Category: Russia

This Business Will get out of Control. It Will get out of Control and we’ll be Lucky to Live Through It.

The military dick waving in Europe is getting out of control.

First, the US engages in show of force in the Atlantic Resolve exercise, and Russia responded with its own maneuvers, first with 40,000 troops, and a few days later another 40,000:

Russia said Thursday it had doubled the number of troops taking part in mass drills ordered by President Vladimir Putin this week to 80,000 in a major show of strength amid tensions with the West over Ukraine.

Putin on Monday ordered drills for more than 40,000 troops in regions spanning the country, from the Arctic to the far east to the volatile southern Caucasus, and ordered nuclear bomber jets to be deployed in Crimea a year after its annexation by Moscow.

Russia’s chief of the general staff, Valery Gerasimov, said Thursday that the “number of troops taking part in the exercises has gone up to 80,000, and the number of aircraft has increased to 220,” quoted by RIA Novosti state news agency.

Troops in the western and central regions and military aircraft were scrambled for exercises, Gerasimov said.

The drills are the latest in a succession of large-scale military maneuvers that Moscow has ordered as relations with the West have plunged to a post-Cold War low over the crisis in Ukraine.

Note that Atlantic Resolve deployed something on the order of 3000 troops, and on short notice, the Russians deployed nearly 30 times that, and included a much wider variety of forces.

BTW, western military analysts were very impressed with the speed and competence of the Russian deployment:

“It’s helped us further develop our understanding of freedom of movement in Eastern Europe,” said Lt. Gen. Ben Hodges, the Army’s most senior commander in Europe, in an interview with Defense News and Army Times reporters and editors.

………

“[Russian President Vladimir] Putin exercises freedom of movement all the time” within Russia, Hodges said, and the US plans to demonstrate how it converges people and vehicles, a “tremendous opportunity” to practice and reassure allies in the face of Russian aggression. To pull it off, the Army is navigating diplomatic requirements and assessing infrastructure among Eastern European allies.

“This is what the US Army does, we can move a lot of capability a long distance,” Hodges said. “I’ve been watching the Russian exercises … what I cared about is they can get 30,000 people and 1,000 tanks in a place really fast. Damn, that was impressive.”

The remarks coincide with the one-year anniversary of Russia’s annexation of Crimea, condemned by Kiev and the West as an illegal land grab but heralded by many Russians as correcting a historic injustice.

Aside from the Russian military’s ability to converge quickly, Hodges noted Russia’s modernized jamming and signal direction-finding capabilities, stressing the importance of US troops using secure communications.

And our military is determined to continue to engage in dick swinging against country with the 2nd largest nuclear arsenal in the world.

As I stated earlier today, this is not the sort of stuff that should only be done when there are specific orders authorizing the action by civilian authorities.

I will add that if this was a decision by civilian authorities, that person needs to be fired.

H/t Information Dissemination.

IMF Violates Its Charter to Loan to the Ukraine

The IMF charter forbids the making of loans to countries that are either engaged in a civil war, or those who are at war with another member state.

That being the case, how the f%$# does the IMF justify making a massive loan to the Ukraine?

The International Monetary Fund (IMF) has agreed on a scheme of war financing for Ukraine. For the first time, according to Fund sources, the IMF is not only violating its loan repayment conditions, but also the purposes and safeguards of the IMF’s original charter.

IMF lending is barred for a member state in civil war or at war with another member state, or for military purposes, according to Article I of the Fund’s 1944-45 Articles of Agreement. This provides “confidence to members by making the general resources of the Fund temporarily available to them under adequate safeguards, thus providing them with opportunity to correct maladjustments in their balance of payments without resorting to measures destructive of national or international prosperity.”

To deter Russian and other country directors from voting last week against the IMF’s loan, and releasing their reasons in public, the IMF board has offered Russia the possibility of, though not the commitment to repayment for Gazprom’s gas deliveries, and the $3 billion Russian state bond which falls due in December.

On March 11 the IMF board agreed to approve an Extended Loan Facility (EFF) for Ukraine for a total of 13.4 billion Special Drawing Rights (SDR), currently equivalent to $17.5 billion. Here are the IMF papers spelling out the details.

………

Take a magnifying glass to the tables titled “Ukraine Capacity to Repay Indicators” in last year’s SBA, and in this month’s EFF: it can be seen the newly scheduled repayments to the IMF are significantly larger from now until 2019 in the new scheme than they were in the old one, and of course they go on for much longer – another decade in fact. . For comparison, go to the SBA document, “Assessment of the Risks to the Fund and the Fund’s Liquidity Position”, page 10; for the EFF document, open this link, and go to the similarly titled document, page 13.

At the IMF Andrew Tweedie (below left) and Mark Flanagan (centre) are responsible for drafting this sleight of hand; Nikolai Gueorguiev (right), a former Bulgarian finance ministry official, has been in charge of negotiating the terms with the government in Kiev. In 2008 Flanagan was much more sceptical in his assessment of Ukrainian government accountability and capacity to repay much smaller liabilities than is plain today.

………

This trio is now making the IMF loan look less onerous for the Ukrainian economy by projecting faster recovery of GDP and exports than they thought was reasonable a year ago; and also by anticipating that other forms of debt relief, including grants, subsidies, and low-cost loans from the US and European Union will reduce the proportion of Ukrainian debt owed to the IMF.

That’s guesswork. It didn’t work in 2014 — because of the war in the east. As Lagarde’s reference to the ceasefire implies, and the EFF papers now confirm, if the war continues, the government in Kiev will be unable to repay; the IMF board’s loan conditions will falter; and disbursement of the EFF cash will stop, just as the SBA cashflow did from last October. So what calculation is the IMF making of the military costs and the war’s impact on what the IMF is calling the Ukraine’s fiscal balance?

There are 163 pages in the dossier released by the IMF to demonstrate that the new loan to Ukraine meets the Fund’s charter, lending conditions, and criteria for repayment. The term “war” appears only once, referring to “war-induced supply shocks”; the terms “defence” and “army”, not at all. Referring to military spending by the government, the IMF dossier acknowledges the “risks to the outlook are exceptionally high and predominantly on the downside. Fighting in the East may resume and spread. This would unravel confidence, increase the direct loss of economic and export capacity while military spending may rise sharply.” This is an admission that the war is what the IMF charter labels “measures destructive of national or international prosperity.”
………

This reveals that past and future spending on the war and the rearmament programme President Petro Poroshenko announced last week are “one-offs”, below the budget line, and not counted by the IMF in the conditions it has set for the release of the scheduled instalments. Since budget funds are fungible, and since the Ukrainian government and Verkhovna Rada (parliament) have agreed to increase military spending substantially, the IMF was asked to say why it is contributing to the war risks by allowing EFF support for military budget outlays at the same time as it is concealing their magnitude in reporting to the IMF board.

………

For the time being, the Russian Finance Ministry is not demurring. Finance Minister Anton Siluanov (right) followed Lagarde’s announcement of board approval for the EFF with this confirmation that Russia will contribute its share to the loan. “The [EFF] program will be financed via the IMF quota resources, and the funding from shareholder countries in the framework of their participation in the so-called New Borrowing arrangements. As such, the Russian Federation will participate in the funding in accordance with its obligations as a participant, and deliver the first tranche of the IMF program for Ukraine in the amount of $13.75 million dollars. The Bank of Russia will carry out the payment on 13 March 2015.”

Although the Obama Administration claims it will not deliver lethal military equipment, it has been offering loans, repayment guarantees, and cash support for Ukrainian military agencies to buy it through third countries. Russian analysts call this a takeover by the Pentagon of the Ukrainian defence budget. Details of the line items totalling UAH 85 billion (about $4 billion) approved this month by the Verkhovna Rada can be read here. International bankers say they cannot think of a precedent in which the treasury of a country at war finances a defeated opponent to renew the fight. Siluanov hints his reason is tactical. Moscow will not call a default of covenants in the December 2013 bond for $3 billion, he says, if Kiev agrees to exclude this debt from its restructuring of other bond obligations, and repays the Russian debt at maturity this coming December.

Let me get this straight:

  • The US is pushing for the IMF loan to fund the war.  
  • The IMF is pretending that there is no war.
  • The Russians are looking the other way, because it has been implied to the IMF loans might be applied to Russian loans to the Ukraine, and the arrears to owed to Gazprom.

 Am I the only one to find this completely f%$#ed up?

H/t naked capitalism.

This Sh%$ Just Got Real

Thank you Victoria Nuland. You got your coup color revolution you wanted, and now the Russians are making noises about deploying nuclear weapons to the Crimea:

Russia has the right to deploy nuclear arms in the Black Sea peninsula of Crimea, which Moscow annexed from Ukraine last year, a Foreign Ministry official said on Wednesday, adding he knew of no plans to do so.

“I don’t know if there are nuclear weapons there now. I don’t know about any plans, but in principle Russia can do it,” said Mikhail Ulyanov, the head of the ministry’s department on arms control, was quoted as saying by Interfax news agency.

Note that it’s about 1500 miles from Sevastopol to Birmingham is around 1500 miles, so if the Russians just stationed an SSBN there with its 6000+ mile range missiles, a launch could be made covering all of Europe on a depressed trajectory giving something around 5 minutes warning.

Of course, they could also just drive the mobile version of their Topol missile there as well.

Poking the bear with a stick is not a smart foreign policy move.

It really does not feel me with confidence that the US Government’s foreign and military policy establishment is filled with people who take hubris to this level.

This is nuclear weapons, not tiddly winks.

I Think that This Provides a Lot of Insight into Russian Views on the Ukraine

Saker, of the blog The Vineyard of the Saker, is definitely a Russian nationalist and an anti-Semite, but he is fluent in Russian, (He might be Russian) and does have his finger on the pulse of much of Russian society, so his missive on Russian perceptions of the intentions of the US with regard to Russia are a worthwhile read:

I parse the Russian media (corporate and social) on a daily basis and I am always amazed at the completely different way the issue of western sanctions is discussed.  I think that it is important and useful for me to share this with those of you who do not speak Russian.


First, nobody in Russia believes that the sanctions will be lifted.  Nobody.  Of course, all the Russian politicians say that sanctions are wrong and not conducive to progress, but these are statements for external consumption.  In interviews for the Russian media or on talk shows, there is a consensus that sanctions will never be lifted no matter what Russia does.

Second, nobody in Russia believes that sanctions are a reaction to Crimea or to the Russian involvement in the Donbass.  Nobody.  There is a consensus that the Russian policy towards Crimea and the Donbass are not a cause, but a pretext for the sanctions.  The real cause of the sanctions is unanimously identified as what the Russians called the “process of sovereignization”, i.e. the fact that Russia is back, powerful and rich, and that she dares openly defy and disobey the “Axis of Kindness”.

Third, there is a consensus in Russia that the correct response to the sanctions is double: a) an external realignment of the Russian economy away from the West and b) internal reforms which will make Russia less dependent on oil exports and on the imports of various goods and technologies.


Fourth, nobody blames Putin for the sanctions or for the resulting hardships.  Everybody fully understands that Putin is hated by the West not for doing something wrong, but for doing something right.  In fact, Putin’s popularity is still at an all-time high.

Fifth, there is a wide agreement that the current Russian vulnerability is the result of past structural mistakes which now must be corrected, but nobody suggests that the return of Crimea to Russia or the Russian support for Novorussia were wrong or wrongly executed. 

I think that his statements that “nobody in Russia” believes various things is overstated, but when you have Mikhail F%$#ing Gorbachev saying that the US and NATO never ended their side of the cold war, it is safe to say that the Russian public and elites generally believe that they are the target of low level hostilities from the west.

I can’t say that this perception is wrong:  It appears to me that there has been a long term campaign to reduce Russia to a client petro-state.

Our Private Little War is Going so F%$#ing Well

With a ceasefire coming into effect on Sunday, the Ukrainian rebels have seized the strategically significant town of Debaltseve:

Ukrainian President Petro Poroshenko called Wednesday for an international peacekeeping mission in his nation’s war-torn east, a stark admission that his nation can no longer fend off pro-Russian rebels after a major battlefield defeat.

Any international force on the ground would harden the battle lines after 10 months of fighting, forcing Ukraine to give up for now its attempts to reunify the nation. But it would also halt Russian-backed rebels from pushing onward toward Kiev.

The suggestion came hours after thousands of Ukrainian troops fled the encircled railway hub of Debaltseve, where fighting only intensified after a cease-fire ostensibly took effect Sunday. Nearly a year after Russia annexed the Crimean Peninsula, the fresh loss threatened tough political consequences for Ukraine’s pro-Western president amid questions of how the troops became surrounded in recent weeks.

Soldiers described a chaotic nighttime retreat over eastern Ukraine’s frozen steppe, with shells raining down on them from two sides.

It’s gotten to the point that even the German press are starting to condemn Victoria “F%$# the EU” Nuland and her role in creating this conflict.  (Google translate link)

The Europeans have begun to realize that following the reckless and bellicose US policies has created nothing but headaches for them.

It also appears that it’s creating headaches at the Brookings Institution as well:

A new report co-produced by the Brookings Institution is not going over well within the think tank. The report calls for an escalation in tensions between the United States and Russia with a recommendation for the US to supply the government in Kiev with $3 billion worth of weapons. The report also had contributions from the Atlantic Council and the Chicago Council on Global Affairs. One of the authors of the report, Michele Flournoy, is expected to be selected as defense secretary should Hillary Clinton win the White House and operates a think tank underwritten by defense contractors.

Brookings Institution fellow and former US State Department official Jeremy Shapiro took direct aim at the report in a piece titled “Why Arming the Ukrainians is a Bad Idea.” While acknowledging it was difficult to write the rebuttal given that his boss, Brookings Institution President Strobe Talbott, had co-authored the report, Shapiro nonetheless took apart the report’s bellicose and reckless recommendations:

The Ukrainian calculus is one of immediate desperation. But the United States needs to think for the longer-term. And if U.S.-provided weapons fail to induce a Russian retreat in Ukraine and instead cause an escalation of the war, the net result will not be peace and compromise. There has recently been much escalation in Ukraine, but it could go much further. As horrible as it is, the Ukrainian civil war still looks rather tame by the standards of Bosnia, Chechnya or Syria. Further escalation will mean much more violence, suffering and death in Ukraine.
The report authors counter that if the United States does not stand up to Russia in Ukraine, the Putin regime will be emboldened to make similar mischief all over Europe and beyond. This is the familiar credibility argument that gave us the war in Vietnam, among other misadventures. In fact, U.S. credibility is not enhanced by making bluffs that we will not ultimately fulfill or by embarking on wasting wars that we do not need.

Ouch. That would be a brutal critique from a rival let alone a colleague. Apparently the war party has not secured its own base and the eagerness to play chicken with a fellow nuclear power has limited support even among DC’s deep state intellectuals.

The Neocon and Liberal Interventionist belief in the “unipolar world”, and in the necessity take action to preserve the illusion of this state is harming both our own foreign policy interests as well as the rest of the world.

Despite the Dispute Over the Ukraine, Russia and the US can Find Common Ground


Egypt’s worst military band covers the Russian national anthem


Carl Lewis will never medal in vocal skills


Rosanne Barr’s Infamous rendition, which I actually found hysterically funny

Specifically the pain of atrociously poor performance of our respective national anthems.

Unfortunately, I could find Robert Goulet’s infamous rendition of the Star Spangled Banner at the Ali-Liston fight.

Oh Well.

It is Ironic that this News Comes Out Just Before Tết

The US is looking to expand its supply of arms to the Ukraine:

With Russian-backed separatists pressing their attacks in Ukraine, NATO’s military commander, Gen. Philip M. Breedlove, now supports providing defensive weapons and equipment to Kiev’s beleaguered forces, and an array of administration and military officials appear to be edging toward that position, American officials said Sunday.

President Obama has made no decisions on providing such lethal assistance. But after a series of striking reversals that Ukraine’s forces have suffered in recent weeks, the Obama administration is taking a fresh look at the question of military aid.

Secretary of State John Kerry, who plans to visit Kiev on Thursday, is open to new discussions about providing lethal assistance, as is Gen. Martin E. Dempsey, the chairman of the Joint Chiefs of Staff, officials said. Defense Secretary Chuck Hagel, who is leaving his post soon, backs sending defensive weapons to the Ukrainian forces.

It appears that the only person with any sanity left in the Obama administration is Susan Rice:

In recent months, Susan E. Rice, Mr. Obama’s national security adviser, has resisted proposals to provide lethal assistance, several officials said. But one official who is familiar with her views insisted that Ms. Rice was now prepared to reconsider the issue.

It’s interesting that the person that Barack Obama has been determined to keep on his staff, John Seymour McCain III, in a fit of infantile pique blocked her nomination to Secretary of State is stopping this, for now at least.

In some ways, it’s a good thing.

He could be listening to the slavering war monger that is Samantha Powers on this.

BTW, the usual crop of DC psychopaths has weighed in:

Fueling the broader debate over policy is an independent report to be issued Monday by eight former senior American officials, who urge the United States to send $3 billion in defensive arms and equipment to Ukraine, including anti-armor missiles, reconnaissance drones, armored Humvees and radars that can determine the location of enemy rocket and artillery fire.

Michèle A. Flournoy, a former senior Pentagon official who is a leading candidate to serve as defense secretary if Hillary Rodham Clinton is elected president, joined in preparing the report. Others include James G. Stavridis, a retired admiral who served as the top NATO military commander, and Ivo Daalder, the ambassador to NATO during Mr. Obama’s first term.

“The West needs to bolster deterrence in Ukraine by raising the risks and costs to Russia of any renewed major offensive,” the report says. “That requires providing direct military assistance — in far larger amounts than provided to date and including lethal defensive arms.”

They don’t get it.

Russia sees this as an existential issue, and they see US actions, from the expansion of NATO to the multiple coups engineered in the Ukraine and other former Soviet republics under the guise of “color revolutions” as a part of a war that has continued to be waged against Russia since the fall of the Berlin Wall.

Truth is, I agree with the Russian view on this.

Since the collapse of the Soviet Union, we have seen this sort of insanity become a fixture of US foreign policy.

The US believes that it can enforce its preferred solution anywhere in the world, even when it does not serve any meaningful interest of America.

There is also the small fact that the Ukrainian military really does not exist as a particularly functional entity.

It has had to be backed up by Fascist militias, and its attempts to use conscription have been met with protests, an orgy of draft dodging, and the mass purchase sinecures as priests.

And these idiots in the Pentagon and White House are determined to go to war with Russia because their latest color revolution did not go exactly as planned.

BTW, Those People Saying that Greece has no Leverage? It’s Bullsh%$

Greece, the only Eastern Orthodox Christian nation in the Eurozone, has a number of close cultural ties to Russia.

What’s more, Russian tourism, which has been hurt by sanctions, is a big part of their economy.

It is not in Greece’s national interest to extend the sanctions, and I expect the new PM, and whoever ends up his Foreign Minister are likely to make this clear on any negotiations with the ECB and EU:

The first test for Syriza would be its stance toward European sanctions on Russia. EU measures including curbs on financing for Russian state-owned banks and a ban on the export of sophisticated energy-exploration equipment will lapse in July unless renewed unanimously by the 28 EU governments.

July is the same deadline for the continuation for Greece’s bailout.

I’m pretty sure that Greece could get a decent deal from Russia if it voted against sanctions.

Smells like leverage to me.

Notorious V. V. P.

Aviaton Week‘s cover this week is announces its selection of Vladimir Vladimirovich Putin as person of the year.

Considering the fact that defense is a significant portion of the magazine’s bailiwick, it is not surprising that they titled the article, “The Notorious Mr. Putin.”

It makes sense, just as it does for them to cast it as a condemnation of his actions.  (Hence the notorious bit)

It’s really kind of silly, but I’d love to see Putin do a rap video.

Here is an Interesting Perspective on Russia Today

Admittedly, he has many reasons for animus towards Putin’s predecessor, Boris Yeltsin, which would give him a more favorable view towards the current Russian President, but the fact that Mikhail Gorbachev credits Vladimir Putin with saving Russia as a Nation is a significant statement:

Russian President Vladimir Putin saved the country from falling apart, former Soviet leader Mikhail Gorbachev said during the presentation of his new book ‘After the Kremlin.’ Gorbachev also commented on the situation in Ukraine and NATO expansion.

I think all of us – Russian citizens – must remember that [Putin] saved Russia from the beginning of a collapse. A lot of the regions did not recognize our constitution. There were over a hundred local constitutional variations from that of the Russian constitution,” RIA Novosti quoted Gorbachev as saying on Friday.

………

In terms of Russia’s worries over NATO’s expansion, Gorbachev agrees that the US is playing a key role in the process. “[NATO] began to establish bases around the world…I think the president [I believe that he is referring to Putin here, not Obama] is mostly right when drawing the attention to the special responsibility the US has,” Gorbachev said.

Meanwhile, when speaking about the domestic situation in the country, the former president of the USSR expressed confidence that Russia will get out of the crisis, adding that the only questions are “when and at what price.”

“Now we need to be very careful in politics – what policy is implemented, by who, and who stands to benefit?”

In total, I do think that Gorbachev is saying that he agrees with Putin’s assessment that NATO in general, and the US in particular, still seem determined to wage some sort of war against Russia.

This is Foreseeable Blow-Back from Our Stupidity in the Banks of the Black Sea

Russia has just revised its military doctrin, and ……… wait for it nostalgia buffs ……… gone back to declaring NATO to be its primary threat:

Russian President Vladimir Putin on Friday signed into law a new defense doctrine that identifies NATO as the chief threat to Russian security and claims the right to use nuclear weapons to counter any aggression that “threatens the very existence” of Russia.

The revisions to the 2010 defense mission statement were few but appeared intended to put further pressure on the United States and the Western military alliance to cease courting Ukraine as an economic and strategic ally.

The North Atlantic Treaty Organization has moved forces closer to Russia’s borders in response to the Kremlin’s annexation of Ukraine’s Crimea region in March and its dramatically increased challenges of the alliance’s airspace and maritime borders. NATO officials report that the number of aerial and maritime intrusions by Russian fighter jets in the Baltic Sea area has more than tripled this year over last.

The new defense doctrine cites NATO troop deployments and induction of former Soviet-allied states as the top threat to Russian security. It also deems the developing Prompt Global Strike program of the United States as hostile. The precision weapons system is being designed to be able to strike anywhere in the world so swiftly that the target has too little time to respond.

The new doctrine also mentions NATO missile defense plans as destabilizing and for the first time identifies a priority for Russia to protect its natural resource and maritime interests in the Arctic Sea.

The Neocon’s little adventure in the Ukraine is the gift that keeps giving.

The insane interventionist streak that oozed out of the American foreign policy establishment at the end of the Cold War is dangerous and insane, but it remains the consensus within the halls of government.

It’s like our government is being run by a bunch of rabid wolverines.

This is Not Going to End Well………

The Ukrainian Parliament has voted to abandon their non-aligned status:

In a sign of Ukraine’s hardening attitude toward Russia, Ukrainian lawmakers on Tuesday voted to remove a legal barrier to joining the NATO defense alliance.

The move provoked an angry response from Russia, even though NATO shows few signs of accepting Ukraine as a member anytime soon. But this year’s bloody conflict in Ukraine’s east has altered the country’s feelings about the Western alliance. A plurality of Ukrainians now favor joining NATO, a stark change from recent years when just a small fraction did.

Ukraine’s decision comes as Russia struggles with a weakened ruble and growing concerns about economic instability.

The vote in Ukraine’s parliament had no immediate practical effect on the country’s relationship with NATO. But it ended Ukraine’s nonaligned status, which was adopted as a way of reassuring Russia that its neighbor would not join NATO. Russian President Vladimir Putin cited his fear of Ukraine’s joining NATO as a reason Russia annexed Crimea in March.

This is a very stupid step to take when the cease fire finally appears to be holding in the east of the Ukraine.

It is a deliberate provocation, and I believe that the US government was involved in this move.

We already know that Victoria Nuland, the Assistant Secretary of State for European and Eurasian Affairs, was intimately involved in funding the revolt that overthrew Viktor Yanukovych, and the fact that senior positions in the current government, most notably the American born Natalie Jaresko at finance minister, indicates that there had to be at least tacit approval.

In fact, Jaresko, appears to still be in the US payroll, albeit through the back door.

There are a whole bunch of people in the State Department, Pentagon, and intelligence services who are still intent on imposing something like the Morgenthau Plan, which was intended  intended to reduce Germany to a pastoral following WWII on Russia.

Putin is very much aware of these attitudes, it’s hard to miss when folks like Senators John McCain and Lindsey Graham have made no bones about supporting this strategy.

Paranoid Putin may be, but it is a justified paranoia, and the recent vote in the Ukraine will only serve to reinforce that attitude, and so escalate the conflict.

It looks like we are into a cycle of doomed imperial hubris on and around the Black Sea.

This is Just Plain Weird

One of the passengers on doomed Malaysian Airlines was found wearing an oxygen mask:

Dutch Foreign Minister Frans Timmermans has said that one of the 298 people killed in the downing of a Malaysia Airlines plane over eastern Ukraine was found wearing an oxygen mask.

He indicated that not everybody on board had died instantly when the plane was hit by a missile.

An initial report said flight MH17 broke up in mid-air after being pierced by objects at high velocity.

………
The Dutch public prosecutor has confirmed that an oxygen mask was found, although a spokesman said it was around the passenger’s neck rather than their mouth. It had been secured with elastic and has been tested for DNA and fingerprints.

The plane had been flying from Amsterdam to Kuala Lumpur on 17 July when it went down over rebel-held territory. Pro-Russian separatist leaders deny shooting it down with a missile.

Although 196 of the passengers were Dutch, the passenger with the oxygen mask was not, the prosecutor said on Thursday. Dutch media said the victim in question was an Australian and the family had been informed about the development.

Needless to say, the tinfoil hat crowd is going crazy over this.

I’m not sure if this means anything beyond some of the oxygen masks deploying before the plane broke up in mid air (confirmed from radar readings).

Still, this is f%$#ing weird.

Kind of Like Your Mother in Law Driving off a Cliff in Your Brand New Car

The huge cyberattack on JPMorgan Chase that touched more than 83 million households and businesses was one of the most serious computer intrusions into an American corporation. But it could have been much worse.

Questions over who the hackers are and the approach of their attack concern government and industry officials. Also troubling is that about nine other financial institutions — a number that has not been previously reported — were also infiltrated by the same group of overseas hackers, according to people briefed on the matter. The hackers are thought to be operating from Russia and appear to have at least loose connections with officials of the Russian government, the people briefed on the matter said.

I have a real hard time choosing sides between Russian Hackers and Wall Street.

The Revolving Door Spins Again

A Russian bank targeted by US sanctions, has hired Trent Lott and John Breaux as lobbyists:

Gazprombank GPB (OJSC), a Russian bank targeted with sanctions by President Obama over the Ukraine crisis, has hired two former U.S. senators to lobby against those sanctions, according to a new disclosure filed with the Senate.
Gazprombank is controlled by Russia’s state-owned energy company Gazprom, the country’s largest gas producer; it supplies about a third of Europe’s natural gas.

In a filing submitted Friday and effective that day, former Senate Majority Leader Trent Lott, R-Miss., and former Senator John Breaux, D-La., are listed as the main lobbyists under the Gazprombank account for the firm Squire Patton Boggs, lobbying on “banking laws and regulations including applicable sanctions.”

Truth be told, the fact that these two are lobbying for Gazprombank is not the real problem, it is the fact that they never went home, and are now paid obscene amounts of money as employees of Squire Patton Boggs (BTW, the Boggs in the name of the firm is Thomas Hale Boggs, Jr., son of Thomas Hale Boggs, Sr., former House Majority Leader).

More back loaded bribery of our elected officials.

Russia and Ukraine Hammer Out Deal

I really don’t think that this can be cast as anything but a setback for both NATO and the Ukraine, but if this deal holds the shooting should stop, which is a good thing:

Russian President Vladimir Putin on Wednesday announced a plan to end the conflict in eastern Ukraine that would entrench rebel gains there and hand a significant defeat to Ukrainian leaders who have sought to regain full control of the territory of their nation.

Putin said that he and Ukrainian President Petro Poroshenko had agreed on the broad outlines of a seven-point peace settlement that would at least temporarily freeze the conflict on the ground. He specified no major concessions for the rebels and instead insisted on a large-scale Ukrainian military pullback and the introduction of international monitors to ensure that fighting does not resume.

Poroshenko did not specifically address the “Putin plan,” as it was dubbed by the Kremlin, but he said that the time had come to end the conflict.

“The first task is peace,” Poroshenko said in a statement. “Today at 5 a.m. I spoke to President Putin about how we can stop this horrible process. There is no denying that people must stop dying.”

Both leaders said that they hoped peace talks could start Friday.

The apparent concessions to Russia dealt a further blow to Ukrainian aspirations to escape the orbit of the nation to which they were once joined as part of the Soviet Union. Months of pro-European protests in Kiev ended in February with the ouster of President Viktor Yanukovych. Russia quickly moved to annex the Crimean Peninsula in response. The Europe-friendly Poroshenko was elected in a landslide victory in May, but his popularity has been damaged by the grueling conflict in the east, where ­Russian-backed rebels have claimed important swaths of territory.

Just weeks ago, Ukrainian forces appeared close to defeating the rebels. But since early last week, the rebels have made rapid, renewed strides against the Ukrainian military after Kiev reported a large-scale Russian incursion into southeastern Ukraine. The Kremlin denies aiding the rebels, although rebel leaders have said that Russian soldiers were using vacation time to fight on their side.

That last bit, the whole, “I’m a soldier, so I’m, going to war on vacation,” is the very epitome of a “Busman’s Holiday.”

Victoria Nuland’s Neocon folly is just the gift that keeps on giving.

Europe is About to Go Pear Shaped

Both the Europeans and the Ukrainians are going to have a long ans cold winter.

While it is clear that the hostilities between the Ukraine and Russia would put a crimp in gas supplies, it turns out that the current billing dispute is almost certainly going to be a bigger problem.

You see, the Ukrainian Government has taken the dispute to arbitration, and any deal that they might cut with the Russians could be used against Gazprom in that proceedings:

But let’s not get into that again today. In the slipstream of the talks this weekend in Minsk between Putin and Poroshenko, a precious little detail seems to have escaped the western press entirely. But I think all our fine journalists will soon have to address it.
You may remember that in an earlier phase of the dispute between Ukraine and Russia (not to be confused with the Kiev vs rebels fight), no agreement was reached on the payment of a $4.5 billion gas bill that Russian Gazprom said was overdue from Ukraine’s Naftogaz. And Gazprom demanded pre-payment for any future gas deliveries to Ukraine.

Kiev, instead of paying the bill, claimed Russia had overcharged it for the already delivered gas, by $6 billion, going back to 2010. And brought its argument before the Arbitration Institute of the Stockholm Chamber of Commerce.

Now maybe, just maybe, someone in the Kiev camp should have paused right before that moment, and consulted with their western backers in Brussels and Washington. Perhaps not so much Washington, but Brussels for sure, and Berlin. And Athens. Rome. Prague. Warsaw.

ou see, a pending case before the Arbitration Institute of the Stockholm Chamber of Commerce can apparently take 12-15 months to resolve. And perhaps Europe doesn’t have that much time. Which is what Putin hinted at at a press-op he did after the weekend Minsk talks. What it comes down is that even if Russia wanted to accommodate Ukraine, it can’t. On strictly legal terms, nothing political.

What’s more, Gazprom had already paid Naftogaz in advance for the use of Ukraine pipelines, but the payment was returned. And that can have grave consequences not just for Kiev, but for almost all of Europe. Lots of countries get their gas through these pipelines.

It looks like the EU, and especially Germany, has started to smell – potential – trouble:
EU Suggests Russia, Ukraine Sign Interim Gas Agreement

The E.U. has suggested an interim agreement on the gas supplies between Russia and Ukraine without waiting for a Stockholm arbitrary court decision, E.U. Energy Commissioner Gunther Oettinger said in a news conference following his meeting with Ukrainian President Petro Poroshenko late Tuesday Two cases are before the Stockholm court, but the hearings will take 12-15 months, which is too long, while Europe needs an interim solution for this winter, Oettinger said In June, Russian gas giant Gazprom switched Ukraine off gas over the unpaid debt and filed a $4.5 billion suit to the Stockholm arbitration court. Later, Kiev reciprocated by sending a suit to the court against Gazprom for making Ukraine overpay $6 billion for gas since 2010, setting too high prices in its contract.

The Russian Legal Information Agency has this:

Putin: Naftogaz Suit Against Gazprom Axes Discount For Ukraine

The fact that Ukraine’s Naftogaz has invoked arbitration proceedings against Gazprom prevents Russia from giving Ukraine a gas price discount, President Vladimir Putin said in Minsk where he met with Ukrainian President Petro Poroshenko. “We cannot even consider any preference solutions for Ukraine since it pursues arbitration,” Putin said. “Russia’s possible actions in this sphere could be used against it in the court. We couldn’t do it even if we wanted to.” After Gazprom switched to a prepayment system for gas deliveries to Ukraine on June 16, Naftogaz turned to the Arbitration Institute of the Stockholm Chamber of Commerce. Naftogaz wants Gazprom to cut the price for gas and to get back $6 billion that Ukraine has allegedly overpaid since 2010.

Gazprom in turn is seeking to recover Ukraine’s $4.5 billion debt for gas deliveries. Putin said Russia offered a compromise solution during the talks held before Gazprom switched to the prepayment scheme. “We reduced the price by $100,” Russian President said. Gas talks between Russia, Ukraine and the European Union went on from April to mid-June. Kiev said it would not repay its $4.5 billion debt unless Russia agreed to supply gas at a lower price. Russia offered a discount, but Ukraine turned down the offer. Russia then said it would only resume gas supply talks after Ukraine paid off its debt.

More signs of German nerves are here in a piece from the European Council on Foreign Relations – I kid you not, they exist -, along with a nice but curious admission:

Has Germany Sidelined Poland In Ukraine Crisis Negotiations?

As Germany takes over leadership of the European Union’s efforts to solve the Ukrainian crisis, Poland is questioning the motivations and strategies behind Berlin’s new diplomatic activism. The initiatives of German Foreign Minister Frank-Walter Steinmeier and Chancellor Angela Merkel are being followed closely in Warsaw – and often with mixed feelings. Is Berlin trying to mastermind a compromise with Russia on Moscow’s terms, ignoring Kyiv’s vital interests? And as Poland is increasingly edged out of the conflict resolution process, has Berlin-Warsaw co-operation on EU Ostpolitik broken down?

As an aside, if I were trying to make sure that there wasn’t someone actively trying not to be a turd in the punchbowl in negotiations with Russia, I would sideline Poland as well.

The (historically justified) political culture of Poland, and many other former Warsaw Pact nations is such that they are more driven a desire for payback than a realistic evaluation of their long-term interests.

Poland was, along with France and Germany, one of the countries that orchestrated the political shift in Ukraine in February. Since then, Warsaw has played a central role in forging a bolder EU response to Russia’s aggression and in providing meaningful assistance to the Ukrainian government. However, as the conflict has worsened, Warsaw has become less visible as an actor in crisis diplomacy. Polish Foreign Minister Radek Sikorski was not invited to join his German, French, Russian, and Ukrainian counterparts in the negotiations on conflict resolution held in Berlin in early July and early August. Before Ukrainian President Petro Poroshenko and Russian President Vladimir Putin agreed to meet at the Customs Union summit in Minsk on 26 August, the idea had been floated of holding another high-level meeting in the “Normandy format” of France, Germany, Russia, and Ukraine.

Kiev is either so high on the EU, US and NATO support it was promised, or so desperate over its latest battlefield losses, that it goes for all on red, probably thinking, and probably rightly so, that the western press will swallow anything whole. Tyler Durden:

Ukraine Accuses Russia Of Imminent Gas Cut-Off, Russia Denies, Germans Anxious

So much for the Russia-Ukraine talks bringing the two sides together as even Germany’s Steinmeier could only say it’s “hard to say if breakthrough made.” Shortly after talks ended, Ukrainian Premier Yatsenyuk stated unequivocally that “we know about the plans of Russia to cut off transit even in European Union member countries,” followed by some notably heavy-on-the-war-rhetoric comments. The Russians were quick to respond, as the energy ministry was “surprised” by his statements on Ukraine gas transits and blasted that comments were an “attempt at EU disinformation.”

Here’s what Putin said at the press op after the talks:

Answers To Journalists’ Questions Following Working Visit To Belarus

Currently, we are in a deadlock on the gas issue. You see, this is very serious matter for us, for Ukraine and for our European partners. It is no big secret that Gazprom has advanced payment for the transit of our gas to Europe. Ukraine’s Naftogaz has returned that advance payment. The transit of our gas to European consumers was just about suspended. What will happen next? This is a question that awaits a painstaking investigation by our European and Ukrainian partners.

We are fulfilling all the terms of the contract in full. Right now, we cannot even accept any suggestions regarding preferential terms, given that Ukraine has appealed to the Arbitration Court. Any of our actions to provide preferential terms can be used in the court. We were deprived of this opportunity, even if we had wanted it, although we already tried to meet them halfway and reduced the price by $100.

The ball is squarely in the western court. Of course many will think and hope that Russia will give in because it needs the revenue, but the problem with that is it could cost the country too much (admittedly, that’s not the only problem). $6 billion to Ukraine for starters, then potentially many more billions on future deliveries to Kiev, and then there’s the rest of its contracts with two dozen or so European nations.

From a legal point of view, this may not be about what Moscow wants to do anymore, but about what it can. The Arbitration Court case may have tied its hands. And unless Europe wants a cold winter, it must seek a solution. Putin, who holds degrees in both judo AND law, understands this. But he didn’t set this up. Western and Kiev hubris did. Certain people got first too pleased with, and then ahead of, themselves.

BTW, I also learned another reason that the Russians do not like the EU deal, it has the effect of severely curtailing Russian exports to the Ukraine:

Putin pointed to another rather difficult but highly interesting legal ‘technicality’ as well, which involves Ukraine moving closer to the EU economically:

We once again pointed out to our partners – both European and Ukrainian partners – that implementation of the association agreement between Ukraine and the EU carries significant risks for the Russian economy. We have shown this in the text of the agreement, directly pointing to specific articles in that agreement. Let me remind you that this concerns nullifying Ukraine’s customs tariffs, technical regulations, and phytosanitary standards.

The standards in Russia and Europe currently do not correspond. But, as you recall, the most classic example is the introduction of EU technical regulations in Ukraine. In that case, we would not be able to supply our goods to Ukraine at all. We have different technical standards. And according to the European Union’s standards, we will not be able to supply our machine-building products there, or any industrial goods. If that happens, we cannot accept Ukrainian agricultural production goods in our territory, because we have different approaches to phytosanitary standards. We feel that many problems would occur.

If we do not achieve any agreements and our concerns are not taken into account, then we will be forced to take measures to protect our economy. And we explained what those measures would be. So our partners must weigh everything and make corresponding decisions.

So, even the EU actions, which were far less bellicose than those of the US State Department, begin to look more and more like a deliberately hostile act, even without considering the traditional Russian paranoia and xenophobia.

I think that Putin considers this a nearly existential threat to Russia, and he is responding accordingly.

H/t naked capitalism.

BTW, just to throw some more fuel on the fire, the Ukrainian PM just announced he will pursue NATO membership:

On Aug. 29, the Ukrainian prime minister said he will pursue NATO membership for his nation by asking parliament to overturn a law banning foreign alliances.

Separately, the NATO secretary general said Russia is undertaking direct military operations designed to destabilize the Ukraine—and that NATO will “fully respect” any change in the Ukraine’s non-aligned status. He made the comments today after an extraordinary meeting of the NATO-Ukraine Commission held at the Ukraine’s request.

………

“The Ukrainian government is submitting a bill to parliament on the abolition of the non-aligned status of the Ukrainian state and on the resumption of Ukraine’s course towards NATO membership,” Prime Minister Arseny Yatsenyuk said in an announcement.

Ukrainian law forbids the nation from forming alliances that would economically or politically entangle the country with the Russian Federation. Overturning this law would remove any legal barriers from Ukraine joining NATO, a goal which the alliance has said it supports.

This is stupidly and provocative.

We are going to see a war in Europe in the next few years, the only question is whether it will be cold, or hot.

Oh, Snap!

It looks like the situation in the Ukraine is in the process of spinning out of control:

World powers have called a succession of emergency meetings to step up the international response to Russia after Kiev accused Moscow of a de facto invasion and of opening up a second front in the conflict in eastern Europe.

The UN security council was meeting in emergency session, the US national security council convened at the White House, and Nato and EU leaders will consider their response on Friday, amid signs that hundreds of Russian soldiers are actively involved in the insurrection against Kiev’s rule in Ukraine.

Russia denies that any of its troops are in eastern Ukraine. But on Thursday Nato said it estimated there were now more than 1,000 Russian soldiers fighting there. The organisation released satellite images that it said showed Russian armoured vehicles and artillery had been crossing into Ukraine for at least a week.

The Russians have offered a rather unconvincing denial that they sent troops, but it’s pretty clear that the Russians are aggressively supporting the rebels in any case.

Hoodoodanode that it would all go pear shaped when the State Department decided it wanted another color revolution.

The illogic of waste, Mr. Spock.

The F%$#ing Council on Foreign Relations Blames the West for the Ukraine Crisis

If there is a boneheaded consensus on foreign policy inside the Beltway, it is the CFR, and they have just published an article in their house organ, Foreign Policy magazine, that blamed the US and NATO for creating the problem:

According to the prevailing wisdom in the West, the Ukraine crisis can be blamed almost entirely on Russian aggression. Russian President Vladimir Putin, the argument goes, annexed Crimea out of a long-standing desire to resuscitate the Soviet empire, and he may eventually go after the rest of Ukraine, as well as other countries in eastern Europe. In this view, the ouster of Ukrainian President Viktor Yanukovych in February 2014 merely provided a pretext for Putin’s decision to order Russian forces to seize part of Ukraine.

But this account is wrong: the United States and its European allies share most of the responsibility for the crisis. The taproot of the trouble is NATO enlargement, the central element of a larger strategy to move Ukraine out of Russia’s orbit and integrate it into the West. At the same time, the EU’s expansion eastward and the West’s backing of the pro-democracy movement in Ukraine — beginning with the Orange Revolution in 2004 — were critical elements, too. Since the mid-1990s, Russian leaders have adamantly opposed NATO enlargement, and in recent years, they have made it clear that they would not stand by while their strategically important neighbor turned into a Western bastion. For Putin, the illegal overthrow of Ukraine’s democratically elected and pro-Russian president — which he rightly labeled a “coup” — was the final straw. He responded by taking Crimea, a peninsula he feared would host a NATO naval base, and working to destabilize Ukraine until it abandoned its efforts to join the West.

Putin’s pushback should have come as no surprise. After all, the West had been moving into Russia’s backyard and threatening its core strategic interests, a point Putin made emphatically and repeatedly. Elites in the United States and Europe have been blindsided by events only because they subscribe to a flawed view of international politics. They tend to believe that the logic of realism holds little relevance in the twenty-first century and that Europe can be kept whole and free on the basis of such liberal principles as the rule of law, economic interdependence, and democracy.

I differ a bit here.

In addition to the whole Kumbaya stuff that John Mearsheimer is talking about, there is also the whole international finance/IMF colonialism, where they slash the social safety net, privatize everything at pennies on the dollar, and strip the assets from the country.

It’s what Larry Summers protege Andrei Shleifer did after the fall of the USSR.

The West’s final tool for peeling Kiev away from Moscow has been its efforts to spread Western values and promote democracy in Ukraine and other post-Soviet states, a plan that often entails funding pro-Western individuals and organizations. Victoria Nuland, the U.S. assistant secretary of state for European and Eurasian affairs, estimated in December 2013 that the United States had invested more than $5 billion since 1991 to help Ukraine achieve “the future it deserves.” As part of that effort, the U.S. government has bankrolled the National Endowment for Democracy. The nonprofit foundation has funded more than 60 projects aimed at promoting civil society in Ukraine, and the NED’s president, Carl Gershman, has called that country “the biggest prize.” After Yanukovych won Ukraine’s presidential election in February 2010, the NED decided he was undermining its goals, and so it stepped up its efforts to support the opposition and strengthen the country’s democratic institutions.

California has a population of about 39 million, and in the ferociously expensive California Senate campaign in 2010, the two campaigns spent about $38 million dollars, or about a dollar per resident.

The Ukraine has a population of about 45 million so that $5 billion, which does not include the spending of other governments, nor the spending of private actors, is about $105 per resident.

It should be noted that the media markets in California are significantly more expensive than those of the Ukraine.

The West’s triple package of policies — NATO enlargement, EU expansion, and democracy promotion — added fuel to a fire waiting to ignite. The spark came in November 2013, when Yanukovych rejected a major economic deal he had been negotiating with the EU and decided to accept a $15 billion Russian counteroffer instead. ………

Note that the Russian offer was FAR more generous than that of the EU/IMF, grants rather than rolling over loans, and not requiring that pensioners be thrown out in the street, nor requiring that the cost of home heating to skyrocket.

……… That decision gave rise to antigovernment demonstrations that escalated over the following three months and that by mid-February had led to the deaths of some one hundred protesters. Western emissaries hurriedly flew to Kiev to resolve the crisis. On February 21, the government and the opposition struck a deal that allowed Yanukovych to stay in power until new elections were held. But it immediately fell apart, and Yanukovych fled to Russia the next day. The new government in Kiev was pro-Western and anti-Russian to the core, and it contained four high-ranking members who could legitimately be labeled neofascists.

Unfortunately, no one in the US understands the history, a real weakness of our body politic:

Putin’s actions should be easy to comprehend. A huge expanse of flat land that Napoleonic France, imperial Germany, and Nazi Germany all crossed to strike at Russia itself, Ukraine serves as a buffer state of enormous strategic importance to Russia. No Russian leader would tolerate a military alliance that was Moscow’s mortal enemy until recently moving into Ukraine. Nor would any Russian leader stand idly by while the West helped install a government there that was determined to integrate Ukraine into the West.

I would add that the fact that this was done through a coup, and that the US continues to back neofascist and hyper nationalist elements in the Ukraine makes it even worse.

Mearsheimer ascribes the impetus on coming from things like Eastern European emigres, etc., but I think that the impetus for the US was far more mercenary: They knew that if the former Warsaw Pact members joined NATO, they would be replacing their military equipment with equipment primarily made by US defense firms.

The Clinton administration was desperate to preserve the defense industry’s industrial base, hence their subsidies for the aggressive merger activity in the sector in the 1990s, and in the time of the “Peace Dividend” selling our stuff to Eastern Europe.

The Europeans wanted integration with the East as well, but the cultural imperative there was that integration into the EU/Euro zone would make things better for everyone, prevent rain on picnic days, and keep their daughter from dating the guy with the tattoos and piercings. (Seriously, I can see no reason to admit Greece except for this. The country has been a complete basket case for its entire modern history)

George Kennan, Ambassador, Historian, and arguably the father of the Cold War strategy of containment, was prescient in his condemnation of NATO expansion:

In that same 1998 interview, Kennan predicted that NATO expansion would provoke a crisis, after which the proponents of expansion would “say that we always told you that is how the Russians are.” As if on cue, most Western officials have portrayed Putin as the real culprit in the Ukraine predicament. In March, according to The New York Times, German Chancellor Angela Merkel implied that Putin was irrational, telling Obama that he was “in another world.” Although Putin no doubt has autocratic tendencies, no evidence supports the charge that he is mentally unbalanced. On the contrary: he is a first-class strategist who should be feared and respected by anyone challenging him on foreign policy.

I think that the author is overestimating Putin a bit.

I think that Putin’s real strength is that he separates the personal from foreign relations: He does not think that friendly relations between world leaders count for much, so he does not take disagreements personally, while many in the west, particularly in the US, seem to think that friendly personal relations trump national interest.

It does not, and it should not.

H/t Washington’s Blog.

Oh Crap

If reports from the Ukrainian government are true, and I’m not big on the idea of trusting them, then they just shelled a Russian aid convoy:

Ukraine claims it has destroyed Russian military vehicles in the country’s east, a day after a column was spotted moving across the border.

Ukraine’s president, Petro Poroshenko, told David Cameron by phone that his country’s armed forces had destroyed part of an armed convoy that the Guardian saw moving through a gap in a border fence on Thursday night.

There was no immediate proof, and it was impossible to establish if the Ukrainians had targeted the same convoy seen by the Guardian. The Russians categorically denied that any of their troops were even in Ukraine. But the claim marks a new escalation in the six-month confrontation over Ukraine and if verified would amount to the first confirmed military engagement between the two adversaries since the crisis began in the spring.

“The president informed [Cameron] that the information was trustworthy because the majority of those machines [Russian military vehicles] had been eliminated by the Ukrainian artillery at night,” a statement from Poroshenko’s office read.

Russia is denying this, but if this is true, or worse, they shelled an aid convoy in the dead of night, the Russians have arranged one with the Red Cross, things are going to go pear shaped quickly.