Tag Archives: Financial

Washington Commanders Deny Financial Malfeasance in a Letter to FTC

Friedman, through his lawyers, stood by his testimony and said he would answer follow-up questions from any of the government agencies reviewing the team’s activities.

“My client is also prepared to defend himself publicly against these baseless allegations if Mr. Snyder permits him to do so,” his lawyers, Lisa Banks and Debra Katz, said, referring to the team’s owner, Daniel Snyder. “In the meantime, we will communicate directly with the team about these demonstratively false allegations.”

In March, Friedman testified to the committee about a practice he said some team executives called “juicing,” in which revenue from N.F.L. game tickets was reported as having come from other events held at the team’s stadium in order to reduce the amount of ticket revenue it was required to share with the 31 other N.F.L. teams.

One example he provided involved licensing fees for college games or concerts hosted at the team’s stadium in Maryland. In testimony the committee cited in its letter to the F.T.C., Friedman said team executives kept one set of books with the altered numbers it submitted to the N.F.L. and a second set with the accurate accounting that was shown to Snyder.

Snyder, through a representative, declined to comment.

In Monday’s submission to the F.T.C., the team said its auditors, as well as those from the N.F.L., had access to all revenue, including from non-N.F.L. events, and would have discovered such a discrepancy had it existed. Specifically responding to Friedman’s claim that $162,360 from Commanders games was categorized as revenue from a college game, the team offered screen shots of emails it claims show that the money was properly listed as the N.F.L. team revenue.

Friedman also testified that in his role he oversaw the processing of security deposits paid by season-ticket holders and that after Snyder bought the team in 1999, the team intentionally made it difficult for ticket holders to recoup their refundable payments. He alleged that the Commanders organization held on to $5 million from such deposits.

Washington disputed those claims, saying it converted about $200,000 in security deposits into revenue, but only after those customers defaulted on their payments. In 2014 alone, the Commanders said, they refunded the security deposits of about 750, or half, of the dormant accounts, and over time returned more than $2 million.

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‘Trade rupture’ between Russia, Germany could cause financial shock: S&P Global

A financial shock could be on the cards if there’s a “trade rupture” between Russia and Germany, warned S&P Global’s chief economist on Tuesday.

“Looking at a downside scenario … there’s kind of several different ways to play that but we think the one that would really move the macro needle is some sort of trade rupture between Russia and Europe,” Paul Gruenwald told CNBC’s “Squawk Box Asia.”

“This is not just cutting off the gas — whether Germany stops buying or Russia cuts it off,” he added.

Following Russia’s unprovoked invasion of Ukraine, several world powers including the U.S., Japan and Canada have hit Moscow with sanctions. The European Union is considering whether to ban oil imports from Russia, and has pledged to eventually cut its reliance on Russian gas by two-thirds.

Russia for its part has demanded that so-called “unfriendly” countries pay in rubles for gas, referring to those that have imposed heavy economic sanctions designed to isolate Russia over its unprovoked onslaught in Ukraine.

The European Union receives about 40% of its natural gas from Russian pipelines and about a quarter of that flows through Ukraine. Germany gets roughly half of its natural gas from Russia.

That would feed through to … lower GDP, lower employment, lower confidence — and then we would get a kind of a macro financial shock out of that.

Paul Gruenwald

chief economist, S&P Global

Gruenwald added: “We’ve got the energy complex, we’ve got commodity prices, we’ve got industrial inputs that Europe’s importing, such as nickel and titanium and other things like that.”

Research and consultancy firm Wood Mackenzie also warned that the global economy could undergo “more permanent changes” with global trade possibly altered by the crisis.

“If the Covid-19 pandemic highlighted a need to shorten supply chains, the war in Ukraine underscores the importance to have reliable trading partners,” research director Peter Martin wrote in a Tuesday note.

“These forces could lead to a lasting realignment of global trade. The global economy becomes more regionalised — shorter supply chains with ‘reliable’ partners.”

Trade between Germany and Russia

A trade rupture between Germany and Russia could put a dent in German manufacturing – one of three global manufacturing centers besides the U.S. and China, Gruenwald said.

“That would feed through to … lower GDP, lower employment, lower confidence — and then we would get a kind of a macro financial shock out of that. So that’s the sort of scenario we’re worried about that could move the needle,” he warned.

Trade between Germany and Russia jumped significantly in 2021 compared to the year before, with the value of goods surging 34.1% to 59.8 billion euros ($65 billion), according to Germany’s Federal Statistical Office.

Germany’s imports from Russia rose considerably last year, rising 54.2% compared to 2020. Exports also rose but at a slower pace than imports – rising 15.4%.

The main products that Germany exported to Russia included vehicles, machinery, trailers and chemical products, according to the agency. Russia’s main exports to Germany included crude oil, natural gas, metals and coal.

Russia accounted for 2.3% of total German foreign trade, and was the fourth most important country for German imports outside of the European Union in 2021.

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Boris Johnson pledges financial, military aid after meeting Zelensky in Kyiv

U.K. Prime Minister Boris Johnson paid a surprise visit to Kyiv on Saturday to meet with Ukrainian President Volodymyr Zelensky “in a show of solidarity with the Ukrainian people,” British and Ukrainian officials said.

Driving the news: Johnson pledged new military assistance to Ukraine, including about 120 armored vehicles and new anti-ship missile systems, and guaranteed an additional $500 million in World Bank lending to Ukraine, per his office.

  • We’re setting out a new package of financial & military aid which is a testament of our commitment to his country’s struggle against Russia’s barbaric campaign,” Johnson wrote in a tweet after his meeting with Zelensky.
  • Zelensky and Johnson also walked through the center of Kyiv on Saturday, according to Ukraine’s Ministry of Defense.

What they’re saying: “Boris was among those who did not hesitate for a moment whether to support Ukraine,” Zelensky said in his nightly address Saturday, according to an official transcript posted in English.

  • “The leadership of the United Kingdom in providing our country with the necessary assistance, especially in terms of defense, as well as the leadership in sanctions policy will remain forever in history. … Ukraine will always be grateful to Boris and Britain for this,” Zelensky added.

Meanwhile, Johnson praised Zelensky for showing “resolute leadership and the invincible heroism and courage of the Ukrainian people that Putin’s monstrous aims are being thwarted,” per the U.K. prime minister’s office.

  • “I made clear today that the United Kingdom stands unwaveringly with them in this ongoing fight, and we are in it for the long run,” he continued.
  • “We are stepping up our own military and economic support and convening a global alliance to bring this tragedy to an end, and ensure Ukraine survives and thrives as a free and sovereign nation,” Johnson added.

State of play: In a meeting with German Chancellor Olaf Scholz on Friday, Johnson announced new sanctions against the Russian economy and condemned Russian President Vladimir Putin’s “barbaric onslaught against Ukraine.”

  • Johnson, who has been outspoken in his condemnation of Russia’s unprovoked invasion of Ukraine, called the Russian missile attack on a train station in the city of Kramatorsk a “war crime.”
  • “The attack at the train station in eastern Ukraine shows the depths to which Putin’s vaunted army has sunk … Russia’s crimes in Ukraine will not go unnoticed or unpunished,” Johnson said on Friday.

Go deeper … Dashboard: Russian invasion of Ukraine

Editor’s note: This article has been updated with comment from Zelensky.



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The Billionaire Peter Thiel Rocks the Financial World With His Prediction That the Price of Bitcoin (BTC) Will Increase “100x” to Over $4 Million!

Bitcoin (BTC), the world’s largest cryptocurrency by market capitalization, is poised for astounding gains in the next few years should Peter Thiel’s latest prediction pan out.

Speaking at the Bitcoin 2022 summit in Miami, the co-founder of Paypal and Palantir made headlines as he doubled down on his uber bullish outlook for Bitcoin while mocking Warren Buffett, Bill Gates, Larry Fink, and Jamie Dimon.

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Readers can watch Thiel’s entire keynote address here:

In his speech, Thiel railed against corporate ESG concerns, terming them the “real enemy”.

“[ESG] is just a hate factory. It’s a factory for naming enemies, and we should not be allowing them to do that. When you think ESG, you should be thinking Chinese Communist Party.”

For context, Bitcoin has continued to receive flak from various quarters, including Tesla’s Elon Musk, for its detrimental carbon footprint. As per a recent report by Crypto Carbon Ratings Institute (CCRI), a typical US household consumes 10,600 kWh of electricity per year. Bitcoin, with its vast network of decentralized nodes, consumes an average of 89.78 billion kWh of electricity per year, often exceeding the yearly energy output of entire nations.

Nonetheless, as we noted recently in a dedicated post, this simplistic narrative ignores crucial subtleties. As an illustration, back in September 2020, the University of Cambridge estimated that around 39 percent of Bitcoin’s total energy consumption was carbon neutral, hammering the point home that the network’s energy consumption is not equal to its carbon footprint. Moreover, proponents also argue that the global banking and finance industry uses energy that is orders of magnitude higher.

zkEVM and Loopring Earn: Two Reasons To Remain Bullish on the Loopring (LRC) Coin Through 2022

Turning his verbal gun toward Warren Buffett, who has famously termed Bitcoin “rat poison”, Thiel railed against the “sociopathic grandpa” while also disparaging the “finance gerontocracy” as encapsulated by Buffett, Bill Gates, Larry Fink, and Jamie Dimon.

Peter Thiel Believes Bitcoin is Poised for ‘100x” Price Gains

In what was inarguably the centerpiece of his address, Thiel noted that Bitcoin was deliberately being undervalued as it is the most honest market in the world, thereby serving as the proverbial canary in the coal mine:

“Bitcoin is the canary in the coal mine; it was telling us that inflation is coming; it is telling us that central banks are bankrupt; it is telling us that we are at the end of the fiat money regime.”

Thiel then observed that Bitcoin’s true competitor was not Ethereum but global equities. He correctly noted that one of the primary factors behind the bull market of the past 40 years was the historically low inflation in the post-Volcker era. However, now that inflation has returned, Bitcoin should outperform equities.

We have repeatedly highlighted Bitcoin’s soaring correlation with US equities. In fact, currently, around 48 percent of the moves in Bitcoin are accounted for by the corresponding moves in the benchmark S&P 500 index. Back in January 2022, this correlation stood at over 60 percent.

Source: https://charts.coinmetrics.io/correlations/

Nonetheless, if Thiel’s predictions pan out, Bitcoin will likely exit this troubling correlation regime in the near future, setting the stage for outsized gains.

In fact, Thiel believes that there should be parity between the market capitalization of global equities and that of Bitcoin. For reference, global equities currently have a market cap of around $115 trillion, while this metric for Bitcoin is hovering at $807 billion right now. Thiel then said:

“I am still hopeful that bitcoin goes up by a factor of 100x.”

Should this prediction pan out, it would equate to an astounding situation where 1 Bitcoin would be worth over $4 million!

Do you agree with Peter Thiel’s assessment? Let us know your thoughts in the comments section below.



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Report: 24-year Washington Commanders employee testified to Congress about alleged financial improprieties

USA TODAY Sports

More facts are coming to light regarding the recent reporting as to alleged financial irregularities within the Washington Commanders organization.

According to Daniel Kaplan of TheAthletic.com, an employee who spent 24 years working for the Commanders has testified before the U.S. House Committee on Oversight & Reform and “alleged financial malfeasance.” Jason Friedman gave the secret testimony, which as Kaplan writes “appeared to” spark multiple reports in recent days, including the bombshell contention that the team withheld payments from the ticket revenues that go into a league-wide visiting-team pool.

Kaplan, citing an unnamed source, reports that “Friedman supplied no evidence to back up his claims.” Kaplan also points out that it’s unclear whether Friedman held a position that would have given him access to records or other evidence that would support the claims.

Friedman previously supplied a letter to the Committee corroborating the allegations made by former team employee Tiffani Johnston against Commanders owner Daniel Snyder. His testimony presumably addressed that incident, along with his claims about financial irregularities.

A spokesman for Republican members of the Committee apparently took indirect aim at Friedman with this comment, released in the aftermath of recent reporting: “The leak of one-sided, unconfirmed, unsupported allegations from a disgruntled ex-employee with an ax to grind is just further proof the Democrats’ investigation is a waste of Congress’ time. Nothing the committee has heard from any credible witness points to any financial improprieties; in fact, the only credible witness in a position to know the facts the Democrats have heard from has denied any such improprieties.”

As we see it, there’s no gray area here. Financial improprieties happened, or they didn’t. Friedman’s testimony is a starting point. The ending point is proof to support his claims or proof to debunk his claims (or the absence of proof to support his claims).

And if there’s nothing to any of this, it’s safe to assume that the league or the team will say so, loudly.

The Commanders issued a statement last week, in the aftermath of the initial reporting regarding potential financial improprieties. There has been no specific statement since Saturday’s report from A.J. Perez of FrontOfficeSports.com regarding the allegation that money was withheld from the visiting-team fund.

Given the potential implications of this specific claim, which if true would undoubtedly bring down Snyder, it’s hard to imagine that the league and the team will remain silent.

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Congress investigating allegations of financial impropriety by Commanders

The financial investigation remains behind closed doors and among the highest levels of the 45-person committee at this point. Asked about this new phase, several members of the panel indicated they have heard speculation about this but said it remains at such a sensitive phase they do not know details. Other members were unaware.

“The team is not aware of any investigation by the House Oversight Committee regarding financial matters, despite vague and unsubstantiated claims today by anonymous sources,” a Commanders spokesman said. “The team categorically denies any suggestion of financial impropriety of any kind at any time. We adhere to strict internal processes that are consistent with industry and accounting standards, are audited annually by a globally respected independent auditing firm, and are also subject to regular audits by the NFL. We continue to cooperate fully with the Committee’s work.”

The committee’s examination of alleged financial irregularities in team operations comes amid the NFL’s second investigation of the team or Snyder’s behavior in the past 19 months.

The NFL’s current probe — led by Mary Jo White, a former U.S. attorney for the Southern District of New York and former chair of the Securities and Exchange Commission — was prompted by an allegation of sexual misconduct against Snyder that was aired during a public roundtable hosted by the Oversight Committee on Feb. 3. During the proceedings, Tiffani Johnston, a former cheerleader and team marketing manager, told members of Congress that Snyder harassed her at a team dinner, putting his hand on her thigh and pressing her toward his limo afterward. In a statement, Snyder called Johnston’s allegations “outright lies.”

When asked whether the panel is looking into allegations of financial impropriety, a spokesperson for the committee said: “The Committee continues to investigate the hostile workplace and culture of impunity at the Washington Commanders as well as the National Football League’s inadequate response and lack of transparency. The Committee will follow the facts wherever they may lead.”

The House Oversight Committee launched its investigation of the team in October, after some members expressed dissatisfaction with a perceived lack of transparency in the NFL’s investigation of the team’s workplace, which was led by Beth Wilkinson and began in the summer of 2020.

Following Wilkinson’s 10-month investigation, the NFL fined the team $10 million in July and announced that Snyder’s wife, Tanya, the team’s co-CEO, would take over the franchise’s day-to-day operations for an unspecified period. The NFL did not release Wilkinson’s findings, saying then that she had been directed to relay her conclusions orally rather than in writing.

The committee requested the NFL turn over all documents and information related to Wilkinson’s work, as well as her findings. Frustrated by what it called partial compliance by the NFL, the committee set a second deadline for all of the requested documents and threatened further action in February for anything short of that. In a February letter to the House committee, the NFL wrote that the Commanders were denying access to approximately 109,000 requested documents related to Wilkinson’s investigation. An attorney for Snyder denied the assertion.

The House Oversight Committee is the investigative arm of Congress, and its chair, Rep. Carolyn B. Maloney (D-N.Y.), has subpoena power to compel the production of documents not willingly provided and the authority to convene hearings on matters of public interest. There is some disagreement among members, largely breaking down along party lines, over whether the inner dynamics of a professional football team warrant the committee’s attention.

While the committee’s focus remains on the Commanders’ workplace culture and the NFL’s handling of allegations of pervasive sexual misconduct within the franchise, the financial allegations arrive amid indications that the NFL is growing weary of defending Snyder.

NFL Commissioner Roger Goodell publicly rebuked Snyder for announcing during Super Bowl week that the team would handle the investigation of Johnston’s allegations. Goodell said instead the NFL would do so via an independent investigator because it would be improper for the team to investigate itself.

At the NFL’s annual meetings Tuesday in Palm Beach, Fla., Goodell said Tanya Snyder would continue to oversee the team’s daily functions and represent the Commanders at league meetings “for at least the foreseeable future.”

The Commanders are worth $4.2 billion, according to Forbes. While in his 30s, Snyder led an investment group that bought the team and its stadium for $800 million in 1999.

After an acrimonious dispute with his second set of limited partners in the team in 2020, Snyder was granted a debt-ceiling waiver by the NFL in March 2021 that enabled him to buy out his partners’ combined 40 percent stake for approximately $875 million.

The deal put ownership of the team entirely in the hands of Snyder and family members but saddled him with as much as an additional $450 million in debt at a time when the Commanders’ fan base is eroding. The NFL’s top-drawing team in the early 2000s, the Commanders ranked 31st among the league’s 32 teams in home attendance last season, ahead of only the Detroit Lions.

Anheuser-Busch, the official beer sponsor of the NFL and more than two dozen of its teams, acknowledged in a mid-March statement to The Washington Post that it was ending its partnership with the Commanders.

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Financial ‘jackpot’ unlikely for cash-strapped Saint Peter’s Peacocks despite generating NCAA tournament revenue

PHILADELPHIA — One of the most endearing facets of Saint Peter’s NCAA tournament run is the proportional size of the school’s athletic budget compared to the schools that it has slayed.

Saint Peter’s has beaten No. 2 Kentucky, No. 7 Murray State and No. 3 Purdue, which is remarkable considering Saint Peter’s spent $130 million less on athletics last year than Kentucky. Saint Peter’s athletic director Rachelle Paul said the school’s basketball operating budget, which does not include coaching salaries, is less than $250,000 and the lowest number, by far, in the Metro Atlantic Athletic Conference.

When No. 15 Saint Peter’s plays No. 8 North Carolina for a chance at the Final Four on Sunday, a vexing question will loom for the MAAC and Saint Peter’s going forward. How do they split up the spoils from Saint Peter’s magical run?

NCAA tournament money math is wonky, but it’s safe to estimate that Saint Peter’s three wins in the tournament will mean a windfall of at least $6 million in additional money from the three extra NCAA units. That money is distributed to the MAAC over the next six years, and the league has autonomy as to how to distribute the money.

“I would like to see however it’s distributed among the members of the MAAC, I’d like to see Saint Peter’s get a little bit more,” Paul said. “We’re the ones doing this, quite frankly.”

Paul added that Saint Peter’s accomplishment and accompanying financial uptick are “unprecedented.” MAAC commissioner Rich Ensor, who is a Saint Peter’s graduate, acknowledges this but said there’s unlikely to be a windfall headed Saint Peter’s way.

Ensor said the ultimate decision on how to fairly compensate Saint Peter’s is something that he’d have to “take up with my board,” which is made up of MAAC presidents. Ensor said there’s already a distribution system in place that allows for a “modest” slice of money for teams that have won in the tournament. The rest of the excess money is expected to be dedicated toward improving basketball in the league.

“I don’t anticipate there’s going to be a jackpot,” he said of Saint Peter’s. “[The presidents] could go in a different direction. It’s really not my call. They tend to want to reinvest.”

Different leagues handle unit money distribution in different ways. It’s not uncommon for a league to weight distribution toward teams that win more games.

For a league like the MAAC, which lacks the revenue of major football conferences, a run like this is transformative. The MAAC hasn’t received more than one unit in the NCAA tournament since 2009.

The MAAC, like all conferences with an automatic bid in the NCAA tournament, is guaranteed one unit every year. This year, those units are worth $338,210.96, according to the NCAA. Those units are paid out over six years, and according to the NCAA, they fluctuate with broadcast rights. So that means each unit is worth at least $338,210.96 over six years, or $2,029,265. For the MAAC, that means this run is worth more than $8.1 million, $2 million of which was already guaranteed. How could a bigger slice of that money dedicated to Saint Peter’s help the infamously cash-strapped program?

“Oh, my gosh,” Paul said. “It could change our whole program. It could help with recruiting, it could help with scholarships, it could help with facility upgrades. There’s a million things that we could use that money for.”

Saint Peter’s coach Shaheen Holloway makes nearly $266,000 per year, according to the latest available tax documents. (The possibility of him leaving for Seton Hall, his alma matter, looms in part because they can pay him nearly ten times more than Saint Peter’s.)

The Saint Peter’s basketball staff has four members who are completely unpaid, according to Paul. And even Saint Peter’s as a university has a smaller endowment ($37 million) than the total amount of Kentucky coach John Calipari’s current contract ($86 million). Paul said the modest basketball operating budget doesn’t even include things like paying officials, as fundraising is required for things that many have money allocated for.

“I would say we’ve got a ways to go to just get to a point where we’re comfortable not crunching numbers for every road trip and every hotel,” she said. “I’m probably making it sound more dire than it is. But we’re very conscientious about what we spend the money on. It only goes so far.”

When Saint Peter’s run does end, there will be a lot of eyes on campus as to how it is rewarded financially for its efforts.

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Texas official quizzes financial companies on fossil fuel investments

March 16 (Reuters) – Texas Comptroller Glenn Hegar has questioned 19 financial companies to clarify their investment policies on fossil fuels, his office said on Wednesday, showing the breadth of a review that could see firms losing state pension mandates.

Letters were sent to companies including BlackRock Inc, (BLK.N), JPMorgan Chase & Co (JPM.N) and Wells Fargo & Co among others “that may be boycotting the fossil fuel industry,” according to a statement and other material sent by a spokesman for the Republican state official.

Even if companies currently hold oil and gas investments today, some may be “selling the hope of a ‘green’ tomorrow with promises to divest or reduce” fossil fuel exposure, Hegar said in the statement.

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Another round of letters will soon be sent to more than 100 other publicly-traded investment companies “that appear to have one or more funds boycotting fossil fuels,” according to Hegar’s letter.

Under a new state law, Hegar will draw up a list of financial companies found to boycott fossil fuels. Those firms could then be barred from managing state pension money. read more Hegar told companies they have 60 days to provide details.

At stake is access to state pension funds like the $197 billion Teacher Retirement System of Texas, which has about $2.5 billion with BlackRock for example.

Major investors face balancing acts as some pension funds and endowments move to divest from fossil fuel stocks over climate change concerns. High energy prices have helped keep other investors in the stocks however. read more

A spokesman said Hegar was not available for further comment.

Representatives for BlackRock, JPMorgan and Wells Fargo did not comment. In a previous letter, BlackRock had argued to Texas officials that as a long-term investor in fossil fuel companies, “we want to see these companies succeed and prosper.”

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Reporting by Ross Kerber; Editing by Bernard Orr

Our Standards: The Thomson Reuters Trust Principles.

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China has expressed some openness to providing military and financial aid to Russia, US cable suggests

It is not yet clear whether China intends to provide Russia with that assistance, US officials familiar with the intelligence tell CNN. But during an intense, seven-hour meeting in Rome, a top aide to President Joe Biden warned his Chinese counterpart of “potential implications and consequences” for China should support for Russia be forthcoming, a senior administration official said.

The series of events underscored the growing concern among American officials at the budding partnership between Moscow and Beijing as Biden works to isolate and punish Russia for its aggression in Ukraine. While officials have said the Chinese President was alarmed at what has taken place since Russia invaded, there is little to indicate China is prepared to cut off its support entirely.

That leaves open a troubling possibility for American officials — that China may help prolong a bloody conflict that is increasingly killing civilians, while also cementing an authoritarian alliance in direct competition with the United States.

In a diplomatic cable, the US relayed to its allies in Europe and Asia that China had conveyed a willingness to assist Russia, which has asked for military support. The cable did not state definitively that assistance had been provided. One official also said the US warned in the cable that China would likely deny it was willing to provide assistance.

Among the assistance Russia requested was pre-packaged, non-perishable military food kits, known in the US as “meal, ready-to-eat,” or MREs, according to two sources familiar with the matter. The request underscores the basic logistical challenges that military analysts and officials say have stymied Russian progress in Ukraine — and raises questions about the fundamental readiness of the Russian military.

Forward-deployed units have routinely outstripped their supply convoys and open source reports have shown Russian troops breaking into grocery stores in search of food as the invasion has progressed. One of the sources suggested that food might be a request that China would be willing to meet, because it stops short of lethal assistance that would be seen as deeply provocative by the west.

The Chinese Communist Party leadership is not all in agreement regarding how to respond to Russia’s request for assistance, said one of the sources. Two officials said that China’s desire to avoid economic consequences may limit its appetite to help Russia. Officials separately told CNN that Chinese President Xi Jinping has been unnerved by how the war in Ukraine has reinvigorated the NATO alliance.

“There is real concern by some that their involvement could hurt economic relationships with the West, on which China relies,” said one of the sources.

Officials are also monitoring whether China provides some economic and diplomatic relief for Russia in other forms, like abstention votes at the United Nations.

In Rome, US national security adviser Jake Sullivan and a US delegation who met with top Chinese diplomat Yang Jiechi “raised directly and very clearly” concerns about Chinese “support to Russia in the wake of the invasion, and the implications that any such support would have for” China’s relationship with the US and partners around the world, State Department spokesperson Ned Price said.

“That includes allies and partners in Europe and the Indo-Pacific,” Price said at a State Department briefing Monday.

Concerns over China’s potential involvement in the war came as bombardments intensified in Kyiv, the Ukrainian capital, and Russia’s military campaign moved westward. Still, there remained signs that Russia’s armed forces are being hampered by Ukrainian fighters, underscoring Russia’s need for outside assistance.

Ukrainian forces have “effectively struck Russian logistics and sustainment capabilities” in the war, a senior US defense official told reporters on Monday. And the US does not believe Russia’s missile strikes on a Ukrainian military training center in western Ukraine will affect American efforts to provide weapons shipments to that country’s military.

Biden, who is working to rally international support for Ukraine, could travel to Europe soon to further consult with allies there, people familiar with the plans said, though as of Monday no trip had been finalized. His administration is also considering expediting the resettlement of Ukrainian refugees with US ties. The US President may face increased pressure to assist displaced Ukrainians soon — the nation’s President, Volodomyr Zelensky, plans to virtually address a joint session of Congress on Wednesday.

US watching how China responds to Russian invasion of Ukraine

Heading into the meeting, US officials said they expected Yang to portray China as a neutral partner willing to help facilitate talks between the two sides aimed at bringing an end to hostilities. China has ramped up its diplomatic efforts in the past days, including in a call last week between Xi and the leaders of France and Germany meant to signal a willingness to adopt a more proactive role in the crisis.

The US has viewed those efforts somewhat skeptically, given China’s recent closeness with Russia. And over the weekend, US officials said they had information that Russia had asked China for military support, including drones, as its invasion advances more slowly than the Kremlin had expected. Both the Chinese and Russian governments publicly denied that the request had been made.

Sullivan told CNN on Sunday that China providing Russia with support is a “concern.”

“We also are watching closely to see the extent to which China actually does provide any form of support, material support or economic support, to Russia. It is a concern of ours. And we have communicated to Beijing that we will not stand by and allow any country to compensate Russia for its losses from the economic sanctions,” Sullivan said.

American officials say they believe Xi has been unsettled by Russia’s invasion and the performance of Russia’s military, which has experienced logistical and strategic setbacks since the invasion began more than two weeks ago. Watching from Beijing, Xi was caught off-guard that his own intelligence had not been able to predict what happened, even though the United States had been warning of an invasion for weeks, the officials said.

“They may not have understood the full extent of it,” Sullivan said on CNN on Sunday, “because it’s very possible that Putin lied to them, the same way that he lied to Europeans and others.”

The mostly global repudiation of Russia’s actions has caused China to weigh what damage it may suffer to its reputation by sticking with Russian President Vladimir Putin. And an economic rupture with Europe or the United States could damage a Chinese economy already growing more slowly than it has in 30 years.

For all those reasons, American officials believe now is a moment when engaging with China is an imperative as it determines how to proceed amid Russia’s aggression. US and Chinese officials have been in regular touch over the past several weeks, including in the lead-up to Russia’s invasion.

Price said the US is “watching very closely the extent to which the PRC” — another name for China — “or any other country, for that matter, provides any form of support, whether that’s material support, whether that’s economic support, whether that’s financial support to Russia.”

“Any such support from anywhere in the world would be of great concern to us,” he said.

He declined to comment specifically on reports about the diplomatic cable.

“We have communicated very clearly to Beijing that we won’t stand by. … We will not allow each country to compensate Russia for its losses,” he added.

Price characterized the Chinese response to the Russian invasion of Ukraine as somewhat “ambivalent.”

“I read a statement the other day from a PRC official calling the situation complicated. There’s nothing complicated about this. This is naked aggression,” he said.

Russian invasion of Ukraine tosses its relationship with China into tumult

Sullivan’s meeting Monday in Rome was originally meant as a follow-up to US President Joe Biden and Xi’s nearly three-hour virtual summit in November, which occurred at the same time American officials began warning of a massive buildup of Russian troops along Ukraine’s borders. On that call, Xi warned Biden that dividing the world into competing blocs would “inevitably bring disaster,” according to a Chinese readout.

Yet Russia’s invasion has done more to align the world in competing alliances than anything Biden had done with the aim of bolstering American relationships — an outcome American intelligence has found Xi was also unprepared for, believing instead that European economic interests would prevent countries there from imposing severe sanctions.

That dynamic has complicated a relationship that Xi and Putin declared had “no limits” in a lengthy document in February, when Putin visited Beijing for talks and to attend the opening ceremony of the Winter Olympics. The US decision to stage a diplomatic boycott of the Games infuriated Xi, officials have said, making Putin’s presence in the stadium even more important.

The evolving response in China to the Russian invasion — from denying one would happen to avoiding public condemnation to presenting itself as a possible mediator — has been closely monitored by the White House, where the potential of a Moscow-Beijing alliance is viewed with heightened concern. CIA Director Bill Burns said last week the partnership was rooted in “a lot of very cold-blooded reasons.”

A new “axis” forming in opposition to American-led efforts at bolstering regional security has been in the works since before the war in Ukraine, including in the economic, political and military sectors. But the US does not view the partnership as fully developed, Director of National Intelligence Avril Haines told lawmakers last week.

“We do see it as not yet at the point where we are, for example, with allies,” Haines said. “They have not achieved that kind of level of cooperation, and we anticipate it is unlikely in the next five years that they will … become the way we are an ally with our other NATO members in that context.”

This story has been updated with additional reporting.

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Allianz, Swiss Re join other financial firms in turning from Russia

  • Allianz says stopped insuring new business in Russia
  • Swiss Re says not renewing business with Russian clients
  • Europe’s securities regulator says ensuring orderly markets
  • Deutsche changes position late on Friday
  • FTSE Russell ejects four UK-listed, Russia-focused stocks

FRANKFURT/LONDON/ZURICH, March 14 (Reuters) – Allianz (ALVG.DE) and Swiss Re (SRENH.S) said on Monday they were cutting back on Russian business as European financial institutions turn their backs on Russia.

The German insurer and Swiss reinsurer join banks Deutsche (DBKGn.DE), Goldman Sachs (GS.N) and JPMorgan Chase (JPM.N) which have exited Russia following its Feb. 24 invasion of Ukraine and subsequent Western government sanctions.

The moves will pile pressure on others to follow.

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Allianz said it had put a stop to insuring new business in Russia and was no longer investing in Russia for its own portfolio. read more

Swiss Re said it was not taking on new business with Russian and Belarusian clients and was not renewing existing business with Russian clients. In a statement sent via email, Swiss Re said it was reviewing its current business relationships in Russia and Belarus. read more

The decisions follow similar action by other major European insurers and reinsurers, which provide cover for large projects such as energy installations.

Insurer Zurich (ZURN.S) no longer takes on new domestic customers in Russia and will not renew existing local business, a spokesperson told Reuters on Monday.

Hannover Re (HNRGn.DE) said last week that new business and renewals for customers in Russia and Belarus were on hold, while Italian insurer Generali (GASI.MI) said earlier this month it would pull out of Russia. read more

Insurance broker Willis Towers Watson (WTY.F) also said on Sunday it would withdraw from Russia, following similar moves by rivals Marsh (MMC.N) and Aon (AON.N).

Asset managers have said they will not make new investments in Russia and many Russian-focused funds have frozen because they are unable to trade following the sanctions and counter-measures taken by Russia. read more

The European Union’s markets watchdog ESMA said on Monday it was coordinating the bloc’s regulatory response to the Ukraine conflict to ensure markets continued to function in an orderly manner.

Britain’s pensions regulator said the sector had little direct exposure to Russia, but that there were practical difficulties in selling Russian assets. read more

Ukraine said on Monday it had begun “hard” talks with Russia on a ceasefire, immediate withdrawal of troops and security guarantees after both sides reported rare progress in negotiations at the weekend, despite Russian bombardments. read more

Russia calls its actions in Ukraine a “special operation”.

WINDING DOWN

Deutsche, which had faced stinging criticism from some investors and politicians for its ongoing ties to Russia, announced late on Friday that it would wind down its business there. read more

It was a surprise reversal by the Frankfurt-based lender, which had previously argued that it needed to support multinational firms doing business in Russia.

Britain’s London Stock Exchange Group also said late on Friday it was suspending all products and services for all customers in Russia, days after suspending the distribution of news and commentary in the country following new laws in Moscow. read more

Index provider FTSE Russell said on Monday it would delete four UK-listed, Russia-focused companies including Roman Abramovich’s Evraz (EVRE.L) after many brokers refused to trade their shares.

Evraz, along with Polymetal International (POLYP.L), Petropavlovsk (POG.L) and Raven Property Group (RAV.L), would be deleted from all FTSE’s indexes during the March review, it said in a statement.

FTSE Russell said it had received feedback from its External Advisory Committees and market participants that trading in the shares was “severely restricted” as brokers refused to handle the securities, hitting market liquidity. read more

JPMorgan says the majority of forecast risk for European banks from the Russia shock will come from commodity and economic spillover effects, with the sector plunging since the end of February.

European banking stocks (.SX7P) have come off their lows in recent days, however, and rose 3.8% on Monday.

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Additional reporting by Marc Jones, Iain Withers and Joao Manuel Mauricio, Writing by Carolyn Cohn, Editing by Catherine Evans

Our Standards: The Thomson Reuters Trust Principles.

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