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Superstar Taylor Swift arrives at Arrowhead Stadium in Kansas City, Missouri, before a matchup between the Tampa Bay Buccaneers and the Kansas City Chiefs.
Hard Numbers: Swifties descend upon Toronto, Sharp increase in Russian drone attacks after Trump’s win, Men abused at Abu Ghraib receive millions, NYC contends with ‘historic amount of brush fires’
500,000: Toronto is anticipating up to 500,000 visitors as pop superstar Taylor Swift plays six shows in the Canadian city, with the first set for Thursday evening. The concerts are expected to generate roughly CA$282 million for Toronto.
44: Russian drone attacks on Ukraine have increased 44% since Donald Trump’s election win, according to an analysis from ABC News. The outlet found that there were 641 Russian drone attacks in the week after Trump’s victory. The president-elect has pledged to end the war in Ukraine in “24 hours” but has not elaborated on how he intends to do this.
42 million: A federal jury in the US on Tuesday awarded $42 million to Iraqi men who were abused at the infamous Abu Ghraib prison. The jury found a Virginia-based military contractor that supplied interrogators to the US Army for the prison liable for contributing to the torture and maltreatment of the detainees.
229: The New York City Fire Department on Wednesday said it has responded to 229 brush fires since Oct. 29. FDNY Commissioner Robert S. Tucker said the “historic amount of brush fires” were a product of “remarkably dry conditions.” There have been fires across the Northeastern US in recent days as the region contends with a historic drought.Nuclear-capable missiles are displayed during a massive parade to mark the 60th anniversary of the founding of the People's Republic of China in Beijing October 1, 2009.
US, China talk tough on nukes and banks
National Security Council arms control official Pranay Vaddiraised a lot of eyebrows recently by saying the US may need to expand its nuclear arsenal. Citing the expansion and diversification of nuclear arsenals by Russia, China, and North Korea, Vaddi toldthe annual meeting of the Arms Control Association that "more nuclear weapons are required to deter our adversaries.”
In response, an unnamed Chinese embassy representative told Russia’s state-affiliated Tass news agency that Washington is "undermining nuclear disarmament and non-proliferation regimes and should stop doing it.” The representative criticized the U.S. for “clinging” to a first-use nuclear policy, withdrawing from arms control treaties and enhancing NATO's nuclear capabilities.
Get ‘em back at the bank. But while China is worried about a potential future war, Western countries are trying to curb Beijing’s support for Russia’s invasion of Ukraine. Sources say the US expects G7 nationsto deliver a stern warning to small Chinese banks to stop providing financial assistance to Russia to wage war on Ukraine. “Our concern is that China is increasingly the factory of the Russian war machine,” said Daleep Singh, US deputy national security adviser for international economics, dubbing Beijing “the arsenal of autocracy.”
Observers don’t expect immediate punitive actions, such as restricting access to the SWIFT messaging system or cutting off access to the dollar. And by targeting smaller institutions instead of larger ones, the G7 seeks to curb support for Russia without causing major disruptions to the global economy. We’ll be watching for the statement – and the fallout - at the upcoming G7 summit in Italy June 13-15.What We're Watching: World War Z, US-Venezuela thaw
What’s Z deal with that Russian symbol?
Russian gymnast Ivan Kuliak was widely criticized for taking to the podium of a World Cup event over the weekend with the letter “Z” taped to his leotard. Why? Well, since Putin ordered his armies into Ukraine two weeks ago, the Roman letter Z — often rendered in a paintbrush style — has become a symbol of support for the invasion and for Putin’s regime. In Russia, it’s been slapped on cars, drawn on lapels, and even emblazoned on the sweatshirts of the guys in this super chill “non-fascist” video in support of the war. Where does the Z come from? The clearest answer is that it’s the symbol the Russian military has slapped onto its trucks and tanks in Ukraine to distinguish them from the same Soviet-era hardware that the Ukrainians also have. The Russian Ministry of Defense’s Instagram account has all kinds of uses for the Z now: Za Pobedu! (For Victory!), DenaZification! DemilitariZation! Still, why not use a Cyrillic letter? Then again, after all the sanctions and boycotts, the Roman letter Z might soon be the only Western thing left in Russia.
US meets with Venezuela’s Maduro
With fears that the war in Ukraine could push global energy prices even higher, Washington has brought an olive branch to an unlikely shore. US officials recently met with Venezuelan President Nicolás Maduro to discuss conditions for repealing the crippling US sanctions in place against the South American oil producer. Washington, which broke off relations in 2019 over Maduro’s rigged elections and crackdowns on opposition protests, is reportedly demanding free and fair presidential elections and extensive reforms to the Venezuelan oil sector. Maduro, for his part, wants an end to US sanctions on Venezuelan oil and to be readmitted to the SWIFT global financial platform (see our explainer on SWIFT here.) Venezuela is, of course, a close ally and partner of Russia. With Moscow itself now under crushing economic and financial sanctions, the US is surely gauging whether there’s room to drive a wedge between Caracas and Moscow.The Graphic Truth: Russia's forex war chest
He prepared for a standoff with the West. President Vladimir Putin has built up his country’s foreign currency reserves to the tune of over $640 billion to insulate the Russian economy. It was a solid plan until the US, EU and global partners announced stinging sanctions against Moscow over its invasion of Ukraine. This includes a plan to ban some Russian banks from SWIFT — a global network for payments between banks — as well as sanctioning Russia’s central bank, which will make it hard for the Kremlin to tap into some of the reserves needed to prop up the crashing rouble. We take a look at Russia’s forex war chest since Putin came to power in 2000.
Destroyed armored personnel carrier on the roadside in Kharkiv, Ukraine.
Watching the War: Ukrainians resist, West triggers SWIFT sanctions
Russia vs. Ukraine. The war in Ukraine is escalating, with Russian troops now fighting Ukrainian soldiers in Kharkiv, the country’s second-largest city. Meanwhile, in the battle for the capital, Kyiv, the Ukrainians have so far resisted the Russian onslaught, but the mayor says Russian troops have surrounded the city. While President Vladimir Putin no doubt hoped to declare a swift victory, Ukrainian forces are giving him a run for his money. As former CIA chief David Petraeus told Ian Bremmer: “If [Ukrainian forces and partisan brigades] want to put up resistance, it would be a very difficult situation for the Russians.” Russia has roughly 50,000 troops involved, or two-thirds of its massed forces, but US defense officials warned Sunday that Putin has more combat power up his sleeve.
Ukrainian President Volodymyr Zelensky said Sunday that he’s accepted an invitation by Belarusian strongman — and Putin ally — President Alexander Lukashenko to hold peace talks “without conditions” at the Belarusian border. Neither Zelensky nor Putin will attend, and it’s hard to see what kind of negotiated settlement both sides could accept: Russia attacked Ukraine unprovoked and clearly has grand territorial aspirations, while Zelensky said just last week he was unwilling to cede sovereign territory to the Russians, and he’s leaving the door open to NATO membership. Depending on how the talks go, Belarus could also send troops into Ukraine as soon as Monday, according to a US intelligence official.
The West vs. Russia. This weekend, the US and its allies further tightened the screws on Russia’s economy. First, they announced they would trigger the (economic) nuclear option of excluding some Russian banks from the SWIFT financial messaging platform, stifling their ability to do business with foreign clients. Second, the allies pledged to block Russian central bank foreign currency reserves held by Western financial institutions — a move that would virtually wipe out more than half of Putin’s $640 billion war chest overnight (the rest is mostly in gold kept in Russia and in yuan held by Chinese banks).
The EU announced on Sunday that it’s taking the unprecedented step of financing the purchase of arms for a country in conflict by pledging to buy weapons for Ukraine. Chancellor Olaf Scholz also reversed a longtime German policy on not supplying deadly weapons to countries at war by agreeing to send Ukraine 1,000 anti-tank weapons and 500 surface-to-air missiles. Scholz also plans to raise Germany’s annual defense spending to 2% of GDP, something US and NATO leadership have been encouraging for years. These are the latest signs that the Russian invasion has resulted in the most unified NATO we’ve seen since the Cold War.
In response, Putin on Sunday ordered the Russian military to put its nuclear forces on “special alert” to counter NATO’s “aggressive statements.” While this doesn’t mean Moscow intends to use nukes in the conflict, the move raises the stakes for miscalculation and allied intervention.SWIFT logo displayed on a phone screen with Russian flag in the background.
A SWIFT explanation
You’re probably hearing and reading a lot about SWIFT these days. Those who want stronger sanctions on Russia for invading Ukraine say that the US and Europe should exclude Russia from SWIFT. Others caution against taking a step that is considered a nuclear option (economically speaking!).
So, what is it? SWIFT is the acronym for Society for Worldwide Interbank Financial Telecommunication, a global network for payments between banks. It’s sort of like a gigantic messaging system. Some 11,000 banks, in just about every country in the world, use SWIFT to facilitate money transfers across borders. The system processes roughly 42 million transactions a day.
Who owns SWIFT? The system is run out of Belgium, under the direction of two dozen national central banks, including the US Federal Reserve and the European Central Bank. Its 25-member board of directors currently has a Russian rep. But the Americans are the most influential member country, which in the past has allowed the US to exclude hostile nations like Cuba, Myanmar, North Korea, and Iran.
What happens if Russia is kicked out? It would swing a wrecking ball through the Russian economy and financial system, making it almost impossible for Russians and Russian companies to do electronic business with banks or companies in other countries. Former Finance Minister Alexei Kudrin once estimated that losing access to SWIFT alone would cause Russian GDP to shrink 5%. Crucially, losing SWIFT access could complicate Russia’s ability to take payment for natural gas shipments to Europe. Virtually overnight, the Kremlin would lose its largest gas consumer, and the Europeans would lose their largest source of energy imports. (This is why some Europeans are skittish about booting Russia from SWIFT.)
Does Vladimir Putin have an alternative? Yes, sort of. Russia has its own financial electronic payments system called SFPS. The problem is that SFPS — established in 2014, when the Kremlin feared expulsion from SWIFT for annexing Crimea — has few users and even fewer foreign members. The Russians have been in talks with the Chinese to set up another SWIFT-alternative network, but the project is still at a very early stage.Putin and Xi meet in Beijing for the first time since late 2019.
What We’re Watching: China’s Ukraine dilemma, Russian sanctions avoid SWIFT
How China sees Ukraine. One man’s invasion is another man’s … what, precisely? China apparently prefers not to define Russia’s attack on Ukraine as an invasion, a point reflected in Assistant Foreign Minister Hua Chunying’s repeated dodging of the question in a Thursday press conference. The invasion — yep, we’re calling it like we see it — puts Chinese leadership in a tricky spot. Earlier this month, at the opening of the Olympic Games in Beijing, Xi Jinping and Vladimir Putin pointedly closed ranks against the West. But even Xi is unlikely to condone Russian actions that end up destabilizing the world economy (Thursday's markets were all over the place). Instability, after all, is Xi’s bugbear, and China had already softened its support for Putin’s aims in Ukraine even before the Russian assault began. While China is unlikely to join the US-led allies in sanctioning Moscow — perhaps because Xi is worried he could face similar economic punishment should he someday decide to move on Taiwan — a new Cold War is the last thing a country focused on economic growth and global commercial power wants. Even Hua admitted, dryly: “What you are seeing today is not what we have wished to see.”
Biden SWIFTly avoids “nuclear” economic sanctions option. US President Joe Biden on Thursday announced fresh sanctions on Russia just hours after Vladimir Putin invaded Ukraine. Biden says the sanctions — which build on Tuesday’s first wave by targeting more Russian banks and cutting Moscow off from the US financial system — will severely cripple Russia’s economy. But the US president held back on booting Russia from the SWIFT global financial payments system, likely because some European nations need it to keep buying Russian natural gas. (Not the UK, whose PM Boris Johnson notably favored Russia’s exclusion from SWIFT.) Meanwhile, some EU members are reportedly asking for exemptions to the sanctions: Italy wants to keep selling fashion items to wealthy Russians, and Belgium to continue sourcing Russian diamonds.
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