Putin orders retaliatory sanctions

[Donhollio]

http://www.msn.com/en-ca/news/world/vladimir-putins-state-of-union-speech-caps-a-bad-year-for-russia/ar-BBgiSL9?ocid=BDT5DHP






Vladimir Putin's state of union speech caps a bad year for Russia
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As Russian President Vladimir Putin gives his state of the union address Thursday, he'll be capping off a tumultuous year for his country in which it commanded the world's spotlight during the pageantry of the Sochi Olympics, only to plunge to rogue status in the months since.

Consider that last year, Putin scored several wins on the global stage. He talked down the U.S. into a deal that got international inspectors into Syria to disarm its chemical weapons stockpiles. Then Russia partook in the successful P5+1 pact on Iran's nuclear program. 

Putin also opposed, and effectively blocked, airstrikes against Syrian President Bashar Assad's regime. His motives may well have been otherwise, but he gave lip service to a logic that has now, in some ways, proved prescient.

"Al-Qaeda fighters and extremists of all stripes" are arrayed against Assad, Putin warned in a New York Times op-ed, and would be among those benefiting from aerial bombardment. Well before the Islamic State group, aka ISIS, became a mainstay in headlines and a byword for brutalism, Putin was expressing wariness of it.

"He was a major player," said City University of New York political scientist Rajan Menon, a member of the Council on Foreign Relations and an expert on Russian foreign relations.

Then there were the Olympics in Sochi. Despite the backdrop of Russia's vicious anti-gay propaganda, the Games earnedsympathy, even praise, in the Western press as organizers pulled off the massively costly event while facing down threats of militant attacks and concerns about preparedness.

"But he's gone from that to being a pariah," Menon said.

Crimea a turning point: prof

Forbes named Putin the world's most powerful person in its annual ranking in November, but things have soured for the Russian leader over the past nine months as a result of his country's incursions into Ukraine, its marginalization at world summits, the plummeting price of oil, and even a corruption inquiry by soccer's global governing body.

Whether Putin acknowledges problems in his speech Thursday or not, he and his country are now facing many.

A key turning point after Russia's Olympics success was Crimea. Less than a month after the Sochi Games closed, Russia effectively annexed the region from Ukraine.

"That completely changed the dynamic, because it brought the European Union — which had been much more reluctant than the U.S. — to slap sanctions on Russia," Menon said.

But Moscow didn't stop there — it stoked ethnic Russian rebels in eastern Ukraine's Donbass area, and then denied sending troops or materiel. Russia has also been accused of supplying a surface-to-air missile that may have been involved in the shooting-down of Malaysian Airlines flight MH17, killing the 298 people aboard, although investigators are still determining the cause of the disaster. Moscow suggests another aircraft shot down the airliner.

More rounds of sanctions followed the events in the Ukraine.   

Russia will hit recession in 2015 because of oil and Ukraine, Kremlin admits© Provided by CBC Russia will hit recession in 2015 because of oil and Ukraine, Kremlin admits   
By themselves, the sanctions might have been a mere annoyance that could be worked around with creative use of Russia's large cash reserves from its oil sales, said Menon, but that strategy has now snagged. The price of oil is down 35 per cent from its recent highs in June, hovering around $70 a barrel.

Russia needs oil to sell for $100 a barrel to balance its budget, according to its own projections and those of the International Monetary Fund.

"The Russian economy is about 50 per cent dependent on petroleum. That's a fairly strong dependence," said Aurélie Campana, a professor of politics at Laval University in Quebec City who studies and teaches Russian nationalism.

Snubbed at world events

The need for strong petroleum revenue, plus the sanctions on Russian state companies, have driven the country to partner with China on a gas deal and Turkey on an oil pipeline, instead of routing hydrocarbons to Europe as it has in the past.

Meanwhile, Moscow has become increasingly sidelined at major world summits. It was supposed host a G8 conference in Sochi in June. Instead, the other countries kicked it out, met as the G7 and moved the sessions to Belgium.

Then at the G20 meeting in Australia last month, Putin dined alone and left a day early, having been snubbed by some world leaders and talked to sternly by others, including Canadian Prime Minister Stephen Harper.

"On the international scene, Russia has affirmed its power but also isolated itself, in particular from its European and American partners," Campana said.

Domestically, the combined effect of the sanctions (especially Russia's retaliatory ones) and the tanking oil price have dragged the ruble to record lows against the U.S. dollar, jacking up inflation. It has forced the government to cancel a planned sale of treasury bonds and poses the risk of throwing the country into a recession. 

For the average Russian, food prices, particularly due to the import bans on European and North American agricultural goods, are climbing steeply — 17 per cent year-over-year for meat and poultry as of September, for instance. The government is weighing the option of bringing in price controls.

Campana said the price hikes probably won't pose a problem for Putin in the short term, but in the mid-term, "social discontent is possible."

Adding salt to the wounds, even world soccer's governing body has its eye on Russia. FIFA asked Swiss officials last month for a criminal probe of the bid process by which Russia was awarded hosting duties for the 2018 World Cup.

Overall, Menon said, no matter what Putin announces in his address to the nation, the situation is sobering for Russia and its leader. "They're in deep trouble."

[WestCoast]

So how are those western sanctions doing against Russia? Russian President Vladimir Putin announced that the country's reserve funds, usually earmarked for investment in state projects, should be used to bail out troubled Russian banks.

It's rarely a good sign for a country's economy when the government has to step in to help keep the banks running. However, due to sanctions Russian banks don't have access to the foreign markets for financing leaving the job of keeping Russian banks operating to the Russian government.



http://finance.yahoo.com/news/putin-just-announced-massive-foreign-200700766.html

[Manny]

It's rarely a good sign for a country's economy when the government has to step in to help keep the banks running.

The UK government had to bail out and/or nationalise quite a few British banks after the 2008 crisis. Some banks on Guernsey failed altogether. It didn't quite see us off.

Ironic that that too was caused by the US.

[andrewfi]

See these lists posted by unthinkers such as Donhollio, fun though they are for unthinkers because they give a chance to appear erudite because they think they can understand the small thoughtbites of which they consist, the lists are usually fact lite, at best, and fictional at worst.

Go back to you list Don, see if you can identify the thoughtbites are that true, then go back and make a second list of the ones that are fact based but deliberately misleading and then make the third list consisting of works of fiction.

Of your list, Don, the first selection will be much smaller than the other two, but ALL are presented as being true.

As for your propaganda source Westy, you might want to read up on how the CBR works and what the state funds are designed to do. Try using a credible primary or secondary source from Russia.

By the way, in the article you linked, the passage underlined in the image, is not news, it has been happening and is a result, yes, of sanctions but the funds were set up to provide exactly this sort of remedy. You see, the writer of the article did not bother to explain or point out the purpose of the provision of the extra capital: in the speech it is quite clear - the capital is designed for use in specific types of new projects within Russia. This is not to enable firms to repay existing debts - that is already not an issue. The welfare funds were set up to do exactly that which the president proposed: capital for assets for the benefit of the Russian Federation and its citizens - but you'd not know that, would you.

What you see is the use of internal funding to do that which, in the U.S, would require either borrowing from the Chinese, printing of more money or not be done at all - the latter being the more likely option these days. As for the repayment of debts, remember, if you can, that Russia and Russian firms are not short of money, the economy is fundamentally more sound than, for example, the U.S but firms have a shortage of dollars to fund payments. Russia does not have a shortage of dollars, the country is awash in them which is why the government is buying loads of physical gold. This article explains why, on the whole, there is not an issue with payments, while making clear that there are challenges. http://www.bloomberg.com/news/2014-07-18/why-sanctions-won-t-upend-russia-s-debt-repayments.html

Westcoast, you have the time, in between playing checkers at the senior day care center and waiting for your meals on wheels deliveries, to learn stuff; why not try to do so rather than pasting links to stuff that you don't understand?

[cufflinks]

Errata:

It's rarely a good sign for a country's economy when the government has to step in to help keep the banks running.

The UK government had to bail out and/or nationalise quite a few British banks after the 2008 crisis. Some banks on Guernsey failed altogether. It didn't quite see us off.

Ironic that that too was caused by the UK&US manipulation of the global financial markets via unproven and risky derivatives.

[AvHdB]

Errata:

It's rarely a good sign for a country's economy when the government has to step in to help keep the banks running.

The UK government had to bail out and/or nationalise quite a few British banks after the 2008 crisis. Some banks on Guernsey failed altogether. It didn't quite see us off.

Ironic that that too was caused by the UK&US manipulation of the global financial markets via unproven and risky derivatives.

Most of the financial instruments origionated in the United States and were at best flimsy and mostly to complex for even a banker to understand. They were packaged and sold during W's reign and the lack of common sense and the vast amount of greed brought about the 2008 crisis.

Bear in mind the English had little to due with this debacle ~ but the Bank of England played a part with manipulations of the so-called LIBOR rate.

[WestCoast]

Errata:

It's rarely a good sign for a country's economy when the government has to step in to help keep the banks running.

The UK government had to bail out and/or nationalise quite a few British banks after the 2008 crisis. Some banks on Guernsey failed altogether. It didn't quite see us off.

Ironic that that too was caused by the UK&US manipulation of the global financial markets via unproven and risky derivatives.

Most of the financial instruments origionated in the United States and were at best flimsy and mostly to complex for even a banker to understand. They were packaged and sold during W's reign and the lack of common sense and the vast amount of greed brought about the 2008 crisis.

Bear in mind the English had little to due with this debacle ~ but the Bank of England played a part with manipulations of the so-called LIBOR rate.

IMHO those involved with the financial manipulation of the markets that caused the market collapse in 2008 and those involved with the manipulation of the LIBOR rate should be heavily fined and serve time. However since that would mean a number of very wealthy money managers doing time and large financial companies being fined or shutdown it will never happen.

[cufflinks]

Actually the HARP or Home Affordable Refinance Program has been a major success at finally putting a floor under USA residential Real Estate prices and was largely funded via massive fines on the too big to fail gangsta bankstas.  The Justice Department threat of personal criminal prosecution of the C level officers of said banks were the not so polite arm twisting needed and I know two people who have benefited from HARP mortgage refinances.

Bottom line is the people who destroyed the USA economy have been forced to rebuild and reinforce it.

[Markje]

Errata:

It's rarely a good sign for a country's economy when the government has to step in to help keep the banks running.

The UK government had to bail out and/or nationalise quite a few British banks after the 2008 crisis. Some banks on Guernsey failed altogether. It didn't quite see us off.

Ironic that that too was caused by the UK&US manipulation of the global financial markets via unproven and risky derivatives.

Most of the financial instruments origionated in the United States and were at best flimsy and mostly to complex for even a banker to understand. They were packaged and sold during W's reign and the lack of common sense and the vast amount of greed brought about the 2008 crisis.

Bear in mind the English had little to due with this debacle ~ but the Bank of England played a part with manipulations of the so-called LIBOR rate.

IMHO those involved with the financial manipulation of the markets that caused the market collapse in 2008 and those involved with the manipulation of the LIBOR rate should be heavily fined and serve time. However since that would mean a number of very wealthy money managers doing time and large financial companies being fined or shutdown it will never happen.

I can't comment on all of them. but in the Netherlands, several big CEO / board members in Rabobank were in fact forced to resign over the Libor mess. (publicly stated chose to resign... but the choice was voluntary or forced, the leaving part was never optional).

[Donhollio]

http://www.msn.com/en-ca/news/world/putin-master-of-destruction/ar-BBgKdQL?ocid=BDT5DHP





Putin: Master of destruction






Michael Petrou

It’s much easier to predict what Russian President Vladimir Putin won’t do in 2015 than what he will. Putin will not end Russia’s occupation of Crimea. For that matter, he’s unlikely to end Russia’s brazen yet brazenly denied military intervention in eastern Ukraine. And he probably won’t try to repair Moscow’s relationship with Europe and the rest of the West. Beyond that, it’s a mug’s game. Putin’s aggression in 2014 completely overturned widely held assumptions regarding Europe’s post-Cold War order. Treaties can’t be trusted. Borders don’t seem secure. It’s no longer obvious that the Cold War itself is a thing of the past.

The biggest questions loom over Ukraine. But to know what Putin may do there requires understanding his larger strategy: Does Putin wish to annex more of Ukraine, split the country in two, weaken and destabilize it, or force it to come simpering back to Moscow’s lap, begging for forgiveness? No one’s really sure.

In the short term, having annexed Crimea, Putin finds himself in a bit of a bind. The territory doesn’t share a land border with Russia, but now, Putin is responsible for the welfare of its residents, who need everything from gas to water to survive. Tourism, once a major source of revenue, has pretty much dried up. Russia is in a poor position to shoulder the extra financial burden. Its economy, suffering because of Western sanctions and falling oil prices, is expected to fall into recession next year.

Balazs Jarabik, a visiting scholar at the Carnegie Endowment for International Peace, worries that unless Russia and Ukraine can agree on a way to supply Crimea, Putin may escalate his military intervention to create a land bridge linking Crimea to territory held by pro-Russian rebels in eastern Ukraine. Such a move would also take Russian troops to within approximately 300 km of Transnistria, a pro-Russian breakaway region of Moldova. Pressing across southern Ukraine to reach Transnistria and link it by land to Russia would be tempting.

This would come with a steep cost. Western sanctions would increase, and more Russian soldiers would die. Besides, Russia may not want a bigger piece of Ukraine than it already has. Its annexation of Crimea was lightning-quick. But, after months of conflict, it still hasn’t made similar moves to take formal control of Ukrainian territory in the hands of pro-Russian rebels. “It may be more of a pressure point, if they keep it as an open status,” says Steven Pifer, a senior fellow at the Brookings Institution and former American ambassador to Ukraine.

According to Orysia Lutsevych, a research fellow at the London-based think tank Chatham House, Putin’s goal in Ukraine is not land, but power. She says he wants to keep Ukraine weak for several reasons: to punish it for the revolution that toppled the pro-Russian president, Viktor Yanukovych, earlier this year; to prevent Ukraine from reorienting its politics westward toward NATO and the European Union; and to demonstrate to Russians that the sort of pro-democracy street movement that unseated Yanukovych is doomed to fail—and will fail if it is attempted in Russia.

Pifer believes further Russian aggression in Ukraine might be deterred if the West provides Ukraine with “defensive” arms, such as portable anti-tank missiles, to raise the cost to Russia of new military offensives. While most Russians supported Moscow’s annexation of Crimea, they don’t want to fight a large-scale war in Ukraine.

Jarabik isn’t so sure that a continued Western pressure on Russia will force Moscow to change its behaviour. Putin, he says, thrives on Russians’ perception that the West is besieging their country. “When the Russians think things are bad, or they are actually bad, they mobilize against the enemy. The Russian tolerance for suffering and sacrifice is much higher than the European one,” he says. “The more we mobilize the Russians with our sanctions policy and with our reactions in Ukraine, the better for the Kremlin.” Instead, Jarabik says, the West should focus on helping Ukraine while also de-escalating tensions with Russia. He says Russia’s ongoing confrontation with the West, and the sanctions that come with it, provide Putin with a scapegoat to blame for Russia’s ills.

It’s true that Putin has thrived on the chaos he has created in Ukraine. Polls put his approval rating above 80 per cent. He’s seen as a strong leader who stood up to the West and, by annexing Crimea in the face of protesting howls from Washington, won. But Putin’s aggression in Ukraine may ultimately cost Moscow the influence it, until recently, enjoyed there. While it’s taken some territory, the rest of the country is unlikely to see Russia as a potential friend and partner again. Kiev recently signed the association agreement with the European Union that Yanukovych rejected.

None of this is of much comfort to other countries that feel threatened by Russia. There are large ethnic Russian minorities in the Baltics that Moscow might decide are in need of protection. “Vladimir Putin has this huge antipathy toward NATO,” says Pifer. “If he saw an opportunity to make a challenge to NATO, he might be tempted to try it.” It feels in many ways like a return to the Cold War, when the world could be divided into opposing power blocs. There are differences today, says Pifer. Then, the confrontation was total: military, economic and ideological. Things aren’t so bad now, he says, but adds: “We are in the most difficult period since 1990,” when the Cold War was winding down.

Russia and the West still have overlapping interests. Trade between Russia and Europe is significant. Radical Islam is a mutual concern. “If Afghanistan fails in a year or two, that’s a bad thing for the United States,” says Pifer, “but it’s a problem that’s 9,000 km closer for Russia.” It’s the sort of reality that would seem like a reason for Putin to reach some sort of accommodation with the West. And yet, so much of what Putin has done in the past year suggests he believes Russian and Western goals conflict.

There are those in NATO capitals who hope he might still be persuaded otherwise. They will probably be frustrated. “I think Putin will at least keep everyone jittery,” says Maria Lipman, a visiting fellow at the European Council on Foreign Relations. “He’s the manager of uncertainty.”