Alaska and the fate of Russian frozen assets
Key Markets report for Monday, 18 August 2025
On Friday, 15 August 2025 the summit between President Trump and President Putin took place leaving the world guessing about what was really achieved there. By all appearances, it wasn’t much but it’s certain that much of what was discussed was done in secret and is not yet for public consumption. At any rate, both leaders appeared very satisfied with the encounter with Trump rating it a ten out of ten. Vladimir Putin affirmed his belief that if Donald Trump were President in 2020, the war in Ukraine would not have happened.
The very fact that the meeting took place at all must not be underestimated. Contrary to the pronouncements of some observers that the two leaders met with a tabula rasa, unsure what could be achieved during their meeting, but we know that the foundation of the meeting was a proposal made to the Russians by the Trump government, which “we find acceptable,” in the words of Putin’s longtime aide Yuri Ushakov.
The Russian position on Ukraine has been consistent and very firm. They have demanded that all of Russian security concerns must be addressed and that any talk of peace must be based on removing the causal factors that led to the war. They also categorically rejected the unconditional ceasefire that the Ukrainians and European leaders have insisted upon. The fact that the two Presidents met in person suggests that the Trump administration expressed readiness to talk peace on those terms.
Was Ukraine only a side issue?
Furthermore, the makeup of the two powers’ respective delegations suggests that the scope of the discussions go far beyond “Project Ukraine.” In fact, Trump’s delegation was a mix of high-level cabinet members, close political aides and trusted allies with focus on economic and diplomatic domains. It did not include any Russia or Ukraine policy specialists.
US Delegation:
Marco Rubio - Secretary of State
Steve Witkoff - Special Envoy to Ukraine and the Middle East
Scott Bessent - Treasury Secretary
Howard Lutnick - Commerce Secretary
John Ratcliffe - CIA Director
Susie Wiles - White House Chief of Staff
Karoline Leavitt - White House Press Secretary
Steven Cheung - Communications Director
Dan Scavino - Political Aide
James Blair - Political Aide
Beau Harrison - Political Aide
Nick Luna - Political Aide
Robert Gabriel - Political Aide
Will Scharf - Political Aide
Ross Worthington - Political Aide
Monica Crowley - State Chief of Protocol
Pete Hegseth - Defense Secretary (noted as part of the expanded working lunch)
President Putin’s smaller delegation similarly included a group of high-level officials in the domains of economy and finance.
Russian delegation:
Sergei Lavrov - Foreign Minister
Yuri Ushakov - Foreign Policy Advisor, senior Kremlin aide and former Russian Ambassador to the United States (1998–2008)
Andrei Belousov - Defense Minister (but economist by his specialty)
Anton Siluanov - Finance Minister
Kirill Dmitriev - US-educated Head of the Russian Direct Investment Fund
Alexander Darchiev - Russian Ambassador to the United States
Notably, Putin’s delegation did not include Vladimir Medinsky, Russia’s chief negotiator for Ukraine, suggesting that the two sides may have already reached an understanding on that issue and used the occasion of their Alaska summit to focus on the question of future development between the two nations, primarily economic and political issues.
The fate of Russian frozen assets
I suspect that one of the outcomes of Russia-US cooperation - this we will find out in due course - will resolve the fate of the Russian frozen assets held by Western countries. The amount in question is estimated at $300 to $335 billion. Most of these assets by far are held in Europe: the largest portion is managed by Belgium-based Euroclear central securities depository, which holds around $190 to $208 billion.
France holds up to $71 billion in Russian Central Bank assets, but there’s suspicion that the Macron government already helped themselves to much of that money. According to the more recent figures, only about $25.6 billion of the Russian money remains in French custody. The UK holds about $37 billion of Russian assets. At the same time, the US portion is estimated at only $5 billion to $8 billion, primarily in debt securities and cash.
Donald Trump will likely be keenly interested to have Russia invest that money in the US. For their part, the Russians have every reason in the world to accommodate Trump and such an investment deal would certainly go a long way to advancing the two powers’ cooperation. In February I wrote in this report about Eruope’s prospect of losing access to these assets as follows:
“For the collateral starved British financial system, this could prove catastrophic. The same is true for Europe: Emmanuel Macron's dream of using $260 billion in frozen Russian assets as collateral for reconstruction investments was also meant to underpin a large-scale credit impulse in Europe. The reconstruction [of Ukraine] was meant to be financed by European banks and the contracts awarded to European corporations. Unfortunately, none of that will be possible without strong backing by the United States.”
If anything about Donald Trump is predictable, it is that he’ll want those assets in the US in order to rearm, reindustrialize and Make America Great Again. For the same low price he’ll be able to deliver another humiliating kick to the duplicitous, warmongering Europeans. I simply don’t see him resisting that temptation and one day soon, the news will report that Trump has ordered that the Russian assets held in Europe be transferred to US custody. The Eurotards will have no recourse but to comply.
The coalition of the willing goes to Washington
Today, Ukraine’s illegitimate “President” Volodymyr Zelensky is due to meet with President Trump. For the occasion, the heaviest of Europe’s heavy hitters will join him to show solidarity and support.
Europe’s dream team in Washington
Keir Starmer, Prime Minister of the United Kingdom
Emmanuel Macron, President of France
Friedrich Merz, Chancellor of Germany
Giorgia Meloni, Prime Minister of Italy
Alexander Stubb, President of Finland
Ursula von der Leyen, President of the European Commission
Mark Rutte, NATO Secretary General
It’s fortunate that everything is superawesome in Europe, making it possible for all these presidents and prime ministers to clear their schedules on such short notice in order to chaperon Zelensky in Washington. No doubt, they’ll exert all their diplomatic finesse and negotiating leverage to derail any positive cooperation between Washington and Moscow. However, given that their stated position on Ukraine hasn’t perceptibly changed in the last three years, the occasion will probably pass with face saving platitudes and little more: peace, stability, security guarantees for Ukraine, making progress, bla, bla, bla…
Significantly however, President Trump has insisted on meeting Zelensky one-on-one without his support team. They will meet today at 1:15 PM (17:15 GMT). The “multilateral” meeting with European leaders is scheduled to take place at 3:00 PM. I expect that Trump will offer Zelensky a life-saving way out and expect that Zelensky’s body language will tell us more than we’ll learn from the subsequent press conference. So far as the European leaders are concerned, their political support at home is so thin, they’ll probably have to pretend that everything really is awesome and that “daddy” Trump still loves them the most.
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Today’s trading signals
With Friday’s closing prices we have the following change for the Key Markets portfolio:
