Friday, March 27, 2015

Shia-Sunni divide deepens.

Almost a year ago (April 4, 2014) I had written about the Shia-Sunni divide. It has now grown wider.


Iraq. Shia militias are fighting ISIS at Tikrit with Iranian troops helping. US planes are bombing ISIS. Two of the Shiite militias have quit, because they object to Iran's involvement.


Yemen. Shiite (Houthi) tribesmen plunged the country into civil war with Iranian help. Saudi planes (the Saudis are Sunni) are bombing the Shiites. Egypt (which is Sunni) is planning to send troops. Besides the Houthis, there is an Al Qaeda branch that is also involved.

Libya is in a state of civil war.

Syria. We have the Shiites of Assad pitted against the Sunni insurgents and ISIS which is also Sunni.

The Obama regime is reported to have allowed Iran to continue uranium enrichment toward building atomic weapons.

The Saudis now want their own atomic weapons.

Afghanistan. The Taliban is resurgent again.

Meanwhile, the Obama regime formally disclosed that Israel does have nukes.

Sean Hannity described Obama's policies as insane.

Wednesday, March 25, 2015

Cruz makes inroads...

Cruz Makes Inroads in the Most Important Primary of All

By C. Edmund Wright from American Thinker today.
You can talk about the Iowa Caucus and New Hampshire and South Carolina all you want – and those all are important – yet none of them is the most important primary on the Republican side.
No, the most critical Republican primary, at least for non-establishment candidates, is the Rush Limbaugh-Drudge Report-Breitbart-Mark Levin-Sean Hannity-Glenn Beck internet message board primary.  For a conservative base candidate to win the nomination, he or she must carry most of the above precincts.
Now, this is not to say that all or any of the above  will endorse a candidate by name during the primary season.  They probably will not.  But they will all talk about, report on, interview, and discuss what and whom they like.  And the some 30-40 million people who make up those combined audiences and readerships will be impacted and educated by these venues.  They go to these shows and these websites specifically for opinion and news, after all.
Thus, it is critical to win this primary, because those are the voters who turn out for non-establishment candidates in primaries.  They just are.

Consider: for the past six weeks, Scott Walker has dominated this primary.  The Drudge Report has posted many very friendly headlines about Walker during this time, and talk radio – led by Limbaugh – has been recounting over and over how Walker defeated the liberals and the unions in Wisconsin.

As a result, he has skyrocketed up the polls, gotten unexpected fundraising traction, and has been drawing fire from panicked liberals from everywhere.  And why not?  He has beaten them at every turn.  It appears he will be formidable for the long run, and as such, he has been aggressively vetted by some on the right as well.  The takeaway is, his dominance of the Rush-Drudge-et al. universe was a tremendous launching pad for him.  It was almost overnight.

And going back to the cycle of 2007-2008, during the two stretches of that cycle where Newt Gingrich clearly won this universe, he was way ahead in the polls and did in fact win South Carolina in a high-turnout rout.  Newt did this by attacking Obama, judges, academics, unions, and the media relentlessly in debate while praising other Republicans.  For some strange reason, he abandoned that strategy totally in Florida, and promptly imploded.  He immediately lost the talk radio-internet universe and became irrelevant.  It was over at that point.

Thus, this “primary” matters.  A lot.  Jeb might be able to win without it (though I doubt it), but no one else can.
And there was a shift in this realm on Monday as Ted Cruz announced his candidacy at Liberty University.  Nobody said anything negative about Walker, but the talk of the internet and talk radio was about how impressive Cruz was, and how the liberal media was going bananas over him, and how finally there was someone articulating what we believe and doing so fearlessly and very well.  Rush said it was dazzling and “scared the heck out of the left.”
Cruz definitely started to make big inroads in this unofficial primary on this day.

This makes sense.  Of all the potential candidates out there, Cruz is probably the most ideologically simpatico with, say, Rush, Levin, and the other talkers.  More to the point, he is perhaps more in step with the listeners and readers of these venues than any other candidate.  And many of these voters will no doubt rally around Cruz’s fearlessness as well.

Conservatism matters, but so does tone.  This universe is not the least bit interested in some doddering old fool telling us we have “nothing to fear from an Obama presidency,” the way McCain did in 2008, nor is there any appetite for someone who’s going to call the Democrats “nice guys who are simply over their heads,” the way Mitt Romney’s catastrophic campaign did.

Conservatism, well articulated and without apology, will attract a huge following.  It’s the unpolled craving out there.  Certainly there is no slam-dunk in politics, especially at this extremely early stage.  However, I think it’s a pretty safe bet that Cruz’s message will continue to resonate, and that he too will enjoy a tremendous boost from talk radio and the internet
.
The Rush-Drudge-et al. primary: you must win this, or at least a big slice of it, as a conservative to have a chance.
And for a domain where the ability to defend and promote conservatism off the cuff  and without notes is paramount, Cruz’s ability to do just that will be important and score big points for him.
The author is contributor to American Thinker, Breitbart, Newsmax TV, and Talk Radio Network and author of WTF? How Karl Rove and the Establishment Lost…Again.
 

Monday, March 23, 2015

How derivatives work and their danger to the world.


The world's next credit crunch could make 2008 look like a hiccup

Is this why central bankers are so scared of raising interest rates?

 
 
 
 
 
 
A solar eclipse, a super moon, the FTSE 100 breaching 7,000 and the US Federal Reserve speaking in tongues - truly some kind of financial apocalypse must be nigh. Well, maybe.
We are certainly living in strange times. An unprecedented monetary experiment is coming to a staggered end and no one knows the potential repercussions - a plague of frogs cannot be entirely ruled out.
 
For the time being, the markets remain sanguine, expecting, for example, a gentle increase in the Bank of England’s main interest rate to just 1.5pc by the end of the decade. And, who knows, maybe the markets are right.
 
But maybe it’s too quiet. Last week, Ray Dalio, the founder of the $165bn (£110bn) hedge fund Bridgewater Associates, wrote a widely-circulated note warning his clients that the US Federal Reserve risked setting off a 1937-style crash when it starts raising interest rates again.
Then, as now, the central bank had spent years printing money in order to help the American economy recover from the 1929 crash. But the side effect was a stock market bubble, which promptly burst when the Fed prematurely increased rates. Mr Dalio is worried about a repeat performance: “We don’t know - nor does the Fed - exactly how much tightening will knock over the apple cart.”
It’s true that the policy and regulatory response to the last crisis often sows the seeds for the next. It is not hard to map out a sequence of events in which that proves to be the case again. If it were, a US stock market crash might be the least of our problems.

In 1937 the US was, economically speaking, an island, entire of itself; today, thanks to globalisation, the power of the dollar and a long period of ultra-loose monetary policy, it is a part of the main.
Christine Lagarde, the head of the International Monetary Fund, recently raised concerns in India about the ripple effect of Fed tightening on countries that have borrowed heavily in dollars and whose still-recovering economies remain vulnerable to a rate rise.

And in 1937 the equity markets were the financial be-all and end-all; today they are dwarfed by the debt markets, which are, in turn, dwarfed by the derivatives markets.
The total value of all global equities was around $70 trillion in June last year, according to the World Federation of Exchanges; meanwhile, the notional value of all outstanding derivatives contracts was more than $690  trillion. It is worth noting that the vast majority (around four-fifths) of all existing derivatives contracts are based on interest rates.

The derivatives market is the not the vast roulette table of popular perception. These financial instruments are essentially insurance policies - they are designed to protect the holder from adverse price movements.

If you are worried about (to pick some unlikely examples) a strong euro, or expensive oil, or rising interest rates, you can buy a contract that pays out if your fears are realised. Managed well, the gain from the derivative should offset the loss from the underlying price movement.
Nevertheless, the arguments employed by the derivatives industry sometimes sound similar to those employed by the pro-gun lobby: derivatives aren’t dangerous, it’s the people using them that you need to worry about.

That’s not hugely reassuring.
What could go wrong? Let’s say that US interest rates do rise sooner and faster than the market expects. That means bond prices, which always move in the opposite direction to yields, will plummet. US Treasury bonds are like a mountain guide to which most other global securities are roped - if they fall, they take everything else with them.

Who will get hurt? Everyone. But it’ll likely be the world’s banks, where even little mistakes can create big problems, that suffer the most pain. The European Banking Authority estimates that the average large European lender still has 27 times more assets than it does equity. This means that if the stuff on their balance sheets (including bonds and other securities priced off Treasury yields) turns out to be worth just 3.7pc less than was assumed, it will be time to order in the pizzas for late night discussions about bail-outs.

Barclays has predicted that if the yields on 10-year Treasury bonds reverted back to their historical average it would wipe nearly a fifth off the tangible book value of European banks.
Yes, a fifth. This is what is meant by interest rate risk. It’s big and it’s real and the banks know all about it. Their answer is to hedge the risk with interest rate derivatives. It’s one of the reasons why there are so many of these contracts in existence. So that’s all OK then.

Just one question though: who have they bought those derivatives from? Why, other banks of course. This creates what is known as counterparty risk. Bank A sells insurance to Bank B. But then Bank A gets into financial difficulties (a significant deterioration in their creditworthiness would be enough) and suddenly Bank B isn’t as well protected as it thought it was.

Indeed, Bank A might start struggling precisely because of the insurance it has sold to Bank B. What if it can’t honour the contract? This creates a potential Catch-22 situation: the derivatives work as long as they’re not needed; calling them into action renders them useless.
This is precisely the kind of thing that occurred during the credit crunch - banks stopped trusting each other. New rules introduced since then require banks to actively manage their counterparty risk. In other words, banks are being asked to hedge their hedges. Are you starting to feel uneasy yet?
It is far from clear whether any of this makes the system less risky or just further complicates the cat’s cradle of financial interconnectedness.

Regulators are clearly worried. They have brought greater transparency to the derivatives market, demanding better reporting and that a higher proportion of contracts be routed through central counterparties or clearing houses, which sit between the two sides of a trade and sort out the mess if anyone goes bust.

But, again, the risks haven’t been magicked away. Clearing houses are designed to deal with one or two counterparties going down. But what happens if more go kaput? The clearing house itself would face collapse, be judged too big to fail and, well, you already know how this story ends.
It doesn’t take a soothsayer to foretell that taxpayers would, yet again, have to clean up the mess.
ben.wright@telegraph.co.uk

AJ adds: So, the international financial system is like a house of cards. Knock one out and the rest may come down.

Hillary Clinton: Her crimes continue.

Ever since the time Hillary was a bagman for Bill Clinton in Arkansas, she and Bill have been collecting cash from people needing influence. Never mind the kerfuffle of Hillary' illegal and felonious emails while Secretary of State, but the Clinton Foundation has collected "donations" from people who have business with the United States government. The Governor of Virginia (a Republican) and his wife have been convicted because they accepted gifts from a person doing business with the State of Virginia. The Clintons have accepted millions in donations to their Foundation from people who have business with the US government.

While, I do not expect Hillary and Bill to be indicted for clear violations of laws (after all they are Democrats and as such get a free pass), it is noteworthy that Hillary is given a "hard time" by the Media. The person in charge of this is Obama's Shiite Iranian advisor, Valerie Jarred. You might wonder why they bother? The story is that Obama does not trust Hillary to continue remaking us as a Marxist and Islamic Republic, so they want her out of the way to make room for Elizabeth Warren. Stay tuned. The Clintons throw off stories about crookedness like Linus sheds dirt in a Charley Brown cartoon .

Israel Beware!

Michael Goodwin
First he comes for the banks and health care, uses the IRS to go after critics, politicizes the Justice Department, spies on journalists, tries to curb religious freedom, slashes the military, throws open the borders, doubles the debt and nationalizes the Internet.
He lies to the public, ignores the Constitution, inflames race relations and urges Latinos to punish Republican “enemies.” He abandons our ­allies, appeases tyrants, coddles ­adversaries and uses the Crusades as an excuse for inaction as Islamist terrorists slaughter their way across the Mideast.
Now he’s coming for Israel.

Barack Obama’s promise to transform America was too modest. He is transforming the whole world before our eyes. Do you see it yet?
Against the backdrop of the tsunami of trouble he has unleashed, Obama’s pledge to “reassess” America’s relationship with Israel cannot be taken lightly. Already paving the way for an Iranian nuke, he is hinting he’ll also let the other anti-Semites at Turtle Bay have their way. That could mean American support for punitive Security Council resolutions or for Palestinian statehood initiatives. It could mean both, or something worse.

Whatever form the punishment takes, it will aim to teach Bibi Netanyahu never again to upstage him. And to teach Israeli voters never again to elect somebody Obama doesn’t like.
Apologists and wishful thinkers, including some Jews, insist Obama real­izes that the special relationship between Israel and the United States must prevail and that allowing too much daylight between friends will encourage enemies.

Those people are slow learners, or, more dangerously, deny-ists.
If Obama’s six years in office teach us anything, it is that he is impervious to appeals to good sense. Quite the contrary. Even respectful suggestions from supporters that he behave in the traditions of American presidents fill him with angry determination to do it his way.
For Israel, the consequences will be intended. Those who make excuses for Obama’s policy failures — naive, bad advice, bad luck — have not come to grips with his dark impulses and deep-seated rage.

His visceral dislike for Netanyahu is genuine, but also serves as a convenient fig leaf for his visceral dislike of Israel. The fact that it’s personal with Netanyahu doesn’t explain six years of trying to bully Israelis into signing a suicide pact with Muslims bent on destroying them. Netanyahu’s only sin is that he puts his nation’s security first and refuses to knuckle ­under to Obama’s endless demands for unilateral concessions.

That refusal is now the excuse to act against Israel. Consider that, for all the upheaval around the world, the president rarely has a cross word for, let alone an open dispute with, any other foreign leader. He calls Great Britain’s David Cameron “bro” and praised Egypt’s Muslim Brotherhood president, Mohammed Morsi, who had called Zionists, “the descendants of apes and pigs.”
Obama asked Vladimir Putin for patience, promising “more flexibility” after the 2012 election, a genuflection that earned him Russian aggression. His Asian pivot was a head fake, and China is exploiting the vacuum. None of those leaders has gotten the Netanyahu treatment, which included his being forced to use the White House back door on one trip, and the cold shoulder on another.
It is a clear and glaring double standard.

Most troubling is Obama’s bended-knee deference to Iran’s Supreme Leader, which has been repaid with “Death to America” and “Death to Israel” demonstrations in Tehran and expanded Iranian military action in other countries.
The courtship reached the height of absurdity last week, when Obama wished Iranians a happy Persian new year by equating Republican critics of his nuclear deal with the resistance of theocratic hard-liners, saying both “oppose a diplomatic solution.” That is a damnable slur given that a top American military official estimates that Iranian weapons, proxies and trainers killed 1,500 US soldiers in Iraq and Afghanistan. Who in their right mind would trust such an evil regime with a nuke?

Yet Netanyahu, the leader of our only reliable ally in the region, is ­repeatedly singled out for abuse. He alone is the target of an orchestrated attempt to defeat him at the polls, with Obama political operatives, funded in part by American taxpayers, working to elect his opponent.
They failed and Netanyahu prevailed because Israelis see him as their best bet to protect them. Their choice was wise, but they better buckle up because it’s Israel’s turn to face the wrath of Obama.

AJ adds: Obama is a Marxist Muslim and as such he hates Israel and America. He is diligently at work to destroy both. He does this by the actions described above. He knows that creating power vacuums in the Middle East and N Africa invites the most extreme of the Muslim radicals.

Wednesday, March 18, 2015

Israel: Another Obama loss.

The Right-of-Center prevailed in the Israeli lection. No doubt there will be lots of prognostications as to why. Also no doubt, there will be lots of negotiations now to set up a coalition government. After all, bargaining is not only a Jewish national sport but a hollowed tradition.

What was the important factor that allowed Likud to confound the pollsters and secure a Netanyahu victory? Was it the blatant hatred of the Obama regime for Likud and the almost naked effort by the regime to secure a Labor victory?  Was it the realization that this was not the time to hand power into the hands of people and parties who are almost genetically incapable of championing the interests of the Jewish people?

It should be an example to Republicans that articulating their philosophy (what brought them to power) is a way to secure victory. The strategy of giving in to your enemies is a dicey strategy that seldom leads to victory.

Tuesday, March 17, 2015

Ukraine deal is on shaky ground.

AJ begins: After my previous post, Poroshenko did submit a new law to the Ukrainian Parliament. The Rebs are criticizing the law. Here are the grounds:

1. The new law contains provisions not agreed to by the Rebs;

2. The special status granted to the East does not include the rest of Donetsk and Luhansk Oblasts now in govt hands. It also excludes Debeltsvese. This is not acceptable to the Rebs.

3. The new law would become effective only if there were elections and the results were acceptable to the Western Europeans. Here is an article in the Kiev Post:

https://www.blogger.com/blogger.g?blogID=3066448791083019565#editor/target=post;postID=9050828253271298146

.

Monday, March 16, 2015


Putin in film on Crimea: US masterminds behind Ukraine coup, helped train radicals

Published time: March 15, 2015 14:18
Edited time: March 15, 2015 17:36
                            
Vladimir Putin (Screenshot from 'Crimea - The Way Home' documentary aired by Rossiya 1 news channel)
Vladimir Putin (Screenshot from 'Crimea - The Way Home' documentary aired by Rossiya 1 news channel)
 
The Ukrainian armed coup was organized from Washington, Russian President Vladimir Putin stated in an interview for a new documentary aired Sunday. The Americans tried to hide behind the Europeans, but Moscow saw through the trick, he added.
“The trick of the situation was that outwardly the [Ukrainian] opposition was supported mostly by the Europeans. But we knew for sure that the real masterminds were our American friends,”Putin said in a documentary, 'Crimea - The Way Home,' aired by Rossiya 1 news channel.
“They helped training the nationalists, their armed groups, in Western Ukraine, in Poland and to some extent in Lithuania,” he added. “They facilitated the armed coup.”
The West spared no effort to prevent Crimea’s reunification with Russia, “by any means, in any format and under any scheme," he noted.
Putin said this approach was far from being the best dealing with any country, and a post-Soviet country like Ukraine specifically. Such countries have a short record of living under a new political system and remain fragile. Violating constitutional order in such a country inevitably deal a lot of damage to its statehood, the president said.
Soldiers near a military base in the village of Perevalnoe, Crimea where a coastal defense brigade blocked the Ukrainian Navy (RIA Novosti)
Soldiers near a military base in the village of Perevalnoe, Crimea where a coastal defense brigade blocked the Ukrainian Navy (RIA Novosti)

READ MORE: US boosting ‘anti-propaganda’ budget, mulling ‘increase of lethality’ for Ukraine support – Nuland
“The law was thrown away and crashed. And the consequences were grave indeed. Part of the country agreed to it, while another part wouldn’t accept it. The country was shattered,” Putin explained.
He also accused the beneficiaries of the coup of planning an assassination of then-President Viktor Yanukovich. Russia was prepared to act to ensure his escape, Putin said.
“I invited the heads of our special services, the Defense Ministry and ordered them to protect the life of the Ukrainian president. Otherwise he would have been killed,” he said, adding that at one point Russian signal intelligence, which was tracking the president’s motorcade route, realized that he was about to be ambushed.
Yanukovich himself didn’t want to leave and rejected the offer to be evacuated from Donetsk, Putin said. Only after spending several days in Crimea and realizing that “there was no one he could negotiate with in Kiev” he asked to be taken to Russia.
Viktor Yanukovich after a news conference in Rostov-on-Don (RIA Novosti)
Viktor Yanukovich after a news conference in Rostov-on-Don (RIA Novosti)

The Russian president personally ordered preparation of the Crimean special operation the morning after Yanukovich fled, saying that “we cannot let the [Crimean] people be pushed under the steamroller of the nationalists.”
“I [gave them] their tasks, told them what to do and how we must do it, and stressed that we would only do it if we were absolutely sure that this is what the people living in Crimea want us to do,” Putin said. He added that an emergency public opinion poll indicated that at least 75 percent of the people wanted to join Russia.
“Our goal was not to take Crimea by annexing it. Our final goal was to allow the people express their wishes on how they want to live,” he said.
“I decided for myself: what the people want will happen. If they want greater autonomy with some extra rights within Ukraine, so be it. If they decide otherwise, we cannot fail them. You know the results of the referendum. We did what we had to do,” Putin said.
READ MORE: 95.7% of Crimeans in referendum voted to join Russia - preliminary results
He added that his personal involvement helped expedite things, because the people carrying out his decision had no reason to hesitate.
According to Putin, part of the operation was to deploy K-300P Bastion coastal defense missiles to demonstrate Russia’s willingness to protect the peninsula from military attack.
“We deployed them in a way that made them seen clearly from space,” Putin said.
The president assured that the Russian military were prepared for any developments and would have armed nuclear weapons if necessary. He personally was not sure that Western nations would not use military force against Russia, he added.
A tent camp of the supporters of Ukraine's integration with the EU on Maidan Square in Kiev where clashes between protesters and police began in February 18, 2014 (RIA Novosti / Alexey Furman)
A tent camp of the supporters of Ukraine's integration with the EU on Maidan Square in Kiev where clashes between protesters and police began in February 18, 2014 (RIA Novosti / Alexey Furman)

In order to demilitarize the Ukrainian troops based in Crimea, Russia sent the army's Main Intelligence Directorate (GRU) forces, the president said.
“A specific set of personnel was needed to block and demilitarize 20,000 people, who were well-armed. Not only in quantity, but in quality,” Putin said, adding that he gave orders to the Defense Ministry to “deploy the special forces of the GRU, together with marine forces and paratroopers.”
However, according to Putin, the number of Russian forces did not exceed the limit of 20,000 authorized under the agreement on basing the Russian Black Sea Fleet at its military base in Crimea.
“As we didn’t exceed the number of personnel on our base in Crimea, strictly speaking, nothing was violated,” he said.
The Russian president added that the move to send additional Russian troops to secure Crimea and allow a referendum to be freely held there prevented major bloodshed on the peninsula.
“Considering the ethnic composition of the Crimean population, the violence there would have been worse [than in Kiev]. We had to act to prevent negative development, not to allow tragedies like the one that happened in Odessa, where dozens of people were burned alive,” Putin said.
READ MORE: As part of Russian territory Crimea can host nuclear weapons – Foreign Ministry
He acknowledged that there were some Crimean people, particularly members of the Crimean Tatar minority, who opposed the Russian operation.
“Some of the Crimean Tatars were under the influence of their leaders, some of whom are so to speak ‘professional’ fighters for the rights of the Tatars,” he explained.
Simferopol residents attending the "Crimea-Spring" concert on Lenin Square in the city center on the day of voting in a referendum about the status of Crimea (RIA Novosti)
Simferopol residents attending the "Crimea-Spring" concert on Lenin Square in the city center on the day of voting in a referendum about the status of Crimea (RIA Novosti)

But at the same time the “Crimean militia worked together with the Tatars. And there were Tatars among the militia members,” he stressed.
The Crimean people voted in a referendum to join Russia after rejecting a coup-imposed government that took power in Kiev in February 2014. The move sparked a major international controversy, as the new government’s foreign backers accused Russia of annexing the peninsula through military force.
Moscow insists that the move was a legitimate act of self-determination and that the Russian troops acted only to provide security and not as an occupying force. Russian officials cite the example of Kiev’s military crackdown on the dissenting eastern Donetsk and Lugansk regions, which claimed more than 6,000 lives since April 2014, as an example of bloodshed that Russia acted to prevent in Crimea.

Sunday, March 15, 2015

Ukraine: toward the next phase of history.

1. There was supposed to be a new law submitted to the Ukrainian parliament guaranteeing local ,autonomy for Eastern Ukraine . The deadline is today. The submission is blocked.

2. President Poroshenko has disclosed that 17 EU countries agreed to supply weapons to the Ukraine.

3. The US is delivering Humvees, drones and programs to pinpoint the position of enemy guns.

4. Russia warns US about supplying weapons to Ukraine.

5. President Poroshenko boasts of new lines of defense being built by Ukrainian troops.

6. Ruthenians ("Little Russians" of about 4 M) want autonomy as well. There are also 500,000 Hungarians on the Western edge of Ukraine.

Here is an interview by a transplanted Russian Noveliest.

"corruption, says Ukrainian writer Andrey Kurkov.
“Ukraine will never be the same state as before. But Russia will not change.”
Andrey Kurkov
Ukrainian novelist
Ukrainian novelist Andrey Kurkov’s irony cuts as elegantly as a scalpel, and the blade is aimed at the corrupt, ignorant, money-grabbing, power-seeking and sometimes brutal authorities who have dominated the territory of the former Soviet Union.
Born in what was then Leningrad — his father was a Soviet test pilot — Kurkov came to Kyiv as a toddler, and he speaks both Russian and Ukrainian. That gave him an ideal vantage point on the year-old “Euromaidan” uprising, with its violent aftermath of Russia’s annexation of Crimea and support for a separatist rebellion in eastern Ukraine.
While his earlier books — like Death and the Penguin — are works of dark, surreal satire recalling Russian writers Nikolai Gogol and Mikhail Bulgakov, his most recent work is the non-fiction Ukraine Diaries: Dispatches From Kiev.
It records how growing unease with the leadership of Viktor Yanukovych slid into protests, violent clashes and national disaster, through the eyes of a wry observer who is also struggling to live a normal life. In Toronto last week for a speaking engagement at U of T, Kurkov said that in this disorienting landscape, life now trumps art.
“On Nov. 21, I stopped writing my novel. I’ve tried many times to continue but it doesn’t work. I cannot get detached from reality.”
This interview has been edited for length and clarity.
Ukraine’s “Euromaidan” revolt is described as the European Union vs. Russia: is that an oversimplification?

That’s a cliché many journalists use for a very complex situation. For Ukrainians, Europe doesn’t mean the EU, it means a country without corruption: with rule of law, civil society, civilized life with European standards. The Euromaidan wasn’t a unified movement, it was dozens of groups with different interests. Almost nobody writes that the famous (radical) “Right Sector” has an ideology that is anti-Russian, anti-European and anti-NATO.
What about the propaganda war — Russian-speakers vs. Ukrainian speakers, “fascists” vs. “terrorists?”
On language, one example explains everything. About seven to eight million Russian speakers live in Ukraine, and about 50 per cent of the population speaks Russian. About 80 per cent of people in Kyiv speak Russian, but you’ll not find any pro-Russian movements or Putinophiles there. Another complex issue.
As for the rhetoric, it has toned down in the past month or so. It’s now “separatists” and “pro-Ukrainians.” That doesn’t sound so abusive.
So what really divides Ukraine?
It’s a clash of two mentalities — the post-Soviet collective mentality, where people lack initiative and are taught to depend on the boss or factory owner for perks. And people who start businesses and take responsibility themselves.
In Donbass (in the east) you won’t find many small businesses. But if you check the register in Lvov, you’ll see tens of thousands.
Many outside Kyiv saw the Euromaidan as a far-right coup. How large a role did it play in ousting Yanukovych?
They played quite a large role. After the Orange Revolution (which began in 2004) young patriots said that it came to nothing because there was no physical struggle. Without removal of the corrupt officials and politicians there will be no change. Ten years later they united under the Right Sector (banner.)
The (Euromaidan) was associated with peaceful protest. But the radicals built their own barricades on Grushevsky Street leading to the cabinet and parliament. The first deaths occurred there. But even if there was no violence on the side of the Right Sector sooner or later there would have been violence from Yanukovych.
Did Russian President Vladimir Putin intervene because Yanukovych was his close ally?
We should remember that it was Yanukovych who suddenly decided to sign an agreement with Europe.
He was blackmailing Russia, trying to get a special deal on (natural) gas and other things. There was a conflict for three years between Putin and Yanukovych — Putin hates him.
The first thing Yanukovych did as president was sign a prolongation (of the lease for the Russian naval base in Crimea) for another 25 years in exchange for promised lower gas prices. Putin deceived him many times. Yanukovych said publicly, in front of his own party, that he was fed up with Putin. He said he was not in love with Europe, but felt betrayed by Putin.
How important was the annexation of Crimea for Ukraine? President Petro Poroshenko has said Ukraine would never give it up.
The Crimea (invasion) marked the beginning of the war. The lack of reaction from the West gave Putin the idea that he could expand his territory, plan the occupation of the southeast and the unification of Transnistria (a separatist region of Moldova). After the annexation of Crimea, Transnistria asked the Kremlin to accept it as part of the Russian Federation. So obviously there were plans to disintegrate Ukraine.
However, there was nothing much Ukrainian about Crimea. It had only one newspaper in Ukrainian with a circulation of about 2,000. There were three schools in Ukrainian for 2 million people. It was always deeply Soviet.
You point out that a root cause of the Euromaidan was corruption. New laws to target corruption have just been signed. But how hard will it be to bring in real reform?
There are two kinds of corruption in Ukraine: low level, like paying doctors who demand money for treatment or paying off local police. Then there are fixed schemes between business, ministries, customs etc. A lot of those big schemes are still running. That is the worst danger. The information is there and always available. But action is never taken.
If you don’t have official investigations and trials there will be no trust for Poroshenko or any reforms he tries to bring in.
So Ukrainians are faced with a devil’s choice — they don’t want to be part of Russia’s kleptocratic system, but they don’t trust their own country?
There are two enemies: inside and outside the country. Reforms face huge sabotage by civil servants who were there for 20 years running corruption schemes and are trying to stop the reforms brought in by top managers coming from abroad. And at the same time the economy is in difficulty.
If Russia’s forces — and Russian-backed forces — withdrew from Ukrainian territory, would Ukraine be the same country it was before the Euromaidan?
Ukraine will never be the same state as before. But Russia will not change. Even if Putin is removed there is no democratic force that would try to change Russian politics. However, the more Putin becomes the more chance there will be of a new (Nikita) Khrushchev — someone who wants to reconstruct relations with the West. 

The Disappointment Index.

Bet you did not know that there was such a thing, did you? Well, there is. Except, it is called the U.S. Economic Surprise Index. Here it is:




What does it mean exactly?

The article referenced a Bloomberg Index such:"The Bloomberg ECO U.S. Surprise Index, which measures whether data beat or miss forecasts, fell to the lowest since 2009, when the nation was in the deepest recession since the Great Depression." So, the economic data have been underwhelming.

Why is that?

Larry Edelson defines the problem as "deflation."

And why do we have deflation?

His answer is too much debt and investors moving into the "risk off" mode. Here is how he puts it:

"
a matter of fact, according to a recent study, global debt has increased a whopping $57 trillion since 2007 which has outpaced the global growth in gross domestic product.   So debt to GDP ratios as a whole in terms of the global economy have actually gotten much, much worse since the real estate crisis of 2007/2009.   Debt has gone up $57 trillion while GDP in most cases is stagnant and in the case of Europe has actually declined. 

As part of that, household debt has increased only roughly 2.8% while corporate debt has increased about 5.9%.   Household debt increase of 2.8% since 2007 is really very modest so that is telling you that the households are really contracting their debt, certainly not taking on much more new debt.   Corporate debt has increased 5.9%, greater than the global growth in GDP, something to be concerned about, no doubt. 

But the key here is the red sentence at the bottom.   Government debt on a global basis has increased a whopping 9.3% since 2007, an extraordinary amount.   Why?  

Well, it is simple.   Governments around the world, despite their talk about austerity amongst their own public sector, amongst the government, is a bunch of BS.   Governments are still spending money dramatically, way more so than the growth in global GDP.   So this is leading to a very tenuous situation and investors recognize it.   There is too much debt in the world so they are pretty much in a risk-off mentality, waiting for the next shoe to drop and that by its nature is deflationary." Larry then shows the Commodity Indexes dropping as deflation devastates prices.  

What might fix the situation is a strategy used by Ronald Reagan: one that employed tax cuts and optimism.  

Wednesday, March 11, 2015

Tuesday, March 10, 2015

Employment numbers and B(L)S statistics.

The latest B(L)S figures show an increase of 295K jobs in a month. This would be good if true. However, ADP Payroll report shows only 212K and the household survey shows only 96K. Labor force participation has dropped again, so the decrease in percent unemployed is most likely due to some unemployed no longer being counted.

The Drive by Media is also in on the deal to paint a rosier picture.
Thus the report that the economy grew by 4.8% during Q2 and Q3. When the dust settled, the revised growth for 2014  turns out to be only 2.4%.

January's existing home sales fell to the lowest in 9 Months. Consumer spending fell in both December and January, in spite of the drop in gasoline prices. Wholesale stockpiles increased slightly as sales plunged in January by the largest amount in six years.

First time unemployment figure rose to above 300K. Thus, employment figures should be steady if the hires equaled 295K, but unemployment has gone up if the people hired was less than the B(L)S figure of 295K.

GOLD. Meanwhile, gold was dropped below 1,200/oz. We found out that the GLD fund kept its gold at the MSBC bank. MSBC then announced that it is closing its vaults. So, where is the gold? Most likely, it has been sold to keep gold prices down, so owners will get paper money in settlement.

Monday, March 9, 2015

Will Greece hold a referendum?

Negotiations between the Greek govt and its creditors are like water torture. An earlier proposal was accepted in one day by creditors.


What were the terms?


In its letter requesting an extension to the bailout last month, Greece’s government had committed to streamline sales tax rates, with a view to limiting exemptions, implement a comprehensive review of government spending in every sector, and auction digital frequencies used by TV channels.
The letter, which was sent to euro area finance ministers on Feb. 23, and got their approval the day after, also included a commitment to pension reform, the elimination of loopholes and incentives that give rise to an excessive rate of early retirements, and the removal of barriers to competition in its goods and services markets.


So, why the crisis again?


Greeks reacted negatively and their govt now wants to renegotiate their proposals. The talk of a referendum is to shuffle responsibility onto the voters.


Payments begin on March 13.

Sunday, March 8, 2015

Hillary in the Obama word wooze.

Obama has a formula to sweep scandals under the rug. He made some changes in responding to the Hillary scandals.

1. He just heard about the emails (omits that he is outraged);
2. He did not say he was going to get to the bottom of it;
3. Says it is OK, because she is coming clean.

Harf, harf, harf. What she did was illegal. Nothing about accepting contributions from corporations that dealt with State. I guess these things are illegal only when done by Republicans.

Saturday, March 7, 2015

Betraying the people: political parties diss voters.

Each country has different problems, but most have the problem of the political elite acting against the peoples' interest.

In Greece, the political parties contributed to implementing a Left-wing philosophy that bankrupted the Country. Now, it is a party even further to the Left that needs to correct the problems. Chance of that is near zero.

In France, the parties encouraged immigration of Muslims and closed their eyes to the Muslim outrages. That is why the National Front has risen to be the most identified with party:

http://www.ft.com/intl/cms/s/0/21c43558-c32e-11e4-ac3d-00144feab7de.html#axzz3ThpUp0VN

In the United States, the Republican Party has betrayed the voters by allowing the radical Muslim Obama to act as if the Constitution has lost its meaning. We see the betrayal when the Democrats are swearing to protect the turncoat John Boehner and his Speakership. The Dems know that Boehner acts to thwart the will of the people who have elected a Republican Congress. 

Friday, March 6, 2015

The Greek financial crush.




How was the country financed lately. Here are some details:


 
Here are the coming payments to the IMF.
 
Upcoming Greek payments to the IMF: - €350 million on March 13 - €580 million on March 16 - €350 million on March 20
 
Greek money is being taken out of banks and flowing into US Dollars.
 
 

Thursday, March 5, 2015

Russia and NATO escalate drills.

Buffett has sold all his stock in EXXON. Hmmm. Could Buffett be getting intelligence from his pal O'Bungle that the US and NATO are about to start something against Russia? And EXXON is heavily involved in Russia.

England has started delivering Strykers to Ukraine and 600 American paratroopers have landed in the Ukraine as advisors. NATO is starting maneuvers in the Black Sea and the Russians are joining the parade:

http://rt.com/news/177868-russia-air-force-exercises/

You can always count on Democrats to get us into a war: first by projecting weakness then bungling diplomacy until fighting is inevitable.

Greece unraveling quickly.

from Al Reuters

During a cabinet meeting last week, Prime Minister Alexis Tsipras said that improving living conditions of those hurt by the crisis was the government's "foremost duty", but reiterated Athens was still committed to a balanced budget.
The government's first bill foresees the restoration of electricity connections in primary residences by the end of 2015. The long-term unemployed and families with young children will have priority. About 300,000 Greeks will get food vouchers.
A rent allowance of up to 220 euros a month for 30,000 households is also included in the bill, whose total cost is estimated by the government at about 200 million euros.
The government also wants to appoint a general secretary who will coordinate and supervise authorities fighting corruption.
Two more bills are expected to be tabled this week. One is aimed at giving incentives to debtors to settle tax and pension fund arrears. Athens hopes that will help offset a steep fall in tax revenues which has added pressure on the government.
Greece has received two EU/IMF bailouts totaling 240 billion euros since its worst debt crisis in decades broke out. The austerity program imposed as a condition of the bailout has left one in four people out of work.
The Syriza party was elected on Jan. 25 on promises to end the belt-tightening that came with the bailouts by raising wages and pensions and reversing some unpopular reforms. But with state revenues and liquidity in Greek banks dropping rapidly since the vote, Athens was forced to request an extension to its EU/IMF loan agreement instead.
It got a four-months breather after a reform list, which included cracking down on tax evasion, was approved by its lenders. Even so, the government was forced to give way on some of its pledges. Greece is not due to receive any financial aid until it specifies its planned reforms.
Despite rifts in the party because of the concessions it made, polls show Syriza's popularity rising. An MRB survey published on Tuesday put its support at 41.3 percent.
But shut out of debt markets and with international lenders on hold, Athens is scrambling to cover its funding needs this month.
"We know that March is a difficult month," said Gabriel Sakellaridis, a government spokesman. "All of our obligations will be repaid on time ... in order not to have any problems with our lenders, or at home."

(Writing by Renee Maltezou; Additional reporting Angeliki Koutantou Editing by Deepa Babington, Larry King)

AJ adds: The word on the street is that Greece is almost out of money and will need more bailout before June. "Fighting corruption" are code words for expropriating private property.

Wednesday, March 4, 2015

Greece, Ukraine and Iran.

Greece.

All signs point to a coming disaster. You can see this in the US Dollar Index continued rise as European money flows into Dollars. Greece has another tranche of money coming from its second bailout, a  sum of aroung 7B Euros. But, that money is tied to Greece continue with its reforms; reforms that Syriza has pledged to end. In addition, there is talk of another bailout of Greece in the vicinity of E50B. That is bad enough, but tempers are flaring. The Greeks are accusing the governments of Spain and Ireland and Portugal of ganging up on them as these governments demand that Greeks do not get preferential treatment. Greece received a 4 month extension, but discussions are not going well. If Greece defaults and leaves the Euro, it faces rough going, because its currency the drachma would not be accepted. A Greek default would mean a traumatic event for the German banks.

Ukraine.

Ukraine is once again showing that it has no intention of dealing with its Eastern provinces other than considering them terrorists. There is no efforts to undertake the constitutional changes they promised. In addition, Ukraine is once again sending tanks to the cease fire line. The tanks are refurbished T64's to replace the tanks lost in the last flareup. The two breakaway provinces in the East are counting on the junked Ukrainian equipment to supplant the 60,000 tons of steel promised by Russia by 30,000 tons of steel. Much of Donetsk and Luhansk provinces under Reb control have been severely damaged by Ukrainian and Reb shelling. For now the shaky cease fire holds, but the government is obviously planning to junk it when they finish replenishing their lost tank force. I am looking to find out what countermeasures the Russians are planning.

Iran continues to execute near a thousand people a month to crush any potential opposition. The country is counting on a phony treaty "negotiated" by the O'Bungle crowd to revive its economy so it can continue to buy centrifuges and finance terrorism.

Tuesday, March 3, 2015

PM Natanyahu's stirring address to the US Congress.

http://www.c-span.org/video/?324609-2/awaiting-israeli-prime-minister-benjamin-netanyahu-address-congress

In a stirring address to the US Congress, PM Netanyahu reminded Congress that:

1. The deal being negotiated is to pave the way for a nuclear Iran;
2. That it is a bad deal;
3. That the alternative to a bad deal is a better deal;
4. That Iran remains a fount of aggression and terrorism;
5. That if Iran wants to be treated as a normal nation it should act as a normal nation;
6. That the Jewish nation is back in its historic home and is no longer defenseless.

Some Democrats made themselves conspicuous by boycotting the speech. We know who they are and with whom they stand. You can view the whole procedure:

http://www.c-span.org/video/?324609-2/israeli-prime-minister-benjamin-netanyahu-address-congress