Ukraine 14: Nipple beams and tiger fights for all!

[snake]

Excellent article in Der Spiegel that takes us through the mistakes that were made leading up to this crisis.

Another article that talks of possible cracks within the German government with regards to Russia. The end of the article seems to suggest that dialogue with Russia will once more be on the menu.

In similar news, Russia and Abkhazia signed a common security and defense deal. Georgia, NATO, et al, are not pleased.

France puts the sale of its Mistral warships to Russia on hold indefinitely.

And S & P's forecast for the Russian economy is not as dire as that of others.

[KAH]

Compounding energy troubles from gas, coal is added to the list of worries for Kiev...

[snake]

I thought Russia and Ukraine had resolved the gas issue.?

[Ser Scot A Ellison]

Snake,

Sure, if Ukraine concedes to all Russian demands Russia will sell them fossil fuels at gouge level prices. Resolved. :(

[snake]

Snake,

Sure, if Ukraine concedes to all Russian demands Russia will sell them fossil fuels at gouge level prices. Resolved. :(

Scott,

No. I thought they had worked out a deal last month to ensure gas flows and the price that was to be paid. I'll see if I can find someninfo

[The Fallen]

It seems Russia is back to it's old tricks.

http://news.yahoo.com/large-unauthorized-convoy-enters-east-ukraine-russia-ukrainian-134642916.html

The Ukrainians think that most of the stuff being transported over the border is going to the rebels. I didn't realize that this is the eighth such shipment.

[Suttree]

So when the land grab first happened in Crimea, many analysts pointed out how ineptly South Ossetia was handled with mass corruption ruining their economy. Not to mention the serious drag it became on Russia's budget. Well things are not looking particularly encouraging moving forward.

MOSCOW — After months of insisting that Russia could weather sanctions and plunging oil prices, Moscow has for the first time acknowledged that the economy would fall into a recession next year.

The Ministry of Economic Development, which publishes the government’s economic outlook, on Tuesday revised its forecast for 2015 to show a contraction of 0.8 percent, compared with a previous projection of 1.2 percent growth.

The ruble dropped against the dollar, having opened at 52 to the dollar and slipping to 53 in afternoon trading on Tuesday. That continued its nose dive in recent months, driven by Russians’ fears of economic isolation and their eagerness to change rubles into dollars or euros to move wealth out of the country.

Add to the above the South Stream pipeline being scrapped, the arms deal with France "off until further notice", and China capitalizing on it by taking them to the cleaners in negotiations over the Siberian pipeline. Should be interesting to see how this plays out. Think Angela Merkel said it best:

Putin’s brand of macho elicits in Merkel a kind of scientific empathy. In 2007, during discussions about energy supplies at the Russian President’s residence in Sochi, Putin summoned his black Lab, Koni, into the room where he and Merkel were seated. As the dog approached and sniffed her, Merkel froze, visibly frightened. She’d been bitten once, in 1995, and her fear of dogs couldn’t have escaped Putin, who sat back and enjoyed the moment, legs spread wide. “I’m sure it will behave itself,” he said. Merkel had the presence of mind to reply, in Russian, “It doesn’t eat journalists, after all.” The German press corps was furious on her behalf—“ready to hit Putin,” according to a reporter who was present. Later, Merkel interpreted Putin’s behavior. “I understand why he has to do this—to prove he’s a man,” she told a group of reporters. “He’s afraid of his own weakness. Russia has nothing, no successful politics or economy. All they have is this.”

[snake]

Interesting article by Shlomo Ben-Ami about Russia.

[Suttree]

Russia's worst enemy at the moment appears to be the currency market.

Vladimir Putin’s biggest enemy right now may well be the currency markets. Even as it spars with Ukraine, Russia’s government is in the midst of a full-scale war to preserve the value of the ruble as a plummeting oil price has led to billions flooding away from the country. The ruble fell 11 percent against the dollar on Monday alone.

To try to stanch the bleeding, on Monday evening (the middle of the night Moscow time), the Central Bank of Russia announced a stunning interest rate increase. Its main deposit rate is now 17 percent, up from 10.5 percent when Russian banks closed for business Monday.

It may go without saying, but a 6.5 percentage point emergency interest rate increase announced in the middle of the night is not a sign of strength. Rather, it is the kind of thing you see only in an old-school emerging markets currency crisis. And that is very much what Mr. Putin’s Russia is now experiencing.

[Recovering forum addict]

As expected, the new Ukrainian parliament has voted to abandon the four years old non-alignment policy and work towards a NATO membership:

http://www.bbc.com/news/world-europe-30587924

Ukrainian President Petro Poroshenko pledged to seek Nato membership over Russian support for rebels in the east.

Russia, which annexed the Crimean peninsula in March, denies supplying the rebels with weapons. However, it is subject to EU and US sanctions over the crisis.

In a vote in Ukraine's parliament on Tuesday, MPs overwhelmingly backed the move by 303 to eight.

[...]

In a Facebook post on Monday, Russian Prime Minister Dmitry Medvedev warned that Ukraine's rejection of neutrality would have "negative consequences".

"In essence, an application for Nato membership will turn Ukraine into a potential military opponent for Russia," he wrote.

Potential military opponent. Dear gods.

[Suttree]

All bluster. Russia is in a very bad place right now due to falling oil prices, crony capitalism and Putin's inane adventurism in Crimea.

If you’re the type who finds macho posturing impressive, Vladimir Putin is your kind of guy. Sure enough, many American conservatives seem to have an embarrassing crush on the swaggering strongman. “That is what you call a leader,” enthused Rudy Giuliani, the former New York mayor, after Mr. Putin invaded Ukraine without debate or deliberation.

But Mr. Putin never had the resources to back his swagger. Russia has an economy roughly the same size as Brazil’s. And, as we’re now seeing, it’s highly vulnerable to financial crisis — a vulnerability that has a lot to do with the nature of the Putin regime....

But Russia’s difficulties are disproportionate to the size of the shock: While oil has indeed plunged, the ruble has plunged even more, and the damage to the Russian economy reaches far beyond the oil sector. Why?
Actually, it’s not a puzzle — and this is, in fact, a movie currency-crisis aficionados like yours truly have seen many times before: Argentina 2002, Indonesia 1998, Mexico 1995, Chile 1982, the list goes on. The kind of crisis Russia now faces is what you get when bad things happen to an economy made vulnerable by large-scale borrowing from abroad — specifically, large-scale borrowing by the private sector, with the debts denominated in foreign currency, not the currency of the debtor country.
In that situation, an adverse shock like a fall in exports can start a vicious downward spiral. When the nation’s currency falls, the balance sheets of local businesses — which have assets in rubles (or pesos or rupiah) but debts in dollars or euros — implode. This, in turn, inflicts severe damage on the domestic economy, undermining confidence and depressing the currency even more. And Russia fits the standard playbook.
Except for one thing. Usually, the way a country ends up with a lot of foreign debt is by running trade deficits, using borrowed funds to pay for imports. But Russia hasn’t run trade deficits. On the contrary, it has consistently run large trade surpluses, thanks to high oil prices. So why did it borrow so much money, and where did the money go?
Well, you can answer the second question by walking around Mayfair in London, or (to a lesser extent) Manhattan’s Upper East Side, especially in the evening, and observing the long rows of luxury residences with no lights on — residences owned, as the line goes, by Chinese princelings, Middle Eastern sheikhs, and Russian oligarchs. Basically, Russia’s elite has been accumulating assets outside the country — luxury real estate is only the most visible example — and the flip side of that accumulation has been rising debt at home.
Where does the elite get that kind of money? The answer, of course, is that Putin’s Russia is an extreme version of crony capitalism, indeed, a kleptocracy in which loyalists get to skim off vast sums for their personal use. It all looked sustainable as long as oil prices stayed high. But now the bubble has burst, and the very corruption that sustained the Putin regime has left Russia in dire straits.

The lengths they are going to prop up the ruble are fairly staggering.

In the past week, Russia has taken extraordinary steps to stabilize the ruble. Russia’s central bank raised its key interest rate — in the middle of the night — to 17 percent, from 10.5 percent. With the ruble continuing to weaken, Russia on Thursday sold $500 million in foreign currency holdings, part of a sell-off of more than $10 billion in the last month to support the currency.

[The Fallen]

This is an article positing that Putin is acting, as President Obama insinuated, out of weakness and that these actions will end up making Russia weaker and, to an extent, ostracized.

http://www.vox.com/2014/12/26/7381413/russia-putin-racketeer

[The Fallen]

Russian political activist, Alexei Navalny, and his brother, Oleg, are sentenced by Russian court for embezzling. The charges seem to be trumped-up by the Kremlin.

The Kremlin's main effort to oppose Navalny has been to target him with trumped-up criminal charges. He has been convicted of embezzling funds from a state-owned regional timber company, but that deal was investigated at the time and determined to be legal. He has been accused of stealing from a defunct political party, but a senior party official has stated publicly that no theft ever took place.

And today, Navalny and his brother Oleg — a former postal-service employee who is not involved in politics — have been convicted of embezzling funds by inflating shipping rates, even though the postal service itself stated that it had no involvement in the charges and no claims against Oleg.

The three and one-half year custodial sentence for the brother Oleg seems to be aimed at stopping Alexei from continuing his criticism of Putin.

However, today's sentence seems to be a clear attempt to silence Navalny by threatening his family. Oleg Navalny was given a three-and-a-half-year custodial sentence, not a suspended one. NYU professor Marc Galeotti points out that Oleg's more serious sentence "is hard to interpret as anything but an attempt to use him as a hostage," given that prosecutors had actually requested a lighter punishment for him.

[voodooqueen126]

Hmn I came here looking for a place to ask questions for my AU novel.

Probably way off topic.

[Suttree]

Fascinating breakdown on the time leading up to Yanukoyvch abandoning his post.

Russia has attributed Mr. Yanukovych’s ouster to what it portrays as a violent, “neo-fascist” coup supported and even choreographed by the West and dressed up as a popular uprising...

Few outside the Russian propaganda bubble ever seriously entertained the Kremlin’s line. But almost a year after the fall of Mr. Yanukovych’s government, questions remain about how and why it collapsed so quickly and completely.

An investigation by The New York Times into the final hours of Mr. Yanukovych’s rule — based on interviews with prominent players, including former commanders of the Berkut riot police and other security units, telephone records and other documents — shows that the president was not so much overthrown as cast adrift by his own allies, and that Western officials were just as surprised by the meltdown as anyone else.

Hint: Contrary to the assertions of some posters who will remain unnamed Victoria Nuland's magic cookies never entered the equation.

[Ulthosian Stark]

The thing that really sucks is if ruble falls too far there will positively be war if Russia doesn't back down and play nicely... I would hope there's a no-nukes policy if so

I mean cmon, I've been staying current, not some uneducated opinion but a desperate Russia controlled by a man like Putin with its own supply of gasoline that would benefit itself better in their military vehicles vs shipping vehicles... Already showing aggression... Humiliated by Sochi... Kalashnikov's doing a makeover of the Ak47 (officially announced, honestly excited to see what they come up with).... Its getting to powder keg status

[The Fallen]

Well that's the doom everyone is assured will happen. I think that like N. Korea, the Russians use their nuclear arsenal to scare everyone into not standing in their way. But unlike the N. Koreans they've got a lot to lose. I don't think that Putin would guarantee the end of Mother Russia over a misplay and misread of the resolve of Pres. Obama and the E.U.

Better to back-off, have sanctions lifted (maybe done in a way to minimizes the embarrassment for Russia), right their economy, and finally join the 21st century political reality. (I can see the tears of American conservatives due to the taming of their favorite macho man by Obama.)

Or even better, the Russian people will force him out.

[Ser Scot A Ellison]

Fallen,

But is there really the mass support in Russia for pushing Putin out of power? The Russian State controled media is still in Putin's control and painting Putin and Russia as the agreeved party in the whole affair with Ukraine.

[snake]

Fallen,

But is there really the mass support in Russia for pushing Putin out of power? The Russian State controled media is still in Putin's control and painting Putin and Russia as the agreeved party in the whole affair with Ukraine.

Last I seen Putin's approval rating was around 80% in August and a majority of Russians are pleased with the annexation of Crimea. It doesn't seem like sanctions or falling oil prices are hurting him yet.

Here's an interesting article that suggests it would take years of poor economic performance to force change in Russia and that sanctions may well be making him politically stronger.

[Suttree]

and that sanctions may well be making him politically stronger.

Are you talking about the xenophobia bit?

Regardless this quote from the article really cuts to the heart of things:

No, Russia cannot sustain itself endlessly in the face of plummeting energy prices and the attendant sag in commodity prices worldwide. It has currency reserves, but those cannot bridge the gap between what the economic generates and what it requires if prices do not rise in the future. Putin can stoke nationalism, but as billionaires flee the country and the urban middle class grow disenchanted, that will erode the very Russian power he so ardently seeks to revive.