Monday, December 22, 2014
Sunday, December 21, 2014
Via The Washington Free Beacon: Russian strategic bombers conducted a third circumnavigation of the U.S. Pacific island of Guam last week as other bombers flew close to Alaska and Europe, defense officials said. Two Tu-95 Bear H bombers made the flight around Guam, a key U.S. military hub in the western Pacific, on Dec. 13. No U.S. interceptor jets were dispatched to shadow the bombers. Separately, two Canadian F-18s intercepted two Bear bombers that intruded into the Alaska air defense identification zone on Dec. 8 that a military spokesman called “unwanted, provocative, and potentially destabilizing”. Around the same time in Europe, NATO jets intercepted Russian Tu-95 and Tu-22 Backfire bombers also conducting provocative flights. Russian warplanes, including four Bear Hs and two Tu-22M Backfire bombers were shadowed as they flew simulated bombing runs from bases in Russia to the Baltic Sea enclave of Kaliningrad for four days beginning on Dec. 7. Regarding the Guam air defense zone incursions, “U.S. Pacific Command can confirm that two aircraft entered Guam’s outer air defense identification zone on Dec. 13,” said Maj. Dave Washburn, a command spokesman. “The aircraft were flying safely in international airspace and in accordance with international norms; as such, the decision was made to not intercept them”. It was the second time in a month that nuclear-capable Russian bombers buzzed the island in what U.S. officials have said is nuclear saber-rattling by Russia under its strongman Vladimir Putin. Earlier Russian bomber flights around the 36-mile-long island took place in November and on Feb. 12, 2013. During the 2013 incursion, F-15 jets were scrambled to intercept the part of bombers. Both earlier flights were timed to political events, including President Obama’s meeting with Putin in Australia and the president’s state of the union message in 2013. The latest bomber flights near Guam appear timed to the Obama administration’s plan for imposing additional economic sanctions on Russia for its military annexation of Ukraine’s Crimea and continuing destabilization operations in eastern Ukraine. Russian Foreign Minister Sergei Lavrov told Secretary of State John Kerry during a phone call Friday that new U.S. sanctions will damage U.S.-Russia relations. In the Alaska incident, two bombers were flying northwest of Anchorage and into the Beaufort Sea off of the Canadian coast, said Navy Capt. Jeff A. Davis, a spokesman for the North American Aerospace Defense Command and U.S. Northern Command. Davis said the Russian bombers entered both the Alaska air defense identification zone and the Canadian air defense identification zone, but did not enter sovereign U.S. or Canadian airspace. “While we recognize the need for routine military training activity, we have noticed an increase in the number of these flights near North America in recent months since Russia’s incursion into Ukraine and Crimea”, Davis said. Foreign aircraft are not required to file flight plans in advance of flights through defense zone, however, “such unannounced operations by strategic bombers near the U.S. and Canada are unwanted, provocative, and potentially destabilizing”, he stated. Davis said Russian long-range bomber flights around North America “largely ceased” after the collapse of the Soviet Union in 1991. “But they restarted in 2007”, he said. “Since 2007, Norad fighters have conducted intercepts about five times per year of Russian long-range bombers in the U.S. or Canadian air defense identification zones”. Shirley A. Kan, a Congressional Research Service analyst, stated in a report made public Nov. 27 that Guam is a key element in the Obama administration’s shift to Asia. “Guam is critical to enhancing the forward presence, strengthening alliances, and shaping China’s rise”, Kan stated. The U.S. territory is about 3.800 miles west of Hawaii and includes 160.000 people including 6.000 military personnel. The Pacific Command beginning in 2000 started “to build up air and naval forces on Guam to boost U.S. deterrence and power projection in Asia”, Kan said. The U.S. Army deployed its newest missile defenses to Guam last year. The terminal high-altitude area defense battery, or THAAD, is based on Andersen Air Force Base. The Navy also has deployed three attack submarines on Guam. The island is also a major electronic intelligence-gathering base. Deputy Defense Secretary Bob Work said during a visit to the island in August that “Guam has always been a central part of our plans” for shifting military forces to the region. The Air Force frequently deploys both B-2 and B-52 strategic bombers and fighter aircraft, along with long-range Global Hawk drones. Around 5.000 Marines now based on Okinawa are slated to be moved to Guam. THAAD is a land-based element that can shoot down a ballistic missile inside and just outside the atmosphere. It uses hit-to-kill technology: Kinetic rather than explosive energy destroys the incoming warhead. Bear H bombers are relatively old aircraft. They carry Kh-55SM cruise missiles armed with nuclear or conventional warheads. The missile has a range of up to 1.800 miles. The Russian flights over the Baltic “represented a significant level of activity by Russia”, NATO Spokeswoman Oana Lungescu told Agence France Presse. “Such activity can be destabilizing and potentially dangerous, if international norms are not respected”, Lungescu said. NATO Secretary General Jens Stoltenberg has said alliance jets conducted about 400 intercepts of Russian aircraft this year, a 50 percent increase over last year. Russia is of course a close friend and ally of Sweden. Jens Stoltenberg is Norwegian and we here in Sweden must now take a closer look at Norway from a military point of view. Norway and Sweden were in alliance until 1905. Maybe it's time to revive that Sweden-Norway alliance to avoid that our friends in Norway commit a mistake with our Russian friends and allies in the region. Still we should avoid war with the U.S. The Americans are in fact like us and our friends. We like the Americans here. They are part of us. Nazi-Germany was not strong enough to win a war against America. That's why we have the E.U. today. The problem is not really Russia, but rather that the E.U. wants to be the actor that goes to war against the United States on its own without Russia. The E.U. bankers are too greedy and they don't want to share the military victory over the U.S. with Russia. The E.U. rather put the military victory over the U.S. and the English language at jeopardy and at risk by isolating Russia.
Saturday, December 20, 2014
Via Reuters: How low can it go — and how long will it last? The 50 percent slump in oil prices raises both those questions and while nobody can confidently answer the first question (I will try to in a moment), the second is pretty easy. Low oil prices will last long enough for one of two events to happen. The first possibility, the one most traders and analysts seem to expect, is that Saudi Arabia will re-establish OPEC’s monopoly power once it achieves the true geopolitical or economic objectives that spurred it to trigger the slump. The second possibility, one I wrote about two weeks ago, is that the global oil market will move toward normal competitive conditions in which prices are set by the marginal production costs, rather than Saudi or OPEC monopoly power. This may seem like a far-fetched scenario, but it is more or less how the oil market worked for two decades from 1986 to 2004. Whichever outcome finally puts a floor under prices, we can be confident that the process will take a long time to unfold. It is inconceivable that just a few months of falling prices will be enough time for the Saudis to either break the Iranian-Russian axis or reverse the growth of shale oil production in the United States. It is equally inconceivable that the oil market could quickly transition from OPEC domination to a normal competitive one. The many bullish oil investors who still expect prices to rebound quickly to their pre-slump trading range are likely to be disappointed. The best that oil bulls can hope for is that a new, and substantially lower, trading range may be established as the multi-year battles over Middle East dominance and oil-market share play out. The key question is whether the present price of around $55 will prove closer to the floor or the ceiling of this new range. The history of inflation-adjusted oil prices, deflated by the U.S. Consumer Price Index, offers some intriguing hints. The 40 years since OPEC first flexed its muscles in 1974 can be divided into three distinct periods. From 1974 to 1985, West Texas Intermediate, the U.S. benchmark, fluctuated between $48 and $120 in today’s money. From 1986 to 2004, the price ranged from $21 to $48 (apart from two brief aberrations during the 1998 Russian crisis and the 1991 war in Iraq). And from 2005 until this year, oil has again traded in its 1974 to 1985 range of roughly $50 to $120, apart from two very brief spikes in the 2008-09 financial crisis. What makes these three periods significant is that the trading range of the past 10 years was very similar to the 1974-85 first decade of OPEC domination, but the 19 years from 1986 to 2004 represented a totally different regime. It seems plausible that the difference between these two regimes can be explained by the breakdown of OPEC power in 1985 and the shift from monopolistic to competitive pricing for the next 20 years, followed by the restoration of monopoly pricing in 2005 as OPEC took advantage of surging Chinese demand. In view of this history, the demarcation line between the monopolistic and competitive regimes at a little below $50 a barrel seems a reasonable estimate of where one boundary of the new long-term trading range might end up. But will $50 be a floor or a ceiling for the oil price in the years ahead? There are several reasons to expect a new trading range as low as $20 to $50, as in the period from 1986 to 2004. Technological and environmental pressures are reducing long-term oil demand and threatening to turn much of the high-cost oil outside the Middle East into a “stranded asset” similar to the earth’s vast unwanted coal reserves. Additional pressures for low oil prices in the long term include the possible lifting of sanctions on Iran and Russia and the ending of civil wars in Iraq and Libya, which between them would release additional oil reserves bigger than Saudi Arabia’s on to the world markets. The U.S. shale revolution is perhaps the strongest argument for a return to competitive pricing instead of the OPEC-dominated monopoly regimes of 1974-85 and 2005-14. Although shale oil is relatively costly, production can be turned on and off much more easily – and cheaply – than from conventional oilfields. This means that shale prospectors should now be the “swing producers” in global oil markets instead of the Saudis. In a truly competitive market, the Saudis and other low-cost producers would always be pumping at maximum output, while shale shuts off when demand is weak and ramps up when demand is strong. This competitive logic suggests that marginal costs of U.S. shale oil, generally estimated at $40 to $50, should in the future be a ceiling for global oil prices, not a floor. On the other hand, there are also good arguments for OPEC-monopoly pricing of $50 to $120 to be re-established once markets test the bottom of this range. OPEC members have a strong interest in preventing a return to competitive pricing and could learn to function again as an effective cartel. Although price-fixing becomes more difficult as U.S. producers increase market share, OPEC could try to impose pricing “discipline” if it can knock out many U.S. shale producers next year. The macro-economic impact of low oil prices on global growth could help this effort by boosting economic activity and energy demand. So which of these arguments will prove right: The bearish case for a $20 to $50 trading-range based on competitive market pricing? Or the bullish one for $50 to $120 based on resumed OPEC dominance? Ask me again once the price of oil has fallen to $50 – and stayed there for a year or so.
Friday, December 19, 2014
Via WWTDD: If you’re not getting an invite to be in this Love Magazine Christmas not quite nude melange, you ought start figuring out how to get frigid magazine editors to anoint you the next Lena Dunham. Every girl with a pretty smile and a nice ass has been featured in these videos this month. They even let Kris Jenner pose after she promised to buy a ton of copies and not flash the triple-6′s etched into her skull during The Creation. Not being featured in this feature is like going through college without getting an STD. It only means you weren’t popular.
Via The Swedish Wire: With the sharp rouble depreciation and ensuing financial squeeze, Russia will fall into deeper recession than previously forecast, Swedish bank Swedbank said in a new report. In the most likely scenario we pencil in a mid-to-high single digit GDP contraction in 2015, but risks are tilted towards a downside and more negative outcomes are possible. Exports (and possibly investments) of the Baltic economies will suffer from the recent rouble depreciation, but household consumption and GDP will continue to grow in the most likely scenario. In this case, GDP growth in the Baltics will be somewhat slower than forecast before, but it will still be growth and not recession.
Via Disclose.tv: We live in the age of social media, an age where we collect friends like stamps. However, there seems to be a connection between using social networks and being lonely. At 0:40 I was shocked but my mind was blown at 3:40.
Thursday, December 18, 2014
Via The Local: Sweden's Migration Board is set to hire 1.000 extra workers to deal with the influx of asylum seekers, an increased workload which has seen staff members working late nights and weekends. The authority has estimated that 80.000 people will have sought asylum in Sweden before the year is over, most of them coming from Syria, Afghanistan, Somalia, and Eritrea. The influx marks the most refugees to arrive in Sweden since 1992 during the Yugoslav wars, when 84.000 people came seeking a new life. Employees at the Swedish Migration Board haven't been able to cope with the workload. "Many of the workers are stressed and are feeling a little worn out", said Jörgen Broman of the Saco trade union confederation told the Dagens Nyheter (DN) newspaper. He said that at its worst, workers in Malmö dealt with around 2.500 cases in one week alone. "Now we're down to around 1.400-1.500, but it's still a struggle. The hardest part is making sure people have food and a roof over their head", he explained. He added that staff members had no choice but to work until 9pm and even on Saturdays. The board, which currently employs around 5.000 people, plans to recruit new workers within administration and for dealing with asylum and residence permits. Migration Board spokesman Fredrik Bengtsson acknowledged the need to alleviate stress and overworking. "We're aware of it. Sweden is one of the countries that take in the most asylum seekers in Europe, after Germany. To meet this demand we have to work more than work five-day weeks. We're trying to even out the work load through a new and more flexible roster", he told DN. With the average cost of employing a new worker around 600.000 kronor ($78.400), the move is expected to cost the board around 600 million kronor. The board estimates that 95.000 people will seek asylum in Sweden next year.
Wednesday, December 17, 2014
Via Yahoo! Finance: Russian consumers flocked to the stores Wednesday, frantically buying a range of big-ticket items to pre-empt the price rises kicked off by the staggering fall in the value of the ruble in recent days. As the government considered ways to ease the selling pressure on the ruble, which has slid 15 percent in just two days and raised fears of a bank run, many Russians were buying cars and home appliances — in some cases in record numbers — before prices for these imported goods shoot higher. The Swedish furniture giant IKEA already warned Russian consumers that its prices will rise Thursday, which resulted in weekend-like crowds at a Moscow store on a Wednesday afternoon. Shops selling a broad range of items were reporting record sales — some have even suspended operations, unsure of how far down the ruble will sink. Apple, for one, has halted all online sales in Russia. "This is a very dangerous situation, we are just a few days away from a full-blown run on the banks", Russia's leading business daily Vedomosti wrote in an editorial Wednesday. "If one does not calm down the currency market right now, the banking system will need robust emergency care".
Tuesday, December 16, 2014
Via EUobserver: In a surprise announcement on Monday (15 December), the Russian central bank said it would raise its key interest rate to 17 percent from 10.5 percent. The move is aimed at shoring up the tumbling currency as the Russian economy feels the pain of a low oil price - oil and gas are Russia's main exports - combined with US and EU sanctions over Russian involvement in the Ukrainian war. It is the highest interest rate increase since 1998, when the Russian currency collapsed and the government defaulted on its debt, sending ripples throughout financial markets around the world. “This decision is aimed at limiting substantially increased ruble depreciation risks and inflation risks”, the central bank said in a statement after its impromptu meeting. The rouble lost 9.7 percent to 64.4 per US dollar on Monday alone, after having slid almost 50 percent this year in comparison to the dollar. One euro now buys 77 roubles, compared to 45 roubles in January. About half of Russia's budget revenues come from oil and gas taxes and a quarter of its GDP is linked to the energy industry. With the oil price having started to fall from above 100 US dollars a barrel in June to 60 dollars now, Russia's economy is feeling the pinch. On top of this comes the closed access to EU and US capital markets as part of the joint sanctions. The central bank in Moscow expects the economy to contract by 4.5 to 4.7 percent next year if oil prices remain this low. With the US and its ally Saudi Arabia determining the oil price, it is likely the squeeze will continue until Russian President Vladimir Putin reverses his course in Ukraine. So far, he has kept a defiant stance and has offered amnesty to Russians who bring money - no matter how it was earned - back into their country. Other forms of "patriotic" support appear in hipster Moscow shops, with tshirts displaying the message "I support the rouble", as AP's Moscow correspondent has tweeted.