The West Promises More Sanctions on Russia

Early this morning, President Vladimir Putin of Russia ordered what he called a “special military operation” in Ukraine, which looks like an invasion from air, land and sea. Ukraine said it faced a “full-scale attack from multiple directions.” Blasts were heard around the country, and people lined up at banks to withdraw cash and at gas stations to fill up their cars to leave cities.

The attacks are roiling already shaky markets, with stocks plunging and energy prices soaring. Futures suggest that the S&P 500 will sink further into correction territory at the open today, while the tech-heavy Nasdaq is approaching a bear market. Brent crude oil surpassed $100 a barrel, up more than 7 percent this morning alone, and W.T.I., the U.S. benchmark, is not far behind. (Goldman Sachs estimates that every $10 increase in the price of oil cuts 0.1 percentage points from U.S. economic growth.) Natural gas prices in Europe are surging, with a key futures contract for March delivery jumping 40 percent.

  • Russian stocks, especially its biggest banks, are collapsing — losing a third or more of their value — and the ruble is at a record low against the dollar.

  • Banks with big operations in Russia are among the hardest hit in early European trading, with the shares of Austria’s Raiffeisen, France’s Société Générale and Italy’s UniCredit all down double-digit percentages.

  • Gold, a traditional safe haven, is up more than 2 percent, while Bitcoin, which some believe should behave similarly, fell 9 percent.

The war of words between world leaders suggests that retaliation will be severe. “Russia alone is responsible for the death and destruction this attack will bring, and the United States and its allies and partners will respond in a united and decisive way,” President Biden said. “Anyone who tries to interfere with us,” Putin said, “must know that Russia’s response will be immediate and will lead you to such consequences as you have never before experienced in your history.” An extraordinary exchange between the Russian and Ukrainian ambassadors at an emergency meeting of the U.N. Security Council, which was in session as the invasion began, captured the tension.

What’s next: When Western leaders yesterday announced an initial salvo of economic punishments for Moscow, critics said those would do little to deter Putin, and so it seems. Far tougher punishments are in store today, as leaders meet and coordinate their actions.

The E.U.’s top foreign official, Josep Borrell Fontelles, said the “harshest package of sanctions we have ever implemented” was in the works. Prime Minister Boris Johnson of Britain said he was preparing “a massive package of economic sanctions designed in time to hobble the Russian economy.” Those could include restrictions on Russia’s biggest banks, hindering their access to Western markets. Also on the table is a potential ban on tech exports to Russia.

Putin is betting that world powers will pull back from the toughest measures, however: American officials have reportedly skirted punishments that would further raise energy prices. (More on that below.) European countries are also seeking to carve out exemptions in potential sanctions, hoping to protect favored industries. And while some are pushing to ban Russia from SWIFT, the global payments system underlying international finance, Western leaders appear hesitant to do so — for now.

A consensus on Russia’s potential weakness is emerging. Johnson of Britain today called on the West to “collectively cease the dependence on Russian oil and gas that for too long has given Putin his grip on Western politics.” That won’t be easy — Russia supplied a third of the natural gas Europe consumed in 2020 — but some see a path to achieving that:

  • David Fickling of Bloomberg Opinion argued that Russia is more dependent on European cash than Europe is on Russian gas, and that the continent could switch over to renewable energy: “It’s not hard to see how Europe could get by without Russian gas altogether.”

  • The hedge fund billionaire Ken Griffin and the historian Niall Ferguson called on the U.S. to export more liquid natural gas to Europe: “Today American energy can end Berlin’s dependence on Russia.”

To keep up with the latest on the fast-moving developments in Ukraine, follow The Times’s live blog and updated maps and videos tracking the Russian invasion.

The Manhattan district attorney’s inquiry into Donald Trump appears in doubt. The two prosecutors leading the office’s investigation into the former president’s business practices have resigned, The Times reports. The moves came after Alvin Bragg, the new district attorney, expressed doubt about moving forward with the case.

The 1MDB trial is paused. The judge overseeing the case against the former Goldman Sachs banker Roger Ng halted proceedings after federal prosecutors said — for the second time in a week — that the government hadn’t turned over evidence belonging to a key prosecution witness for the defense to review.

Countries’ approaches to lifting pandemic restrictions diverge. In the U.S., municipalities like Los Angeles and companies like Target are easing requirements for mask-wearing; Singapore, however, has begun reimposing restrictions as Covid cases rise. And the rise of a more infectious type of the Omicron variant is making some health authorities question their public reopening plans.

The U.S. ends an initiative to fight Chinese national security threats. A top Justice Department official said the Biden administration will end the Trump-era China Initiative, which sought to prosecute academics and researchers who lied to the government about Chinese affiliations. Instead, the department will use a more “comprehensive” approach against a variety of threats.

Starbucks’s efforts to fight unionization are dealt a setback. The National Labor Relations Board rejected the coffee chain’s argument that workers must vote to organize by geographic region, instead of store by store. The ruling sets a binding precedent that will make it more difficult for Starbucks to stop workers at over 100 locations holding union elections.

Insight Partners has raised $20 billion for its 12th fund to invest in tech, software and internet companies. With this fund, the private equity and venture capital investor now has more than $90 billion of assets under management. Insight typically invests between $5 million and $500 million in companies, though it has also done larger leveraged buyouts, like its roughly $6 billion acquisition of CoreLogic (alongside Stone Point Capital) and the roughly $7.3 billion acquisition of Inovalon (led by Nordic Capital.)

Insight began to raise the fund last May, “with a target that was slightly lower” than $20 billion, Deven Parekh, a managing partner at the firm, told DealBook. The value of public tech companies has cooled considerably since then. “There’s been a lot of volatility the last few months,” and the crisis in Ukraine is the latest factor contributing to it, Parekh said. But he added that falling valuations in the public market have yet to be reflected in the early stage companies and leveraged buyouts that Insight has focused on. “Just in the last two weeks, we’ve got multiple of our companies that have signed follow-on term sheets with investors that have significant markups to the last round,” Parekh said.

Insight will look across the tech sector for deals, from health care technology to A.I., fintech and Web3 (it’s already made a few bets on NFTs). In the crypto world, Insight’s bets will be on infrastructure, rather than the applications themselves — “playing the growth in the market without necessarily trying to pick winners,” Parekh said.

— Times Opinion’s Peter Coy on the revival of interest in price controls among some economists and policymakers as inflation hits a 40-year high. (Subscribe to his newsletter here.)

After the Omicron variant of the coronavirus derailed the latest round of return-to-office plans late last year, many companies are making yet another attempt to call their workers back — for real this time, The Times’s Emma Goldberg reports.

Office occupancy rates across the country are creeping up after a January dip: Across 10 major cities, it was an average of 31 percent of pre-Covid levels earlier this month, up from 23 percent in early January, according to the security firm Kastle Systems. But no common playbook for return-to-office policies has emerged. Taking Wall Street as an example, here are some of the approaches companies are taking:

  • Goldman Sachs and JPMorgan Chase both called employees back on Feb. 1.

  • Citigroup said U.S. employees should return to the office at least two days per week starting March 21, if they haven’t yet come back.

  • BNY Mellon is allowing managers to decide which days employees will be in the office, and Jefferies is asking people to work with their managers to determine how many days they should commute in.

Among the trickiest decisions companies face remains whether to require coronavirus vaccinations. The Times surveyed 500 top companies about their vaccine policies, and of the more than 100 that responded or made their plans public, 75 said that they would require shots for some employees.

Several companies are going beyond government requirements, after the Supreme Court blocked a federal rule that would have required large employers to mandate vaccines, and a separate rule requiring vaccines for federal contractors was stayed in court. The consequences for workers who fail to comply with company rules vary widely. Among the survey’s other findings:

  • At least seven companies are mandating booster shots for employees.

  • So far, 11 companies that are top federal contractors will still require vaccinations, regardless of whether the courts clear a federal mandate.

  • About a dozen companies, including Walmart and UPS, require vaccination for some white-collar workers, but not for frontline workers in stores and supply-chain facilities.


  • Ford’s C.E.O., Jim Farley, said the carmaker has no plans to break itself up. (Reuters)

  • “Goldman Sachs Wants Its Bonuses Back as Punishment for Jumping Ship” (Bloomberg)

  • The back story to Volkswagen’s long-awaited effort to spin out Porsche. (FT)

  • How an early deal with a Russian investor deprived early employees at Bumble of a stock windfall when the dating app went public. (Insider)


  • Prime Minister Justin Trudeau of Canada revoked his government’s use of emergency powers to break up antigovernment protests by truckers. (WSJ)

  • E.U. legislation could hold companies liable for environmental or human rights abuses within their supply chains. (NYT)

  • Elon Musk said he was “greatly encouraged” that the Justice Department was investigating short sellers. (CNBC)

  • “Jack Ma Did What He Was Told. Why Is He Getting Scrutinized Again?” (Bloomberg Opinion)

Best of the rest

  • Estée Lauder suspended John Demsey, the leader of its MAC cosmetics brand, after he posted a picture to Instagram that contained a racial slur. (WSJ)

  • Right-wing social media influencers and conspiracy theorists are flocking to the smaller search engine DuckDuckGo. (NYT)

  • Male investors are more skeptical of E.S.G. goals than female ones, a new study finds. (Bloomberg)

  • Goodbye, annual raises; hello, more frequent pay reviews. (WSJ)

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