Category: Russia & Former USSR

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What We Know So Far About the Passenger Jet Shot Down in Ukraine

From Elias Groll & Reid Standish:

Update: 1:10 p.m.Prior to the Malaysian Airlines jet’s shoot down, pro-Russian separatist leader Igor Strelkov posted on the Russian social networking site, VKontakte, claiming responsibility for shooting down a Ukrainian AN-26 transport plane. However, after news emerged of the downed Malaysian Airlines plane, Strelkov’s page appears to have been scrubbed of the post.Strelkov’s page claimed responsibility for taking down a Ukrainian jet and posted and accompanying video that shows smoke rising from what is now believed to be the crash site of the passenger jet. Below is a screengrab of Strelkov’s VKonkakte page that includes the post claiming responsibility for the downed transport plane. That post now appears to have been removed. Donetsk separatist boss Strelkov, Kremlin’s proxy in war, says he ordered shootdown thinking plane was Ukrainian pic.twitter.com/uaWKVlsA7q — Strobe Talbott @strobetalbott July 17, 2014 After reports emerged that a passenger jet had been shot down, Strelkov said that his forces were not responsible and that they lacked the capability to shoot down a plane flying at that altitude. The plane was reportedly flying at an altitude of about 33,000 feet.Meanwhile, additional images are emerging of the crash site, including the horrifying image below that was carried by Russian television:

Malaysian Airlines Crash Site

Read more at What We Know So Far About the Passenger Jet Shot Down in Ukraine.

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Enough to make Gazputin grin

  • Chinese stocks drift lower
  • Crude oil rising
  • Other commodities weak

China’s Shanghai Composite Index continues to drift lower on the long-term, monthly chart.

Shanghai Composite Index

Apart from crude oil, commodity prices have fared little better. But crude plays such a dominant role in most commodity indices that they appear more buoyant. Dow Jones-UBS Commodity Index rallied to 140 before retracing for another test of primary support. Oscillation of 13-week Twiggs Momentum around zero, however, does not suggest a significant trend.

Dow Jones UBS Commodities Index

Crude oil is doing a lot better, heading for another test of $110/barrel on the back of supply threats from geo-political tensions. The ascending triangle is very large, but breakout would suggest a long-term target of the 2008 high at $145*.

Brent Crude and Nymex Crude

* Target calculation: 110 + ( 110 – 75 ) = 145

…Enough to make even Gazputin grin.

Vladimir Putin

Read more at Bloomberg, June 2013: Gazprom’s Demise Could Topple Putin

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America’s Ukraine-Policy Disaster | The National Interest

From James W. Carden:

….A second unintended consequence of our involvement with Ukraine is the emergence of Russian hypernationalism. Little attention seems to be given to the effects that our facilitating an anti-Russian regime in Kiev has had on the political landscape in Russia; Russians now, more so than at any other point in the last quarter century, are under the spell of one man. According to the widely respected Levada Center, Vladimir Putin’s approval ratings stand at 80 percent. While respected analysts like the Carnegie Endowment’s Lilia Shevtsova seem to believe that this level of support is unsustainable, the numbers may point to a new and troubling phenomenon: that a rather prosaic Russian nationalism is in the process of transmogrifying into Russian hypernationalism. If this is so, a war in East-Central Europe becomes all the more likely, because as the University of Chicago’s John J. Mearsheimer has noted, “hypernationalism …is the belief that other nations are not just inferior, but dangerous as well, and must be dealt with harshly, if not brutally…[it] creates powerful incentives to use violence to eliminate the threat.”

Read more at America's Ukraine-Policy Disaster | The National Interest.

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Ukraine should sell its gas pipeline to stabilize the region

From OilPrice.com

Gas supply, and the threat to that supply for Europe, is what has forced Russia to move aggressively on multiple fronts to defeat Ukraine in its efforts to modernize and westernize its economy, its future, and its way of life.

So, how to start the liberalization process? Ukraine has argued that its gas transportation system is a strategic asset. Business-minded people take issue with this interpretation, which ignores the commercial potential of the pipeline system. Now that we have come full circle in a long-brewing Ukraine-Russia gas war, perhaps the pipeline should be considered “strategic” — if not in the way the Ukrainian authorities have long understood. The pipeline system, worth $20 to $30 billion, can indeed play a strategic and tactical role in resolving Ukraine’s crisis with Russia, but only if it’s sold off.

Ukraine should sell 50 to 75 percent of it for cash to a consortium involving the EU, U.S. and Russia and operated by a U.S. business enterprise, preferably based in Houston. This can only happen if Russia agrees to remove troops and other proxies in eastern Ukraine and then works with Ukraine to secure the border and cease all low-intensity conflict efforts, including on the ground, and in cyberspace and the trade arena….

Read more at EconoMonitor : EconoMonitor » 5 Things Ukraine Must Do to Become Energy Independent.

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Putin’s strategy: Turning Russia into China’s Ukraine

What is starting to dawn on Vladimir Putin is that, in a free-market system, one is more beholden to one’s customers than to one’s suppliers. It is easier for customers to take their business elsewhere than for suppliers to do so.

China’s biggest customers are Europe and the United States. Russia is attempting to switch their customer from Europe to China. That would move them further down, not up, the supply chain. As Prof Timothy Snyder points out:

…Putin would have to fall back on China, and Russia would become China’s Ukraine.

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What Ukraine Crisis Means for Future of Europe | SPIEGEL ONLINE

Interesting extract from Spiegel interview with Prof. Timothy Snyder from Yale:

SPIEGEL: What motivates Putin?

Snyder: I think Putin is playing an all-or-nothing game, geopolitically speaking. He no longer cares about tolerable relations with the EU or about a solid relationship with Ukraine. Putin has opted for something else, a much larger project, to destabilize Ukraine and the EU. It’s an all-or-nothing game because there is no going back, now that he has embarked on this path.

SPIEGEL: Can he win?

Snyder: There are two options now: Either he achieves his goals, or the European Union achieves political unity and ideological stringency. It would have to define itself as Russia’s adversary and, most of all, develop a joint energy policy with which it could affect Putin. If the EU could do that, there would be radical consequences for Russia. Then Putin would have to fall back on China, and Russia would become China’s Ukraine.

via Experts Discuss What Ukraine Crisis Means for Future of Europe – SPIEGEL ONLINE.

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