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March 10 (Reuters) - President Vladimir Putin said on Thursday that sanctions imposed against Russia would rebound against the West, including in the form of higher food and energy prices, and Moscow would solve its problems and emerge stronger.

Putin said there had been no alternative to what Russia calls its special military operation in Ukraine and that Russia was not a country which could accept compromising its sovereignty for some sort of short-term economic gain.

"These sanctions would have been imposed in any case," Putin told a meeting of the Russian government. "There are some questions, problems and difficulties but in the past we have overcome them and we will overcome them now.

"In the end, this will all lead to an increase in our independence, self-sufficiency and our sovereignty," he told a televised government meeting two weeks after Russian forces invaded neighbouring Ukraine.

His comments were designed to portray Western sanctions as self-defeating and reassure Russians that the country can withstand what Moscow is calling an "economic war" against its banks, businesses and business oligarchs.

Putin said Moscow - a major energy producer that supplies a third of Europe's gas - would continue to meet its contractual obligations even though it has been slammed with comprehensive sanctions including a ban on U.S. purchases of its oil.

"They announced that they are closing the import of Russian oil to the American market. Prices there are high, inflation is unprecedentedly high, has reached historic highs. They are trying to blame the results of their own mistakes on us," he said. "We have absolutely nothing to do with it."

Hitting back against the West, the Russian government said earlier it had banned exports of telecom, medical, auto, agricultural, electrical and tech equipment, among other items, until the end of 2022.

In total, over 200 items were included on the export suspension list, which also covered railway cars, containers, turbines and other goods.

'WE WILL SOLVE THESE PROBLEMS'

Speaking calmly, Putin acknowledged that sanctions imposed since the Feb. 24 invasion were being felt.

"It is clear that at such moments people's demand for certain groups of goods always increases, but we have no doubt that we will solve all these problems while working in a calm fashion," he said.

"Gradually, people will orient themselves, they will understand that there are simply no events that we cannot close off and solve."

Putin noted that Russia is a major producer of agricultural fertilisers, and said there would be inevitable "negative consequences" for world food markets if the West made problems for Russia.

His agriculture minister reported at the meeting that the country's food security was ensured.

Speaking at the same meeting, Finance Minister Anton Siluanov said Russia had taken measures to limit the outflow of capital and that the country would service its external debts in roubles, not in dollars.

"Over the last two weeks Western countries have in essence waged an economic and financial war against Russia," he said.

Siluanov said the West had defaulted on its obligations to Russia by freezing its gold and foreign currency reserves. It was trying to halt foreign trade, he said.

"In these conditions the priority is for us to stabilise the situation in the financial system," Siluanov said.

Firm’s hedge fund lost 8.5% last year, was down by double digits in 2022 through last month

New York hedge-fund firm Aravt Global LLC is shutting down after sustaining significant losses recently, a sign of the severe pain the selloff in growth stocks is inflicting.

Aravt’s hedge fund lost 8.5% in 2021 and was down by double digits this year through February—in line with the tech-laden Nasdaq Composite’s 12% loss including dividends for the period, said people familiar with the firm. Founded by former Ziff Brothers Investments principal Yen Liow, Aravt focused on what he called “horses,” companies that would reliably post above-average growth.

In recent months, Aravt’s concentrated stakes in growth companies including PayPal Holdings Inc. and GitLab Inc. have been pummeled. Other wagers have hurt the fund, too, including on cable operator Charter Communications Inc.

“When we launched in 2014, I made a promise to return capital if I ever lost conviction in our ability to deliver superior absolute returns sustainably. I believe our flagship long/short equity strategy has reached that point,” Mr. Liow, 50, wrote in a letter to investors dated Feb. 28 that was viewed by The Wall Street Journal. He wrote that “structural shifts in the market” would require Aravt to change how it manages its portfolio in ways he wasn’t sure would position the fund for strong performance. He didn’t say what the market shifts were.

Unlike some other growth-oriented hedge funds, Aravt didn’t have the benefit of huge size or significant private investments to help it ride out recent losses, a person familiar with the firm said. Another person familiar with Aravt said Mr. Liow’s decision to close his hedge fund wasn’t based on short-term performance and that the fund hadn’t received any redemption requests recently.

The so-called growth trade, which has generated huge profits for investors across public and private markets over the past decade, is showing signs of unraveling.

For years, low interest rates and a paucity of other attractive opportunities fueled investor appetite for stocks of companies expected to deliver faster-than-average profit growth.

But the strategy has backfired since November as the Federal Reserve has said it would lift rates to combat inflation. Higher rates hurt the value investors ascribe to potential future earnings and hit growth stocks disproportionately hard.

Tiger Global Management’s hedge fund lost 36.7% from November through February, while D1 Capital Partners lost about 25% in its portfolio of public investments. D1’s share class allowing up to half of clients’ money to be invested in private companies lost 6%. Melvin Capital Management, which has been trying to recover from losses suffered in the meme-stock rally of January 2021, lost 18.6% for the period.

The first trading days of March have added to growth funds’ losses, said portfolio managers. The popular reopening trade—a wager that hotels, cruises, airlines and related companies would benefit as the economy reopens—has been hurt by soaring oil prices. Shares of Carnival Corp. and American Airlines Group Inc. have fallen by 13% and 18%, respectively, in March.

Managers estimate that growth-focused funds lost as much as 10% on Monday alone. As those funds look to limit losses, their reduction of exposure to markets in the prior five days was one of the most aggressive in the past decade, a Tuesday client note from Goldman Sachs said.

“March has been horrific,” said one manager who asked not to be named.Some clients of growth-oriented hedge funds said they are re-evaluating their investments.

A Malaysian-Chinese Australian who attended business school in the U.S., Mr. Liow oversaw technology, media and telecom investments for a hedge fund run within the New York family office of the Ziff brothers, heirs to a publishing fortune. When he joined the firm in 2000 during the dot-com bust, Mr. Liow recounted in a podcast recently, he contributed to the “mother of all shorts” across the ecosystem of internet infrastructure that became hugely profitable.

Running his own fund proved tougher. Aravt launched in February 2014, managing $1.5 billion at one point, and was one of a number of funds founded by former Ziff sector heads to launch around the time the firm closed its multibillion-dollar hedge funds in 2013and 2014.

From its start through 2018, Aravt averaged gains of less than 2% a year compared with more than 9% for the S&P 500, including dividends. Mr. Liow by early 2019 had “streamlined” his investment team, a change he told investors would improve returns. Indeed, the hedge fund gained 31% and 36% in 2019 and 2020, respectively, but its assets by mid-2020 had dwindled to $500 million as investors stung by earlier losses defected.

Aravt’s name pays homage to Genghis Khan, Mr. Liow said in the podcast, adding the Mongolian warrior always chose battles he likely would win. He said a lesson was, “If you want to compound capital at a really extraordinary rate, you’ve got to be very, very careful in the games you choose and how to play them, and only do it when the odds are stacked in your favor.”

(Reuters) - Self-proclaimed Bitcoin creator Craig Wright must pay another $43 million to a joint venture he co-created, adding to a $100 million verdict against him last year, a federal judge in West Palm Beach, Florida, ruled Wednesday.

A jury in December found Wright unlawfully seized intellectual property belonging to the joint venture with late computer forensics researcher Dave Kleiman, W&K Info Defense Research. U.S. District Judge Beth Bloom awarded the additional $43 million in interest on damages W&K suffered from when he took control of the IP in 2013 until the court's final judgment.

Wright had argued that W&K should only be entitled to interest measured from October 2021, when the IP's value was highest, through December.

Wright's attorney Andrés Rivero of Rivero Mestre said in a statement that the award was still "but a fraction of the amount plaintiffs claimed" and does not affect the jury's finding that Kleiman did not co-invent Bitcoin with Wright.

W&K's attorneys said in a statement that the decision, like the verdict, "sets a historical precedent in cryptocurrency and blockchain."

Kleiman's brother sued Wright on behalf of his estate in 2018, alleging he stole intellectual property related to blockchain technology from W&K along with 1.1 million bitcoin.

According to court papers, the bitcoin was mined by Satoshi Nakamoto, who wrote a white paper describing the framework for what would become bitcoin. Wright has said that he is Nakamoto, which has been disputed.

Jurors awarded W&K $100 million for Wright's conversion of its intellectual property but cleared Wright of other claims including theft and fraud, and found W&K and Kleiman were not entitled to any of the disputed bitcoin.

Kleiman said in the lawsuit that the assets were worth over $11 billion. Today, the 1.1 million bitcoin would be worth $43 billion.

The case is Kleiman v. Wright, U.S. District Court for the Southern District of Florida, No. 9:18-cv-80176.

For Kleiman: Vel Freedman and Kyle Roche of Roche Freedman, Andrew Brenner, Steve Zack, and Max Pritt of Boies Schiller Flexner

For Wright: Andrés Rivero of Rivero Mestre

War stokes internal debate in Japan’s ruling party over changing nuclear weapons policy

Russia’s invasion of Ukraine has spurred some of Washington’s closest allies in Asia to harden their stance against China and bolstered voices in Japan’s ruling party who argue the country should consider hosting US nuclear weapons.

The shift in thinking in Japan, Australia and South Korea is raising fears of heightened tension in a region that is already home to several of the world’s most dangerous flashpoints.

“It is a major wake-up call. War has not gone away. There’s no denial of that any more,” Rory Medcalf, head of the National Security College at the Australian National University, said of the fallout of the Ukraine invasion on the region.

In Japan, senior figures in the ruling Liberal Democratic party said it had prompted a historic shift in thinking within its ranks, which they also believed, though some way off, would eventually be shared by the public.

In the past, Japanese citizens had felt their safety was guaranteed by the US and through Tokyo’s policy of strictly limiting the capability of the country’s self-defence forces and restricting its overseas activities. But now voters were more likely to take a “practical and realistic” view of what Japan needed to protect itself from a changing threat, argued the senior LDP figures, speaking in an off-record briefing.

“The old way of thinking about things is dying out. Japan is becoming more pragmatic about the security debate,” said one person in the top echelons of the LDP.

The remarks follow a suggestion by Shinzo Abe, the former prime minister, last month that Japan should consider allowing the deployment of US nuclear weapons on Japanese territory similar to European Nato members.

But the measure of how divisive that shift would be, even within the LDP, came as Abe’s remarks were swiftly rebutted by Nobuo Kishi, the defence minister and the former leader’s younger brother. He stressed that Japan would stick to its principles of not producing, possessing or permitting the introduction of nuclear arms on its territory.

The idea of hosting US nuclear weapons on Japanese soil in peacetime, to be carried by Japanese fighters in an emergency, would never be allowed, said Kishi.

Still, Abe’s proposal sparked a debate about an issue long considered taboo because of the country’s pacifist constitution and the historic trauma of the US nuclear attacks on Japan that ended the second world war.

Another person close to the top LDP policymaking ranks pointed in particular to one of the more alarming elements of the Ukraine war: the fighting around Ukraine’s Chernobyl and Zaporizhzhia nuclear power plants. “The fact that there were Russian attacks on nuclear power plants is telling us that we need in Japan new thinking and new definitions in the security debate.”

Similarly, the Ukraine war has emboldened the Australian government — one of the most vociferous critics of Russia’s Ukraine invasion — in its pursuit of a stronger defence relationship with the US to hedge against China.

Prime Minister Scott Morrison highlighted this week the “instinctive relationship” between Russia and China, which have aligned over “the sort of world order that they would prefer”. That, he argued, showed the need for stronger alliances in the Indo-Pacific to curb China’s rise.

Australia’s defence spending is expected to rise to 2.1 per cent of gross domestic product this year. It also announced a shortlist of locations for a new base for nuclear-powered submarines to be supplied under Canberra’s Aukus contract with the UK and US, giving impetus to the flagship defence project.

“The timetable for the nuclear submarines is being pulled forward,” said Richard McGregor, senior fellow at the Lowy Institute, who argued that the Ukraine invasion had given Morrison’s government a platform to “rally support for its position on China” in the region.

Even Chinese analysts share dark predictions over how Russia’s invasion will increase tension in the region. Yan Xuetong, dean of the Institute of International Relations at Tsinghua University in Beijing, said the Ukraine war “will cause more conflicts between China and Japan and more conflicts between China and Australia”.

Jia Qingguo, a professor at the School of International Studies at Peking University, warned of further “Ukraine-like events, where countries challenge the international order and China and the US cannot work together to address the problem”. He added: “If China and the US cannot work together, we are going to see war.”

In South Korea, the two leading candidates in the presidential election this week both used Russia’s invasion to justify their competing visions for South Korea’s defence.

Lee Jae-myung, the candidate of the ruling Democratic party, which has historically pursued a defence policy more independent of Washington and conciliatory towards Pyongyang and Beijing, was forced to apologise last week. This followed a suggestion that Ukrainian president Volodymyr Zelensky “had caused a major clash by inciting Russia with a hasty promise of Ukraine’s Nato admission”.

The conservative candidate Yoon Suk-yeol, who narrowly won the election on Thursday, has called for Seoul to step up its military deterrence of North Korea and pursue closer security ties with the US. Yoon has argued that “the case of Ukraine shows that you cannot protect national security and peace with paper and ink”.

Go Myong-hyun, a senior fellow at the Asan Institute of Policy Studies in Seoul, said: “There is a view in the Korean defence establishment that Ukraine was not adequately militarily prepared for war and that will reinforce an existing bipartisan consensus that South Korea needs to invest more heavily in its defence.”

With North Korea’s nuclear and missile programmes progressing steadily, Go said it was Russia’s implicit threat of nuclear escalation, rather than the invasion itself, that would probably have the greatest impact on South Korea’s security debates.

“People haven’t yet connected the dots between the situation in eastern Europe and the situation in East Asia,” said Go. “But when the dust settles on the election, it is a debate we’re going to have.”

Shanghai at risk of lockdown after more than 1,000 cases confirmed across the country

Mainland China is struggling to contain its biggest coronavirus outbreak since the pandemic erupted in Wuhan two years ago, as the Omicron variant tests Xi Jinping’s zero-tolerance strategy and puts Shanghai at risk of being locked down.

Health authorities reported on Friday that daily case numbers have tripled in the past week, adding up to more than 1,000 cases across 16 cities and forcing officials in north-east China to erect emergency makeshift hospitals.

China’s case numbers remain low by almost all international comparisons. New Zealand, a country of 5mn people, reported more than 20,000 new infections on Friday, while South Korea reported 280,000 cases among its 52mn.

The latest rise in China’s cases has refocused attention on Beijing’s decision not to stray from its zero-Covid strategy of tightly sealed borders and — whenever an infection is detected — citywide lockdowns, mass testing and meticulous contact tracing.

The policy, which has been credited with suppressing China’s pandemic death rate, has endured despite authorities delivering more than 3bn Covid-19 vaccine doses to a population of 1.4bn.

While much of the rest of the world is rapidly reopening, Beijing’s approach reflects shortcomings in China’s healthcare system, said health experts, who pointed to the comparatively low efficacy of the country’s domestically produced vaccines.

A flurry of school closures and localised lockdowns over recent days in Shanghai, one of China’s biggest cities, has sparked concerns among its residents that more draconian measures beckon. Health officials in the city have urged people to get booster jabs.

The approach is also under intense scrutiny in Hong Kong, with the Chinese territory recording more than 550,000 infections since the latest wave of infections began in late December — five times the 112,000 infections recorded in mainland China during the entire pandemic.

Hong Kong hospitals have been overwhelmed, mortuaries are at capacity and grocery stores have been stripped bare by panic buying. About 3,000 deaths, mostly elderly and unvaccinated residents of care homes, have been recorded in the territory.

The Hong Kong government has been forced by Beijing to adopt a “dynamic zero-Covid” strategy after Carrie Lam, Hong Kong’s chief executive, prioritised reopening the city’s border with China over the rest of the world.

Hong Kong’s daily case count has eased to 31,000 from 55,000 last week. But the city’s 7.4m people, living under strict social distancing measures for months, remain on edge over the potential for a citywide lockdown and the threat that anyone who tests positive will be detained in a government quarantine facility.