Smart Economy

When will the Recession End? Part 263 Turkey, Ukraine Most Exposed in Crisis Repeat, Goldman Says

Turkey, Ukraine Most Exposed in Crisis Repeat, Goldman Says

Bloomberg Friday, August 26, 2011

 (Updates with comment from third paragraph, Hungary in sixth, Israel in eighth, South Africa in ninth.)

Aug. 26 (Bloomberg) -- Turkey and Ukraine are more vulnerable to a repeat of the 2008 financial crisis than other nations in central and eastern Europe, the Middle East and Africa, Goldman Sachs Group Inc. said.

Turkey has "accumulated substantial external imbalances" and an International Monetary Fund program has been sidelined in Ukraine, economists including Clemens Grafe and Ahmet Akarli said in an e-mailed report today. Russia would also be exposed, though "a more resilient banking system and increased ruble flexibility" should limit the impact, they said.

"Our analysis suggests there are marked financing risks in a number of CEEMEA economies should we see a repeat of 'crisis- like' stress conditions," Goldman said. "The 'stress-case' scenario implies that Turkey and Ukraine may be relatively more vulnerable to potential balance of payments incidents."

Turkey's current account deficit, which widened to a record $72.5 billion in the 12 months through June, or about 9 percent of economic output, has brought losses for the lira of 13 percent this year, the biggest decline among more than 20 emerging markets tracked by Bloomberg. Meanwhile, in Ukraine, the IMF has delayed a visit planned for next week until October, pending a revamp of its pension system and steps to narrow the budget deficit.

'More Abrupt'

In the event of external financial stress, the adjustment to correct Turkey's current account deficit "would have to be much more abrupt, leading to significant output losses, further lira weakness and possibly a fall in foreign exchange reserve levels," Goldman said.

In Hungary, five-year credit default swaps, which measure the cost of insuring a country's debt against default, have surged to the highest since April 2009, partly on concern that disagreements with the IMF leave the country more exposed to a financial shock.

"The breakdown in negotiations with the IMF means that the government will need to convince the markets of the credibility of its reforms and fiscal commitments; an unconvincing performance would increase the likelihood that the country would have to undergo another painful adjustment," Goldman said.

The external balances of Israel and Kazakhstan look more resilient, the report said.

In South Africa, "the required current account adjustment is to a large extent generated by the existing moderate current account deficit," Goldman said. "In addition, we would expect to see a relative outperformance of gold under a 'back to 2008' scenario."

--Editors: Alan Purkiss, Chris Peterson

Read more: http://www.sfgate.com/cgi-bin/article.cgi?f=/g/a/2011/08/26/bloomberg1376-LQISBE6TTDS001-5CTSQS5U0NP6IK02TBUONVAG88.DTL#ixzz1WIDsQvIN

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Out and Out Ukrainian government LIE  !!!!!

 

Info is that the  IMF has no plans to come to Ukraine , and that the commitment --a "maybe"  for October/November was all  that Yaroshenko (Finance) and Bojko (Energy) could get. Tihipko did not even go to Washington, as he knows how hopeless it was...wd

Ukrainian PM Sees No Obstacle to Getting Another IMF Tranche
Interfax
Friday, August 26, 2011

Ukrainian PM sees no obstacle to getting another IMF tranche

KYIV. Aug 26 (Interfax) - There is no reason why Ukraine cannot get another tranche from the International Monetary Fund, Ukrainian Prime Minister Mykola Azarov said.
"I am saying once again: We do not need money now. If we need it, this means we will go to Washington, set certain conditions, look at the conditions required from us by the creditors, and get this tranche," he told journalists on Friday.
"There are no obstacles to getting the tranche," Azarov said.
The cooperation between Ukraine and the IMF has been not just active, but also growing, he said.
The fact that the IMF mission has postponed its visit to Ukraine is the result of talks between Ukraine and the IMF, he said.
"The statement made by the IMF yesterday says that the cooperation does not just continue, but is actively developing. The real situation is that our finance minister, our minister of fuel and energy and the head of the National Bank held talks with the IMF management and agreed to determine how the program is being implemented and slated the dates for the mission's arrival," Azarov said.
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Ukraine does not need IMF money - premier
Interfax-Ukraine
Friday, August 26, 2011

Kiev, 26 August: There are no obstacles to Ukraine's receiving the next tranche of the IMF loan, Prime Minister Mykola Azarov has said.

"I am telling you again: we do not need the money now. If we need it, we will go to Washington, set certain conditions, (agree) the fulfilment of conditions set by our creditors and get the tranche. There are no obstacles to receiving the tranche (from the IMF - Interfax-Ukraine)," Azarov said to journalists today.

(The IMF's mission was to arrive in Kiev on 29 August to discuss the transfer of a new trache. The visit has been postponed until November. The Kommersant-Ukraina business daily reported on 26 August, quoting a Ukrainian official source "close to the talks with the IMF", that the decision to defer the visit was a move supported by both Ukrainian and IMF officials.)

(Description of Source: Kiev Interfax-Ukraine in Russian -- Service provided by the Russian news agency Interfax focusing on events in Ukraine)

 

Cognition> How Do I Remember That I Know You Know That I Know?

How Do I Remember That I Know You Know That I Know?
“I’ll meet you at the place near the thing where we went that time,” says the character Aaron in the 1987 movie Broadcast News. He and the woman he’s talking to have a lot of common ground, the shared territory that makes conversations work.  Common ground is why, after you’ve mentioned Great-Aunt Mildred’s 80th birthday party once in a conversation, you can just refer to it as “the party.” In a new study to be published in an upcoming issue of Psychological Science, a journal of the Association for Psychological Science, the authors pinpoint the type of memory required to make common ground work and confirm that people with a particular type of amnesia have trouble making common ground in conversation.

People with declarative memory impairment (amnesia) have good memories of what happened before their amnesia started, but they can’t form new declarative memories. That’s the kind of memory for facts and events, like what they did yesterday or the name of a person they just met. They can still form non-declarative memories, like learning how to ride a bike or other skills, says Rachael Rubin of the University of Illinois. For this study, she worked with five people with declarative memory amnesia and five healthy people. Rubin cowrote the new paper with Sarah Brown-Schmidt and Neal Cohen of the University of Illinois and Melissa Duff and Daniel Tranel of the University of Iowa.

Rubin and her colleagues tested people on whether they could keep up with common ground in conversation. In one condition, the participant and experimenter sat facing each other, looking at back-to-back monitors. Each monitor showed a 3×3 grid, which looked like a real set of cubbyholes between the two people, with objects in each compartment. The participant could see right through the top row of compartments. The middle row was blocked off, and the bottom row was blocked at the back so the participant could see what was in the compartments but the experimenter couldn’t. The experimenter asked the participant: “What object is in the bottom left?” The participant would answer – “an elephant.” After 40 seconds of conversation about something else, the experimenter would say, “Look at the elephant.” The catch was, the participant had two elephants to choose from. Normal people looked to the elephant that had been referred to just previously. But people with amnesia looked equally at the two elephants, showing no benefit from the earlier portion of the conversation.

This suggests that declarative memory is required for keeping track of what’s going on in a conversation, even if it was something that was mentioned less than a minute ago. “Memory and language are related more than people thought before,” Rubin says. And it’s a reminder that people with amnesia don’t just have trouble with memory; their memory problems extend to other parts of their lives, like the ability to connect with other people through conversation.

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For more information about this study, please contact: Rachael Rubin at rrubin2@illinois.edu.

The APS journal Psychological Science is the highest ranked empirical journal in psychology. For a copy of the article "How do I remember that I know you know that I know?" and access to other Psychological Science research findings, please contact Divya Menon at 202-293-9300 or dmenon@psychologicalscience.org.

Tags: Language, Learning, Learning Disabilities, Long-Term Memory, Memory, Mental Health, Psychological Science

Dentistry breakthought- Filling without drilling

Researchers at the University of Leeds have discovered a pain-free way of tackling dental decay that reverses the damage of acid attack and re-builds teeth as new.

The pioneering treatment promises to transform the approach to filling teeth forever.

Tooth decay begins when acid produced by bacteria in plaque dissolves the mineral in the teeth, causing microscopic holes or 'pores' to form. As the decay process progresses these micro-pores increase in size and number. Eventually the damaged tooth may have to be drilled and filled to prevent toothache, or even removed.

The very thought of drilling puts many people off going to see their dentist, whether or not they actually need treatment. This tendency to miss check-ups and ignore niggling aches and pains means that existing problems get worse and early signs of decay in other teeth are overlooked.

It's a vicious cycle, but one that can be broken, according to researchers at the University of Leeds who have developed a revolutionary new way to treat the first signs of tooth decay. Their solution is to arm dentists with a peptide-based fluid that is literally painted onto the tooth's surface. The peptide technology is based on knowledge of how the tooth forms in the first place and stimulates regeneration of the tooth defect.

"This may sound too good to be true, but we are essentially helping acid-damaged teeth to regenerate themselves. It is a totally natural non-surgical repair process and is entirely pain-free too," said Professor Jennifer Kirkham, from the University of Leeds Dental Institute, who has led development of the new technique.

The 'magic' fluid was designed by researchers in the University of Leeds' School of Chemistry, led by Dr Amalia Aggeli. It contains a peptide known as P 11-4 that - under certain conditions - will assemble together into fibres. In practice, this means that when applied to the tooth, the fluid seeps into the micro-pores caused by acid attack and then spontaneously forms a gel. This gel then provides a 'scaffold' or framework that attracts calcium and regenerates the tooth's mineral from within, providing a natural and pain-free repair.

The technique was recently taken out of the laboratory and tested on a small group of adults whose dentist had spotted the initial signs of tooth decay. The results from this small trial have shown that P 11-4 can indeed reverse the damage and regenerate the tooth tissue.

"The results of our tests so far are extremely promising," said Professor Paul Brunton, who is overseeing the patient testing at the University of Leeds Dental Institute. "If these results can be repeated on a larger patient group, then I have no doubt whatsoever that in two to three years time this technique will be available for dentists to use in their daily practice."

"The main reason that people don't go to the dentist regularly is fear. If we can offer a treatment that is completely non-invasive, that doesn't involve a mechanical drill, then we can change that perceived link between dental treatment and pain. This really is more than filling without drilling, this is a novel approach that enables the patients to keep their natural teeth!"

 

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The study is being funded by credentis ag who have licensed the technology and are preparing to introduce P11-4 to dentists worldwide.

Contact: Paula Gould
p.a.gould@leeds.ac.uk
44-113-343-8059
University of Leeds

Why does stress causes DNA damage?

DURHAM, N.C. – For years, researchers have published papers that associate chronic stress with chromosomal damage.

Now researchers at Duke University Medical Center have discovered a mechanism that helps to explain the stress response in terms of DNA damage.

"We believe this paper is the first to propose a specific mechanism through which a hallmark of chronic stress, elevated adrenaline, could eventually cause DNA damage that is detectable," said senior author Robert J. Lefkowitz, M.D., James B. Duke Professor of Medicine and Biochemistry and a Howard Hughes Medical Institute (HHMI) investigator at Duke University Medical Center.

The paper was published in the Aug. 21 online issue of Nature.

In the study, mice were infused with an adrenaline-like compound that works through a receptor called the beta adrenergic receptor that Lefkowitz has studied for many years. The scientists found that this model of chronic stress triggered certain biological pathways that ultimately resulted in accumulation of DNA damage.

"This could give us a plausible explanation of how chronic stress may lead to a variety of human conditions and disorders, which range from merely cosmetic, like graying hair, to life-threatening disorders like malignancies," Lefkowitz said.

P53 is a tumor suppressor protein and is considered a "guardian of the genome" – one that prevents genomic abnormalities.

"The study showed that chronic stress leads to prolonged lowering of p53 levels," said Makoto Hara, Ph.D., a postdoctoral fellow in the Lefkowitz laboratory. "We hypothesize that this is the reason for the chromosomal irregularities we found in these chronically stressed mice."

Lefkowitz earlier had proved the existence of isolated, and characterized the G-protein-coupled receptors (GPCRs) such as the beta adrenergic receptor. These receptors, which are located on the surface of the membranes that surround cells, are the targets of almost half of the drugs on the market today, including beta blockers for heart disease, antihistamines and ulcer medications.

Now he is continuing studies along another pathway,stemming from the GPCRs, that was discovered in his lab, which is known as the beta-arrestin pathway. At first, the theory was that beta-arrestin proteins turned off or desensitized the G-protein pathways, but evidence is accumulating that these proteins are also responsible for causing certain biochemical activities in their own right.

In the current study, the scientists found a molecular mechanism through which adrenaline-like compounds acted through both G-protein and the beta-arrestin pathways to trigger DNA damage.

The Nature publication showed that the infusion of an adrenaline-like compound for four weeks in the mice caused degradation of p53, which was present in lower levels over time.

The study also showed that the DNA damage was prevented in mice lacking beta-arrestin 1. Loss of beta-arrestin 1 stabilized cellular levels of p53 both in the thymus, an organ that strongly responds to acute or chronic stress, and in the testes, where paternal stress might affect an offspring's genome.

Future studies planned by the Lefkowitz laboratory include studying mice that are placed under stress (restrained), thus creating their own adrenaline or stress reaction to learn whether the physical reactions of stress, rather than an influx of adrenaline in the lab as was done in the current study, also leads to accumulation of DNA damage.

 

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Other authors include Jeffrey J. Kovacs, Erin J. Whalen, Sudarshan Rajagopal, Ryan T. Strachan, Seungkirl Ahn, Barbara Williams, Christopher M. Lam, Kunhong Xiao, and Sudha K. Shenoy, all of the Duke Department of Medicine; Aaron J. Towers and Simon G. Gregory of the Department of Medicine and the Center for Human Genetics at Duke; and Wayne Grant and Derek R. Duckett of the Translational Research Institute, The Scripps Research Institute, Jupiter, Fla..

The study was supported by the Howard Hughes Medical Institute.

When will the Recession End? Part 262 What's behind the London Riots? consumerism

THE SHOPPING RIOTS

By Gwyneth Holland, Sr. Editor, Europe - Iconowatch

As the world and his wife now knows, England was last week beset with a string of riots. The unrest began in London but sprung up later in towns across the country, including major cities like Manchester, Bristol, Liverpool and Birmingham. While the burning buildings and terrorised citizens looked much like other imiages of unrest around the world, the events in England had a troubling undertone — consumerism.

Disenfranchised youth may have railed against police mistreatment of young black and Asian men in London’s most deprived boroughs, but their outrage soon mushroomed into a protest not just against the police, but against government cuts, splintered communities and — most visibly — against the things the rioters didn’t have. Taking particular punishment were electronics stores, jewellers and department stores, where rioters ran out of broken shopfronts with armfuls of aspirational goods. As the Guardian’s Zoe Williams put it, “these are shopping riots”, not simply the “pure criminality” declaimed by Cameron’s government. The Financial Times commented that in comparison to the young revolutionaries in Egypt and Tunisia, “Our young people have nothing to lose and nothing to gain, except thrills and new trainers”.

The spreading riots set a new paradigm for the fast-moving story, with social networks being used to alert rioters of the next location. But those networks were likewise used by people to keep one another safe, by warning of new pockets of violence and helping people to unite against wrongdoers and coordinate damage cleanup. Twitter-fuelled cleanup campaigns hit the streets last Tuesday morning, while online campaigns sprung up to support local businesses who had lost everything. The “Keep Aaron Cutting” campaign (http://keepaaroncutting.blogspot.com/) raised £35,000 to enable 89-year-old Tottenham barber Aaron Biber to get back on his feet, while DeLoot London (http://www.delootlondon.co.uk/) aims to help independent shopkeepers restock after looting.

While the riots created a subset of public enemies, it also created some public heroes, like the fearless Hackney woman who questioned the politics of looters: "We're not gathering together to fight for a cause, we're running down Foot Locker and thieving shoes”. The English are still looking for answers to why the rioting and looting took hold so quickly and brutally, but the effects of last week’s events will be far-reaching. For rioters this may mean swift justice, but for everyone else, it also means reexamining the social divisions that led to the riots. 

What's behind London's shopping riots - Iconowatch

World Future 2012: Dream. Design. Develop. Deliver. The Annual Conference of the World Future Society July 27-29, 2012; Toronto, Canada

WorldFuture 2012: Dream. Design. Develop. Deliver.The Annual Conference of the World Future Society July 27-29, 2012; Toronto, Canada Sheraton Centre Toronto Hotel Toronto, Ontario, Canada Register Today and Save $300! http://www.wfs.org/content/register-worldfuture-2012 The World Future Society's annual conference, "WorldFuture 2012: Dream. Design. Develop. Deliver" will give you the opportunity to learn from others in many different fields, and to explore actions affecting our futures in as yet unimagined ways. You can join about 1,000 futurists from more than 35 countries around the world. This is truly an international event. And if you register by August 31, you'll save $300 off the on-site fee. Should your plans change, you can receive a full refund through June 29, 2012. The conference will feature approximately 100 leading futurists offering more than 60 sessions, workshops, and special events over the course of two and a half days. And for those who want to take a “deeper dive,” into key studies of interest, the preconference Master Classes allow for an in-depth look in a small group setting. The focus throughout WorldFuture 2012 is empowering individuals to effect change, particularly in this time of global unrest. The theme of “Dream. Design. Develop. Deliver” evokes the energy of entrepreneurship and the spirit of “DIY” as applied to all of our endeavors for building a better tomorrow. Sessions will address a wide range of sectors, including business and careers, technology and its impacts, futures methodologies and processes, governance and communities, resources and the environment, education and learning, consciousness and spirituality, health--and much more! Those of you who attended our 2011 conference in Vancouver experienced some of the most innovative programs and speakers that WFS has ever offered. That conference offered new and creative ways to help futurists connect, because the best thing about a WorldFuture conference is always the people who attend. From the conference-wide WiFi to the Microsoft Tag system and from the Twitter network to our innovative new Web site, launched at the conference, Vancouver was a whirlwind of innovation and imagination. In addition, the two-night Futurists:BetaLaunch event gave attendees a chance to relax after the day’s sessions and try out tomorrow’s technology today. The highly competitive event brought inventors to the conference to showcase their creative solutions to real-world problems. Another feature of WFS conferences is the opportunity afforded to specialty foresight groups to meet, focusing on national security, international women’s issues, governmental forecasting, and global regions. This is a glimpse of the continuing outreach and networking offered at every WorldFuture meeting. As one Vancouver attendee said, “This conference is a wake-up call to the real alternatives for go-forward thinking.” And of course, the 2012 conference in Toronto will continue this focus on innovation. Speakers will be seasoned futurists as well as fresh voices in a resource-rich weekend of seminars, workshops, keynotes, panel discussions, coffee bar think tanks, and the like.  We’re also trying new events, like “Speed Futuring,” a fast-paced networking event designed to give you immediate connections with a personal team of other forward-thinking people you can collaborate with beyond the conference weekend. Speakers will be added to the program continuously throughout the next several months, so be sure to check the Web site for the latest updates: http://www.wfs.org/content/worldfuture-2012 A "Meeting of the Minds" Who attends World Future Society conferences? Business executives, government officials, educators, corporate planners, researchers, scientists, students, forecasters, well-known authors, and many other thought-leaders and visionaries like you--all with a deep interest in learning more about the future. Some conference goers will be coming to share their innovative ideas, while others are coming to learn new skills and hear about new opportunities. And still others want to explore the diversity of people and viewpoints to be found at Society meetings. Attendees range from those new to the study of the future to those already responsible for tracking trends and their implications for their companies, organizations or government, as well as those ultimately responsible for crafting responses to these challenges and opportunities. Conference attendees will be envisioning--and creating--humanity's future in the decades ahead. It's a rare opportunity to discover what's happening not only in your sector, industry, or region, but in many others as well. And there is one lesson the study of the future teaches, it is that many more factors affect your own future than you might have expected--and so a broad view is the most productive one. World Future Society conferences have earned their reputation as unique and exciting events. With so many creative, forward-looking people gathered in one place, addressing a common purpose, and bringing together a fantastic diversity of experience, opinion, and expertise, WFS meetings provide an incredibly rich, valuable, and stimulating experience. "WorldFuture 2012: Dream. Design. Develop. Deliver" will examine exciting new technologies now emerging in fields such as information science, genetics, and medicine, as well as practical strategies you can use to make important decisions in both your work and private life. No other meeting attracts such a broad array of leaders and experts from as many fields and nations to share ideas and forecasts and to establish networks of common concern. Special facilitated discussions and interactive learning sessions will give you the opportunity to share your experiences and expertise and to build relationships with others whom you would not otherwise have an opportunity to meet. For those who use futuring methods and ideas in their professional capacity, be sure to plan to stay an extra day for the WFS Professional Members' Forum. This Forum is open to all Professional Members of WFS free of charge as part of their membership. Toronto Welcomes You! Toronto, Ontario, located on the northern shore of Lake Ontario, is actually one of the southernmost cities in Canada. Accordingly, it has a mild climate and is the entertainment capital of Canada, with live theater, concerts and international headliners. Toronto is also a highly cosmopolitan city, with distinctive neighborhoods representing a myriad of diverse global cultures. Its international airport sees 25 million passengers from around the world and offers a range of convenient connections with downtown Toronto. The Sheraton Toronto Centre Hotel--our home for the conference--offers beautifully appointed meeting rooms and sophisticated design to enhance the conference experience. The hotel includes the largest indoor/outdoor pool in the city, as well as a 24-hour fitness center and full service spa. Several full service restaurants and the waterfalls garden and the stunning view from the hotel combine to create a warm inviting atmosphere and a highly enjoyable stay. Why Come to WorldFuture 2012? “It was a great pleasure and experience for me to meet all these people--futurists, consultants, etc.--at the WorldFuture,” said Dr. Heiko A. von der Gracht, managing director of the Center for Futures Studies and Knowledge Management (CEFU) at EBS Business School in Wiesbaden, Germany. “I found this a really inspiring networking event and I am sure that that I will come back and contribute again.” Indeed, participating at a conference is like getting the whole World Future Society experience live in one place and in person, at a dynamic event that you can share with old friends and fascinating new acquaintances. Many members have been attending Society conferences over the years as a unique vacation--an adventure of the mind--where they can explore the exciting world that they are helping to build themselves: The future! We look forward to welcoming you to Toronto--and bringing your World Future Society experience to life! Please join us. Cordially, Timothy C. Mack President P.S. And don't forget that if you register right away, you'll save a substantial amount over regular registration costs--$300. Register Today and Save $300! http://www.wfs.org/content/register-worldfuture-2012

When will the Recession End? part 261 Putin Ignores The Gathering Economic Storm in Russia

Putin Ignores The Gathering Economic Storm

The volatile turbulence that battered the world economy last week should have passed Russia by, but it did not. Indeed, Russia is not burdened by a massive debt and is spared political feuds about budget cuts and is not even exposed to the looming Greek default; nevertheless, its stock exchange fell deeper than most. The Dow Jones index, for that matter, opens this Monday on about the same level where it was a week ago, while the RTS slipped from the plateau of about 11,600 to a low of 9,600 and barely bounced to 9,900 on Friday (Kommersant, August 13). Certainly, the speculative games are only a symptom, and not necessarily a reliable one, of the real economic trends, but statistics suggest that Russia’s economic growth slowed down in the second quarter, and experts argue that the country is entering into the new phase of turmoil, for which it is not any better prepared than it was in mid-2008 (www.newsru.com, August 10; Nezavisimaya Gazeta, August 12).

Most world leaders frequently hold emergency sessions of their cabinets and try to convince opposition parties to accept austerity packages, but Prime Minister Vladimir Putin remains supremely relaxed. He made a few headlines with a loose remark about US “parasitism” on the global economy and advised scared markets to calm down, but obviously sees no burning need in his trademark “manual management” (RIA Novosti, August 1; Kommersant, August 10). It was his diving in the Black Sea that received most media attention, when he discovered two ancient amphorae in a shallow bay that had been thoroughly searched by archeologists and combed by the security service, a feat that has given much joy to Russian bloggers (www.besttoday, August 13). Perhaps playing these PR-games is indeed the best Putin could do in a situation where the US dollar and the Euro are seriously unstable, but the ruble is “unpatriotically” depreciating against both (www.gazeta.ru, August 12).

It is exactly Putin’s confident steering that has made the Russian economy so vulnerable to the swings of markets’ moods because he took particular pride in rising pensions and other social programs, which has made the budget seriously over-loaded with irreducible obligations. In the next few years, steep increases of funding for law enforcement and rearmament are earmarked, but the stagnation of revenues guarantees the execution of severe cuts in populist and militarist commitments, which could hardly be postponed longer than a few months after the presidential elections in spring 2012 (www.gazeta.ru, August 11). The foreboding in the middle classes translates into the deepening and widening urge to move away from the crumbling “stability” (Moskovskiy Novosti, August 12). It also drives the discontent with the too generous federal funding for the North Caucasus where the smoldering civil war has become a profitable business for local elites (Vedomosti, August 3).

Russian corporate debt is now higher than it was in 2008 and the reserve fund is depleted, so the solvency is entirely a function of high-and-rising petro-revenues, which are in fact flat with a tendency to fall (www.newsru.com, August 8). Russian oil companies are bracing for lower profit margins, but it is the almighty Gazprom that feels threatened by the shrinking demand in Europe and the falling prices on the spot market (RBC Daily, August 12). Sticking to the letter of its treasured long-term contracts Gazprom has shown so little flexibility on prices that now even its trusted German partner E.ON is taking it to court for abusing its monopolistic position (Ekspert, August 1; Vedomosti, August 11). Desperate demands for price cuts come also from Ukraine where former Prime Minister Yulia Timoshenko is even behind bars for signing an allegedly detrimental gas deal with Russia in January 2009 (RIA Novosti, August 6). Moscow is not impressed with this politicized investigation, and the meeting between President Dmitry Medvedev and Viktor Yanukovych in Sochi last week brought no compromise (Kommersant, August 12). Russia has no interest in pushing Ukraine to bankruptcy and it is not even pressing Putin’s proposal for Gazprom’s “big-brotherly” takeover of Ukrainian Naftogaz, it appears to pursue the simple aim of revenue maximization.

This reduction of the political agenda to securing the inflow of petro-dollars shows that Russian rulers believe that in the dawning era of market volatility and “quantitative easing” of major currencies the value of oil and gas as secure assets is set to grow. This goes against Medvedev’s “modernization” discourse based on the lesson from the painful contraction of 2008-2009, which pointed to the unacceptable risk of over-dependency upon energy exports. The key pre-condition for modernization is investment, but entrepreneurs showed only superficial enthusiasm for Medvedev’s “innovations,” while strategically moving their money out of Russia. In the last week, this trickling-out turned into a current, as only the investment funds evacuated from the Russian market more than $400 million (Kommersant, August 13). Even in the energy sector, modernization is not happening and the failed attempt to build the “Bolshoi Petroleum” alliance between the BP and Rosneft, torpedoed by vicious business-political intrigues, testifies to that (RBC Daily, August 11).

Anxiety about Russia’s entry into a new phase of economic crisis is inevitably influenced by the reflections on the collapse of the USSR, because this week marks the twentieth anniversary of the military putsch that sought to rescue the imploding super-power and instead precipitated its demise. Public opinion remains divided and more sour than celebratory about that event, and Putin is hardly going to orate about it, but it has definitely left a deep scar on the national psyche (Ekho Moskvy, August 11). The shock from seeing tanks in Moscow streets has long been erased by impressions from too many other tanks burning in the squares of Grozny or rolling towards Tbilisi, but the sinking feeling of living through a state failure is back. It was the military-industrial complex that bankrupted the oil-based Soviet economy in the 1980’s, and now it is the corrupt bureaucracy that proceeds along the same track. Putin is both the master and the servant of this system that has extracted from Russia value exceeding the limits of economic self-reproduction, and he is set to preside over the unraveling.

--Pavel K. Baev

Eurasia Daily Monitor -- Volume 8, Issue 157

When will the Recession End? part 260 Russia still faces risk of economic meltdown - expert

Abstract (summary) 

The basis for the return of the world's financial markets to growth were yesterday's statements (heard late in the evening Moscow time) by representatives of the US Federal Reserve System. They effectively promised to "increase liquidity" if the situation…

Text of report by Russian political commentary website Politkom.ru on 10 August

[Report by Ivan Preobrazhenskiy, leader of IA Rosbalt's political desk: "Premature End to Panic"]

The Federal Reserve System in the United States, the Ministry of Finances in Russia, and financial departments in other countries have put an end to the financial panic that arose at the end of last week. Real monetary "injections" for the financial markets, and to a greater extent, even the simple promise to pour money on the fire, were enough, many people think, to avert a second wave of financial economic crisis. However, in reality, it is rather too early to rejoice. And the rouble could still easily be devalued, oil prices go down again, and the US economy enter the stage of recession. After all, the main cause - the gigantic, simply unmanageable debts of those states that after 2008 assumed the obligations of major corporations - has not gone anywhere.

The basis for the return of the world's financial markets to growth were yesterday's statements (heard late in the evening Moscow time) by representatives of the US Federal Reserve System. They effectively promised to "increase liquidity" if the situation on the stock markets does not enter a normal channel, and the United States' debt problem remains as acute. And after this, the American stock markets quietly crept upward. True, not with the fervour with which, before this, they collapsed into the "minus" abyss.

Incidentally, Russia also resorted to measures similar to those employed by the Americans. Here things were not limited to Vladimir Putin's promises alone. In order to stabilize the situation, the Ministry of Finances floated temporarily available budget funds to the tune of 40 billion roubles. In the upshot, the combination of the external and internal factors brought some long-awaited calm to the Russian stock markets. Like the American markets, they resumed their growth. Accordingly, the US dollar exchange rate also fell slightly against the Russian rouble. It may appear that Russians can relax. And that those of them who managed to open "metal" accounts in banks, or who bought investment coins, can altogether grow sick at heart, because the growth of prices on the most important valuable metal virtually stopped. However, such an optimistic conclusion is premature.

The first sign is the continuing, albeit limply, fall of the rouble exchange rate. Against the Euro, if not the dollar. Second, there is the continuing growth in the price of gold. Albeit not such significant growth as in the previous few days, but tangible growth all the same. Finally, the third indirect sign is the bankruptcies of small tourist firms and airlines that have been observed in Russia. It does not testify directly to continuing instability in the financial markets, of course. However, it is painfully reminiscent of the 2008 situation, when the first financial problems also began among tour operators and air carriers, and it all ended with a large-scale market collapse and a pronounced devaluation of the rouble.

In point of fact, it is devaluation that is predicted by many analysts as the first, and most probable consequence of what has happened. In other words, we can expect, if not in the next month or two, then in the foreseeable future, a fall in the rouble exchange rate, and, in parallel, inflation, with all its charms; that is to say, first and foremost, rising prices and tariffs. Even entirely official people do not conceal this. For example, Deputy Finance Minister Sergey Storchak, justifying the need for the population to have roubles in their hands by the fact that they buy bread with these same roubles, nevertheless says: "When it comes to large sums of savings, there is still some sense in turning to exotic currencies. But if it is a question of the comparatively small sums of money that our population has in their hands, it is not worth abandoning the dollar."

So that it is clearly not worth being in a hurry. Even if those who optimistically state that the panic of recent days is not the first phase of an burgeoning new world economic crisis are right, for Russia individually, its own micro-crisis is virtually guaranteed. It is especially likely if oil prices, which ground to a halt rather than beginning to go up, continue over the next few days the fall began earlier, and drop below the 80 dollars per barrel barrier.

Admittedly, it is after the elections that one should most likely prepare for a collapse. It is then that it is most possible. Because, as many experts note, before the elections, political objectives are more important for the Russian authorities than economic ones, and even though accumulated funds are not as considerable as in 2008, all the same, they are entirely sufficient to "stretch" until the spring of 2012 and to elect a president. Well, and after that, he will have six years to combat all possible crises.

Credit: Politkom.ru website, Moscow, in Russian 10 Aug 11

Politkom.ru website, Moscow, in Russian 10 Aug 11/BBC Monitoring/(c) BBC

 

 

When will the Recession end? part 259 Why did the Soviet Union Collapse? It went BROKE!

This new evidence  supports my earlier notion for the key reason why the USSR fell apart. see http://bit.ly/gDR578

Stefan Lemieszewski says "A historian has secretly copied 30,000 pages of secret archival material from the Gorbachev Foundation and made them available to Spiegel.  They blow away the myth of Gorbachev as a “reformer” and replace it with the image of “Gorbachev the beggar” by revealing that the economic decline of USSR got so bad that Gorbachev had gone to London begging for $30 billion to keep the Communist empire (and himself) afloat. Documents also show that Kohl supported Gorbachev and not Yeltsin. Kohl didn’t want the USSR to collapse.

 http://www.spiegel.de/international/europe/0,1518,779277,00.html#ref=nlint

Spiegel Online

11Aug2011

The Gorbachev Files

Secret Papers Reveal Truth Behind Soviet Collapse

By Christian Neef

 

[ . . . ]

Gorbachev: You know, Helmut, there are many people among our American friends who are whispering things about "Gorbachev's situation." They're saying, for example: Look, Gorbachev supports preserving the union, while Yeltsin might grant the Baltic states and other republics their independence. Yeltsin supports private ownership, while Gorbachev favors a mixed economy. Yeltsin will be more preoccupied with domestic issues and therefore won't get in the way of the Americans in various parts of the world. These are not credible recommendations. Bush and his secretary of state, (James) Baker, are still holding their ground, but they are coming under growing pressure. Of course, I also have to overcome these difficulties.

Kohl: You can rely on me, Mikhail. I will make this sufficiently clear to the Western European and American leaders.

On July 5, when Yeltsin was already the de-facto president of Russia, waiting only for his inauguration, Kohl met with Gorbachev at the summer residence of the Ukrainian Communist Party in Mezhgorye. At that moment, neither of the two leaders could know that, half a year later, Ukraine would already be an independent country.

As they were being driven from the Kiev airport to Mezhgorye, Kohl reviewed the worst-case scenario:

Kohl: I've thought about it: What would happen if Gorbachev would suddenly leave and Yeltsin would take his place? I have to say that the mere thought of it horrified me. Of course the country cannot be left to such a man.

Gorbachev: We certainly agree on that point.

Kohl: What will you do, Mikhail, when the Baltic states finally leave the union?

Gorbachev: They can do that, of course. It's difficult to change their ideas about sovereignty. They refuse to engage in any reasonable argumentation. If they truly want to withdraw, there is only one way to do it -- the constitutional approach. But they are terrified of taking the normal constitutional path.

Kohl: You really won't keep them in the union by force. On the other hand, it must be clear to the Baltic states that there is no option other than the one prescribed by the constitution. And the West's verbal support for them changes nothing in this regard.

Neither the German nor the Russian would later publicize this conversation, because Kohl's view of Yeltsin was as devastating as Gorbachev's. What the chancellor also preferred not to see in print was the fact that he drew a clear distinction between his public support for the principle of self-determination and his actual position. Kohl did not truly support the Baltic Soviet republics withdrawing from the union, and he demanded that such decisions be approved by the parliament in Moscow -- which, by then, was already wishful thinking.

Kohl: Only a donkey can assume that the destruction of the union benefits anyone. The collapse of the Soviet Union would be a catastrophe for everyone.

[ . . . ]

Part 4: 'We Need Money for Current Expenses'

Two weeks later, he traveled to London to attend, for the first time, a summit of the seven leading industrialized nations, and to request that his country be admitted to this club of economic heavyweights. Kohl had paved the way to London for Gorbachev, over the objections of the Americans and Japanese. In reality, however, he traveled to London to beg for at least $30 billion to rescue the ailing Soviet Union and its president.

Many of the reports written in those weeks -- none of which Gorbachev would later publish -- indicate that he must have perceived the situation as demeaning.

[ . . . ]

The new friendship with the Germans has been given yet another large scoop of cement. If all goes well with the Soviet-German factor, it will determine the fate of both Europe and global politics.

On the flight back to Moscow, Gorbachev said:

Kohl ... will do everything to help us rise up again and become a modern superpower. Well, he is very anxious about Ukraine (Kohl also met with the Ukrainian leadership in Kiev ). But for him it's no longer Hitler's Lebensraum.

By early September, about three weeks after the August coup, the financial situation in the USSR was so precarious that Gorbachev took then German Foreign Minister Hans-Dietrich Genscher aside while Genscher was visiting Moscow and, abandoning any sense of pride, said:

Gorbachev: We need money for current expenses, so that we can continue to live and maintain imports while the negotiations on the restructuring of our short-term debts are underway. I plan to discuss this with Kohl on the phone today.

Genscher: I don't know if you should address such a delicate matter on the telephone. I can send the chancellor an encrypted telegram right away, so that only he can read it.

Gorbachev: We need two billion dollars. Perhaps you advance half a billion from the payments we are to receive from you in October, and we'll take another half out of our reserves. We hope to obtain the second billion in the Middle East . I have sent (the deputy head of the KGB) Primakov there with this mission.

===============================================

 

Smart materials Revolutionary material dramatically increases explosive force of weapons

A revolutionary material that will replace steel in warhead casings will bring added lethality and increase the likelihood of a hit on an enemy target, the Office of Naval Research (ONR) announced August 10.

By combining several metals with standard manufacturing techniques, High-Density Reactive Material (HDRM) has the potential to dramatically increase the explosive impact of most weapons with little or no compromise in strength or design.

Unlike conventional munitions, the innovative materials approach integrates the casing with approved warhead explosives for increased lethality. In addition, the unique design for fragmenting warheads allows release of chemical energy after impact, increasing the probability of a catastrophic kill.

"Recent testing and demonstrations have consistently shown that the new casings can be integrated into naval missiles and are durable enough to withstand both high acceleration of missile launch and the forces exposed to during the detonation event," said Dr. Clifford Bedford, ONR's energy conversion program officer. The HDRM fragments can penetrate a target's skin, followed by a rapid and sustained combustion/explosion."

The last test shots were fired at the Army's Blossom Point Field Test Facility in Maryland at the end of June.

HDRM has the strength of common aluminum alloys yet the density of mild steel, making it an ideal replacement for steel components. This is important because, in order for existing weapon systems to maintain probability of a hit, they must have a density similar to that of steel.

ONR is planning additional test shots in mid-August at Blossom Point. A large-scale demonstration against multiple stationary targets is tentatively planned for September.

###

The reactive materials team at Naval Surface Warfare Center, Indian Head Division, a partner with ONR, was recently honored with a Top Scientists and Engineers of the Year award for developing the material

Public release date: 10-Aug-2011

Contact: Peter Vietti
onrcsc@onr.navy.mil
703-588-2167
Office of Naval Research