Testy Tensions
Picking on Elon Musk, fake promises of ESG, and how will Russia pay back its foreign investors?
Goood morning!! I hope you had a wonderful night and a great day planned ahead. You deserve it :))
Daily quote:
“Life shrinks or expands in proportion to one’s courage.“
— Anaïs Nin
Facing some heat.
Dan O’Dowd, candidate for the California Senate, is running on an ani-Elon Musk campaign.
Calling Tesla’s self-driving technology unsafe, the man has spent 7 years pushing regulators to act against the company. It seems he is not running a “single-issue” campaign, but rather a “single-man”1 campaign.
Federal regulations require broadcasters to give hefty discounts to qualified candidates for public office. Thus, his objective is not to win a seat in the senate, but rather, to get a better price on advertising his attacks on Musk.
The New York Times predicts that Elon may face the wrath of more political candidates in the coming election year. Democrats could use him as political pay dirt due to his plan to buy Twitter and possibly allowing Trump back onto the platform. He is also an easy target for progressives who are keen to harp on higher taxes for billionaires.
On top of declaring he would now “vote Republican,” Elon’s recent complaint about the ESG S&P500 Index being hacked by “phony social justice warriors” likely will not help his case…
“Vanity ESG” continues.
As accusations of misleading players, sponsors and fans roll in, it is now far-fetched to think that the 2022 FIFA World Cup in Qatar will be “carbon neutral.” In Frankfurt, Deutsche Bank and its DWS unit were raided by police on suspicions of greenwashing. CEO Christian Sewing is no foreigner to regulatory and legal issues.
More on Russian bonds.
Remember when everyone was talking about how Russia would pay back bond-investors? Remember when we realised investors had literally no leverage and had to accept Rubles?
Well, here’s the update:
Part of a US sanction, US banks cannot move money on behalf of the Russian government. Luckily, there was an exception for Russian bond payments. However, this exception elapsed, and meant that $100 million worth of coupon payments could not be made to foreign investors’ accounts by Friday evening. Now, we have entered a 30-day grace period before default.
Russia cannot sent dollars without involvement of US banks. So unless Russia has enough US dollar cash, those bonds aren’t getting paid back.
To avoid defaulting, Russia is getting creative.
The newest idea is to open Russian bank accounts for bondholders so that technically the bondholders have their dollars, but they will by no means be able to transfer those dollars into their US bank accounts or use them.
There is another bundle of $400 million in payments due in June, which is also set to take place “outside Western financial infrastructure” in this manner.
This is putting a heavy strain on the bond-holders —which only the largest institutional investors are likely to survive unscathed. These intricate matters also add worries of reputation risk and risk of sanctions violations.
I’m wondering if the newly thought-out bond payment mechanism will work & who really has the most on the line…
That’s it for today! Happy Wednesday!
Lots and lots of love,
Angeline
Resources:
“Price pain.” The Bloomberg Close, Europe Edition, Bloomberg, May 31, 2022.
Cremades, Alejandro. “He Raised $300 Million For A Startup Where 500 Employees Work Remotely.” Dealmaker, The Inner Circle, Pathera Advisors, May 31, 2022.
Levine, Matt. “Russia Has Some Dollars Somewhere.” Money Stuff, Bloomberg Opinion, Bloomberg, May 31, 2022.
Sorkin, Andrew Ross. “Tightening the squeeze on Russia.” DealBook, The New York Times, May 31, 2022.
Thomas, Zoe & Carter, Bill. “Space Manufacturing: Building an Economy Beyond Earth.” Tech News Briefing, WSJ Podcasts, The Wall Street Journal, June 1, 2022.
C’mon I’m very funny