Thread by @doctorow

For years, investors have been buying up Russian government bonds, lured in by the high interest rates paid in dollars, euros and pounds. 1/

If you'd like an unrolled version of this thread to read or share, here's a link to it on pluralistic.net, my surveillance-free, ad-free, tracker-free blog:

pluralistic.net/2022/03/15/san… 2/

These investors are now whining because they're pretending they only just noticed the fine-print on these bonds, especially the clause that lets Russia pay the coupon in roubles if hard currency isn't available "for reasons beyond Russia's control." 3/

Russia argues that sanctions brought by foreign governments and corporations mean that it no longer has any real money to pay to foreign investors, so it's going to switch to paying roubles, whose value is in freefall with no sign of slowing. 4/

On @creditslips, @mweidemaier and Mitu Gulati write that these bonds were sold *after* Russia embarked on a campaign of conduct that was likely to give rise to sanctions, including annexing its neighbors and assassinating people abroad with nerve gas.

creditslips.org/creditslips/20… 5/

Moreover, the prospectus for Russian bonds actually *explains this*, citing the "geopolitical tensions" that might " adversely affect ... the Russian Federation's ability to repay its debt denominated in currencies other than the rouble, including amounts due under the Bonds." 6/

In other words, buying Russian bonds was a means for "for investors to fund Russian misbehavior" (and profit from it). 7/

Incredibly, some of these investors are "Environmental, Sustainability and Governance" (#ESG) funds, a form of papal indulgence for capitalism whose primary role is #greenwashing planet-destroying initiatives as just fine, actually:

pluralistic.net/2021/11/17/do-… 8/

Back to Weidemaier and Gulati: "investors buy Russian sovereign debt specifically because they do not care about ESG goals." Or perhaps, "the ESG part of the investor’s brain is off doing something else while the part that chases yield buys Russian bonds." 9/

Either way, if you bought Russian paper, your coupon is now denominated in rouble-scented toilet paper, and that's all you deserve. 10/

Image:
Scripophily.com
scripophily.net/imperial-russi…

Public domain 11/