Wednesday Reads: Turd Reich
Posted: December 11, 2019 Filed under: corruption, Donald Trump, impeach trump, morning reads, open thread, Russian Trump Investigation, Saudi Arabia, The Media SUCKS, Trump Impeachment 24 CommentsAfter seeing a few minutes of the MSNBC interview with Barr yesterday…I had to turn the shit off.
Did you see this crap:
Check out some of the responses on that thread.
I believe my expression had to be something like that mountain lion…
Wouldn’t you know it, later last night…
If this impeachment trial in the Senate goes by like we know #MoscowMitch will handle it… I am so fearful of what could end up happening…
Someone is actually selling this design online… (lucashgm on redbubble)
The photo above was taken in Atlanta.
Now a few non-tRump things:
Didn’t something like this happen the last time a Saudi national murdered some dissident… after Khashoggi, women got the right to drive? Yes? (Actually, it was given to them a couple of months before he was killed.) I’m just making a connection.
That asshole. Fucking disgusting.
Let’s end this on a positive note.
This is an open thread.
Is it Sunday? Reads: Yeah, I guess it is…
Posted: January 4, 2015 Filed under: Africa, Art, Diplomacy Nightmares, Discrimination against women, Egypt, Feminists, Foreign Affairs, History, legislation, Middle East, misogyny, morning reads, racism, Republican politics, Saudi Arabia, unemployment, Women's Rights, worker rights | Tags: catalogues of illuminated manuscripts 14 Comments
allegory of Winter: Neptune in a dolphin chariot
Filippo Alberici, Hieroglyphica, Paris ca. 1507
British Library, Royal 12 C III, fol. 16r
Good Morning All
I had completely forgot today was Sunday, and since my laptop is still giving problems…and my new one is not being delivered until Monday, this post is going to be brief.
Images will be from this blog…discarding images, if you have some time go and check that site out.
![flame-farting bonnacon 'In Asia an animal is found which men call bonnacon […] when it turns to flee, it discharges fumes from the excrement of its belly over a distance of three acres, the heat of which sets fire to anything it touches. In this way, it drives off its pursuers with its harmful excrement.’ (transl. The Aberdeen Bestiary Project) De Natura animalium, Cambrai ca. 1270. Douai, Bibliothèque municipale, ms. 711, fol. 8r](https://dakiniland.files.wordpress.com/2015/01/tumblr_mu5vqovwqw1rqxd5ko1_1280.jpg?w=590&h=391)
flame-farting bonnacon
‘In Asia an animal is found which men call bonnacon […] when it turns to flee, it discharges fumes from the excrement of its belly over a distance of three acres, the heat of which sets fire to anything it touches. In this way, it drives off its pursuers with its harmful excrement.’ (transl. The Aberdeen Bestiary Project)
De Natura animalium, Cambrai ca. 1270.
Douai, Bibliothèque municipale, ms. 711, fol. 8r
Now the links:
Weather was the “triggering factor” in the crash of AirAsia flight 8501 with icing likely causing engine damage, Indonesia’s meteorological agency said on Sunday, as bad weather continued to hinder rescue efforts.
Nosferatu (or Yoda) and Gandalf the Gray smoking a pipe?
the text is Psalm 17:50 in Latin and Old Polish ‘Propterea confitebor tibi in nationibus, Domine, et nomini tuo psalmum dicam’; ‘Przeto spowiadać sie będę tobie w ludzioch, Gospodnie; i twemu imieniu psalm będę mołwić’ (‘Therefore will I give thanks unto thee, o Lord, among the heathen, and sing praises unto thy name’)
trilingual Sankt Florian Psalter (Psałterz floriański), Kraków 14th/15th century.
Warszawa, Biblioteka Narodowa, Rps 8002 III, fol. 28vThe Airbus A320-200 crashed into the Java Sea a week ago carrying 162 people from Indonesia’s second city Surabaya to Singapore, and relief workers are hunting for the “black box” flight data recorders to determine the cause of the crash.
The search teams from several countries including the United States and Russia recovered another body on Sunday, bringing the total to 31.
They also found another major part of the aircraft to add to the four discovered on Saturday but rough seas again forced them to abandon their efforts early.
In other aviation news: Saudi national airline may introduce gender segregation on its flights — RT News
You may remember I linked to a story recently about the delays caused by certain Orthodox Jewish men who refuse to sit next to women passengers on flights out of New York. This is on the other side of the coin…I mean religious coin, if you get what I am saying.
don’t mess with female saints St. Juliana of Nicomedia and the devil (‘Hic bellum sathane superat virtus Iuliane’) Picture Bible, Abbey of Saint Bertin, Saint-Omer (?), ca. 1190-1200. Den Haag, Koninklijke Bibliotheek, 76F5, fol. 32r
Saudi Arabia’s national airline carrier is planning to introduce gender segregation aboard its flights following complaints from passengers who refused to have random males seated next to their wives, the Kingdom’s media report.
Airline company Saudia will order its staff to keep men and women separated onboard, unless they are close relatives, the Emirates247 news website reported.
Meanwhile, sticking with the Mideast…North Africa a little longer:
Have you seen this? Egypt warned Amal Clooney she risked arrest | World news | The Guardian
More on this from Juan Cole: Why Egypt’s Threat to Arrest Amal Clooney will hurt its Economy | Informed Comment
Patrick Kingsley of The Guardian reported on Friday that Amal Clooney was threatened with jail by Egyptian authorities last February if she released a report in Cairo on flaws in the Egyptian judiciary that had been commissioned by the International Bar Association. The report is available on the Web here.
Significant elements of the Egyptian judiciary are obviously arbitrary, conspiratorial to the point of paranoia, and a complete mess, as demonstrated by the opposite verdicts reached in the two cases against former dictator Hosni Mubarak; in the mass executions of Muslim Brothers ordered by a notorious provincial hanging judge; by the jailing of Aljazeera and other journalists for reporting the news; and by the jailing of protesters for protesting (the hero of 2011, Ahmad Maher of the April 6 Youth, among many others, is in jail for another two years).
Ms. Clooney and her colleagues wrote early last year,
“Three distinct prosecutorial trends are discernible. First, under the short period of military rule that followed the 2011 revolution, more civilians were prosecuted for ‘crimes’ against the military – such as the crime of ‘insulting the military’ – than had ever been prosecuted during 30 years of Mubarak rule. Secondly, under Morsi’s Brotherhood presidency, those who insulted Islam or insulted the President himself were targeted.
According to some sources, the number of prosecutions brought for ‘insulting the president’ in the Morsi period exceeded the number of such prosecutions brought over three decades under Mubarak and the number of persons who were sentenced to imprisonment for insulting Islam also increased dramatically. Finally, in the post-Morsi era during the second half of 2013, a startling number of prosecutions were initiated against Brotherhood figures, including the former President himself, the Brotherhood’s entire senior leadership and thousands of others.
This record of selective prosecutions undermines the potential for a peaceful transition and reconciliation between communities in Egypt, as well as the right to freedom of expression in a new democracy. It is therefore suggested that a transitional justice process be put in place, ideally with international involvement to guarantee independence and impartiality. This would honour the rights of the many victims of serious crimes that have been committed in Egypt and combat impunity for government abuses.”
So she probably wasn’t surprised when they threatened to prosecute her, too.
One reason all this matters, beyond the thuggish threats of arbitrary imprisonment of people for thinking independently, is that Egypt’s judiciary is an obstacle to the country attracting foreign investment.
More at the link.
To think that Clooney’s wife may get more attention then him? hmmmm
Not that I think it is, as the title of this article puts it: The End of Men – Atlantic Mobile
Earlier this year, women became the majority of the workforce for the first time in U.S. history. Most managers are now women too. And for every two men who get a college degree this year, three women will do the same. For years, women’s progress has been cast as a struggle for equality. But what if equality isn’t the end point? What if modern, postindustrial society is simply better suited to women? A report on the unprecedented role reversal now under way— and its vast cultural consequences
Meh, you go and read the article and take it for what it is…it is a long winded piece of…well, it was written back in 2010, I guess the Atlantic felt the time had come to republish it? I don’t know but they had it up at their site as if it was a recent post. The point is, things have gotten worse for women and I feel it ain’t going to get better any time soon.
Example? Why activists and feminists get so many death threats – Salon.com
More than twenty years have passed, but Jonathan Huston still vividly remembers one specific day during his stint as editor of a New Hampshire weekly.
[I was] writing a series on the titans of trash — about racketeering by the nation’s two largest garbage haulers. A lawyer came to my office one day to convey a warning about my latest investigative reporting.
“Jonathan, I hope I don’t open up the pages of the Union Leader one day,” he said, “to read that the editor of a certain weekly newspaper got into his car, turned over the ignition, and got blown sky high.”
“That shall not happen,” I said.
“How can you be so sure?”
“Because I don’t own a car.”
To some extent the specter of violent death hangs over us all, lurking at the edge of consciousness most of the time, perhaps brought into focus by a mass shooting in which victims remind us of our children or friends, or of ourselves. Or maybe we are shaken by a local story about domestic violence, a murder suicide, a drive by, or road rage turned lethal.
For women in particular, the threat never completely disappears. A cartoon that made its way around Facebook underscores the point. On one side a thought bubble above a male figure reads, “What if she gave me a fake number?” On the other, a bubble above a female says, “What if he rapes and kills me?”
Mercifully, for most of us most of the time, the risk of violence seems small and distant. Even so, it can shape how we live. It can make us hesitate to say no. Or yes. It can make us hesitate to stay home alone. Or go out at night.
Or speak our minds.
Fear has the power to paralyze and silence even strong, determined people, which is why threats of violence are such a potent, common, and toxic presence in political discourse. Consequently, it is a wonder, and a gift to us all, when engaged citizens like Jonathan Huston refuse to be silenced.
Read the rest at the link.
In strange as fuck news: Granite City man finds out what’s been hidden in his arm for 51 years : News
Uh, here’s the kicker…it was a piece of a car, a 1963 Thunderbird turn signal that got stuck in there from an accident years ago.
Anyway, there is a good article however over at the Atlantic about my home state of Georgia: What’s Wrong With Georgia? – Atlantic Mobile
Throughout the economic downturn and subsequent recovery, there have been some usual suspects when it comes to the most pitiful state in monthly unemployment figures.
bird hat guy and a ballchinian monster
Luttrell Psalter, England ca. 1325-1340.
British Library, Add 42130, fol. 145rFor awhile, Michigan took the prize for highest unemployment rate in the country, until Nevada knocked it off its perch in May of 2010. Nevada then held the title for most of the next three years, sometimes sharing the honor with California, until it ceded the top (more accurately, the bottom) spot to Rhode Island in December 2013.
But now, as the economy picks up steam, and consumer sentiment rises to its highest levels since 2007, a new state keeps appearing at the top of the unemployment list. Georgia, home to Fortune 500 heavyweights such as Home Depot, UPS, and Coca-Cola, had the highest unemployment rate in the nation in August, September, and October. With a November rate of 7.2 percent, the state was narrowly edged out by Mississippi’s 7.3 percent (December statistics won’t come out until mid-January).
This may seem surprising, since Georgia was named the best state to do business in both 2014 and 2013 by Site Selection magazine, largely because of its workforce-training program and low tax rates. Nathan Deal, the state’s GOP governor, handily won reelection in November against Jimmy Carter’s grandson by speaking about Georgia as a job magnet.
But those who follow the state’s economy say the state’s troubling economic figures are directly related to Georgia’s attempts to paint itself as a good state for corporations.
“This is what a state looks like when you have a hands-off, laissez-faire approach to the economy,” said Michael Wald, a former Bureau of Labor Statistics economist in Atlanta. “Georgia is basically a low-wage, low-tax, low-service state, that’s the approach they’ve been taking for a very long time.”
Oh it is low everything state…but then again, we all know that already.
I found this interesting, Cannonfire-Get the government off our tops!
Are they serious? Oklahoma may soon have a law banning hoodies in public. Apparently, this new piece of legilsation is an extension of an old law against wearing a hood during the commission of a crime — a measure originally designed to make life inconvenient for the KKK.
This is ridiculous. I used to wear a hoodie, during my first winter on the east coast. When you’re a shaven-headed guy with no scarf, a hoodie can be a lifesaver. (My ears get cold, even in summer.) Eventually, I acquired some classier means of staying warm — tuques, hats, scarves, earmuffs, long winter coats.
But dammit, I’ll wear a hoodie if I want to. It’s my right. Besides, they offer cheap warmth.
Interestingly, this measure is taking hold in Oklahoma, which is nobody’s idea of a blue state. How can the Republicans blame government intrusiveness on the Dems?
How the hell can the Republicans pass shit like this continuously, not to mention the crap they pull with women’s right to choose…and still say they are against government interference? We are in for a shitstorm of GOP legislative fuckturds…I am telling you!
Oh, and since I brought up the subject of fuckturds: 2014 LIEBERMAN AWARD WINNER: BOB McCULLOCH | Gin and Tacos
(Editor’s note: The Lieberman Award is given annually to the worst example of a human being over a twelve month period. Click the tag at the end of the post to review past winners.)
Gin and Tacos and its parent company, Nordyne Defense Dynamics, hold very high standards with respect to the final product you see published here four or five times per week. When we say someone is an asshole, we want you the reader to know that we have done our homework and vetted the subject thoroughly. We aren’t going to give you people who are just kind of an asshole. You can rest assured that when we look back at a year and say “This person was an asshole of such magnitude that he defined 2014 with how rotten he is at being human,” the honor is richly deserved and well earned.
St. Louis County Prosecutor Bob McCulloch is everything wrong with America today, far more so than any cigar stealing Thug or even any trigger happy police officer could ever be. He is old, dying, white America incarnate, struggling mightily to control a country it is no longer capable of understanding and not even willing to try.
medieval facepalm
(Noah, Ham, Shem and Japheth, Genesis 9:20-24)
Biblia Pauperum, Netherlands ca. 1395-1400 (British Library, Kings 5, fol. 15r)Bob McCulloch is every gun-hoarding authoritarian personality type who sees a threat in everything and everyone that does not look and behave like himself. Bob McCulloch is the America that is on its way being demographically irrelevant and is attempting to maintain a position of superiority by dominating the institutions of state power to such an extent that their privileges can never be taken away. You know, like white people did in Apartheid-era South Africa.
Bob McCulloch is your uncle who bitches constantly about big government and taxes while every paycheck he has collected in his life has been from the public teat. He is the public’s mental caricature of an incompetent, corrupt civil servant, so protected and insulated from the repercussions of his professional actions that he is unwilling even to fake giving a shit if you can see how corrupt he is. Bob McCulloch is the old, bitter white people that dot major cities throughout the Rust Belt; everyone young and financially able has left and now he reigns over a poor, crumbling, crime-ridden corpse of a city and it makes him so bitter and angry, despite his job security and material comfort, that all he can do to make himself feel a little better is lash out at people he considers a rung (or two) beneath him on the social ladder.
You need to go read the rest. Y’all know I post links regularly from Gin and Tacos, be sure to check this one out.
There is a series going on now at the National Geographic: On the ‘Grapes of Wrath’ Trail, the Dust Bowl Still Resonates
Retracing the route Steinbeck described in his classic novel 75 years ago, a family finds parallels between today and the ‘Dirty Thirties.’ This is the first of three parts.
“The highway became their home and movement their medium of expression. Little by little they settled into the new life.” —The Grapes of Wrath
Interesting indeed…
In another nostalgic look, this time cartoons: Saturday Morning Cartoons: The Dot and the Line
The 1950s were arguably the most successful decade of animator/director/overall creative genius Chuck Jones’ career: he directed almost two dozen cartoons for the Warner Bros. studio during that period. Eight of these cartoons would eventually be voted to the Jerry Beck-curated 50 Greatest Cartoons list in 1994; four of them–What’s Opera, Doc; Duck Amuck; Duck Dodgers in the 24 1/2 Century; and One Froggy Evening–appear in the top five of that list. In fact, Jones is the most-represented animator on the list–with ten total entries, his work comprises a full TWENTY PERCENT of what is considered the “best” animation of all time.
No other artist comes close.
Jones was undoubtedly the biggest asset to the Warner Bros. animation empire, and he was locked into an exclusive contract with the studio. But in the early 1960s, Jones collaborated with animators from UPA to produce the feature Gay Purr-ee (1962), which he co-wrote with his wife, Dorothy.
Ironically, Warner Bros. won the distribution rights for the film; when Jones’ role in its production was discovered, his now-violated contract with the studio was terminated in 1962. The Warner Bros. animation department was shut down the following year.
Jones subsequently formed his own animation studio, Sib Tower 12 Productions, and rehired his old unit from Warner Bros. (which had been disbanded after Jones was fired). The studio was contracted to create new cartoons for the Tom and Jerry series for MGM; two years later, Jones’ studio was purchased outright by MGM and renamed MGM Animation/Visual Arts. All in all, Jones produced nearly three dozen Tom and Jerry shorts throughout the 1960s.
Devil changed his profile picture
Breviary of Louis de Guyenne, Paris ca. 1414.
Châteauroux, Bibliothèque municipale, ms. 2, fol. 1vBut his time wasn’t completely consumed by the antics of the cat and mouse; he also worked on several other projects for the studio, one of which–The Dot and the Line: A Romance in Lower Mathematics (1965)–won Jones his only competitive Academy Award as a producer.
The Dot and the Line, as its full title indicates, tells of the romance between a dilettante dot and the straight line that loves her. While the dot is initially enamored of a “wild and unkempt squiggle” (whose wildness is underscored by a clamorous rock-and-roll tune that sounds every time it is onscreen), the “stiff as a board” straight line tries to adapt himself into something else in order to entice the dot back to his side. After struggling a long time, the line finally learns to form himself into an angle, which then allows him to form an unending series of increasingly complex shapes that, in the end, are much more appealing to the dot than the “chaos” presented by the squiggle. The cartoon concludes with the tongue-in-cheek moral: “To the vector belong the spoils.”
Read more about “The Dot and the Line” at the link and you can also see the full video of the cartoon here:
And since this post has been illustrated with doodles and drawings from Medieval manuscripts: New Images on the Catalogue of Illuminated Manuscripts – Medieval manuscripts blog
Exciting news for those of our readers who might want to search for an image of a 13th-century devil with horns, an English drawing of a horse from the 10th century, rain over the Italian countryside, severed limbs or even Job afflicted with boils. More than 200 new images are now available online in our Catalogue of Illuminated Manuscripts. For those who have not yet used this catalogue, it has an advanced search page which allows you to search for key words combined with place of origin, date range and many other criteria: http://www.bl.uk/catalogues/illuminatedmanuscripts/search2.asp.
Over 4000 illuminated manuscripts from 800 to 1800 have been catalogued to date and we have now added a new selection with images and descriptions that were not previously available online, mostly from the Additionals series.
I bet you can tell from the images below…the search keyword was “dwarf.”

miniature-of-the-month-of-may-with-a-seated-young-man-receives-fruit-and-flowers-from-a-courtly-group-composed-of-a-dwarf-three-girls-and-five-youths-some-of-whom-play-musical-instruments

drawing-of-king-mark-in-a-pear-tree-spying-on-tristan-and-isolde-who-have-come-to-meet-secretly-and-raise-their-hands-to-each-other-in-greeting-while-the-dwarf-spies-on

Detail of a miniature of two knights kneeling in submission to Cleriadus, while another lies dead, and a fourth with a broken arm, with two ladies and a dwarf behind
Finally, bits of childhood keep washing up on the shores of beaches…BBC News – Mapped: The beaches where Lego washes up
The story of millions of Lego pieces washing up on beaches attracted huge interest when first told by the Magazine. The list of places where the toys have been spotted is still growing.
Beachcomber Tracey Williams has been picking up Lego along the Cornish coastline ever since a container spill dumped millions of the toy pieces into the sea in 1997.
Since the curious tale was reported by the Magazine, dozens of people have contacted Williams to say they, too, have found parts of the much-loved toy scattered on shores.
They mostly got in touch via the Facebook page she set up about the drifting toy pieces from various Lego sets, many of which were nautical-themed.
Most of the people who’ve contacted her found Lego around Cornwall, she says. “From what I’ve been told, Perranporth is a hotspot for brooms, and the Lizard seems to be a hotspot for octopuses.”
Brighton, East Sussex, some 300 miles away, is the furthest confirmed report she has received to the east along England’s southern coastline. But some of the sightings have come from much further afield.
hey cat. stop licking your butt on the Book of Maccabees or you’ll get an arrow!
see also: Gospel Cat and Apocalyptic Cat
below the cat: 1Maccabees 16:18-20 ‘Et scripsit hæc Ptolemæus, et misit regi ut mitteret ei exercitum in auxilium, et traderet ei regionem, et civitates eorum, et tributa. Et misit alios in Gazaram tollere Joannem: et tribunis misit epistolas, ut venirent ad se, et daret eis argentum, et aurum, et dona. Et alios misit occupare Jerusalem et montem templi’ (‘And Ptolemee wrote these things and sent to the king that he should send him an army to aid him, and he would deliver him the country, and their cities, and tributes. And he sent others to Gazara to kill John: and to the tribunes he sent letters to come to him, and that he would give them silver, and gold, and gifts. And he sent others to take Jerusalem, and the mountain of the temple’)
Biblia Porta, France 13th century.
Bibliothèque cantonale et universitaire de Lausanne, U 964, fol. 376rNearly 4.8 million Lego toy parts fell overboard from the Tokio Express container ship in a storm off Land’s End on 13 February 1997.
Williams says the pieces which now drift up on an “almost daily basis” in numerous locations are flippers, spear guns, seagrass, scuba tanks and life preservers.
There is a breakdown of parts that were lost and other pictures at the link…
Well, have a
wonderful day.
Sunday!
Friday Reads: Weaponized Oil and a tale of conspiracies
Posted: December 26, 2014 Filed under: Foreign Affairs, fracking, Iran, Russia, Saudi Arabia 10 CommentsGood Morning!
So, I’m going to write briefly about something that’s been fascinating me lately. That’s the incredible decrease in oil prices and the impact that it’s having on Russia and other oil producing nations outside of the Emirates and Saudi Arabia . I’m a sucker for a good currency crisis since it’s basically right up my research alley.
Also, oil has been one of those commodities that’s pretty much dominated my adult life. I remember having to buy gas on even days because the Dealer’s tags on our cars ended in 8 during the oil crisis. I know what it did to my dad’s business as a car dealer. Basically, oil’s been the most fungible commodity in modern times. No modern economy can live without it. We’ve definitely fought wars to control it. Oil’s being weaponized like never before.
There are several key factors driving down your gas at the pump. First, the global economy has slowed down so that the demand for oil has tapered off. That’s one thing that’s been at play. But the more interesting factor has been the increase in supply which is related to the interesting way that Saudis have been ignoring OPEC quotas and inching up the supply. There’s been some rumors going around–actual conspiracy theories– that they are doing so for three reasons. First, they want to make sure that the nascent tar sands oil industry in North America isn’t profitable. Second, they want to hurt Iran, Syria, and Iraq and any other Shia nation involved with oil production. The third reason is to get at Russia. I want to share what I’ve found on these fronts with you. It has the feel of a new kind of cold war and the opposite of the gas wars of the 1970s.
Russia just experienced a “Black Monday” in that the Russian Stock market has collapsed as has the ruble. The Russia economy is heavily dependent on oil exports so any decrease in oil prices has an impact. These continued price decreases have their economy on the verge of failure. The entire situation has been exacerbated by UN Sanction against the country for its invasion and intervention in the Ukraine. It’s not pretty.
In recent weeks, the fall in the Russian ruble and Russian stock markets closely tracked the declines in global oil prices. But everything changed on December 15. The oil price remained stable, but the ruble and the stock-price indices lost 30% in the subsequent 24 hours. An unprecedented effort by the Central Bank of Russia (CBR) in the wee hours of December 16 to stabilize the ruble, by hiking the interest rate from 10.5% to 17%, proved useless.
The cause of Russia’s “Black Monday” was readily apparent: the government bailout of state-owned Rosneft, the country’s largest oil company. Usually, bailouts calm markets; but this one recalled early post-Soviet experiments, when the CBR issued direct loans to enterprises – invariably fueling higher inflation. The CBR’s governor at the time, Viktor Gerashchenko, was once dubbed the world’s worst central banker.
In 2014, the CBR is more constrained than it was in Gerashchenko’s era: it cannot lend directly to firms. Yet it has also become more sophisticated at achieving the same ends that Gerashchenko sought.
In October, Rosneft issued $11 billion worth of ruble-denominated bonds (an unparalleled amount for the Russian market, equivalent to 70% of the total value of corporate bonds issued in Russia this year). The coupon on these bonds was actually 1.5 percentage points below sovereign bonds of similar maturity, which is also unusual, especially given that Rosneft currently is subject to Western sanctions.
Then, unnamed investors (allegedly the largest Russian state banks) benefited from the CBR’s decision on December 12 to allow these bonds to be used as collateral for three-year CBR ruble loans at the policy rate. Moreover, the CBR scheduled a special auction for such loans on December 15 – with the total amount of the loans similar to that of Rosneft’s bond issue. Thus, the CBR would be able to provide a massive pile of rubles to Rosneft at below-market rates. So why did the deal trigger a panic?
At first glance, this deal was intended to meet contemporary Russia’s most important economic challenge. Sanctions have cut off Russian banks and companies from Western financial markets. Russian companies have to repay or refinance about $300 billion of debt over the coming two years. Some of this debt is owed to Russian companies’ offshore owners, who will certainly be happy to roll it over. But in most cases, firms’ liabilities comprise real debt owed to major international banks.
Global investors are anxiously awaiting some kind of strategy for recovery. Actions by the Central Bank of Russia have been very curious. All of the countries that depend on oil exports for huge amounts of their funding are in trouble. Russia is probably just the most obvious of them. This goes for Iran also. That’s because both of them are heavily weighed down by UN sanctions.
The non-OPEC producing countries (Russia, Brazil and Norway, as examples) are starting to become backed into an economic corner. In all of these countries, oil represents a major export and helps finance other economic activities. For example, as Russia sells oil in the open market (priced in dollars) at $60 per barrel, the revenue in dollars is 50 percent less than was the case in June of this year. Since June, the Russian Ruble has declined by 59 percent (to the U.S. dollar). A “crash” in the value of any currency leads to very high inflation (imports are now more expensive than would have otherwise been the case), which leads to potential civil unrest. On a global scale, the “wealth” of Russia as a nation, priced in Rubles, has declined by 59 percent in the last six months.
This is the stuff that leads to revolutions. Oil, other commodities and vodka are about the only exports Russia creates and helps fund their country’s spending. They are net importers of most all consumption goods (health supplies, food, etc.). In their own currency, those imports are now 59 percent more expensive than they were this past summer.
To some, the problem Russia currently faces sounds like something Vladimir Putin created by his dalliances in the Crimea and Ukraine. There is some truth to this as those actions led to economic sanctions unleashed by the West on Russia. The oil pricing issue is indirectly due to his destructive behavior. What really matters to the rest of the world at this stage is the potential for economic weakness to spread to the rest of the world from Russia… monetary contagion, anyone?
How would this happen? Why would the rest of the world be negatively affected by weakness in the Russian Ruble? Russia’s economy is the world’s eighth largest (as measured by the IMF ), a little larger than Italy and a little smaller than Brazil. At about $2.1 trillion in GDP, Russia is dwarfed by the United States at $17.5 trillion. If Russia’s economy contracts by 4 percent (which potentially is in the cards for 2015), it will impact the world’s GDP by about $84 billion, or .1 percent. No big deal. However, let’s think not about the world’s income statement (GDP) but rather about the world’s balance sheet – the world’s banking system.
Most Russian national debt is priced in Rubles and the value of that debt has collapsed from six months ago when the Ruble was higher and Russian interest rates were dramatically lower. Russia’s public debt is $216 billion. The Russian benchmark interest rate was at 7.5 percent in June of this year – that interest rate is now 17 percent.
How much this impacts any other country has a lot to do on how many banks hold Ruble-denominated assets or liabilities. The interesting thing is that Saudi Arabia seems no where done with its dalliance in increasing oil supply. This particular bit of news is what motivated me to finally bring this up here. The emirates and Saudi Arabia seem willing to dig into their own sovereign wealth and their countries’ spending to see this through. They must be extremely serious about something. Is it the threat from Shia Muslims? From US Fracking Oil? Do they just plain hate the Russians?
Saudi Arabia’s Cabinet on Thursday endorsed a 2015 budget that projects a slight increase in spending and a significant drop in revenues due to sliding oil prices, resulting in a nearly $39 billion deficit
In a sign of mounting financial pressure, the Finance Ministry said the government would try to cut back on salaries, wages and allowances, which “contribute to about 50 percent of total budgeted expenditures.” That could stir resentment among the kingdom’s youth, who make up a majority of the population and are increasingly struggling to find affordable housing and salaries that cover their cost of living.
The price of oil— the backbone of Saudi Arabia’s economy — has fallen by about a half since the summer. Saudi Arabia is extremely wealthy, but there are deep wealth disparities and youth unemployment is expected to mushroom absent a dramatic rise in private sector job creation. The International Monetary Fund says almost two-thirds of employed Saudis work for the government.
A the height of Arab Spring protests sweeping the region in 2011, King Abdullah pledged $120 billion to fund a number of projects, including job creation and hikes in public sector wages. The move was largely seen as an effort to appease the public and blunt any challenges to monarchical rule.
Associate Fellow and energy researcher at Chatham House, Valerie Marcel, said massive government spending across the Gulf on public sector salaries is “really the thing that keeps the lid on the bottle.” She said that for now the Arab monarchies of the Gulf can afford to run deficits due to surpluses accumulated over the years from high oil prices.
Now that’s commitment. There’s actually some discussion around that the US and the Saudis basically colluded to drop oil prices. This all is happening while OPEC has called for widespread production cuts. Anyone with a little game theory background along with economics know that this is a deadly game. The ones that cut their production will lose income.
Turning to the current price drop, the Saudis and OPEC have a vested interest in taking out higher-cost competitors, such as US shale oil producers, who will certainly be hurt by the lower price. Even before the price drop, the Saudis were selling their oil to China at a discount. OPEC’s refusal on Nov. 27 to cut production seemed like the baldest evidence yet that the oil price drop was really an oil price war between Saudi Arabia and the US.
However, analysis shows the reasoning is complex, and may go beyond simply taking down the price to gain back lost marketshare.
“What is the reason for the United States and some U.S. allies wanting to drive down the price of oil?” Venezuelan President Nicolas Maduro asked rhetorically in October. “To harm Russia.”
Many believe the oil price plunge is the result of deliberate and well-planned collusion on the part of the United States and Saudi Arabia to punish Russia and Iran for supporting the murderous Assad regime in Syria.
Punishing Assad and friends
Proponents of this theory point to a Sept. 11 meeting between US Secretary of State John Kerry and Saudi King Abdullah at his palace on the Red Sea. According to an article in the Wall Street Journal, it was during that meeting that a deal was hammered out between Kerry and Abdullah. In it, the Saudis would support Syrian airstrikes against Islamic State (ISIS), in exchange for Washington backing the Saudis in toppling Assad.
If in fact a deal was struck, it would make sense, considering the long-simmering rivalry between Saudi Arabia and its chief rival in the region: Iran. By opposing Syria, Abdullah grabs the opportunity to strike a blow against Iran, which he sees as a powerful regional rival due to its nuclear ambitions, its support for militant groups Hamas and Hezbollah, and its alliance with Syria, which it provides with weapons and funding. The two nations are also divided by religion, with the majority of Saudis following the Sunni version of Islam, and most Iranians considering themselves Shi’ites.
“The conflict is now a full-blown proxy war between Iran and Saudi Arabia, which is playing out across the region,” Reuters reported on Dec. 15. “Both sides increasingly see their rivalry as a winner-take-all conflict: if the Shi’ite Hezbollah gains an upper hand in Lebanon, then the Sunnis of Lebanon—and by extension, their Saudi patrons—lose a round to Iran. If a Shi’ite-led government solidifies its control of Iraq, then Iran will have won another round.”
The Saudis know the Iranians are vulnerable on the oil price. Experts say the country needs $140 a barrel oil to balance its budget; at sub-$60 prices, the Saudis succeed in pressuring Iran’s supreme leader, Ayatollah Ali Khamanei, possibly containing its nuclear ambitions and making the country more pliable to the West, which has the power to reduce or lift sanctions if Iran cooperates.
Adding credence to this theory, Iranian President Hassan Rouhani told a Cabinet meeting earlier this month that the fall in oil prices was “politically motivated” and a “conspiracy against the interests of the region, the Muslim people and the Muslim world.”
So, you can see, there’s a little bit of economy theory blended with conspiracy theory here. Frankly, I”m all for Saudi Arabia crippling American Fracking even though I’m sitting in a state where things will only go from bad to worse in this situation. (Although I will mention I’m actively looking at real estate in Washington State right now.)
Despite repetition in countless media accounts and analysts’ notes over the past few weeks, though, the idea of a “sheikhs vs. shale” battle to control global oil supplies has precious little evidence behind it. The Saudi-led decision to keep OPEC’s wells pumping is a direct strike by Riyadh on two already hobbled geopolitical rivals, Iran and Russia, whose support for the Syrian government and other geostrategic machinations are viewed as far more serious threats to the kingdom than the inconvenience of competing for market share with American frackers.
Among the world’s oil producing nations, few suffer more from the Saudi move than Tehran and Moscow. At a time when both are already saddled with economic sanctions — Russia for its actions in Ukraine and Iran for its alleged pursuit of nuclear weapons technology — the collapse of oil prices has put unprecedented pressure on these regimes. For Russia, the crisis has hit very hard, with the ruble losing 40 percent of its value to the dollar since October. This is particularly problematic since Russian state-owned oil firms have gone on a dollar-borrowing spree in recent years; now, servicing that debt looks very ominous.
True, Saudi OPEC minister Ali al-Naimi insisted last month that the move was intended to target shale. But he would say that, wouldn’t he? After all, his OPEC counterparts were standing beside him — including the OPEC minister from Iran.
The fact is, Saudi Arabia has little to fear from shale. Saudi Arabia’s huge reserves of conventional oil can and probably will be produced for decades after the shale boom has run its course — which the U.S. Energy Information Administration (EIA) expects to happen by 2050 or so — and at much lower costs.
So, that one could be just a conspiracy theory. Anyway, it is very interesting situation that seems to converge economics with geopolitics. It won’t be the first time that oil and other commodities have been used as weapons. The Spanish Empire was taken down by its gold lust and hoarding by Good Queen Bess as one example. It’s really interesting no matter what the rationale.
For all our worries over Russia, however, we in Britain should not lose sight of the humiliation of another swaggering and once-mighty force in world politics, the Organisation of Petroleum Exporting Countries (OPEC). When it burst on the world scene 40 years ago, OPEC terrified the wasteful West.
Over the previous decades, we had grown used to abundant oil, bought mostly from Middle Eastern producers — with little global muscle — at rock- bottom prices.
However, OPEC changed that. By restricting supply, the cartel quadrupled the oil price, from $3 to $12.
Saudis remain in a strong position because oil is cheap to produce there. Above, the country’s Minister of Petroleum and Mineral Resources Ali Ibrahim Naimi
That is only a fraction of today’s price — but the oil crisis sparked by the rocketing cost in 1974 was enough to lead to queues at filling stations and national panics in the pitifully unprepared industrialised world.
Four decades later, Saudi Arabia has become one of the richest countries in the world, with reserves totalling nearly $900 billion.
But the rest of the world is less at its mercy than it once was. Here in Britain, our energy consumption is dropping remorselessly — the result of increased energy efficiency.
Moreover, many other nations now produce oil. And oil can be replaced by other fuels, such as natural gas, which OPEC does not control.
Also, OPEC no longer has the discipline or the clout to dominate the market, and we in Britain are among the big winners from all this, reaping the benefits of lower costs to fill up our cars and power our industries.
At its meeting in Vienna last month, the OPEC oil cartel — which controls nearly 40 per cent of global production — faced a fateful choice.
Would it curb production and thus, by reducing supplies, try to ratchet the oil price back to something near $100 a barrel — the level most of its members need to balance their books? Or would it let the glut continue?
The organisation’s 12 member countries, including Saudi Arabia, Iran, Iraq, Kuwait, Venezuela and Nigeria, chose to do nothing, proving that its once-mighty power has withered. Oil prices subsequently fell even further.
One central problem is that several of OPEC’s members detest each other for a variety of reasons.
Above all, Saudi Arabia and its Gulf allies see Iran — a bitter religious and political opponent — as their main regional adversary.
They know that Iran, dominated by the Shia Muslim sect, supports a resentful underclass of more than a million under-privileged and angry Shia people living in the gulf peninsula — a potential uprising waiting to happen against the Saudi regime.
The Saudis, who are overwhelmingly Sunni Muslims, also loathe the way Iran supports President Assad’s regime in Syria — with which the Iranians have a religious affiliation. They also know that Iran, its economy plagued by corruption and crippled by Western sanctions, desperately needs the oil price to rise. And they have no intention of helping out.
The fact is that the Saudis remain in a strong position because oil is cheap to produce there, and the country has such vast reserves. It can withstand a year — or three — of low oil prices.
The fact is that the Saudis remain in a strong position because oil is cheap to produce there, and the country has such vast reserves. It can withstand a year — or three — of low oil prices.
In Moscow, Vladimir Putin does not have that luxury — and the Saudis know it.
They revile Russia, too, for its military support of President Assad, and for its sale of advanced weapons to Iran.
So there’s the piece on why Russian and Iran are targeted. Anyway, unless you’re a CIA analyst specializing that area with access to all the back and forth, it’s hardly possible to untangle all these wicked webs. It is evident, however, that the Saudis have some bones to pick with a lot of folks and picking away they are.
It will be interesting to watch this unfold. I have no doubt this will have bigger implications and I also know that most folks aren’t following this. I’m also pretty sure the usual news outlets are giving this short shrift. You can tell if you if follow any of my links because only one goes to the NY Times. The rest are mags that are read by very few folks.
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