The Refined Response To Thuggery

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With everything else we have to worry about we now have the thorny problem of looking out for Russian agents, or third party agents of Russia, wandering around our market towns prodding passers-by with nerve agents. The furore following the Salisbury incident which so far has resulted in Mrs May looking Prime Ministerial for really the first time while Jeremy Corbyn has reverted to type, has seen a bunch of so called diplomats booking one way tickets and an otherwise pretty measured governmental response. Meanwhile the clarion calls from the back benches, commentators in the press and the usual cabal of 'experts,' have pretty much called for the same thing, 'hit them in the pocket....... hit Putin's Oligarch friends.' 

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Unfortunately, any show of resolve from these shores was somewhat undermined on Friday when 50% of the demand for a new $4bn Russian bond issues came from the UK. Total demand was around $7.5bn with UK investors dominating the $2.5bn tap of existing 2047 bonds and buyers from the US soaked up a 20% share of the notes. US investors also bought 34% of the $1.5bn of new 11 year bonds with Russians taking 35% of the issue. The deal was well engineered and offered at terms designed to mitigate failure in front of the weekend's election.

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The absence of pushback from international investors, particularly in the UK and the US, is hardly laudable. The sound of the door to capital markets closing would have more resonance in Moscow than will welcoming back a few expelled spies. All that was required would have been a few discreet telephone calls, word that demand was weak would have rattled around markets and the issue would have flopped. Cue embarrassment in Moscow and perhaps a recalibration of their 'not us Guv,' responses to date. One wonders though, if anyone actually considered it as an option. Perhaps not then....