SNB 3-month libor policy rate down again

They seem to be taking this policy rate down about 0.1% per day or so since the big one-day drop last week the day of the announcement...

Whatever process they are using to adjust this rate is ending up supporting the CHF vs the USD and EUR while the SNB probably wants these currencies to rise vs the CHF as balances of these two foreign currencies are about the only financial assets the SNB has... these 2 financial assets and gold, that is about all that comprises the SNB balance sheet.

And I'd assume the SNB is sitting on big losses on these 2 currency positions based on the huge moves down by these currencies last week vs. the CHF.

At this pace, they should be about at the lower limit of this policy rate range of -1.25% by next Wednesday.  At that point maybe they will finally get some of the CHF weakness they are probably looking for as they will have to stop whatever it is that they are doing to lower this policy rate everyday.

This is similar in outcome to our US Fed finally stopping the QE and then we can finally get the nice bond rally we've had and lower rates that current borrowers are now finally able to take advantage of.

DSWright — Taken For Granted At Davos That US Government Run On ‘Legalized Corruption’

In an interview at Davos with Bloomberg News related to growing concerns about rising wealth inequality and its corruption influence on American politics economist and NYU business professor Nouriel Roubinistated as a matter of fact that it would be hard for the US to overcome wealth inequality because the US political system was based on “legalized corruption” which meant rich people – having more resources to bribe politicians with – would generally prevail.

It's called "stability," you know, versus "rabble rule."

Firedog lake
Taken For Granted At Davos That US Government Run On ‘Legalized Corruption’
DSWright

William F. Engdahl — Russia and China: Watch Out Moody’s, Here We Come!

Over the past approximate quarter century of so-called economic globalization, Wall Street’s ability to be the home of the only dominant “global” rating agencies to bestow ratings on the credit-worthiness of the world has been one of the most effective weapons of financial warfare in the Wall Street arsenal. They rate nations as well as private corporations. Now an answer to the Moody’s-Standard & Poors-Fitch US rating monopoly is coming. Not from the EU, where it is long overdue. It is coming from Russia and China, as so many bold and challenging initiatives of late.…

Unlike the politically impotent EU, however, Russia today is not the Russia of the corrupt Yeltsin era of the late 1990’s. Vladimir Putin and China’s Xi have agreed to create their own international credit rating agency and it plans to open for business this year, 2015. 

The Universal Credit Rating Group (UCRG) plans to begin official independent ratigs in 2015 to challenge the Moody’s, S&P and Fitch ratings monopoly, according to RusRating Managing Director, Aleksandr Ovchinnikov. 

The new agency will be based in Hong Kong. Interestingly, there is a third equal partner to Russia and China in UCRG. In addition to China’s Dagon Credit Rating Agency, Russia’s RusRating the US-based independent Egan-Jones Ratings is partner in the new UCRG. Each member will hold an equal share in the venture, with an initial investment of $9 million. In effect, three already well-established national independent rating agencies form the new UCRG joint venture. It is a serious challenge to the New York Big Three monopoly. 

Egan-Jones Ratings Company, also known as EJR, founded in 1995 is a very interesting artner for Russia and China raters. It is unique among US nationally recognized statistical rating organizations (NRSROs) for being wholly investor-supported, not client-financed, eliminating the gross conflict of interest of the Big Three. On April 5, 2012, Egan-Jones was the first rater to downgrade the credit ranking of the United States. In addition Egan-Jones was also the first to downgrade WorldCom and Enron. 

The UCRG was officially created in June 2013 and has since been finalizing its business structure. Ovchinnikov added that, “When the issue of creating an agency alternative to the ‘Big Three’ was raised, we in fact offered a project that was ready to be launched and was supported by the governments of Russia and China.” He explicitly pointed to the bias of the US Big Three raters to be overly “generous” to US and EU clients while being biased against developing or emerging countries such as the BRICS—Brazil, Russia, India, China, South Africa. 

Now with an independent credit rating agency, a $100 billion BRICS Infrastructure Bank and strategic local currency agreements in place, Russia and China, Brics for Brics, are establishing the architecture to a genuine alternative to the destructive neo-colonial IMF and World Bank and the tyranny of the Wall Street dollar system. The year 2015 will indeed by interesting. Poor Mr. Soros might have to look for another job.

New Eastern Outlook
Russia and China: Watch Out Moody’s, Here We Come!
William F. Engdahl

See also, The Great Ratings Game: How Countries Become Creditworthy by David James Gill and Michael John Gill at Foreign Affairs (CFR).

Simon Wren-Lewis — Encouraging dialogue between economists and social scientists

Encouraging that the mainstream is talking about this.

Mainly Macro
Encouraging dialogue between economists and social scientists
Simon Wren-Lewis | Professor of Economics, Oxford University

George Friedman — The European Union, Nationalism and the Crisis of Europe

Europe's crisis is not ultimately an economic one. Everyone — families and nations — has economic problems. The crisis is not war, which tragically is as common as poverty. Europe's problem is that it promised a joy beyond custom, a joy yielding brotherhood and abolishing war, and a promise based on prosperity, which is a promise so vast it is beyond anyone's hope to make perpetual. Neither perpetual peace nor perpetual prosperity can be guaranteed, therefore the joy that would overcome custom and bind men in brotherhood is a base of sand. 

In the European Central Bank's compromise with Germany, we can see not only the base of sand dissolving but also the brotherhood of Europe falling apart. At the heart of this promise is the idea that Germany will not share the fate of Greece, nor France the fate of Italy. In the end, these are different nations. Their customs can be overcome by the joy uniting them in brotherhood, but absent that joy, absent peace and prosperity, there is nothing binding them together.

Stratford
The European Union, Nationalism and the Crisis of Europe
George Friedman |  Chairman of Stratfor

Paul De Grauwe — The sad consequences of the fear of QE

Since Milton Friedman we have all become monetarists. In order to raise inflation it will be necessary to increase the growth rate of the money stock. This requires that the ECB increase the money base. And to achieve the latter there is only one practical instrument, ie, an open-market purchase of government bonds. There is no other way to raise inflation than through an increase in the money base and a bond-buying programme is the time-tested way to achieve this.…

But as stressed by many observers, QE alone may not do the job. It is necessary but not sufficient. The fact that it is not sufficient, however, should not lead to the conclusion that it can be dispensed with. Even if little else is done, QE should have a significant effect on the exchange rate of the euro. By increasing the supply of money base the ECB will contribute to a further weakening of the euro vis-à-vis other currencies such as the dollar, the pound and the yuan, thereby increasing exports and boosting inflation.…

What about an EZ nation defaulting on it bonds.

 When the central bank writes down the … bonds, the value of its assets declines. The counterpart on the liabilities side of the central bank’s balance sheet is a decline in equity. A central bank, however, does not need equity. It can easily live with a negative equity. When the equity of the central bank declines there is no need to call upon taxpayers “to foot the bill”. There is no bill to be paid.

Unfortunately, the ECB (and many other central banks) keep this fiction of the need for equity alive, by asking the participating governments to “recapitalise” the bank. But such a recapitalisation is also a purely accounting convention without implications for taxpayers. It implies that governments place bonds on the ECB’s balance sheet. These bonds then create the same circular movement of interest payments, ie, the governments make interest payments to the ECB and the latter refunds these back to the same governments. No taxpayers are involved.

The Economist
The sad consequences of the fear of QE
Paul De Grauwe | John Paulson Chair in Political Economy, London School Of Economics

Ambrose Evans-Pritchard — Shadow banking now poses top risk to US stability, warns IMF

Non-financial lending has reached $15 trillion since the crisis and is outside the control of authorities warns the Fund's deputy chief.…

The US shadow banking nexus is coming back to haunt like some hydra-headed beast and now poses the biggest potential threat to the American financial system, the International Monetary Fund has warned.

Zhu Min, the IMF's deputy chief, said regulators have successfully cleaned up much of the global banking system since the Lehman crisis, but the excesses have moved off books and are once again growing to disturbing proportions.

"The key risk has shifted to shadow banking," he said, speaking at the World Economic Forum in Davos. 

While the explosion of China's shadow banking is well-known, Zhu Min said there has been a surge of lending by asset management funds and others non-bank players to US companies. This is outside normal control and is hard to track.

The Telegraph
Shadow banking now poses top risk to US stability, warns IMF
Ambrose Evans-Pritchard

Ambrose Evans-Pritchard — EU has squandered last chance to make euro workable, warns Ex-Bundesbank chief

Forward or forget it.

The former head of the German Bundesbank has warned that the European Central Bank (ECB) will not succeed in raising inflation for years to come and is almost powerless to revive the fortunes of the eurozone on its own. 

Axel Weber, now chairman of UBS and widely-regarded as Europe's most influential private banker, said Europe's leaders had squandered the chance to rebuild the eurozone's foundations when the going was good and markets were calm. 

In an ominous sign, he appeared to lose confidence in the euro altogether, cautioning that monetary union will be tested repeatedly and may not survive unless EMU leaders agree to bite the bullet on full fiscal and political union.…

Mr Weber warned that central banks are pursuing policies in a narrow self-interest without much regard for the global knock-on effects, though he stopped short of calling it a currency war. "The international system at the moment is seriously unanchored," he said. 

The effect is finally ricocheting back into the US in the form of a surging dollar and rising risks in the US high-yield debt market. Mr Weber said the Federal Reserve may not be able to tighten policy or raise rates as soon as the markets seem to expect. "I don't think the Fed can continue on the path announced," he said.

The Telegraph
EU has squandered last chance to make euro workable, warns Ex-Bundesbank chief
Ambrose Evans-Pritchard

Bill Mitchell — Denmark should abandon its euro peg

In my soon-to-be-published book on the Eurozone I examined the case of Denmark in some detail in the context of the evolution of the European Monetary System, the European Exchange Rate Mechanism (ERM), and the ratification process of the Treaty of Maastricht. Denmark was a participant in all the attempts to maintain fixed exchange rates after the Bretton Woods system collapsed in 1971. Further, while Denmark did not formally enter the monetary union by adopting the euro that doesn’t mean that they have maintained their currency independence. They chose instead to peg the Danish kroner against the euro (effectively continuing the ERM parities), which immediately meant that its central bank had to follow ECB monetary policy. Fiscal policy then became a passive player to ensure it didn’t exacerbate the peg parity and Denmark also bought into the Stability and Growth Pact fiscal rules. This meant that internal devaluation (wage cutting) was the only real counter-stabilisation option available to them when facing external imbalances and domestic recession. It hasn’t worked well as one would expect. In fact, the euro peg works against the interests of the Danish people, particularly low income workers prone to unemployment. Yet the nation has an obsession with maintaining it. Groupthink abounds. The correct policy strategy which would give the Danish government a wider range of policy tools to enhance the well-being of its people would be for Denmark to abandon its euro peg. It should do that virtually immediately.…

The post contains a history of currency unions in Europe and why the euro is another failed experiment.

Bill Mitchell – billy blog
Denmark should abandon its euro peg
Bill Mitchell | Professor in Economics and Director of the Centre of Full Employment and Equity (CofFEE), at the Charles Darwin University, Northern Territory, Australia

Swiss 3-Month LIBOR

Chart below of recent Swiss policy rate of 3-month libor:

So we can see how they really had to step on this rate overnight between the 14th and the 15th in order to meet the new policy mandate of the -0.75% +/- target announced that day.

And they keep pushing it down a bit ever since on the 15th it was -0.37 and yesterday -0.66

From the SNB statement last week:  Moved the target range for 3-month Libor further into negative territory, to between –1.25% and −0.25% (from the current range of −0.75% and 0.25%).

So they can push this rate to as low as -1.25% if they think (to them) this will help weaken the CHF.

What are the open market operational procedures that the SNB personnel have to go thru to collapse this rate like this?

Would these open market operations have the effect of somehow "bidding up" the simultaneously free-floated CHF currency vs. the major Swiss foreign reserve currencies ie the USD and the EUR?

Sell USD ... Sell EUR ... Buy CHF @ 3-month rate = -0.37%   ?

I'd assume that to adjust this policy rate down, they would have to bid up some sort of CHF financial asset at some point in the process.

They could just use new CHF reserves to buy CHF financial assets at the new policy rate I suppose; without having to sell any foreign reserves; at least I don't immediately see any reason to sell any foreign reserves at the same time...

So what we are looking for here is if the SNB open market operations required to adjust this Swiss 3-month term rate downwards directly resulted in the significant CHF currency exchange rate increase that happened concurrently within the CHF system.

Pew: Americans Say Obama is a "Good Man" Who is "Incompetent"

The American people are correct in their observations again, as usual.  Who said democracy doesn't work...

Results discussed here at Reason Magazine (FD: I chuckle every time I read the title of this magazine)

Although I think it unfair to single out or only criticize Barack Obama for being incompetent he has the unanimous company of all current economic policymakers in these people's "Good and Incompetent Club".

Its not good enough to be only good, you need to be good AND competent.

Kenneth Thomas — What is Noah thinking?

Noah Smith put up a post Sunday purporting to show that things aren't so bad for the middle class. Then he immediately shows us a chart of median household income. Stop right there. As I have argued before, this is always going to give you a rosier picture than reality. We need to look at individual data, aggregated weekly (because average hours per week have fallen for non-supervisory workers), to know what's going on. 

Because the individual real weekly wage is still below 1972 levels, households have had to compensate by having more incomes and going into debt. They have traded time and debt for current consumption. This is not an improvement in the middle class lifestyle. Commenter Richard Serlin points out that we also need to consider risk as well as average incomes, and he is right. The middle class is less secure than it was in 1972. 

Noah has lots of interesting things to say, and you should check out his blog if you haven't already. But this is an error on his part, and I don't understand what he's thinking.

Middle Class Political Economist
What is Noah thinking?
Kenneth Thomas | Professor and Research Fellow, Center for International Studies, University of Missouri at St. Louis

Henry Blodget — One Of The World's Leading Health Experts Just Revealed The Truth About Healthcare

The healthcare expert announced that he was here to participate in a session whose goal was to determine whether all the new healthcare innovation that we're all hearing about is going to make us healthier and be cheaper than all the healthcare we already have — or whether it's all just a bunch of hot air. 

That sounded like an interesting question. 

So I asked the healthcare expert what the answer was. 

"Hot air," he said. "Nothing makes healthcare cheaper." 

The healthcare expert observed that I considered this answer profound, so he qualified it. 

"Actually," he added, "Vaccines have made healthcare cheaper. That's the one innovation that has made healthcare cheaper. Nothing else makes it cheaper. More cost-effective, yes. But not cheaper."

Most politicians know this to be so, too. The question then becomes how to control costs, and the answer to that is rationing either by price or in some other way that is political rather than economic. You know, "death panels."

Or, we could just recognize that affordability is never the problem when the real resources are available. The scarce resources in health care are generally qualified personnel since training takes time. So the answer to universal health care is in large part training personnel commensurate with expected need, e.g., due to population growth.

Business Insisder
One Of The World's Leading Health Experts Just Revealed The Truth About Healthcare

Henry Blodget

Gus Lubin — These 8 Scales Reveal Everything You Should Know About Different Cultures

Many people, perhaps especially Americans, underestimate how differently people do things in other countries. 

Examples and insights for avoiding this can be found in "The Culture Map: Breaking Through the Invisible Boundaries of Global Business," a 2014 bestseller by INSEAD professor Erin Meyer (also check out those global communication diagrams from Richard Lewis). 

Meyer claims you can improve relationships by considering where you and international partners fall on each of these scales: 

Communicating: explicit vs. implicit 

Evaluating: direct negative feedback vs. indirect negative feedback 

Persuading: deductive vs. inductive 

Leading: egalitarian vs. hierarchical 

Deciding: consensual vs. top down 

Trusting: task vs. relationship 

Disagreeing: confrontational vs. avoid confrontation 

Scheduling: structured vs. flexible 

Cultural framing.

Business Insider
These 8 Scales Reveal Everything You Should Know About Different Cultures

Gus Lubin

Such categories are also operative within a single culture, as are different styles of thinking. See, for example, The Art of Thinking by Allen F. Harrison and Robert M. Bramson (formerly published as Styles of the Thinking).

The Synthesist: Sees likeness in apparent opposites, interested in change 

The Idealist: Welcomes broad range of views, seeks ideal solutions 

The Pragmatist: Seeks shortest route to payoff: “Whatever works,” 

The Analyst: Seeks “one best way,” interested in scientific solutions 

The Realist: Relies on facts and expert opinions, interested in concrete results

Tass — Russian Church trying to attract regional governors to setting up Orthodox Christian bank

The chief of Moscow Patriarchate’s department for communications between the Church and Society, Vsevolod Chaplin, has called on the governors of the Belgorod, Kemerovo and Pskov regions, the constituent republic of Mariy-El and the Stavropol territory to take part in the setting up of the Orthodox Christian financial system and an Orthodox Christian bank, Izvestia daily said on Tuesday.…

“The main distinctive feature the Orthodox Christian bank will have is that it won’t issue loans or open deposits,” he said. “Its main objective will be to act as a mediator between Orthodox investors. Hopefully, the Orthodox bankers will offer to form the banking capitals on the basis of gold in the future.” 

Absence of interest rates should become the main principle and asset of an Orthodox banking institution. The concept proposed by Chaplin says bonuses from investments in joint projects should depend on the profitability of an enterprise. 

Along with this, the future Orthodox bank will be forbidden to engage in any operations not aimed at creating the real public wealth or to provide funding for the spheres standing at variance with the ethical principles of Russian Orthodoxy, like gambling, tobacco production, seductive entertainments, the activities related to drugs and so on, Chaplin’s letters say.

Tass
Russian Church trying to attract regional governors to setting up Orthodox Christian bank

Tass — Russian Central Bank’s new appointments to help restore market confidence — experts

Fresh appointments made at Russia’s Central Bank lately amid criticism of the regulator’s measures to defend the ruble are expected to return the market’s confidence in monetary authorities, experts said on Tuesday.

Confidence fairy sighting in Russia.

Tass
Russian Central Bank’s new appointments to help restore market confidence — experts

Dirk Niepelt — Reserves for everyone – towards a new monetary regime?

Recent experience with the zero lower bound on nominal interest rates, and the use of high-denomination notes by criminals and tax evaders, have led to revived proposals to phase out cash. This column argues that abolishing cash may be neither necessary nor sufficient to overcome the zero lower bound problem, and would severely undermine privacy. Allowing the public to hold reserves at central banks could reduce the need for deposit insurance, although the transition to the new regime and the effects on credit supply must be carefully considered.

VOX.eu
Reserves for everyone – towards a new monetary regime?
Dirk Niepelt | Director, Study Center Gerzensee; Professor, University of Bern

Ambrose Evans-Pritchard — Former BIS chief economist warns that QE in Europe is doomed to failure and may draw the region into deeper difficulties

Former BIS chief economist warns that QE in Europe is doomed to failure and may draw the region into deeper difficulties…

Mr White said QE is a disguised form of competitive devaluation. "The Japanese are now doing it as well but nobody can complain because the US started it," he said.

"There is a significant risk that this is going to end badly because the Bank of Japan is funding 40pc of all government spending. This could end in high inflation, perhaps even hyperinflation.…

The painful irony is that central banks may have brought about exactly what they most feared by trying to keep growth buoyant at all costs, he argues, and not allowing productivity gains to drive down prices gently as occurred in episodes of the 19th century. "They have created so much debt that they may have turned a good deflation into a bad deflation after all."

The Telegraph
Central bank prophet fears QE warfare pushing world financial system out of control
Ambrose Evans-Pritchard, in Davos

Scott Sumner — Ralph Hawtrey

You may wonder why I chose to name my chair at Mercatus the “Ralph Hawtrey Chair of Monetary Policy.” Here are a few reasons:

Money Illusion
Ralph Hawtrey

Scott Sumner | Ralph G. Hawtrey Chair of Monetary Policy at the Mercatus Center at George Mason University

Joseph E. Stiglitz — The Politics of Economic Stupidity

In 1992, Bill Clinton based his successful campaign for the US presidency on a simple slogan: “It’s the economy, stupid.” From today’s perspective, things then do not seem so bad; the typical American household’s income is now lower. But we can take inspiration from Clinton’s effort. The malaise afflicting today’s global economy might be best reflected in two simple slogans: “It’s the politics, stupid” and “Demand, demand, demand.” 

The near-global stagnation witnessed in 2014 is man-made. It is the result of politics and policies in several major economies – politics and policies that choked off demand. In the absence of demand, investment and jobs will fail to materialize. It is that simple.…

The big problem facing the world in 2015 is not economic. We know how to escape our current malaise. The problem is our stupid politics.

Hits the high points.

Project Syndicate
The Politics of Economic Stupidity
Joseph E. Stiglitz, a Nobel laureate in economics and University Professor at Columbia University, was Chairman of President Bill Clinton’s Council of Economic Advisers and served as Senior Vice President and Chief Economist of the World Bank

Simon Wren-Lewis — When central bank losses matter

To repeat it in a simple but more provocative way: a central bank giving money to people or governments is out of the question, but a central bank giving money to parts of the financial sector is just fine. That is a very convenient taboo for some.

Mainly Macro
When central bank losses matter
Simon Wren-Lewis | Professor of Economics, Oxford University

Gavin Kennedy— Flawed Knowledge Of Adam Smith's Political Economy Yields Poor Results

Hans-Werner Sinn gets Adam Smith egregiously wrong. Sinn is not even in the right century. And that's not all.

Professor Hans-Werner Sinn displays a touching faith in the efficiency of modern States correcting the inefficiencies of modern firms. Governments are often complicit in crony-capitalism when they are ‘captured’ by powerful corporate interests.

Adam Smith's Lost Legacy
Flawed Knowledge Of Adam Smith's Political Economy Yields Poor Results

Gavin Kennedy | Founder and Chairman of Negotiate, and Emeritus Professor at Heriot-Watt University

Andrew Lainton — Is State (outside) money a liability, and if so to whom?

Readers of this blog will now that I have strongly argued that economics must be rebuilt around the accounting constraints of capitalism- balance sheet economics -, that these constraints are underlying laws of the economics system not legal conventions. Whether or not conventions align with them is just contingent however if account don’t match them that are likely to lead to false economic decisions with real consequences. From this perspective the resolution to such theoretical debates is straightforward in method but not always easy in practice, it is to determine what the accounting mistake is. 

From the balance sheet perspective a liability will be held by an economic agent if it readers an economic service. So what is the nature of that service?

Decisions, Decisions, Decisions
Is State (outside) money a liability, and if so to whom?
Andrew Lainton

Stratfor Chief's "Most Blatant Coup in History" Interview Translated in Full — George Friedman interviewed by Kommersant

This is the translation of the interview George Friedman of Stratfor gave to the Russian newspaper Kommersant in December and has been cited numerous times since.…

This article originally appeared in Kommersant. It was translated by Paul R. Grenier at US-Russia.org

Russia Insider
Stratfor Chief's "Most Blatant Coup in History" Interview Translated in Full
George Friedman interviewed by Kommersant

Liam Halligan — India Is Crucial to Russia's Pivot East

The Russian-India bond is nearly as important as the emerging Russsia-China relationship…

While there’s been little discussion of the growing détente between Russia and India in the Western media, it could prove of similar significance to that between Russia and China. 

The two countries were Cold War quasi-allies, of course, with India a leading member of the “Nonaligned Movement” of Soviet-sympathizing developing nations. 

During the late 1960s and 70s, India saw the USSR as its main supporter on the UN Security Council and there was extensive collaboration across the scientific and defence sectors, with warm relations developing between Soviet and Indian elites. 

The collapse of the USSR, then, was traumatic for India, leading to a surge of economic cooperation with the US, as business between India and Russia withered. 

That trend is now being reversed. Bilateral trade is expanding fast despite – or even partly because of – Western sanctions against Russia. 

Modi went as far as to declare his “opposition to sanctions imposed on Moscow without UN endorsement” during his summit with Putin, openly chiding the EU and US. 

He even expressed interest in joining the Russia-dominated Eurasian Economic Union, as well as the Shanghai Cooperation Organisation – an increasingly important trade and security organisation linking China, Russia and the Central Asian former Soviet states.…

India’s newfound audacity – as shown by Modi’s embrace of Russia and general West-baiting – stems from growing economic clout. With 1.2bn people, and already the world’s tenth-largest economy, India is on course to rank second behind China by 2040 – with the US by then coming in third. 

On a purchasing power parity basis, adjusting for living costs, India is already the third-largest economy on earth.…

The EU and US have tried to punish Moscow with sanctions that have triggered steep drops in the ruble against the dollar and euro. Yet Modi, like China’s President Xi Jinping, has decided to ignore the West and use the sanctions as an opportunity to strengthen commercial and diplomatic relations with Russia instead. 

The growing bond between China and Russia, given their shared interests, is among the mega-trends of our time. The deepening relationship between Russia and India isn’t far behind.

Heartburn in Washington.

Russia Insider
India Is Crucial to Russia's Pivot East
Liam Halligan | Business New Europe

Russia Insisder — Russia Policy Suggestions by Former PM, Yevgeny Primakov

Foreign relations:
Keep links to west to preserve room for maneuver, but China bonds more important 

Arctic Oil:
Not profitable at current prices 

Sanctions:
Prospects for a color revolution are nil 

Charlie Hebdo:
Inappropriate for Russia 

Ukraine:
Concessions on Crimea are off the table
Direct intervention in East Ukraine likewise
Indirect aid to Donbass if Kiev attacks militarily
Ultimate goal is Donbass nominally part of Ukraine with peaceful means 

(Rossiyskaya Gazeta)

I would guess that this is close to Putin's thinking.

Russia Insisder

Russia Policy Suggestions by Former PM, Yevgeny Primakov

Russia Direct — Putin's Orthodox conservatives vs. Russia's unorthodox liberals

It was naïve to imagine that after hundreds of years of cruel monarchy and feudalism, and then after decades of bloody and pointless experiments with Communism, in the 1990s the newly independent Russia would immediately settle down on the path of civilized democratic development. 

No, the conservative-patriarchal conception of life, in which a strong leader and state should protect “mere mortals,” to this day dominates the consciousness of the overwhelming majority of Russians. And increasingly, this conservatism inherited from the past comes into open conflict with liberalism, which the most progressive part of Russian society is preaching.…

The basic distinction between liberalism and conservatism is a preference for freedom or order. Much of the post is about comparing Russian conservatism with American conservatism under the label of the Tea Party, which only goes so far.

According to the editor-in-chief of popular radio station Echo of Moscow Alexey Venediktov, “If Putin happened to have been born in the U.S. then he would doubtless be on the edge of the right wing of the Republican Tea Party, and would be more right wing then Senator John McCain.” 

However, the attempt to place Putin within the ideological spectrum of the American political system is quite superficial. As Russian opposition leader and world chess champion Garry Kasparov says, in the United States “the conservative right ideology is not simply a mechanical selection of values but an entire organism, all its parts are closely interrelated. For the American conservative, individual freedom flows naturally from those very same traditional American protestant values.”

In Russia, Vladimir Putin’s highest priority is order, which is more important than human rights or freedom. Almost all public opinion polls within Russia show this.…

The neocons assume that if there is regime change in Russia, liberals will take power. That is most likely an incorrect assumption, since liberals are in the vast minority. The vast majority of Russians poll as conservative or ultra-conservative, and even the reactionary cohort (monarchist) is significant. The outcome of regime change could well be toward a more nationalistic and reactionary government instead of a liberal one.

Russia Direct
Putin's Orthodox conservatives vs. Russia's unorthodox liberals

Also How Russian Liberals Create Russophobe Myths by Nikolai Starikov

Steven Rosenfeld — Dianne Feinstein's Husband's Real Estate Firm Poised to Make $1 Billion Selling Post Offices

Today's blood boiler.

Washington business model: spouses spot deals with huge upsides.

Cronyism and corruption are bipartisan values.

AlterNet
Dianne Feinstein's Husband's Real Estate Firm Poised to Make $1 Billion Selling Post Offices
Steven Rosenfeld / AlterNet

John Helmer — Bagging The Cat — Ksenia Yudaeva, The First Russian Central Bank Governor To Be Sacked In Secret

Looks like the Russian central bank really doesn’t know what it is doing. As clueless as in the 1997-98 crisis that ended in a needless default.

Following the collapse of the oil price and the rouble, then the government bond and bank defaults of August 17, 1998, Prime Minister Sergei Kirienko was dismissed, and replaced by Yevgeny Primakov. Dubinin announced he was resigning on September 8. The next day he defended himself, publicly accusing other officials in the government. “Under my leadership,” Dubinin claimed, “the Central Bank did not print worthless money. However, monetary policies cannot forever compensate for weaknesses in tax collection and the management of the national debt.”

There it is.

Dancing with Bears

Bagging The Cat — Ksenia Yudaeva, The First Russian Central Bank Governor To Be Sacked In Secret

John Helmer

Greg Palast — Trojan Hearse: Greek Elections and the Euro Leper Colony

The horror of austerity is not the consequence of Greek profligacy: it was designed into the euro’s plan from the beginning. 

This was explained to me by the father of the euro himself, economist Robert Mundell of Columbia University. (I studied economics with Mundell’s buddy, Milton Friedman.) Mundell not only invented the euro, he also fathered the misery-making policies of Thatcher and Reagan, known as “supply-side economics” – or, as George Bush Sr. called it, “voodoo economics.” Supply-side voodoo is the long-discredited belief that if a nation demolishes the power of unions, cuts business taxes, eliminates government regulation and public ownership of utilities, economic prosperity will follow. 

The euro is simply the other side of the supply-side coin. As Mundell explained it, the euro is the way in which congresses and parliaments can be stripped of all power over monetary and fiscal policy. Bothersome democracy is removed from the economic system. “Without fiscal policy,” Mundell told me, “the only way nations can keep jobs is by the competitive reduction of rules on business.”…

Greece’s ruin began with secret, fraudulent currency swaps, designed a decade ago by Goldman Sachs, to conceal Greek deficits that exceeded the euro zone’s 3%-of-GDP limit. In 2009, when the truth came out, Greek debt holders realized they had been cheated. These debt buyers then demanded usurious levels of interest (or, if you prefer, a high “spread”) to insure themselves against future fraud. The compounding of this interest premium brought the Greek nation to its knees. In other words, the crimes committed to join and stay in the euro, not Greek profligacy, caused the crisis. 

The USA, Brazil and China escaped from depression by controlling their money supply, government spending and currency exchange rates—crucial tools Greece gave up in return for the euro. 

Worse, once the Trojan hearse of the euro entered Athens, tourism, Greece’s main industry, drained to Turkey where hotels and souvenirs are priced in cheap lira. This allowed Dr. Mundell’s remorseless wage-lowering machine, the euro, to do its work, to force Greece to strip all its workers of pensions and power. 

Greece fell to its knees, with no choice but to beg Germany for mercy.
But there is no mercy. As Germany’s Schäuble insists, democracy, this week’s vote, means nothing. "New elections change nothing in the accords struck with the Greek government,” he says. “[Greeks] have no alternative.”

Greg Palast

Trojan Hearse: Greek Elections and the Euro Leper Colony

h/t Dan Lynch in the comments

Palast had already explained this in greater detail in Robert Mundell, evil genius of the euro, linked to at MNE on June 29, 2012.

This is all by neoliberal design to bring Thatcherism-Reaganism to Europe and convert the welfare states there to market state like Thatcher's plan for the UK and Reagan's plan for the US. It would become more effective in the EU by denying currency sovereignty and making the EZ nations dependent on the new DM euro. The eurocrats knew exactly what they were doing — imposing TINA.

This is not conspiracy theory, but a an actual conspiracy as Palast explains.