Link back to the discussion thread.

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Europe

• European banks restart Russian bond trading RT

Several major European banks have followed Wall Street by allowing clients to trade Russian debt once again, the Financial Times reported on Wednesday, citing its sources.

The report highlighted that UBS, Barclays and Deutsche Bank have all resumed allowing clients to sell their Russian debt holdings, in line with similar moves by JPMorgan, Bank of America, Jefferies, and Citigroup in the US.

Other European banks, including Credit Suisse and HSBC, have so far held back from re-entering the Russian debt market owing to their lower risk tolerance, people with knowledge of their activities told FT.

The sources explained that the decisions to restart Russian bond trading had not been motivated by trying to profit from the reopening of the market, but instead were intended to allow clients to wind down their exposure in accordance with sanctions rules.

“This is chiefly for clients who continue to want to unwind,” an unnamed employee of one of the banks that has restarted Russian debt trading told the outlet. “The volumes aren’t that remarkable,” he added.

In July, the US Treasury published guidelines that allowed US banks to facilitate, clear and settle transactions with Russian securities if it helped US holders to gradually dispose of them.

Prior to that, the majority of US and European banks had stopped working with Russian securities after the Treasury imposed a ban on transactions with Russian assets as part of the economic sanctions on Moscow.

Russia

• Russia jumps to become third-largest market for yuan payments amid sanctions Reuters

Russia has charged up to third place in a list of countries outside mainland China using the yuan for global payments, highlighting how it is being affected by Western sanctions.

Russia had not even been on the monthly list published by global financial messaging firm SWIFT before its invasion of Ukraine in February, but latest figures released on Thursday showed that only Hong Kong and financial powerhouse Britain are now ahead of it.

Russian firms and banks were involved in almost 4% of international yuan payments by value in July, according to SWIFT. That was up from 1.42% the previous month and from zero in February when the Kremlin’s action in Ukraine, which Moscow calls a “special military operation”, triggered sanctions.

Hong Kong unsurprisingly remains the top source of yuan transactions outside mainland China with 73.8% of the total, followed by Britain which accounted for 6.4%.

Russia’s sudden leap up the list will support the argument that sanctions are working and squeezing it out of the U.S. dollar-based global banking system. But it will also back those who say it will bring Moscow and Beijing closer.

• Even as the West tries to wean itself off Russian oil, Moscow has found itself yet another buyer: Myanmar Business Insider

Despite sanctions and boycotts over its invasion of Ukraine, Russia has managed to acquire new customers for its energy products. This time, Myanmar is joining the line to buy Russian gas and fuel oil, according to Reuters and Bloomberg.

“We aim to buy high-quality fuel oil at a cheap price from the country where we can get it quickly,” Myanmar’s military spokesperson Zaw Min Tun said on Wednesday, per Bloomberg. He said military chief Min Aung Hlaing sealed a fuel oil deal with Russia during a trip to Moscow in July.

Myanmar has been ruled by the military since its civilian government was overthrown in a coup in February 2021. Since then, the junta has been hit by US and European Union sanctions. More than a year after the coup, civil protests continue to rock the country.

Like many economies around the world, Myanmar has been hit by skyrocketing inflation, including fuel prices. In the last week, gas stations in parts of Myanmar have been forced to shut due to fuel shortages, according to Reuters.

• Russian rouble nears 4-week high versus dollar Reuters

The rouble firmed to a near four-week high against the dollar in early trade on Friday, supported by month-end tax payments that boost demand for the Russian currency, while shares in fertiliser producer Phosagro surged after strong results.

At 0704 GMT, the rouble was 0.5% stronger against the dollar at 59.20 after briefly hitting 57.70, a level last seen on July 25.

Against the euro, the rouble gained 0.9% to 59.65.

• Russian ‘Starbucks’ gets new name and logo RT

The Starbucks coffee chain will resume operating in Russia under the new brand name “Stars Coffee,” the Moscow 24 channel reported on Wednesday. According to the media, a girl in a traditional Russian ‘kokoshnik’ headdress will replace the mermaid on the logo.

Coffee shops in the Russian capital will reportedly open under the new name on August 18.

Last month, Russian rapper and businessman Timati (Timur Yunusov) announced that he had purchased all Russian assets of the US coffee chain in partnership with entrepreneur Anton Pinsky. The buyers obtained the rental agreements for all 130 Starbucks coffee shops in Russia, as well as the employment contracts of its 2,000 workers.

In March, Starbucks, which had operated in Russia since 2007, announced that it was temporarily suspending all business activities in the country, including the supply of products, due to Western sanctions. On May 23, the company announced its decision to exit the Russian market, saying it would continue to support its Russian employees, including by paying them six months’ salary and assisting with new employment.

• Putin gives advice on tackling alcoholism RT

The government should promote healthy alternatives to excessive alcohol consumption rather than adopting restrictive policies, Russia’s President Vladimir Putin said on Wednesday.

“You cannot prohibit it or impose excessively high excise duties to ramp up the prices,” the Russian leader said during video meeting with a Russian governor on Wednesday, adding that ignoring the problem and saying “people drink and they always will” is also the wrong approach.

There are “simple things” that can be done to deal with the issue effectively, Putin suggested, including promoting better lifestyles and offering healthier alternative ways for people to spend their free time.

“I am not saying anything novel here, but still. The promotion of a healthy lifestyle is very important. But it’s not enough. There needs to be a developed infrastructure for sports and physical training,” the president noted.

“And culture in the wider sense needs attention. Make the conditions for people to go to places, foster their interest in culture,” he added.

Netherlands

• Dutch Government To Decide Whether To Fill Norg Gas Storage Above 80% Oil Price

The Netherlands could decide this month whether it will fill its largest gas storage facility past 80%, Dutch officials told Reuters on Tuesday.

The news comes as Europe moves to replenish gas supplies heading into the winter months.

The EU is looking to break the chains of Russian oil and gas dependence, but the road to doing so will not be easy. While the EU attempts to replenish their gas stores to be able to withstand the upcoming heating season, some EU countries have tried to steer their residents toward reducing thermostats, shortening showers, and sourcing firewood.

Meanwhile, others are capping the price of household energy—a measure that critics argue will only increase energy usage rather than curb it. . Energy prices continue to skyrocket in much of Europe, and it is widely expected to increase even further this winter. The current high price of natural gas makes the Netherlands’ decision to possibly add more gas to storage even more critical, with the country choosing between high costs of natural gas now to refill that storage, vs. potentially running out or paying even more for natural gas later this winter.

Dutch gas storage facilities are currently 70% full, according to Reuters. The EU has a goal to fill all gas storage to 80% by November. The Netherland’s largest gas storage facility, the Norg storage plant, already achieved the 80% full mark, and efforts to fill it further have for now been suspended. The facility currently houses 5 billion cubic meters of natura gas, the Economic Affairs Ministry said, according to Reuters.

The cost to fill Norg to just 80% was estimated at more than $6 billion. It is not yet clear how the Dutch government would finance additional gas supplies for the facility, which is estimated to hold another 1.2 billion cubic meters.

Germany

• Germany’s Scholz to testify over handling of multibillion-euro tax fraud Reuters

German Chancellor Olaf Scholz is set to testify in front of lawmakers on Friday over his role as Hamburg mayor in tackling a multibillion-euro tax fraud in a case that threatens to tarnish him even as he battles crises on multiple fronts.

In the scheme of “cum-ex” or dividend stripping, banks and investors would swiftly trade shares of companies around their dividend payout day, blurring stock ownership and allowing multiple parties to falsely reclaim tax rebates on dividends.

Oh god. I can feel the horny comments being made right now.

The loophole, now closed, took on a political dimension in the northern port city of Hamburg due to authorities' sluggishness under the mayorship of Scholz at demanding repayment of millions of euros gained under the scheme by important local bank Warburg.

Warburg, which plays a big role in Germany’s second largest city, eventually paid its 50 million euro tax bill after the federal finance ministry intervened.

The case threatens to undermine the chancellor even as he is trying to hold his fractious coalition together in the face of growing public discontent over soaring energy inflation in the wake of Russia’s invasion of Ukraine in late February.

“It all stinks to high heaven and simply cannot have happened without political influence,” Richard Seelmaecker, representative of the opposition conservatives on the committee, told broadcaster ntv.

Scholz, who has dismissed suggestions of any impropriety in his handling of the affair, is due to face a Hamburg parliamentary committee of inquiry investigating the matter in a hearing on Friday from 1400 CET (1200 GMT).

“This has been an issue for two and a half years now,” Scholz recently told reporters. “Countless files have been studied, countless people have been heard. The result is always: There has been no political influence.”

But recent headlines that prosecutors probing the scheme in Hamburg discovered 200,000 euros in the safe of a local politician from Scholz’s ruling Social Democrats has reignited suspicions of political intervention on the bank’s behalf.

Scholz has denied any knowledge of this cash or its origin and said he no longer has contact with the lawmaker involved. The lawmaker did not respond to a request for comment.

• ‘We got too comfortable’: the race to build an LNG terminal in north Germany Guardian

As tourists at the Hooksiel resort on Germany’s North Sea coastline lean back in their wicker beach chairs or stomp around the mud flats, the cast-iron jetty that stretches for 1.3km into the ocean to their right is a familiar sight. The frantic clanging of metal on metal at its furthest tip, however, is new.

Built in 1982, the jetty was designed to host not just two import terminals for chemicals but also one for liquefied natural gas (LNG), shipped in on tankers from the US. With cheap Russian gas beating LNG for price, those tankers never arrived. Two adjacent plots of land, reclaimed from the North Sea to make space for industry, instead attracted rare warblers and bitterns.

But as Russia’s war in Ukraine upends decades of German energy policy, getting LNG tankers to dock on the Hooksiel jetty is suddenly a matter of national priority.

Wilhelmshaven, the nearby historic port town, has become emblematic of a two-fold, seemingly contradictory promise made by Germany’s government: that it can import LNG to compensate for throttled gas imports from Russia at record speed, belying a reputation for bureaucratic plodding; and that the jetty into the North Sea will carry LNG – a polluting fossil fuel – for only a short time, soon to be replaced with a more climate-friendly substitute.

Wilhelmshaven is one of five floating LNG terminals Germany is rushing to build by the end of the year, creating infrastructure that a study in July by the Fraunhofer Institute argued would be vital to avoid cold homes and closed factories this winter not just in Germany but across all of Europe as Vladimir Putin turns off the tap.

The Höegh Esperanza, a 300-metre long tanker converted into a Floating Storage and Regasification Unit and chartered by the German government at a mooted cost of €200,000 a day, will dock at the jetty and turn liquid back into gas at a rate of about 10 hours per tanker load.

Roughly 80 tankers are expected to arrive at Wilhelmshaven each year, substituting half of the gas imports the German energy company Uniper used to have from Russia, or 8% of Germany’s overall gas usage before the start of the war.

Shortly after Russian troops crossed on to Ukrainian soil in the spring, the talk was that building LNG terminals would take three to five years. Now politicians are confident the terminal and its connecting pipeline can be built in seven months, with works finishing on 21 December and gas flowing the day after.

Uniper, which is managing the build, is only slightly more cautious, saying windy weather in the colder months could yet delay completion until the second half of the winter.

Behind-schedule building projects, such as Berlin’s new airport and Hamburg’s Elbphilharmonie concert hall, have in recent years busted myths of German efficiency. The LNG terminals are trying to buck the trend by instead emulating the model behind the creation of Tesla’s new Gigafactory in Brandenburg, with building works already starting while permit applications are still being scrutinised.

France

• Heavy rainfall hits Paris after recent heatwave EU Reporter

Heavy rainfall hit Paris on Tuesday evening (16 August) after a recent heatwave across France, affecting metro stations in the French capital.

The RATP transport organization said several Paris metro stations had been affected by flooding.

Meteo France has said that much of southern France could be hit by storms later this week.

Portugal

• Portuguese wildfire envelops Madrid skyscrapers in smoke 400 km away EU Reporter

On Tuesday (16 August), smoke from a massive wildfire in central Portugal engulfed skyscrapers in Madrid, known as “Four Towers”. Residents of the Spanish capital complained about a strong burning smell.

The fire that ravaged Portugal’s Serra da Estrela National Park began on 6 August, and was largely out by Sunday. However, it rekindled on Monday (15 August), leading several villages to be evacuated.

The fire has scorched over 17,000 ha and was being tackled by more than 1,100 firefighters supported by 13 waterbombing planes.

Andre Fernandes, Civil Protection Commander, stated that the fire was spread across multiple fronts making it difficult for firefighters to tackle in dry, windy conditions.

Finland

• Finland limits visas to Russians amid rush of Europe-bound tourists EU Reporter

Finland will slash the number of visas issued to Russians from 1 September, the Finnish foreign ministry said in a statement on Tuesday (16 August), amid a rush of Russian tourists bound for Europe.

Finnish land border crossings have remained among the few entry points into Europe for Russians after a string of Western countries closed their airspace to Russian planes in response to Russia’s attack on Ukraine.

The Finnish government agreed on Tuesday to curtail their numbers, after Russian tourists begun using Finland’s Helsinki-Vantaa airport as a gateway to European holiday destinations following Russia’s lifting of pandemic-related border restrictions a month ago.

“And this maybe is not very appropriate if we, for example, think of the airspace restrictions put in place for Russia,” Foreign Minister Pekka Haavisto told reporters after government talks.

Finland would cut daily visa application appointments in Russia from 1,000 to 500 per day, with just 100 allocated to tourists, the ministry said.

The number of visas granted was already much lower than before the pandemic and the war. In July, Finland granted just 16,000 visas to Russians, compared with 92,100 during the same month in 2019, foreign ministry statistics showed.

Finland and the Baltic states would also propose that the European Union discontinues a visa facilitation agreement with Russia that makes it easier for Russians to travel to and within the European Union, Haavisto said.

Asia and Oceania

China

• Goldman Sachs Less Positive About China’s Economic Growth Oil Price

Goldman Sachs has revised its forecast for China’s economic growth from 3.3 percent to 3 percent for this year. The bank attributed the revision to weaker than expected data for July and a tight energy supply.

Bloomberg noted in a report on the news that the July data showed a deepening housing crisis combined with continued Covid restrictions, topped by a recent unexpected decision by the central bank of the country to cut interest rates.

Slower economic growth for the world’s powerhouse would mean a softening in oil prices, which would be very welcome by other large consumers who have been trying for months to bring prices down with limited success.

• China mortgage boycotters see little progress one month on, as properties remain unfinished and wider crisis simmers SCMP

On August 17, nearly a month after Wu Xiao signed a public letter joining around 100 fellow homebuyers in a mortgage boycott for an unfinished housing development in Zhengzhou, the capital of Henan province, she finally received some news.

Her mortgage bank, Shanghai Pudong Development Bank, informed her that she could skip her 1,500 yuan (US$220) mortgage payments in August, September and October. But she is expected to pay double in November, December and January to make up for the payment holiday.

“It is only a temporary solution, but better than nothing,” Wu said.

However, getting even this allowance took some work. “No one approached us after we issued the public letter, and we had to request conversations with the bank, the developer and the housing officials,” Wu said.

A month ago, Beijing – facing a boycott movement that quickly grew to 320 projects in 100 cities – promised that “all the difficulties and problems will be properly solved”. But so far, people like Wu say they have received only scant relief. They are still waiting for the government to fix the fundamental problem. Meanwhile, the risk to the wider economy remains.

Wu bought the 45-square-metre studio in 2020 for her parents and had been faithfully making the payments for almost 30 months before joining the mortgage boycott. The home, due in December last year, is still not complete.

That lack of progress leaves buyers like Wu just as resolute as they were at the height of the demonstrations.

“If after three months nothing has progressed, I will not pay 1,500 yuan in November – no need to mention 3,000 yuan,” she said.

After the boycott movement flared up, China’s Politburo issued a statement assuring buyers that the government would help cash-starved developers finish late projects, with local governments responsible for making sure they do so.

• China sentences tycoon Xiao Jianhua to 13 years, fines his company $8.1 bln Reuters

A Shanghai court on Friday sentenced Chinese-Canadian billionaire Xiao Jianhua, not seen in public since 2017, to 13 years in jail and fined his Tomorrow Holdings conglomerate 55.03 billion yuan ($8.1 billion), a record in China.

Xiao and Tomorrow Holdings were charged with illegally siphoning away public deposits, betraying the use of entrusted property, and the illegal use of funds and bribery, the Shanghai First Intermediate Court said.

It added the punishment was mitigated because both had admitted their crimes and cooperated in recovering illegal gains and in restoring losses.

China-born Xiao, known to have links to China’s Communist Party elite, was last seen whisked away in a wheelchair from a luxury Hong Kong hotel in the early hours with his head covered, a source close to the tycoon told Reuters at the time.

Xiao and Tomorrow have “severely violated a financial management order” and “hurt state financial security”, the court said, with the tycoon additionally fined 6.5 million yuan for the crimes.

• China denies Belt and Road Initiative ‘debt trap lie’ as infrastructure spending tops US$1 trillion SCMP

China has worked with almost 150 countries and spent US$1 trillion as part of Beijing’s Belt and Road Initiative to open cross-border trade routes while placing no one in a “debt trap” despite accusations from the United States, according to its foreign ministry.

The government has signed belt and road “cooperation documents” with 149 countries and 32 international organisations as of July 4, while taking on 3,000 projects, Ministry of Foreign Affairs spokesman Wang Wenbin said on Thursday.

The initiative, which is now in its ninth year, offers Chinese support, often through major state-backed enterprises, for roads, airports, seaports and other infrastructure that smooths trade in goods.

Projects began in Asia and extended into Europe before covering parts of Africa and the Americas, but US Secretary of State Antony Blinken has accused China of creating a “debt trap”.

“The so-called Chinese debt trap is a lie made up by the US and some other Western countries to deflect responsibility and blame,” Wang said.

“Their allegation against China is simply untenable.”

It is literally projection by the US. They’ve been debt trapping poor countries for decades via the IMF and World Bank. I’m not claiming that there are no problems with the Belt and Road Initiative, but the infrastructure that gets built in developing countries under the BRI is so much more beneficial than Western foreign outreach that they eve aren’t comparable projects. It’s literally “We are here to enslave you permanently to the West - hand over your fucking agricultural lands or we’ll coup you, motherfuckers” versus “Hey, want a dam? Sure, if you need to pause your debt repayments because of a recession in your country, we can do that for you."

India

• India To Delay Coal Plant Closure Oil Price

India is set to delay the retirement of some coal plants even as it builds new coal generation capacity, Bloomberg has reported, noting this would interfere with climate commitments.

Citing unnamed sources, the report says that plans are to reduce the capacity set for shutdown to less than 5 GW by 2030. The reason for the change is the surge in electricity demand amid tight energy supplies.

The news comes just as India’s government approved a revised version of its Nationally Determined Contributions under the Paris Agreement. Under the revised version, India has committed to increasing the share of non-fossil fuel energy sources in its energy mix to 50 percent by 2030.

Yet these goals may have to be compromised because the need to secure enough energy for a growing population right now is trumping the commitment to make as much of this energy as possible green.

Currently, India generates as much as 70 percent of its electricity from coal power plants with a total capacity of 204 GW. It also has plans to construct 30 GW of new capacity to replace aging plants and more than 20 GW in all-new coal generation capacity. This will expand the country’s total coal generation capacity to more than 250 GW by 2030.

• India cut its purchases of Russian crude for the first time in 5 months and switched to Saudi Arabia’s cheaper oil Business Insider

India slashed its purchases of Russian crude in July for the first time since March this year in the face of cheaper Saudi oil, Reuters reported.

Oil shipments to India averaged 877,400 barrels per day from Russia last month. That’s about a 7.3% decline from June.

Meanwhile, India oil imports from Saudi Arabia rose by 25.6% in July to their highest in three months, Reuters said. Imports reached 824,700 barrels per day after Riyadh reduced its official selling price to Asian customers in June and July.

India and China are the largest importers of Russian crude right now, as Western sanctions on Moscow have deterred buyers in markets like Europe and slashed the value of its oil. Exports of Russian oil to Asia have reeled in stunning revenues for the country where it is expected to generate $285 billion this year from its oil and gas sales.

• Indian company to develop Nepal hydropower plant left by China Al Jazeera

Nepal has signed a pact with an Indian company to develop a hydroelectric plant in the west of the nation years after a Chinese firm backed out, officials said.

Nepal has opened its rivers, which it sees as having a combined potential to generate more than 42,000 megawatts of hydroelectric power, to foreign players to develop its economy and export electricity to narrow the trade deficit of more than $13bn.

Officials said India’s NHPC Ltd signed a memorandum of understanding (MOU) on Thursday allowing it to study details like feasibility, environmental effects, inundation of land and construction costs for two projects – West Seti (750 megawatts) and SR 6 (450 megawatts).

Both plants are to be located on the West Seti River in Nepal’s least-developed far western region.

China’s biggest hydropower developer, Three Gorges International Corp, was previously lined up to develop the West Seti plant, but Nepal scrapped the deal in 2017 amid haggling over the terms, officials said.

“After decades of delays we would not have plunged into another uncertainty,” chief executive officer Sushil Bhatta of the state-run Investment Board Nepal told Reuters news agency.

“NHPC has a good track record of developing such projects in similar terrain in neighbouring areas in India and has the potential to ensure India’s market for electricity,” he said, adding that he hoped for more projects in the region.

Abhay Kumar Singh, managing director of NHPC Ltd, was similarly optimistic. “When we enter a project, we complete it,” he said.

India is already constructing a 900-megawatt hydropower project on the Arun River in eastern Nepal at a cost of $1.04bn.

China and India usually jostle for influence in Nepal.

New Zealand

• New Zealand floods could take years to clean up, with 1,200 people displaced Guardian

Torrential downpours that have battered New Zealand for four days straight have caused floods that could take years to clean up and displaced at least 1,200 people from their homes in the top of the South Island.

Friday’s rain comes on top of weeks of wet weather and is worsening conditions in New Zealand’s already sodden landscape. Experts have attributed the unseasonably wet weather to a narrow stream of water vapour, or “atmospheric river”, sitting above the country.

Evacuated residents in Nelson, a city with a population of more than 50,000 that has been particularly hard hit, were told they were unlikely to be able to return home on Friday, leaving 1,200 people from 411 households displaced. Nelson’s mayor, Rachel Reese, told media it would take years to recover from the flooding, which has badly damaged roads and homes.

DPRK

• North Korea tells South Korean president to ‘shut his mouth’ after offer of aid Reuters

North Korea’s Kim Yo Jong, the powerful sister of leader Kim Jong Un, said on Friday South Korea’s president should “shut his mouth” after he reiterated that his country was willing to provide economic aid in return for nuclear disarmament.

Her comments mark the first time a senior North Korean official has commented directly on what South Korean President Yoon Suk-yeol has called an “audacious” plan - first proposed in May and which he talked about again on Wednesday at a news conference to mark his first 100 days in office.

“It would have been more favourable for his image to shut his mouth, rather than talking nonsense as he had nothing better to say,” Kim Yo Jong said in a statement released by state news agency KCNA, calling Yoon “really simple and still childish” to think that he could trade economic cooperation for the North’s honour and nuclear weapons.

“No one barters its destiny for corn cake,” she added.

Holy shit. Go off, queen.

South Korea’s Unification Minister, who handles relations with the North, called Kim’s comments “very disrespectful and indecent.”

Solomon Islands

• Solomon Islands secures $100m China loan to build Huawei mobile towers in historic step Guardian

The Solomon Islands government has secured a $66m (A$96m) loan from China to build 161 mobile communication towers, which will be built and supplied by Chinese telco giant Huawei.

It is the Pacific country’s first loan from Beijing since it switched diplomatic allegiance from Taiwan to China in 2019 and is a significant bilateral development between the two countries, which signed a secretive and controversial security deal earlier this year.

The Huawei move was celebrated by the Solomon Islands government as “a historical financial partnership” between the two countries that would “work closely to ensure the successful implementation … of the project”.

The loan will come from the Exim Bank of China, which has offered a 1% interest rate.

The use of Huawei in building and supplying the towers will alarm some in Australia, which has banned Huawei from government contracts to build infrastructure in Australia, citing security concerns.

Vanuatu

• Vanuatu’s president dissolves parliament to avoid ousting of prime minister Guardian

Vanuatu’s president dissolved its parliament on Thursday, the state broadcaster VBTC reported, after an attempt by some politicians to oust the prime minister.

The PM, Bob Loughman, had been expected to face a no-confidence motion when parliament next sat after a group of lawmakers in his party said they had sided with the opposition in a bid to remove him.

Vanuatu’s president, Nikenike Vurobaravu, signed a notice dissolving parliament on Thursday to take effect the same day, a copy of the notice showed.

Vanuatu was not due to go to the polls until 2024.

A failed attempt by Loughman to change the constitution to extend election cycles from four to five years, among other changes, had caused discontent in recent months.

The opposition leader, Ralph Regenavu, said the dissolution would be challenged in court, and a majority of parliament members were in support of the bid to remove Loughman, with Regenavu saying he had the support of 29 out of 51 lawmakers.

Loughman and his supporters had boycotted parliament on Tuesday to avoid the no-confidence vote, he said.

Loughman told VBTC he was caretaker prime minister and welcomed the president’s decision. Loughman’s office could not immediately be reached by Reuters.

Middle East

Turkey

• Turkey’s central bank just made a surprise rate cut even as inflation hovers near 80%, driving the lira near record lows against the dollar Business Insider

Turkey’s central bank on Thursday cut its benchmark interest rate by 1 percentage point, an unexpected move that sent the lira lower against the US dollar as that country’s inflation rate stands near 80%.

There’s been “some loss of momentum in economic activity,” and a disinflation process should soon set in, the Central Bank of the Republic of Turkey said in a statement about its rate-cut decision. The benchmark rate was reduced to 13% from 14%, confounding the expectations of all 21 economists in a Bloomberg survey who had expected no rate change.

The dollar gained ground against Turkey’s currency, rising as much as 0.9% to 18.1185 and leaving the lira near a record low versus the greenback.

“You want to know who is plowing a lot of money into the market today? The Turkish central bank,” John Kicklighter, chief strategist at DailyFX.com, said in a Twitter posting. “The surprise 100bp cut to 13% earlier today (despite inflation of ~80%) has only pushed $USDTRY up by 0.8%.”

The decision by the Monetary Policy Committee, led by Governor Sahap Kavcioglu, was made as inflation stood at 79.6% in the 12-months through July in part on the back of rising energy costs. Energy prices worldwide have surged this year in the wake of the invasion of Ukraine by major oil producer Russia.

“The Committee expects disinflation process to start on the back of measures taken and decisively implemented for strengthening sustainable price and financial stability along with the resolution of the ongoing regional conflict,” the central bank said.

Israel

• Israel tells West it’s time to ‘walk away’ from nuclear talks MEE

This is so funny. Iran is like “Yeah, this seems okay, but we have a few changes we want, like for our army not to be called a terrorist organization and also for the next US president to not be able to just ditch it whenever he wants. Once those changes are in place, we’re good with it.” and Israel’s failson diplomats are like “Well, that’s a clear and emphatic no, then! Please stop negotiating with Iran. Please. I’m begging you."

Israel has told Western countries to “walk away” from nuclear talks with Iran after Tehran failed to respond to a yes or no ultimatum on the text of an EU proposal to revive the dormant 2015 accord.

Israeli Prime Minister Yair Lapid told German Chancellor Olaf Scholz in a phone call on Thursday that ”the Europeans sent Iran a final offer… and they declared that this offer was take it or leave it”.

“Iran refused the offer and therefore the time has come to walk away. Anything else sends a message of weakness,” Lapid said, according to an Israeli diplomat who spoke with AFP.

Africa

Mali

• Mali seeks UN help to stop France abetting ‘terrorists’ RT

Mali has urged the United Nations Security Council (UNSC) to put an end to alleged “acts of aggression” by France, accusing Paris of arming and collecting information for terrorist groups operating in Mali’s Sahel region.

French drones, helicopters and fighter jets breached Malian airspace over 50 times this year alone in order to “collect information for terrorist groups operating in the Sahel and to drop arms and ammunition to them,” foreign affairs minister Abdoulaye Diop wrote in a letter to the UN dated Monday and published on Wednesday.

Diop claimed that the flights were engaged in “activities considered to be espionage” as well as intimidation and that the Malian government has evidence proving France had both collected intelligence for and supplied arms to some of the same jihadist groups it has supposedly been fighting for nearly a decade. Specifically, he alleged, France may have transported two members of a jihadist group by helicopter to the Timbuktu region in early August.

Warning that Mali “reserves the right to use self-defense” if the French continue violating its sovereignty under the UN Charter, Diop called on the UN Security Council president, China, to use his claims as the basis for an emergency meeting of the council.

Somalia

• US bombs Somalia for the third time this summer Responsible Statecraft

The United States conducted another round of airstrikes in Somalia — the third this summer. If you were unaware that we were bombing Somalia, don’t feel bad, this is a completely under-the-radar news story, one that was curiously absent from the headlines in all of the major newspapers this morning.

Thanks to Dave DeCamp at Antiwar.com, however, we know that over a dozen of al-Shabab fighters were killed in an Aug. 14 operation by (US Africa Command) AFRICOM, as described in an official statement Wednesday. He writes:

“US Africa Command (AFRICOM) announced the airstrike on Wednesday and claimed it killed 13 al-Shabaab fighters. The command said the strike was launched against al-Shabaab members that were attacking Somali government forces in a remote location near Teedaan, Somalia.”

“AFRICOM said its “initial assessment” found that “no civilians were injured or killed,” but the Pentagon is known for severely undercounting civilian casualties in Somalia.”

“The last US airstrike AFRICOM announced in Somalia took place on August 9, and before that was July 17. The escalation comes after President Biden ordered up to 500 troops to be sent to the East African nation, reversing a Trump-era drawdown.”

The AFRICOM statement goes on to say that “US forces are authorized to conduct strikes in defense of designated partner forces.” There is no clarity on what that means, so we can only guess it is referring to the agreements the United States has with the fragile central government there, which is never not under siege by one militant opposition or another.

When pressed, the military would no doubt say that it is authorized to strike whenever it wants under the 2001 Authorization for the Use of Military Force because al-Shabaab is considered an al-Qaida offshoot. We know that justification is a stretch. Other justifications in the past have included “tactical defense” of U.S. forces and partners, which was used after questions were raised about a 2016 airstrike. Unfortunately, the mainstream media has given so little energy to sussing out authorizations anymore that it’s practically a moot point.

Al-Shabab, by the way, was created when the United States helped to overthrow the Islamic Courts Union after 9/11, which left a convenient vacuum for a new form of violent repressive rule to take hold in the embattled country. There was no serious al-Qaida presence in Somalia, but the U.S. military and CIA have been able to keep a foothold here, conducting over “several hundred declared and alleged US actions…involving drones, AC-130 gunships, attack helicopters, naval bombardments and cruise missile strikes – which between them according to local communities have killed scores of civilians” since 2007, according to Airwars.

There were 52 airstrikes in 2020 and nine since Biden took office, according to DeCamp.

Bottom line, it’s been a long time since the United States was not bombing Somalia. This comes after a particularly bloody period during the GWOT in which the CIA was using the country to detain and torture terror suspects from across North Africa. Whether this has ultimately been a good thing for the country or for the broader security of the region, one need only to look at the continued instability and impoverishment of the people, and of course, the persistent presence of al-Shabab itself.

North America

United States

• This Economy Is Proving Too Hard for Economists Bloomberg

The latest buzzword among many economists and investors is “ noise.” It’s being used to refer to any piece of economic data that doesn’t fit the prevailing narrative, which is happening a lot these days. Don’t get me wrong — this economy is proving hard to understand. It is very strong in some respects and very weak in others. The official government data shows gross domestic product just shrank for two consecutive quarters, meeting the technical definition of a recession, but it doesn’t feel like a true recession.

No sooner had the Labor Department said earlier this month that economy added 528,000 jobs in July, more than double the forecast and exceeding every one of the more than 70 estimates in a Bloomberg survey, than economists dismissed the results as “noise.” They trotted out the word again when the government said on Aug. 10 that the consumer price index was unchanged in July from the month before, an outcome all but four of 63 economists predicted. They expected an increase. And just this week we heard a lot of economists respond with “noise” when the Commerce Department said this week that retail sales for July among a control group that is used to calculate GDP rose more than forecast.

This is all very confusing to many, and I get it. But just because the data doesn’t fit Wall Street’s longstanding models that worked in the pre-pandemic era doesn’t mean that it’s ”noise.” It probably means the models are in dire need of updating.

I agree, though not in the same way you probably mean.

• Economists Fear Fed Minutes Show Central Bank Bent on ‘Unleashing Mass Unemployment’ Common Dreams

The newly released minutes of the Federal Reserve’s July meeting indicate that U.S. central bank officials have no plans to deviate from aggressive interest rate hikes as they attempt to tamp down high inflation, a policy response that one economist characterized as a commitment to “unleashing mass unemployment.”

“We have a supply-side problem, but rather than trying to restore or raise supply-side capacity the Fed is aiming to push demand down to the level where supply is currently constrained by pandemic, war, and climate crises,” noted Adam Hersh, a senior economist at the Economic Policy Institute.

Published Wednesday, the minutes of the Fed’s July 26-27 policy meeting show that the nation’s central bankers believed at the time that “there was little evidence to date that inflation pressures were subsiding,” reporting that “their business contacts remained concerned about persistently high inflation.”

South America

• EU working to stop Russian, Chinese expansion in Latin America Merco Press

The European Union has noticed of Russia’s and China’s advancements in Latin America and is devising a series of measures to counter those effects and avoid losing its traditional partners, it was reported.

According to El País, Europe’s retreat from many countries in the region has left a space, which is being filled by Moscow and Beijing. Hence, Brussels diplomatic and commercial preparations for 2023.

The Spanish newspaper reported an internal document was sent to all EU Foreign admitting the bloc had neglected its ties with Latin America for almost a decade: since 2015 there has not been a summit between the two regions, as Europe looked the other way and dealt with problems closer to its own continent, such as Libya, Syria or now Ukraine.

China, on the other hand, has increased its investments in the region 26fold between 2000 and 2020. The document, drafted by the European External Action Service, also points out that China “is the first or second most important trading partner of Latin American and Caribbean countries, above ”the EU and surpassing the United States in many countries.“

The report underlines that 21 of the 33 countries in Latin America have joined Beijing’s New Silk Road, a plan to expand global Chinese trade.

Brussels will seek to stop the growing estrangement with Latin America with a ”qualitative leap,“ according to the document. A Summit between Europe and Latin America is to be held in the second half of 2023. However, preparations are already underway, and a meeting at the ministerial level is to be held in October in Buenos Aires.

”The credibility of the EU and its power and leverage capacity on the international scene is at stake,“ warns the document quoted by El País.

EU Chief Diplomat Josep Borrell’s pledge to recover Europe’s presence in Latin America has been thwarted by the COVID-19 pandemic. After Russia’s invasion of Ukraine, Europe realized it had lost considerable ground to China, while many Latin American also fail to adhere to Europe’s response to Russian President Vladimir Putin.

”The key will be to have an agenda of measures that will help Latin American countries overcome the macroeconomic consequences of the conflict in Ukraine,“ recommends MEP Javi Lopez, who heads the European delegation to the Euro-Latin American Parliamentary Assembly.

Brazil

• Lula challenges Bolsonaro’s deforestation record, backs oil development Climate Change News

Former leftist president, Luiz Inácio “Lula” da Silva, leads the polls against the current president Jair Bolsonaro, who is seeking reelection. More than 156 million people are registered to vote on 2 October for the first electoral round.

Despite Bolsonaro’s destructive policies towards the Amazon rainforest, both he and Lula have incorporated proposals to halt deforestation, in an effort to attract concerned voters.

More than in previous years, the climate crisis has become a significant voter priority for this election, analysts told Climate Home News.

The South American country of 212 million people is the world’s sixth largest greenhouse gas emitter and home to most of the Amazon rainforest, which has experienced rising deforestation and extreme wildfires in the last four years.

In the case of all major candidates, avoiding climate action in their plans would be a “political suicide”, given the global and national context, said Thales Castro, head of the Political Science Program at the Catholic University of Pernambuco (Unicap).

Bolsonaro’s government plan proposes the use of green bonds and carbon credits to finance emissions reductions, as well as hiring 6,000 firefighters to control extreme wildfires.

The document says he’ll seek to accelerate “actions to reduce” emissions, and adds that Brazil can be a “provider of climate solutions and establishing itself as a world leader in a global green supply chain”.

But Bolsonaro’s deforestation record and his support for large agribusiness show that these proposals cannot be taken seriously, said Marcio Astrini, executive secretary of the climate NGO coalition Observatório do Clima.

Under his term, deforestation in the Amazon rose to a 12-year high. After this data was revealed by Brazil’s National Institute for Space Research, he denied it and sacked the head of the space agency.

Lula has a more positive conservation record as president 2003-2011, but if elected will face the challenge of undoing some of Bolsonaro’s legislation, said Cynthia Suassuna, climate policy researcher at Unicap. For example, a “land-grab” bill that legitimises squatters who raze Amazon rainforest for cattle ranches or soy plantations, which has passed the lower house of parliament and is on the government priority list for a Senate vote before the election.

The former president’s platform includes strengthening environmental institutions weakened by Bolsonaro’s presidency, providing “green” farm loans and meeting Brazil’s Paris Agreement goals.

On fossil fuels, Lula – like Bolsonaro – supports increasing production. His plan calls for development of the “pre-salt”, an abundant reserve of high quality petroleum found near Brazil’s shores.

“It’s necessary to expand the production capacity of (petroleum) derivatives in Brazil, taking advantage of the great wealth of the pre-salt, with prices that take into account the production costs in Brazil,” Lula’s plan reads.

Thanks to its abundant hydropower capacity, Brazil has a relatively clean electricity, with fossil fuels representing only 12% of the generation mix. However, Brazil is a major oil exporter and Latin America’s top producer.

Global

• Xi, Putin to attend G20 summit in Indonesia’s Bali this November Reuters

Chinese and Russian leaders Xi Jinping and Vladimir Putin will attend the G20 summit on the resort island ofBali this November, a longtime adviser to the Indonesian president said on Friday.

Andi Widjajanto, former cabinet secretary and unofficial adviser to President Joko Widodo, who is popularly known as Jokowi, told Reuters the two leaders would join the summit.

“Jokowi told me that Xi and Putin are both planning to attend in Bali,” Widjajanto, who heads the National Resilience Institute, told Reuters.

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Military

The Ukraine War

Russia continues to shell Ukraine and make gains along the frontlines over the past week, with Ukraine seemingly unable to advance or perform a counteroffensive. The focus appears to be the DPR, especially on the portion of the front that has been virtually the same for the last six months - near Donetsk city. These are the most well-defended Ukrainian positions in the entire country.

• Ukraine says Russia plans to disconnect nuclear plant’s power blocks from grid Reuters

Ukraine’s Energoatom state nuclear company said on Friday Russian forces planned to switch off the functioning power blocks at the Zaporizhzhia nuclear power plant and to disconnect them from the Ukrainian power grid.

In a statement, Energoatom said it believed Russia, which controls the power plant in southern Ukraine, was preparing to conduct a “large-scale provocation” there. Moscow itself accused Kyiv of preparing a “provocation” at the site on Thursday.

“There is information that the Russian occupation forces are planning to shut down the power blocks and disconnect them from the power supply lines to the Ukrainian power system in the near future,” the Ukrainian statement said.

“The Russian military is currently looking for fuel suppliers for the diesel generators, which are supposed to turn on after the power units are shut down in the absence of an external power supply for the nuclear fuel cooling systems,” it said.

• Nuclear disaster fears grow as Russia rejects call to demilitarize Europe’s largest plant — U.N. warns this could be ‘suicide’ Fortune

Russia has refused to comply with calls for the demilitarization of Ukraine’s Zaporizhzhia nuclear power plant, despite apocalyptic warnings about what could happen if conflict around the site continues.

Concern is mounting about safety at the plant—the largest nuclear power plant in Europe—amid accusations from both Russia and Ukraine that the other side is bombing the area.

As fears of an impending nuclear disaster continue to grow, employees at the plant have allegedly been told not to go to work on Friday amid speculation from both sides that an “incident” is being planned, according to an NBC News report.

Ukrainian officials later confirmed in a tweet that staff had been given a sudden day off.

• Ukraine could be put on ‘ammo diet’ – US military expert RT

Ukraine’s European backers may be about to put the country on an “ammunition diet”, an American military analyst has claimed in an interview with Germany’s Der Spiegel. Michael Kofman said these nations may already have reached their limit in terms of weapons supplies to Kiev.

In an article published on Tuesday, Kofman was quoted as saying it is not in the Ukrainian military’s best interests to bide its time, as the weather will soon begin to worsen, making any counteroffensive more difficult to pull off. On top of that, according to the US expert, Russian troops could use a hiatus to regroup and “solve some of their personnel problems.”

He noted that time would be on Kiev’s side if Western support was unlimited. However, that is likely not the case, and the Ukrainian leadership is well aware of this, Kofman suggested. He added that the “Ukrainians are apparently quite concerned about for how long they can expect further support, especially from the Europeans.”

The analyst went on to suggest that Kiev’s European backers may already have “given Ukraine most of the weapons they are ready to give.”

“The Ukrainians will likely go on a kind of ammunition diet,” Kofman predicted.

The analyst told journalists that, with this in mind, the leadership in Kiev may be concerned that Ukraine “could come under pressure to accept the stalemate” in the absence of any major success by the start of next year. Such a scenario “would be a defeat for Ukraine,” he noted.

Kofman concluded that Kiev’s ability to reclaim territories seized by Russia ultimately hinges on the extent of its Western support.

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Dipshittery and Cope

For bad takes, awful analysis that makes you wonder why these people get paid, predictions that reveal a staggering lack of knowledge, and hope for a future that would be worse than the present.

Russia/Ukraine

Western reporting on the war is getting really bad again. We’re nearing another peak of the hopium-copium sine wave. I reckon journalists will be depressed again in a few weeks.

• Blasts Rock Russian Bases All Around Ukraine As Kyiv Strikes With Rockets And Drones Forbes

This article is a pretty good example of the current way that western propaganda is shaping the image of the Ukraine War. We’ve moved on a little from the HIMARS circlejerk and are now onto the “Ukrainian resistance cells will bring down the Russian occupation, and then Ukraine can do its counteroffensive and liberate its territories”. This, of course, relies on a completely imaginary image of Ukraine’s current fighting ability and also the ability of cells within Kherson and Zaporozhye oblasts to put up a systematic resistance to Russia - but I imagine this will be what the next month of articles will be like. The real war is going badly, so we’re onto the shadow war. And it’ll be even harder to disprove its effect because, well, it’s hard to see and measure the actual impacts of an underground movement except in retrospect.

I think we all knew that this would come eventually, but I had always assumed that it would only be when Ukraine’s army had been even more weakened that it currently is and unable to even slow down Russian advances that coping pro-Ukraine westerners would latch onto a voice-modulated dude in a balaclava saying “We are legion. Fear us.” on a hacked TV screen in an occupied Ukrainian city. But here we are.

The blasts, targeting ammunition dumps, airfields and other facilities, could disrupt supply lines and air operations and further isolate Russian troops in Ukraine—especially in the south, where Kyiv has been struggling to organize a counteroffensive aimed at liberating the port of Kherson from Russian occupiers.

The strikes began around sunset. An ammo dump exploded in Timonovo, in Russia’s Belgorod Oblast 20 miles from the border with northeast Ukraine. A fire also broke out at Stary Oskol airfield in Belgorod.

Meanwhile something exploded in Nova Kakhovka on the bank of the Dnipro River 30 miles east of Kherson. It was the second time in 24 hours the Ukrainians had struck Russian facilities in the town.

Around the same time, Russian air-defenses reportedly opened fire around Belbek airport in western Crimea and near the Kerch Strait on the eastern side of the peninsula.

It’s not totally clear all the explosions were the results of Ukrainian attacks, but the locations of the blazes are consistent with Kyiv’s ongoing campaign of deep strikes. That campaign has focused on shaping the battlefield in southern Ukraine while also plucking at Russian supply hubs and airfields around Kharkiv, Ukraine’s most vulnerable free city just 25 miles from the border with Russia in the northeast.

The southern strikes coincide with a Ukrainian counteroffensive on the ground. Ukrainian battalions back in May forced their way across the Inhulets River, a natural defensive line that, for months, had separated the Russians and Ukrainians north of Kherson.

But the Ukrainians apparently didn’t advance very far beyond their river lodgments. The Russian 49th Combined Arms Army with its dozen battalions stood between the counterattackers and Kherson. And more Russian battalions arrived in July and August as the Kremlin recognized the danger to its position in the south.

While Ukraine’s tankers and infantry idled just across the Inhulets, Ukrainian gunners, rocketeers, missile crews and drone operators launched coordinated strikes on the 49th CAA’s supply lines as well as on air bases directly supporting the southern army.

Ukrainian artillery—possibly 227-millimeter rockets from High-Mobility Artillery Rocket Systems or 155-millimeter guns firing Excalibur GPS-guided shells—in late July and early August temporarily knocked out all three bridges spanning the Dnipro and Inhulets near Kherson.

Two weeks later in mid-August, the Ukrainians added airfields to their target list. An Aug. 9 attack on Saki air base in Crimea destroyed potentially dozens of Su-24 and Su-30 warplanes belonging to the Russian Black Sea Fleet. That raid bore the hallmarks of a ballistic-missile strike. Namely, wide, deep craters.

But Saki’s distance from the front—120 miles—pointed to a new kind of Ukrainian missile. The Tochka ballistic missiles that comprise the bulk of the Ukrainian army’s long-range rocket inventory normally fly no farther than 70 miles or so.

Kyiv was developing several new, longer-range rocket types when Russia widened its war on Ukraine back in late February. It’s possible some of those new rockets finally have entered service.

Commandos and partisans reportedly are responsible for some of the Ukrainian deep strikes. It’s apparent drones account for the balance. A Ukrainian unmanned aerial vehicle apparently blew up an ammunition dump at a Russian airfield near Hvardiiske in Crimea on Tuesday.

While the Ukrainian air force and navy both operate Turkish-made TB-2 armed drones, Kyvi’s robotic weapon of choice seems to be custom-made “suicide” drones hauling high-explosives. Their operators either fly them into their targets—or land them on the targets before detonating their payloads.

The Russians are keenly aware of the threat. The intensive air-defense fire on Thursday night is proof of that.

It’s obvious why Ukraine is determined to strike Russian supply lines and air bases. Russia for all its heavy losses in six months of fighting still has a numerical advantage over Ukraine when it comes to infantry, tanks, artillery and warplanes.

The Ukrainians cannot hope to match the Russians company for company, battalion for battalion, brigade for brigade—at least not when the Russian formations are adequately supported and supplied.

But if the Ukrainians can cut off the 49th CAA and other Russian armies from their supplies and air support, they could starve and weaken these units before launching a major ground assault.

That attempted strangulation got a lot tighter on Thursday night as Russian base after Russian base exploded and burned.

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We have two articles of such monumental western cope that it’s almost unlike anything I’ve seen before in this war. I am genuinely fucking insulted by these articles. How fucking dare they? How FUCKING DARE they treat me as so fucking stupid as to believe this shit? Do they actually believe that we are all goddamn five year olds? I’m actually kinda pissed off now.

• Russia’s spies misread Ukraine and misled Kremlin as war loomed WaPo

And also this article by Business Insider which just takes information from WaPo and condenses it a little.

In the final days before the invasion of Ukraine, Russia’s security service began sending cryptic instructions to informants in Kyiv. Pack up and get out of the capital, the Kremlin collaborators were told, but leave behind the keys to your homes.

The directions came from senior officers in a unit of Russia’s Federal Security Service (FSB) with a prosaic name — the Department of Operational Information — but an ominous assignment: ensure the decapitation of the Ukrainian government and oversee the installation of a pro-Russian regime.

The messages were a measure of the confidence in that audacious plan. So certain were FSB operatives that they would soon control the levers of power in Kyiv, according to Ukrainian and Western security officials, that they spent the waning days before the war arranging safe houses or accommodations in informants’ apartments and other locations for the planned influx of personnel.

“Have a successful trip!” one FSB officer told another who was being sent to oversee the expected occupation, according to intercepted communications. There is no indication that the recipient ever made it to the capital, as the FSB’s plans collapsed amid the retreat of Russian forces in the early months of the war.

The communications exposing these preparations are part of a larger trove of sensitive materials obtained by Ukrainian and other security services and reviewed by The Washington Post. They offer rare insight into the activities of the FSB — a sprawling service that bears enormous responsibility for the failed Russian war plan and the hubris that propelled it.

An agency whose domain includes internal security in Russia as well as espionage in the former Soviet states, the FSB has spent decades spying on Ukraine, attempting to co-opt its institutions, paying off officials and working to impede any perceived drift toward the West. No aspect of the FSB’s intelligence mission outside Russia was more important than burrowing into all levels of Ukrainian society.

And yet, the agency failed to incapacitate Ukraine’s government, foment any semblance of a pro-Russian groundswell or interrupt President Volodymyr Zelensky’s hold on power. Its analysts either did not fathom how forcefully Ukraine would respond, Ukrainian and Western officials said, or did understand but couldn’t or wouldn’t convey such sober assessments to Russian President Vladimir Putin.

The humiliations of Russia’s military have largely overshadowed the failures of the FSB and other intelligence agencies. But in some ways, these have been even more incomprehensible and consequential, officials said, underpinning nearly every Kremlin war decision.

“The Russians were wrong by a mile,” said a senior U.S. official with regular access to classified intelligence on Russia and its security services. “They set up an entire war effort to seize strategic objectives that were beyond their means,” the official said. “Russia’s mistake was really fundamental and strategic.”

Ukraine’s security services have an interest in discrediting Russia’s spy agencies, but key details from the trove were corroborated by officials in Western governments.

The files show that the FSB unit responsible for Ukraine surged in size in the months leading up to the war and was counting on support from a vast network of paid agents in Ukraine’s security apparatus. Some complied and sabotaged Ukraine’s defenses, officials said, while others appear to have pocketed their FSB payments but balked at doing the Kremlin’s bidding when the fighting started.

There are records that add to the mystery of Russian miscalculations. Extensive polls conducted for the FSB show that large segments of Ukraine’s population were prepared to resist Russian encroachment, and that any expectation that Russian forces would be greeted as liberators was unfounded. Even so, officials said, the FSB continued to feed the Kremlin rosy assessments that Ukraine’s masses would welcome the arrival of Russia’s military and the restoration of Moscow-friendly rule.

“There was plenty of wishful thinking in the GRU and the military, but it started with the FSB,” said a senior Western security official, using the GRU abbreviation for Russia’s main military intelligence agency. “The sense that there would be flowers strewn in their path — that was an FSB exercise.” He and other security officials in Ukraine, the United States and Europe spoke on the condition of anonymity to discuss sensitive intelligence.

NONE OF THIS IS REAL! ARE YOU KIDDING ME? WHAT THE FUCK? I HAVE QUOTED LESS THAN A TENTH OF THIS ARTICLE. THIS GOES ON FOR THOUSANDS OF WORDS. OF COURSE RUSSIA KNEW THAT UKRAINIANS WERE GOING TO RESIST OCCUPATION OUTSIDE OF THE SOUTH AND EAST! THAT’S WHY THERE WAS NO ATTEMPT BY RUSSIA TO PERMANENTLY SET UP ADMINSTRATIONS ALIGNED TOWARDS THEM IN THE AREAS THEY TOOK NEAR KIEV, UNLIKE IN THE SOUTH! THAT’S WHY THEY RETREATED ONCE THE FEINT/RAID WAS COMPLETED, UNLIKE IN THE SOUTH! OF COURSE RUSSIA’S INTELLIGENCE AGENCIES WERE AWARE THAT UKRAINE WASN’T GOING TO ROLL OVER ONCE INVADED! DO YOU THINK PUTIN WAS UNAWARE OF THE ENTIRE FUCKING CIVIL WAR IN UKRAINE THAT HAS TAKEN PLACE SINCE 2014? THAT PRO-RUSSIAN ELEMENTS IN THE DONBASS HAVE BEEN CALLED TERRORIST GROUPS? 14,000 PEOPLE HAVE BEEN KILLED IN THE DONBASS SINCE 2014 PRECISELY BECAUSE THERE ARE STRONG ANTI-RUSSIAN TENDENCIES IN UKRAINE! AND THESE JOURNALISTS SEEM TO GENUINELT BELIEVE WHATEVER MADE UP BULLSHIT THAT UKRAINIAN AND WESTERN INTELLIGENCE AGENCIES HAVE CONCOCTED THAT ACTUALLY, PUTIN BELIEVED HE WOULD BE GREETED AS A LIBERATOR IN FUCKING KIEV?!?! WERE THEY LITERALLY BORN YESTERDAY?! WHAT THE FUCK?!?

• Putin Offers Russia a Potemkin Future Bloomberg

Vladimir Putin is certain he will win in Ukraine, because he must. He has left himself no other options, having started a war that’s been portrayed as a fight for Russia’s very survival, one that has redefined national identity and to which he has tied the fortunes of his regime. It’s an existential fight. That may be why he is focused on reinventing the past and surviving the present, while ignoring the future.

Unfortunately for the Russian leader, the future has a nasty way of catching up with the present. Whatever the exact conclusion of his war of conquest in Ukraine — and outright victory is unlikely — it is hard to imagine an outcome where Russia is not isolated and shunned for years to come. The country faces a future of poor quality goods with low safety standards, paltry foreign direct investment and declining real incomes.

For now, Russians are choosing to brush this aside. Opinion polls, unreliable as they are in any autocratic system, suggest growing support for the government — 68% of respondents said in July that the country was on the right track, up from 52% in February. It’s not that today’s problems are invisible, it’s that more people now expect them to pass, and pessimism about the future has decreased. Indeed, most do not expect to see wage delays, pay cuts or job losses. It helps, perhaps, that fewer Russians are looking for updates from the front.

That all matters, because it suggests public backing is conformist, not unconditional — Russians don’t expect to pay a cost. It’s a detail that hasn’t escaped Putin, who has allowed his citizens to be spectators in his war. He’s downplayed the three-pronged invasion of a neighbor as a “special military operation,” has avoided mass mobilization and (by and large) the use of conscripts. He’s preferring to turn to volunteers from distant regions, to outfits like private mercenary company Wagner and even convicts. No wonder propaganda, at fever pitch in the first months, has become a little less loud — far better for citizens to forget the war altogether.

Will reality bite? Eventually, and inevitably.

Yes, the economic fortress has resisted in the face of the initial shock. Sanctions take time, and Russia was prepared, thanks to years of fiscal restraint, plus the West has not been able to really strike where it would be able to impose the most pain — specifically, oil and gas. Moscow is instead squeezing Europe on gas and selling its crude, which matters more to government revenues, to Asia. Gross domestic product dropped a relatively shallow 4% in the second quarter, the first full quarter since the invasion. Officials now see a decrease of just over 4% for the full year — considerably less than earlier forecasts of more than 12%, which would have marked the steepest decline since the post-Soviet years.

But that’s not the good news it’s supposed to be. The second-quarter GDP decline has still shrunk the economy back to 2018 levels. Never mind that the calculation understates the drop in living standards. Unemployment levels have not soared with Western pull outs. That says something about shallow foreign investment and plenty about the role of state-influenced companies, which tend to prefer to cut wages and reduce hours before culling jobs. And even then, there will be pain. Political scientist Ilya Matveev has calculated the number of workers dependent on foreign capital, directly and indirectly, could be as high as 5 million, roughly 12% of the formal workforce.

Bank of Russia Deputy Governor Alexey Zabotkin is right that the country will find a new long-term equilibrium: It’s called stagnation. Russia exports commodities, but it imports components for a huge variety of industries as varied as agriculture and autos. Now, many of those suppliers are based in countries listed as enemy states. Inventories are rapidly being depleted and substitutes will struggle to match up. McDonald’s Corp., once a symbol of post-Soviet openness, is now Vkusno i Tochka, but the French fries are missing. Russians will still have cars — but where there were Renaults, there will now be Moskvich models; meanwhile, airbags have become a thing of the past and the present is all about government procurement boosting demand. Aeroflot is stripping jetliners for parts.

At a time when the economy should be planning for a carbon-free future — as even Saudi Arabia is beginning to — oil and gas will make up an ever-larger share of the budget. That increases what Janis Kluge at the German Institute for International and Security Affairs described to me as “the asymmetry of power,” the state’s ability to distribute rents and demand compliance. The state becomes the only source of opportunity.

There’s then the slow-burning erosion in education, research, the consequences of a damaging brain drain.

For now, it’s not unlike the end of the Soviet period. There may not be crashing commodities or fiscal mismanagement, but there are hard-currency stores and plenty of excess official optimism. There were forecasts this week that suggest these overly positive scenarios are now the baseline, for example in natural gas exports, where the 2022 outlook implies an unrealistic return to the status quo ante on sales to Europe. Economic thinkers willing to push back are in short supply.

Ultimately, it was economic collapse, not ideological pressure, that felled the Soviet Union. And as with the demonstrations over pensions back in 2018, there will be a trigger for protest and change from Russians themselves. The edifice will crack. The West has to encourage that by keeping a united front and focusing on the endgame, not cultural warfare.

Russians are experts at muddling along — they’ve survived years of anemic economic growth already. The government can keep the military machine going longer by reallocating spending, issuing domestic debt and printing cash. But this is not the 1990s. Russians are overlooking reality because they hope for a short-lived crisis, like those of the past. Putin, ever more out of touch, is offering a Potemkin future — where no one can acknowledge the fall in living standards, the isolation, the technological regression. But then, he has no options. Russians do.

It’s genuinely incredible how the author can write all this about Russia and not the same thing, if not worse, happening right now in Europe before her very eyes. If anything, I think this article is overly pessismistic towards Russia’s long term ambitions (as it completely discounts the impact that non-western countries - that is, over 80% of the world’s population, including China, which is practically the world’s largest economy - will have in helping Russia out), and would in fact be optimistic about Europe’s long term fate if you replaced “Russia” and related words with “Europe”.

Europe

• Can Switzerland Stay Neutral Toward Putin’s Fascism? Bloomberg

Given their reaction to the actual fucking Nazis in the largest war in human history, I would imagine that even if Russia was definitively a fascist state, they would manage it.

“If neutral Switzerland did not exist, we would have had to invent it.” So said an adviser to then-president John F. Kennedy in 1962, just after the Cuban missile crisis. In that closest of calls for humanity, Switzerland played its accustomed role in the background of world affairs — neutral, helpful and very discreet.

There’s a lot to be said for neutrality, which has been part of Swiss national identity for centuries. And yet, in 2022 — as during World War II — the notion seems harder to justify. As Ukraine and the West confront the neo-fascist aggression of Russian President Vladimir Putin, how can any country with democratic and humanitarian values stand aloof?

The number of civilians who have died in Yemen alone, a country besieged by Saudi Arabia and the United States, is something like one or two orders of magnitude above the number of civilians killed in Ukraine. That’s not even mentioning the millions dead elsewhere in the Middle East across the last two decades. There is literally no metric whatsoever by which you can say that Russia is “neo-fascist” without also inadvertedly saying that the United States is the greatest fascistic threat the globe has ever seen.

These terms — protecting power, good offices — come from international law. They refer to neutral nations assuming the functions of ersatz embassies on behalf of countries that have severed diplomatic relations.

Switzerland currently offers such services for the US in Iran, and for Iran in Egypt. It also represents consular interests in both directions between Saudi Arabia and Iran, and between Russia and Georgia (which Putin invaded in 2008). If a Georgian needs a visa or gets in trouble while in Russia, for example, she can go to the Swiss embassy in Moscow, where dedicated staff will deal with her situation.

The tradition dates back to the Franco-Prussian War of 1870-1871, when Switzerland represented the diplomatic interests in France of two belligerents (Bavaria and Baden, both of which merged into the new German Empire). During World War I, the Swiss held 36 such mandates; at one point in World War II they had 219. They represented Britain in Germany and vice versa, for example. Other neutral countries, notably Sweden, also provided good offices.

During the Cold War, the number of mandates declined, but the institution remained vital. For many years, Switzerland represented the US and Cuba to each other. That way, the Swiss were able to provide secret backchannels that occasionally made some things easier, and possibly averted disaster. Hence, presumably, that famous quote from the Kennedy White House.

But to make these diplomatic dances possible, three parties need to tango. And today Russia doesn’t want to. That’s because it no longer views Switzerland as neutral.

Is it? Since Putin’s invasion of Ukraine in February, Switzerland has certainly been treading a diplomatic tightrope.

For many Western diplomats, Switzerland is rather too neutral — that is, self-serving. The country’s banks, boarding schools and other institutions are said to accommodate oodles of Russian money. Swiss markets merrily trade Russian oil and other commodities. Rumor has it that the Alpine nation may even be host to members of Putin’s own family.

Bern, for its part, feels it has gone as far as it can in siding with like-minded Western nations while still preserving formal neutrality. Notably, the Swiss have gone along with the sanctions on Russia passed by the European Union (of which Switzerland is not a member). That’s the official reason for Russia to label the country hostile.

Switzerland points out that “neutrality does not mean impartiality: even a neutral state has the right to political opinions and cooperation, and can stand up for its fundamental values such as democracy, the rule of law and human rights.” Neutrality only means that the country can’t become a party to international conflicts. This also precludes joining military alliances such as NATO.

By that same logic, the six countries that are part of the EU but not NATO must join the transatlantic alliance, as I argued in January. As members of the EU, they signed a mutual defense clause similar to NATO’s Article 5 — “an attack on one is an attack on all.” Sweden and Finland have already jettisoned their neutrality and applied to join NATO. Austria, Ireland, Cyprus and Malta should do the same. If Putin were to attack Estonia, say, they’d be expected to come to its aid anyway.

But Switzerland is a special case. Countries at war eventually need to make peace, and for that they usually require neutral terrain just to gather around the same table and talk. That venue has often been Lake Geneva or some other picturesque Swiss setting, because the country’s role as honest broker has always been credible.

Plus, the alternatives to genuine Swiss-style neutrality are worse. President Recep Tayyip Erdogan of Turkey is a current example. His country is a nominal but troublesome NATO ally. He’s now posing as mediator between Russia and Ukraine, having met repeatedly with Putin and — this week — his Ukrainian counterpart, Volodymyr Zelenskiy. Those talks have helped release Ukrainian grain exports across the Black Sea. But NATO allies are right to suspect that Erdogan may be out to cut separate deals with Putin to suit other interests.

Hang on a minute. Earlier, you said that Switzerland was too neutral to the point of being self-serving, and yet what good has Switzerland actually done so far in this war? And then you criticize Turkey for being selfish, despite Erdogan being a key part of the process of getting grain out of Ukraine’s ports, the very thing that your buddies all across the media have been crying and pissing and shitting their pants about for months? Turkey has been infinitely more helpful in this war than fucking Switzerland.

So let’s let Switzerland stay Switzerland, because otherwise we’d have to invent it again. Let it be a neutral country that can serve as messenger, mediator, arbitrator and — one day — host of another peace conference. But let the Swiss remember that their neutrality is legal, diplomatic and military in nature — not moral. And let them remind Putin of that as well.

I don’t like many countries in Europe, but Switzerland has gotta be up there on the countries that I especially dislike. My fucking god. Shut the fuck up about being unbiased like some kind of country-sized version of an enlightened centrist on reddit.

China

• U.N. expert concludes ‘forced labour’ has taken place in Xinjiang Reuters

I guess the US was very unhappy about the UN visit that found no evidence of human rights violations and made their own investigation. That, plus the recent attempts to piss off China with Pelosi in Taiwan.

It is “reasonable to conclude” that forced labour of members of minority groups has taken place in China’s western Xinjiang region, the UN’s top expert on slavery said in a report released this week, prompting a fierce response from Beijing.

The findings were “based on an independent assessment of available information”, the United Nations Special Rapporteur on contemporary forms of slavery, Tomoya Obokata, said in a report that he shared on his Twitter account on Tuesday.

“The Special Rapporteur regards it as reasonable to conclude that forced labour among Uighur, Kazakh and other ethnic minorities in sectors such as agriculture and manufacturing has been occurring in the Xinjiang Uighur Autonomous Region of China,” it said.

China rejects all accusations of abuse of Uyghurs and other Muslim minority groups in Xinjiang.

The report, dated July 19, is publicly available in a UN documents library.

Two distinct “state-mandated” systems exist in Xinjiang, it said: a vocational skills education and training centre system, where minorities are “detained and subjected” to work placements, and a poverty alleviation through labour transfer system involving rural workers.

“While these programmes may create employment opportunities for minorities and enhance their incomes, as claimed by the Government, the Special Rapporteur considers that indicators of forced labour pointing to the involuntary nature of work rendered by affected communities have been present in many cases,” said the 20-page report, which also covered contemporary slavery-related issues and concerns in other countries.

China’s foreign ministry on Wednesday reiterated Beijing’s denial that there had ever been forced labour in Xinjiang, defended China’s record on protecting workers' rights and heavily criticised the report’s findings.

“A certain special rapporteur chooses to believe in lies and disinformation about Xinjiang spread by the U.S. and some other Western countries and anti-China forces,” Chinese foreign ministry spokesman Wang Wenbin told a daily briefing in Beijing.

Obokata’s report is separate from a highly anticipated report on human rights in Xinjiang being prepared by United Nations High Commissioner Michelle Bachelet, who has pledged to publish it before leaving office at the end of this month.

• Why China will become ever more dangerous as its baby bust worsens WaPo

On Jan. 10, 1980, Daniel Patrick Moynihan, then in the first of his four terms, delivered a Senate speech pertinent to today’s foremost U.S. foreign policy challenge: China. Casting a cold eye on the Soviet Union 17 days after its Christmas Eve invasion of Afghanistan, Moynihan criticized the preceding decade’s excessive emphasis on detente (citing Samuel Johnson: “the triumph of hope over experience”). He added that increased Soviet stridency and aggressiveness suggested the behavior of “a wounded bear.” He had recently said “the defining event” of the 1980s “might well be the breakup of the Soviet Empire.” And it also could be “the defining danger.”

Forty-two years later, China becomes more dangerous as its decline becomes more predictable. Writing in the Spectator, Rana Mitter, a British historian and political scientist, cites a U.N. report that China’s population growth has declined 94 percent, from 8 million in 2011 to 480,000 last year. The projection of China’s 15- to 64-year-old population in 2100 has been revised from 579 million to 378 million.

“Today,” Mitter writes, “every 100 working-age Chinese need to support 20 retirees. If trends continue, by the turn of the next century, every 100 workers will have to support 120 retirees.”

Hey, wait a minute! This is basically the same article you posted the other day, Mr Will!

United States

• Former CIA director said he agrees with notion that there’s no political force more ‘dangerous’ than Republicans Business Insider

Former CIA Director Michael Hayden said he agreed with the notion that there’s no political force more “dangerous” than the Republican party.

Hayden, who also served as director of the NSA, was reacting to a tweet from journalist Edward Luce that said, “I’ve covered extremism and violent ideologies around the world over my career. Have never come across a political force more nihilistic, dangerous & contemptible than today’s Republicans. Nothing close.”

The former CIA chief in response said, “I agree. And I was the CIA Director.”

You have got to me kidding me. Fuck you. Today’s Republicans are nothing compared to the absolutely abhorrent, violent, fascistic regimes that have murdered millions even since the Nazis were (officially, though not actually) defeated. All of these regimes have received either no pushback or even active support from America.

In a USA Today op-ed that Hayden penned with other former top national security and military officials in June, the ex-CIA chief expressed “unprecedented concern for our country and for our democracy.”

“Our democratic institutions and norms are more vulnerable than ever. If you were to ask us when in our lives we were most likely to be losing sleep at night, we would all tell you, ‘Last night. And tonight. And tomorrow night.’ Because history teaches us that democracy is never guaranteed, not even here,” the op-ed went on to say. “For those of us devoted to protecting democracies abroad, there comes a time when our efforts seem overshadowed by the erosion of democracy here at home. And for those of us focused on domestic security, the forces of autocracy now trump traditional foreign threats, hands down.”

If he’s being honest - and I have no reason to believe that he is - I suppose it’s good news that the alphabet boys are being preoccupied by domestic threats and have less resources to devote to crushing democratic movements in foreign countries.

In the wake of a raid on Trump’s Florida home earlier this month, prominent figures on the far right have employed violent rhetoric — including discussions of “civil war.” Experts have warned that the US could see an insurgency, which they’ve described as the 21st century’s version of civil war.

“There is a real threat of civil conflict,” Nina Silber, a Boston University historian and expert on the US Civil War, told Insider last week, adding, “Not just because of the talk of violence but also because of the increasing numbers of people who are armed and ready to use weapons to advance certain political goals.”

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Acceptance

For when people accept reality, though often not fully and not for very long.

• Opinion: Four ways the Inflation Reduction Act doesn’t live up to the hype CNN

The Democrats are celebrating the passage of the Inflation Reduction Act over unified Republican opposition, claiming that the legislation is a historic breakthrough. Sadly, it’s not.

Though the new legislation takes some steps in the right direction on climate and drug prices, it falls far short of what is needed. The Democrats, with control over the White House and both houses of Congress, squandered the historic opportunity for a progressive breakthrough.

There are four big reasons to be skeptical of the Democratic Party’s self-congratulation.

1. Despite its title, the new legislation will have essentially no effect on reducing inflation during the next few years.

…

2. Most of President Joe Biden’s original social agenda was left out of the legislation.

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3. Democrats once again sided with campaign donors and lobbyists over everyday voters.

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4. The much-touted climate actions will deliver modest results despite the headline promises and bravado.

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Good Takes that are Dope

For good, or at least decent, analysis of an event or situation - particularly one that hasn’t been covered endlessly before or has a fresh angle.

• Look Closely at Liz Cheney and Donald Trump. It’s Hard to Tell Much of a Difference. Jacobin

I still don’t care enough about Liz Cheney and whatever the hell she’s up to nowadays to post articles, but this is probably accurate. Good job, Jacobin.

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