Syz the moment

So much so that the World Bank is now classifying Russia as a "high-income country." On Monday 1st of July, the World Bank announced it has upgraded Russia from an upper-middle-income country to a high-income country, according to a report from the financial institution's economists. "Economic activity in Russia was influenced by a large increase in military-related activity in 2023," World Bank economists wrote in their report. Last year, Russians earned $14,250 per person on a gross national income basis. The World Bank's upgrade confirms reports from Russia that suggest the growth is primarily driven by wartime activities that generate demand for military goods and services, making some sectors winners in Russia's wartime economy. Russia's trade jumped by nearly 7% last year, while activities in the financial sector and construction grew by 6.6% and 3.6%, respectively. This boosted Russia's real GDP — which is economic growth adjusted for inflation — by 3.6%. The development has made some poor Russians better off financially, complicating any calculus over how to end the war.

In 2023, they paid 4 times more taxes to the Russian state than they did before the war in Ukraine... According to the FT, Deutsche Bank has increased its profits in Russia from €26mln before the war to €40mln in 2023, while Commerzbank has more than tripled its profits to €51mln. The German state holds a 15.8% stake in Commerzbank. Italian and Austrian banks are doing a killing as well… Western lenders have benefited from the imposition of sanctions on most of the Russian financial sector, which has denied access to the Swift international interbank payment system. That made international banks a financial lifeline between Moscow and the West. Source: FT, HolgerZ

Meanwhile, Germany has massive INDIRECT EXPORTS to Russia - see charts below. What are US taxpayers supposed to think when they see this? Source: Robin Brooks

Source: FT

The drills focused on the simulated delivery of ‘a massive nuclear strike by the strategic offensive-oriented forces in response to a nuclear strike by a simulated enemy’. Note that gold and bitcoin both jumped on the news.

A lot of these goods - mostly cars and car parts - never ends up in Kyrgyzstan, but go directly or indirectly to Russia"

As tweeted by The Kobeissi Letter, Russia and 3OPEC are now cutting a massive 4 million barrels per day of crude oil production. This is the highest level of production cuts outside of recessions over the last two decades. As Saudi Arabia and Russia extend production cuts of 1.3 million barrels per day, supply is going to remain limited for a while. OPEC has proven multiple times over the last three years that they are committed to higher oil prices. Source: The Kobeissi Letter, JP Morgan

With Diesel prices already soaring, recently sending the diesel crack to 2023 highs and assuring that refiners have another blowout quarter, Russia just handed a gift to the Exxons of the world when it "temporarily banned" exports of the diesel in a bid to stabilize domestic supplies, adding pressure on already tight global fuel markets. “Temporary restrictions will help saturate the fuel market, that in turn will reduce prices for consumers” in Russia, the government’s press office said on its website. The "temporary" ban, which also applies to gasoline, comes into force today, Sept. 21, and doesn’t have the final date, according to the government decree, signed by Prime Minister Mikhail Mishustin. Source: www.zerohedge.com, Bloomberg