Biden Ups Russia Sanctions, Calls Ukraine Invasion Underway

You can also listen to our radio show at two pm Eastern Time on Bloomberg Radio or watch us on YouTube search Bloomberg Global News, Glaco and on. When it comes to Ukraine, Russia, the US, UH and NATO allies, Charlie of course mentioning the u S un failing sanctions

and North Stream to pipeline. That's the latest round of sanctions from President by the EU has called an emergency in person some of the blocks leaders that is to happen to tomorrow and then we've often seen a lot of analysis about what we got from the President of the United States yesterday about sanctions, how they didn't seem to do much. So let's get the latest on the situation. What you need to know. Jody Schneider is political news director from Bloomberg TV and Radio. She joins us in

our Interactor Broker studio in New York City. We keep saying, Jody, it's fluid. What do we Uh? The President just in veiling right another round of sanctions. Talked to us about the significance of that. Yeah, so we're expected to see this expanded package, maybe as soon as today. We're hearing this from people familiar with the matter. They haven't been

done yet. They have not yet be done, but but we're we expect we're seeing them, and UH Bloomberg News colleagues are reporting this, according to people familiar with the matter, UH, and the penalties would hit additional Russian elites that are close to Vladimir Putin, as well as UH the builder

of the North Stream to pipeline. This would be on top of the sanctions that were announced yesterday that the President UH announced in his remarks at the White House, which some said we're measured, others said we're a little too modest. And he's getting some criticism in Congress, mostly from Republicans, UH say, why have we not gone far enough? The President yesterday in those remarks said that the beginning of the invasion was occurring, and yet he wasn't hitting hard. Uh.

So there this this is what's uh you know taking place. Now. The White House says that they're going to continue to roll out sanctions. Uh if the uh with what if Putin as Putin, I guess uh would escalate uh the incursion into Ukraine. So we're watching all that. Uh, we're also watching what's happening with the EU and uh their uh NATO allies and what they do with sanctions. I'm really glad you mentioned the EU allies because we've kind of very closely been here before a couple of times

historically CRIMEA two eight in Georgia, very similar concepts. How much further can these sanctions actually hit Russia? Are they still effective given we've gone almost ten years where Russia has been trying to dedolarize and trying to kind of bolster or cushion I should say, the impact, Are they still going to be effective? Well, that's right, that's and that's a key question. And all this, I mean, I think there's two questions there. One is does Vladimir Putin

care um? You know, is this is this a deterrent effect. Has this you know, been a deterrent effect at all? That doesn't really seem that it has. Now maybe it will deter you know, a dramatic escalation. But the other one is a should point out do they work overall? And they haven't really seemed to work so far in the sphere you're talking about, but uh, you know these and and of course they could dramatically escalate if they went against big Russian banks, which has been threatened. That's

a different situation. And if they went to the nuclear option, as as they discussed of you know, doing the swift um currency um uh sanctions, that would be a whole other matter. No one thinks that Joe Biden wants to go there. And then there's a chess game involved if you give up too much with the sanctions, because you don't really have anything else. He's made it clear that there will not be American troops on the ground, uh,

you know in Red Craine. Uh, So you have to hold back a little bit because what, you know, what currency do you have if you use everything now? So it's a waiting game with the White House and everyone's watching and you know, waiting to see what Vladimir Putin does next? Is there a tipping point do you think for President Putin In terms of something that does slow him down significantly? Because you look at his speeches and

what he has said. He feels this territory was it was right part of the former Soviet Union, feels like this belongs to Russia, and so a lot of nationalism right coming from him. So is there something that is seen by the experts as there is a tipping point that will slow him down? Or does do most expect that he's going to go all the way? Yeah? And

that and that's another set of key questions in this. Uh. He has made it very clear that what he wants, that what he kept saying, uh could be something you know, the West get out of jail free card here would be to promise never to allow Ukraine to become part of NATO, which of course is not something that the US or its allies in Europe are willing to do. Uh.

So it's unclear what else might satisfy. I mean, there's been some thinking that that's what these these diplomatic efforts with Anthony B. Lincoln and and you know the other his counterparts among the European nations have been in recent weeks and months that to try to come up with something that could satisfy Putin, but they haven't been able to seem to come up with anything. One good question, how political is this becoming in the United States, because

we've even seen division among the Republicans. But I just wonder about this lack of support congressional support for President binding in this Yeah, and this of course, you know, it's a midterm election year, and the whole thinking is, you know, foreign policy doesn't really matter in those elections, but there's a big you know, there there's one big caveat this year that could make it matter in the

price of gasoline. And if if this really disrupts oil markets and gas prices, which have been going up because of you know, the inflationary pressures, they go up further. This could be really difficult, as Jimmy Carter saw, as others saw when inflation tied to uh international tensions went higher, and that could really hurt the Democrats in power. What are you watching thirty seconds final thoughts, Well, we're watching Putin's moves and and also another thing we're watching is China.

China's responsor is very interesting because while Putin and she spoke at the Olympics and they had those meetings, we haven't heard a lot from China in recent days, very very modest console comments in state on media. So I'm watching them. They've been uping regulatory oversight of their executives and businesses. But I agree it's a really important aspect of this that we need to keep an eye on. Jodie, thank you so much. I know it's busy. Jody Schneider.

She's political news director for Bloomberg TV and Radio. This is Bloomberg Business Week with Carol Masser and Bloomberg Quick Takes. Tim Stinovic on Bloomberg Radio. Listening to Bloomberg Business Week, Carol Master along with Creedy gooptin now as we watch the situation over in Ukraine, there's one other fund to keep an eye on, and that is the cyber attacks intended to create chaos and undermine the Ukrainian government. That

story from Jeff Stone, cybersecurity editor Bloomberg News. He joins, creating myself here in our Bloomberg Interactive Broker studio. How are you well, It's good to have you here. You are busy anything in all things Ukraine right now, Um, what's going on here? Uh? It changes by the day, right you alluded to this, But we have seen a number of attacks, um, that are intended to create chaos, create confusion, create difficulty for Ukrainian government websites trying to

stand online. Um, and it's really tough for banks to stay online. What does difficulty mean? They're overwhelmed with inauthentic traffic that appears to be coming from within Russian borders, and that traffic does what knocks the websites offline. So if you're trying to access your bank, you can't gather your transaction details, for instance, you can't access information from the Ministry of Foreign Affairs for instance. That would freak me out. Yeah, that sounds scary. How much further can

it really go? It's hard to say. Um, we haven't been in a situation before where, um, a traditional warfare situation, troops on the ground, if you will, is combined with this kind of stuff that we've seen evolve in cyberspace over the past five or ten years. Um, it can get worse, Jeff. It does feel like Russia is just chipping away at Ukraine on so many different fronts to really kind of undermine the citizens there. That's true. I

think that's part of the strategy. We're speaking with folks in Ukraine who who say essentially that the goal here is to exhaust us, it is to intimidate us, it is to wear us down. Well, I guess my question here now is if you do have that kind of exhausting wearing it down idea, Um, can't they go the other way as well? Can't cyber attacks happen on Russia as well? As this a a means of warfare if you're not seeing those physical troops on the ground, it

absolutely is. Um. We know that the Russian government is particularly advanced and sophisticated with this kind of stuff, but we have seen attacks against them, not from Ukraine as of yet that we know of, but we've seen cases in the past, certainly from the U S. U S intelligence has affected UM Russian government activity in in cyberspace

prior to the last election. Well, this is kind of interesting right as we are watching what some would say are two week sanctions opposed by the U S. That you do wonder write what's going on behind the scenes in terms of cyber warfare, right which is something that doesn't always get talked about, at least initially. But you do wonder what are you hearing stuff on that front. In terms of the U S specifically in NATO allies. We haven't heard anything about that yet. I would be

surprised if it's If it's not happening. They certainly have the capability to uh take Russian banks offline for instances we've seen in Ukraine and affect uh you know, they can they can certainly get any emails and things like that. We haven't seen anything indicating that that's happening yet. But as a harder story, so how do you protect yourself against the sabama Ukrainian citizen hypothetically, what what do you

do to to to prevent yourself? I think that that candidly, you're your concerns if you're Ukrainian citizen right now, are not in the cyberspace. I think that you want to probably take out cash and make sure that you can access your information, have it handy. UM. But a lot of this stuff is UM kind of a tip for tat in in terms of the geopolitics, we know that the Ukrainian government, for instance, is trying to UM ease some of this burden so that it's not a thought

for people yet. It's just I would say, it's fascinating that you've mentioned that you kind of have to look at your cash right now, because anecdotally, I mean I have friends who are German or live in Europe and have families in Ukraine, and anecdotally they said, well, everyone's pulling their money out of their bank accounts. They're spending

it on real estate in Western Europe. And this is what the President of Ukraine was talking about, right He was saying to President Biden, actually say tamp down the rhetoric, because you're seeing capital flows exit Ukraine at a pace that you just haven't seen. And I thought, my little market mind market hat on, I was like, oh, they're talking about financial markets. That's not what they're talking about

the time, about people's savings. It's wild. If you can say, if I can say one more thing, they also, um, we also are trying to keep this as grounded as possible as you alluded to the President saying, because fears or over emphasizing this kind of rushing capability in cyberspace plays into the Kremlin's hands. Um, you don't want to create that panic that you that you kind of alluded to. No, it's really smart right to be levelheaded about this. But at the same time, this is our current world in

terms of warfare. We've talked about this right over the last really decade or so, if not more, that this is this is how how it is often played or will be increasingly played. Right, Well, you're gonna be busy, Jeff, Thanks for getting up to speak, because this is another side of the story that we just wanted to bring to our audience. Jeff Stone, the cybersecurity editor Bloomberg News. You're listening to Bloomberg Business Week with Carol Messer and

Bloomberg Quick Takes Tim Stinovic on Bloomberg Radio. Well, this is our most read story on the Bloomberg today and it has sat there all day. Uh, it's another one by our street, not urajon, and I guess I don't know. Can we call it a clawback? We'll see what he has to say. Goldman is actually wants your bonus back. So here with who the firm is targeting Istory. He is financial port rep Blomberg News in Bloomberg Interactive Brokers Studio. Is it a clawback. Is it the ultimate clos back?

It definitely is the threat of a claw back. What they're really doing right now is taking steps to confiscate pay for from a couple of their departed executives who when who left to start this banking started backed by Walmart. It's a small startup. It would be somewhat similar to Goldman Zone consumer banking aspirations, which took group five or six years ago, and these two executives were key to that.

But what Goodman is doing here, which is what is rare and unprecedented about that, is they're going after paid that has already vested and been text. We've heard a lot of instances where deferred pay gets taken away. You go from Goldman to JP Morgan, Goldman to Morgan standing you don't have a chance of keeping your deferred faith. That's always you don't have it yet, right, you don't

have it yet. In this case they have it. I mean we also cite example in the story where even the deferred pay is getting pulled from people who are moving to clients and by side films that would typically not be treated that way. But even if you're willing to set that aside, for a second and just count

that as as an aggressive tone of the dial. What they're doing with the vested compensation, compensation that's already been delivered to them, that really stands out, and that to me and a lot of the people have spoken with, is really the prime example perhaps of Goldman and its CEO sending a message, making it loud and clear to stuff. We're still at the bank and thinking about jumping ship.

It might be very costly to do so. Well, what's interesting to me, And you say this in your story, you say that this is something that normally happens when it's kind of it's used for punishments, reserved for cases of misconduct, not necessarily new jobs. And we saw this before, not necessarily at JP or at Goldman. Excuse me, but we saw this. You also quote this in your story an infamous incident with Andrea or cell I remember that story.

Moving over to I want to say Banco santand their right, Yeah, the Spanish bank over from UBS. So this has happened before. It's almost like it's been in the making, except that's a little different. That's one level less aggressive because under your child, who was running investment banking at ubs at the time moving to Banco Santander Spanish retail lender. What blew up that contract was the fact that is deferred

pay was taken away. In this case, they're not only to go with a deferred pay, but they're also going off to pay that has been delivered. That is what makes it a little mind boggling. Well, this is interesting because it also speaks to you when it's vested, right, these are executives who put in their time right and delivered uncertain things. Right. Can we assume that and then

we're awarded absolutely? I mean the performance bonuses what all these large Wall Street films thrive on, and it's awarded at the end of the year. It is supposed to be a pay for performance culture invests over three years and you're restricted from selling it for five years. But those are all steps put in place to make sure no one's making a quick buck so that the stocks going up in the short term and then you cash out in the stock banks, which is why these measures

in place. But you're using some of those restrictions to now find a back door into clowing back that pay. Sure, it sounds like comments getting incredibly aggressive with a lot of stuff. What's going on here? It's the broader backdrop. We have been speaking about the lost for the last two years, through the pandemic, really about this intense battle

for talent. What have all the major firms done in a period of record revenues and profits we saw for when it came to the one pay cycle, all of them, all of them increased their compensation, They boosted pay bonuses were raining down in and the bonuses were going up to a level that you hadn't scenes in the financial crisis in some places, to a new record. That is one side of how you deal with the talent war.

The other, uglier side, I guess, is also trying to send a message to those who are leaving that there is only one top dog in town and you don't to get on the wrong side. Well, what's interesting to me is that this also follows, like you said, this, this conversation has been increasing for a while, right, and it's also eating into their bottom line. So you kind of understand in a way why they're making this decision.

It's it's getting very costly. Yes, and no, I would say, because remember the film that coined the phrase, or at least made the phrase popular long term greedy. That is Goldman Sax It's former leader, Gus Levy in the nineties when he was leading of the film, you know, till his dying day, he was the CEO of Goldman Sex. He ran that place, and that is when this whole idea of you have to be long term greedy to crout. And over the last fifty sixty years that has been

a film that's been closely associated with Goldman Sex. So the question is some of these measures which are likely to irk clients, and we point out a couple of instances in the story where it has irked clients or has led to some awkward conversations. Does that eat into this long term greedy ethos. Any time of record capital markets, record do making activity, massive trading activity, you may not

necessarily see it in the numbers. And the Goldman Sax brand has been built over a hundred and fifty years. Nothing's going to shake the foundation of two or three five clients are upset, but you have to wonder what long term impact it does have if the trend continues, and really is that the best way to boost loyalty and association with the film. Well, and I do think

bottom line. It is about the bottom line, right, Goldman concerned about, you know, preserving the revenues, the relationships, right, because when some of these big topper runers and deal makers go, that certainly impacts them. Yes, but they've also done a fabulous job over several decades of cultivating what

is the corporate world's most powerful alumni network. When these successful rainmakers leave two hundred West Street Goldman's headquarters in New York and take up a lucrative second career, they will come back to Goldman for advice, deals, trades, that connective ishsh that is really a connective issue for a lifetime of shared riches. Yeah, and you always feel like almost really really good at that. Um, We're gonna watch and see if other Wall Street firms follow Street Fantastic

story Street a financial report at Bloomberg News. It is our most read story on the Bloomberg Today. Thanks for listening to Bloomberg Business Week. Download the podcast on iTunes, SoundCloud, or Bloomberg dot com, and you can also listen to our radio show at two pm Eastern on Bloomberg Radio or watch us on YouTube search Bloomberg Global News