramovich didn’t return requests for comment.

A leading Portuguese rabbi who helped Mr. Abramovich obtain Portuguese citizenship was arrested on Thursday as part of a wider investigation in Portugal involving alleged influence-peddling, forgery, money laundering and tax fraud, according to people familiar with the case.

The rabbi, Daniel Litvak, oversees in Porto the process of certifying claims to Portuguese citizenship on the grounds of descent from Sephardic Jews, who were expelled from the Iberian Peninsula in the late 15th century.

The Porto Jewish Community, the organization that issues the certificate, has said there is a “smear campaign” against it. Mr. Abramovich received his Portuguese citizenship last year. He also holds Israeli and Russian citizenship.

Mr. Abramovich’s sanctioning by the U.K. has also upended the sale of his soccer club Chelsea FC, a process he had initiated just before he made Britain’s target list. An initial deadline for offers for the club was set for Tuesday, but that process is now in disarray as advisers and people close to Mr. Abramovich try to determine how to move forward, according to people familiar with it.

The U.K. Treasury said Mr. Abramovich would need to apply for a license to exempt any sale of the club from the U.K. sanctions.

Chelsea executives, meanwhile, are lobbying the government to loosen some of the terms of a separate license the club was granted under which it can continue to operate, according to people familiar with the matter. One of those restrictions is a spending cap of £20,000, or about $26,000, for travel to away games. Chelsea’s next match, on Sunday, is at home.

The U.K. sanctions have had other ripple effects in London, spawning a raft of rules that upend even routine transactions related to Mr. Abramovich’s properties, including blocking rent payments he owes Queen Elizabeth.

In the U.S., a number of hedge-fund firms that have investments from Mr. Abramovich have been told to freeze his assets, The Wall Street Journal previously reported. Mr. Abramovich had been trying to sell interests in funds on the secondary market since at least late February, the Journal reported.

U.K. agencies, like those of other governments including the U.S., have powers to temporarily freeze assets of individuals or entities in their jurisdiction, without proving criminality. In some cases, they can ask other governments to cooperate.

Owners are typically barred from selling or benefiting from them until sanctions are lifted or successfully contested. Governments typically can’t move to take ownership of the assets, though, except after often-lengthy legal proceedings that would require proof of lawbreaking. The U.K. government, however, is considering laws that would give itself the powers to seize sanctioned assets.

Mr. Abramovich’s two megayachts—objects of fascination among yacht aficionados—have gained a wider following amid the sanctions efforts. Easy-to-access online ship-tracking sites have been reporting their nearly real time movements and those of other sanctioned Russian oligarchs.

A handful of yachts belonging to EU-sanctioned Russian billionaires have been seized in recent days by French and Italian authorities. Mr. Abramovich hasn’t been sanctioned by the EU.

Mr. Abramovich’s 533-foot superyacht Eclipse passed through the Strait of Gibraltar into the Mediterranean on Saturday afternoon, after leaving Philipsburg, in the Dutch Antilles in the Caribbean, on March 3, according to vessel tracking site FleetMon. The 460-feet My Solaris, meanwhile, arrived Friday in Tivat, Montenegro, having left Barcelona, Spain, three days earlier, according to FleetMon.

In the Portugal case, authorities initiated a criminal investigation earlier this year into allegations that Rabbi Litvak had falsely attested to the Sephardic origins of Mr. Abramovich and others, according to a statement by the Porto Jewish Community issued March 6.

Rabbi Litvak was questioned by Portuguese authorities late Friday and released, but is forbidden from leaving the country or having contact with other suspects in the case, according to state-owned broadcaster RTP.

>>> Barron’s Weekend Summary

Barron’s Weekend Summary: he integration of global markets that enabled the West to punish the Russian economy in response to Putin’s aggression is leading to higher costs at home, chiefly through rising oil and gas prices, snarled supply lines, and scarcer goods


Cover Story:
-The integration of global markets that enabled the West to punish the Russian economy in response to Putin’s aggression is leading to higher costs at home, chiefly through rising oil and gas prices, snarled supply lines, and scarcer goods. Consumers are just starting to feel the negative effects in the U.S. and Europe, and they will worsen. The war and the response to it could help diminish living standards throughout the West, even as the military conflict reshapes the geopolitical landscape. But globalization, a hallmark of today’s geopolitics, in some form is here to stay.

Interview:
As vice chairwoman of Carbon Direct, a firm that invests in climate technology and supports companies in meeting their decarbonization commitments, Nili Gilbert is tackling one of the hardest problems of all: climate change. Gilbert’s journey from portfolio manager to decarbonization champion took root in college when she had the opportunity to design her own course of study. She focused on the interplay between social and cultural progress over time, and economics and markets. After starting her career in international development at Synergos, Gilbert discovered the world of quantitative investing.

Tech Trader:
Shares of Apple are about flat since the NASDAQ Composite peaked in November. But, that’s a good thing, given the sharp double-digit stock declines for the rest of the tech giants. In part, the market has seen Apple shares as a place to hide, a stable business generating mountains of cash and returning gobs of it to investors. Last week, Wall Street went a little gaga over Amazon.com ’s $10 billion stock repurchase, which was paired with a stock split. Apple has been returning nearly that much to shareholders every month via dividends and stock buybacks.

The Trader:
-Headlines about stagflation are everywhere, and the “flation” part of the equation is pretty obvious. February’s consumer price index arrived this past week, and it was as bad as expected. The CPI rose 7.9%, up from 7.5% in January, while core CPI, which strips out food and energy, rose 6.4%, up from 6%. And the University Of Michigan Index Of Consumer Sentiment pointed to the highest inflation expectations since 1981.
-The market had plenty of reasons to fret. Russia showed no sign of wanting to end its war on Ukraine and appeared ready to escalate attacks, not halt them. In response, the U.S. said it would remove “most favored nation” trading status from the country and blocked Russian oil imports. U.S. corporations, including Goldman Sachs Group, McDonald’s, and JPMorgan Chase, continued to flee.

Features:
Stock buybacks are back—and that’s good news for investors trapped in a volatile market. This past week, two companies that have very different histories with share repurchases announced big buyback plans. Amazon .com, which hadn’t bought back stock since 2012, said it would buy back $10B in shares, while General Electric, which had squandered billions buying back stock before CEO Larry Culp took over the fallen industrial titan, announced plans to repurchase $3B worth of shares.

European Trader:
Russia’s attack on Ukraine means Europe’s military capabilities are in focus, and as a consequence of President Vladimir Putin’s aggression, some defense stocks may be set to benefit. Two companies that derive the greatest share of their revenue in terms of weapons and ammunition—areas that traditionally benefit from increased demand during conflicts—are German arms manufacturer Rheinmetall at 22%, and British defense giant BAE Systems, at 20%. Law also cites U.K. defense firm Chemring Group, a maker of flares that act as decoys for heat seeking missiles, as having indirect exposure to the conflict since it provides parts for weapons but not the actual weapons themselves.

Emerging Markets:
Emerging market indexes should be jumping this year since commodities, particularly oil, have shot up as the conflict between Ukraine and Russia eventually devolved into war. For the year, Brent crude oil alone is up just over 40%. The Bloomberg Commodity Index, which tracks commodity futures including energy, grains, and precious metals, has gained 26%. But the emerging market stocks aren’t jumping as much as history says they should. They’re either losing or chalking up gains that, as history shows, are disappointing. An example of each: the MSCI Emerging Asia Index is down about 12% for the year, but should be up 11%—theoretically. And the MSCI Emerging Markets Latin America Index is up 14%, but should be up 18%.

Commodities:
Nickel prices, for the metal not the coin, spiked to $100,000 per metric ton on the London Metal Exchange this past week before trading was halted. The metal had traded around $25,000 a ton before the run-up, when it cost the U.S. Mint more than five cents to make a nickel.

Streetwise:
Jack Hough loos at the role of cryptocurrencies and the war in Ukraine: “The government of Ukraine, you might have heard, put out a call for crypto donations to fund its defense against Russia’s invasion. It has raised an undoubtedly helpful $63 million. But crypto scammers have bilked Ukraine supporters out of a similar amount. Donations in traditional currencies, meanwhile, are pouring in just fine. And Ukraine must convert its crypto to fiat to spend it on useful things. Keep the crypto flowing, by all means, but let’s not call this a pivotal moment in monetary history.”

>>> Weekend Papers Summary

Weekend Papers Summary

NEW YORK TIMES
-The White House approved an additional $200 million in arms for Ukraine, but Russia warned they would be “legitimate targets,” stirring fears of escalation.
-President Volodymyr Zelensky said that about 1,300 Ukrainian soldiers have been killed, calling Russia’s actions a “war of annihilation.” Here’s the latest.
-To counter Russia, President Biden is rethinking relationships with allies as well as rivals — including China, Iran and Venezuela.
-Some surrogate mothers are trapped in Ukraine as their due dates near. And parents abroad have no idea how they will pick up their babies.
-Western Ukraine has been a safe haven for Ukrainian refugees, as well as businessmen, journalists and diplomats. But attacks in two cities pierced the sense of security in the region.
-Texas Supreme Court Shuts Down Final Challenge to Abortion Law
The ruling says state officials have no authority to enforce the law, which empowers private citizens: “We cannot rewrite the statute.”
-Cities and states with the longest mask and vaccine mandates are rapidly lifting them. The abrupt shift has unsettled the most vigilant Americans.
-New Deltacro’ variant is rare and similar to omicron, experts say.
Scientists have found a handful of cases of a new, hybrid variant in Europe and the United States. It’s unlikely to cause trouble, they say.
-Lawmakers want President Biden’s administration to come up with a bumper-sticker-worthy slogan. The White House says it’s sharpening its message.
-Pandemic fears give way to a rush for bomb shelters. Since Vladimir Putin’s invasion of Ukraine, European anxiety has shifted from Covid to nuclear annihilation. Bunkers, survival guides and iodine pills are flying off the shelves.

THE FINANCIAL TIMES
-Russia has warned that it will fire on western armaments shipments to Kyiv, raising the risk of a direct military confrontation between Moscow and NATO during the war in Ukraine.
-As the west steps up its warnings that Russia could use chemical weapons in Ukraine, a broader fear lurks beneath the surface: the same poison gases that killed thousands on the front lines of WW1 could become an ever more familiar part of 21st century conflict.
-Just as the 30,000 people who queued outside the first McDonald’s in Pushkin Square in 1990 symbolized the start of something new in Russia at the end of the cold war, she says, the huge crowds that made one final trip to Ikea’s stores last week “mark the end of an era”.
-So popular are Turkish-made armed Bayraktar drones with the Ukrainian army that the weapons are celebrated in a song. “We took offence at these orcs. Russian bandits are made into ghosts by Bayraktar,” go the words to the tune posted on the land forces’ Facebook page.
-As Russia plunges deeper into a military quagmire and economic crisis, a central question is whether — if the war is not ended quickly by a peace settlement — Putin can be removed (or persuaded to step down) by the Russian elites themselves, in order to try to extricate Russia and themselves from the pit he has dug for them. To assess the chances of this requires an understanding of the nature of the contemporary Russian elites, and above all of Putin’s inner core.
-As of Friday, Mariupol, which had a population of more than 400,000 people before the war, was in its 11th day without heat, gas, electric power or internet service. Intense Russian shelling knocked these out on March 1, then water the following day.
-The US Department of Justice said banks, cryptocurrency exchanges and other financial institutions that serve Russian oligarchs under American sanctions will be in its “crosshairs”, detailing the agenda of a special task force set up to enforce sanctions in response to Moscow’s invasion of Ukraine.
-Russia has announced it will cut off access to Instagram (part of META) and launch a criminal investigation into its parent company Meta, adding to the country’s growing isolation since the start of its war on Ukraine.
-Former ministers and City grandees who have spent the past decade earning large pay cheques on boards of Russian-backed companies are now racing to cut ties.
-With its unparalleled line-up of big-name speakers, Houston’s CERAWeek conference, now run by its new parent S&P Global, has long been the banner event on the oil industry calendar. This week 6,000 delegates met in person for the first time since 2019. The proceedings opened with John Kerry, the US president’s climate envoy, imploring the delegates not to lose sight of the climate fight. They ended with Joe Manchin, the Democratic senator from West Virginia who helped block Biden’s climate agenda, calling for the US to wield its “weapon” of “energy independence”.
-BlackRock, the world’s largest asset manager, has taken about $17bn in losses on its Russian securities holdings because of the attack on Ukraine. Clients held more than $18.2B in Russian assets at the end of January, the firm said, but shuttered markets and worldwide sanctions imposed after Russian president Vladimir Putin invaded Ukraine have made the vast majority unsaleable, leading BlackRock to mark them down sharply.
-Powerless in other ways, the arts world is doing all it can to express its outrage by focusing on the Russians in their midst. Scores of leading figures have resigned or been dismissed from their posts, and have seen their performances, exhibitions or film showings cancelled. Long-planned visits such as that of the Bolshoi to London’s Royal Opera House have been scotched, and prominent figures of all nationalities have spoken out.

THE NEW YORK POST
-Ukrainian President Volodymyr Zelensky sounded a hopeful note Saturday as he declared that a peaceful end to the Russian invasion is possible – even as Russian ground forces took up positions about 15 miles from Kyiv’s city center and nearby villages were pounded by enemy air strikes.
-Vice President Kamala Harris promised continued United States support on behalf of Ukraine after the country was invaded by Russia over two weeks ago: “The United States stands firmly with the Ukrainian people in defense of the NATO alliance,” Harris told a gathering of the Democratic National Committee in Washington D.C. Saturday. “The ocean that separates us will not leave us untouched by this aggression.”

WSJ : Roman Abramovich U.S. Hedge Fund Investments Are Frozen

Roman Abramovich U.S. Hedge Fund Investments Are Frozen
Hedge funds told to freeze Russian oligarch’s assets after he was sanctioned by the British government

A number of U.S. hedge-fund firms that have investments from Russian oligarch Roman Abramovich have been told to freeze his assets after he was sanctioned by the British government Thursday, according to people familiar with the instructions.

A message from fund administrator SS&C Globe Op to one firm said, “Currently accounts attributed to Roman Abramovich are blocked from transacting, as such any distributions, redemptions or payment cannot be made and no subscriptions or contributions can be accepted.”

SS&C, whose clients include hedge funds and other investment managers, said in the message it was monitoring the situation for guidance from the U.K. Treasury, the Office of Financial Sanctions Implementation and the Cayman Islands Monetary Authority. Other funds have received similar messages, according to people familiar with the matter.

The guidance likely puts a stop to recent efforts by Mr. Abramovich to sell his interests in a slew of hedge funds, said people familiar with the matter.

Mr. Abramovich, who for years has accessed hedge-fund investments through New York-based adviser Concord Management, had been trying to sell interests in funds including those managed by Empyrean Capital Partners in Los Angeles and Millstreet Capital Management in Boston, the people said.

Mr. Abramovich had been seeking to sell the funds on the secondary market since at least late February, the people said. For at least some of the funds, the investor is Concord, with Mr. Abramovich or entities connected with him being the underlying investor, said people familiar with the matter. People familiar with the matter said Concord was a small investor in Millstreet.

Mr. Abramovich also is invested through Concord in hedge funds including Millennium Management, Sarissa Capital Management and Sculptor Capital Management, SCU -2.09% formerly known as Och-Ziff Capital Management, said people familiar with the matter. It couldn’t be determined Friday if he had tried to sell his interests in those funds as well. Mr. Abramovich’s hedge-fund portfolio includes investments in many small funds betting on and against stocks, one person briefed on the matter said.

A spokeswoman for Mr. Abramovich didn’t respond to requests for comment. Concord didn’t respond to a request for comment.

The New York Times earlier reported Mr. Abramovich’s ties to Concord.

The U.K. on Thursday froze Mr. Abramovich’s assets and prevented him from doing any business in the country or selling assets including soccer club Chelsea F.C.

While managers in the past welcomed Concord’s money—the firm has a reputation for being a thoughtful, long-term investor in the hedge-fund industry–the relationship is proving delicate following Russia’s invasion of Ukraine and the cascade of sanctions it triggered.

Managers would have welcomed a sale as a way to distance themselves from a sanctioned oligarch, and some had been thinking about forcibly redeeming Mr. Abramovich from their funds, said people familiar with the matter.

One manager had been considering the possibility of replacing Mr. Abramovich with other investors, another person familiar with the matter said.

Conversations with asset managers regarding their possible exposure to Russian clients have been multifaceted, said Ropes & Gray LLP partner Ama Adams, who heads the firm’s international trade and national security practice. They have covered for example whether firms wish to forcibly redeem investors even if they haven’t been sanctioned, what steps they need to take to freeze assets in the case of investors who have been sanctioned, and what information they can share with other clients who are asking about their Russian exposure.

“Over the past 14 to 20 days, we have seen a global, coordinated effort across multiple regimes” designating Russian oligarchs and others as sanctioned persons, Ms. Adams said. “That creates more of a complicated assessment than historically many managers have had to consider due to the global nature of funds.”

She said past sanctions that were comprehensive, such as those against countries including Iran, Syria or North Korea, had much less of an impact on asset managers because of the lack of investors from those jurisdictions.

>>> US Close Dow -0.69% S&P -1.30% Nasdaq -2.18% RUssell -1.59% VIX 30.75 +1.72%

Closing Stock Market Summary

The S&P 500 fell 1.3% on Friday, as investors appeared frustrated with the state of the market and economy. The Nasdaq Composite (-2.2%) and Russell 2000 (-1.6%) lost more than 1.5% while the Dow Jones Industrial Average lost 0.7%. 

All 11 S&P 500 sectors closed in negative territory, leaving the benchmark index at session lows after it started the day with a 0.7% gain. The information technology (-1.8%), consumer discretionary (-1.8%), and communication services (-1.9%) fell nearly 2.0% while the utilities sector decreased just 0.4%.  

The positive start transpired after President Putin reportedly described a positive shift in talks with Ukraine, but the problem for the market was that no one earnestly believed Mr. Putin was going to stop the invasion without a full surrender from Ukraine. On a related note, President Biden announced new economic actions against Russia in coordination with allies. 

Other issues included higher oil prices ($109.10/bbl, +2.81, +2.6%) following a suspension in nuclear deal talks between the U.S. and Iran, a flatter Treasury yield curve, a decline in consumer sentiment for March, disappointing guidance from DocuSign (DOCU 75.01, -18.87, -20.1%) and Rivian (RIVN 38.05, -3.11, -7.6%), and continued weakness in Chinese ADRs. 

DocuSign and Rivian, specifically, reminded investors that there's still room for further downside in the growth stocks should they not meet expectations. Oracle (ORCL 77.82, +1.17, +1.5%), meanwhile, stood out after providing upbeat revenue guidance. 

The mega-caps were a heavy drag on the market. The Vanguard Mega Cap Growth ETF (MGK 210.96, -4.30) fell 2.0%, versus a 1.1% decline for the Invesco S&P 500 Equal Weight ETF (RSP 149.52, -1.59). 

Strikingly, the Treasury market wasn't as excited as the stock market initially was following the Putin headline. It was relatively quiet, and the ensuing price action signaled concerns that the inflationary environment could lead the Fed to an aggressive rate-hike path and slow down growth even more. 

The 2-yr yield increased three basis points to 1.75% while the 10-yr yield declined one basis point to 2.00%. The U.S. Dollar Index rose 0.6% to 99.11. 

Reviewing Friday's economic data:

  • The preliminary March reading for the University of Michigan Consumer Sentiment Index checked in at 59.7 ( consensus 62.5) versus the final reading of 62.8 for February. The March reading marks the lowest level for the index since October 2012.
    • The key takeaway from the report is that rising inflation is eating away at consumer sentiment, as consumers recognize their purchasing power has been reduced because their income is not keeping up with inflation. That is apt to translate into reduced discretionary spending activity. Notably, it was indicated in the report that personal finances were expected to worsen in the year ahead by the largest proportion since the survey started in the mid-1940s.

There is no economic data of note scheduled for Monday.

  • Dow Jones Industrial Average -9.3% YTD
  • S&P 500 -11.8% YTD
  • Russell 2000 -11.8% YTD
  • Nasdaq Composite -17.9% YTD