Voices from Russia

Monday, 26 February 2018

What Sanctions? Russia’s Investment Rating Upgraded


On 23 February 2018, Standard and Poors raised its estimation of Russia’s sovereign credit rating from BB+ to BBB-. This is good news for the Russian Federation as it continues to realign its economy in response to the various sanctions that the West (mainly the USA) imposes on the nation. Under President Putin’s leadership, Russia gradually improved since the peak of the sanctions crisis near the end of 2015. The rating change means that S&P no longer considers Russia as “junk” investment territory. The Financial Times reported that S&P attributed the upgrade to the country’s “prudent policy response” taken in response to the sanctions. The analysts further said this:

The ratings are supported by Russia’s commitment to conservative macroeconomic management, its strong net external asset position, low government debt, and relatively high monetary flexibility, including a flexible exchange rate. The ratings are constrained by our assessment of Russia’s economy, which remains dependent on revenues from oil and gas exports, as well as by wider institutional and regulatory weaknesses. Further constraints include geopolitical tension, and resulting international sanctions, creating a drag on Russia’s long-term economic growth prospects.

The S&P rating lift takes Russia into stable investment territory. Another analytics agency, Fitch Ratings, affirmed Russia’s long-term foreign and local currency issue default ratings, also at “BBB-” with a Positive Outlook:

Russia’s ratings balance a strong sovereign balance sheet, robust external finances, and an improved policy framework against weaker macroeconomic performance than peers, structural weaknesses (commodity dependence and governance risks), and geopolitical tensions. The Positive Outlook reflects continued progress in strengthening the economic policy framework underpinned by a more flexible exchange rate, a strong commitment to inflation-targeting, and a prudent fiscal strategy. These policies contribute to improved macroeconomic stability and, together with robust external and fiscal balance sheets, increase the economy’s resilience to shocks. The estimated federal budget deficit narrowed to 1.5 percent of GDP in 2017, less than half the 2016 out-turn and well below the BBB median. The non-oil deficit shrank to 7.9 percent of GDP in 2017 from 9.1 percent in 2016. Fitch forecasts that Russia will post a fiscal deficit of 0.6 percent in 2018 (outperforming the budgeted 1.3 percent deficit), reflecting higher-than-budgeted oil prices, continued non-oil and gas revenue growth, and expenditure restraint. It should achieve the current official 2019 primary balance forecast comfortably, with Fitch forecasting surpluses at both the primary and overall levels.

The rest of the report is similarly quite positive. It’s an interesting point that many Russian businesses are grateful for the opportunities created by the sanctions even though they had the intent to hurt and punish Russia for whatever cause célèbre the West could dream up. Whatever doesn’t kill you only makes you stronger, doesn’t it?

25 February 2018

Seraphim Hanisch

Russia Feed     



Thursday, 11 August 2011

11 August 2011. “I’m Worried for My Country”… What More is There to Say?

THIS is what Rush Limbaugh, Michelle Bachmann, John Boehner, Sarah Palin, “Citizens United”, S&P, Fox News, the Fed, and Chilly Hilly Clinton advocate… it’s “for our own good”… workers were too greedy, dontcha know!


Editor’s Foreword:

Mostly, I’m going to give you excerpts from some things that made me think over the past few days. I’m not going to say much at the end… I‘ll confide that hitting people over the head overly much has the opposite effect of what one intends… so, read it, heed it, and make up your own mind. Somehow, I think that we’ll all come to a reasonable consensus in the end, after all.



No matter where you look, fewer people are doing the work because fewer are out there buying, ordering, and building. More people are spending their days worrying… not about who’ll get the blame or who’ll win election, but how they’re going to make ends meet. Do they get this in Washington? Do they feel our pain? I know they all claim they do. However, that’s certainly not how it seems. It doesn’t feel like they’re asking us to pull together; if feels like they’re tearing us apart. It doesn’t feel like the various “leaders” are working together, but like they’re scoring points at one another’s expense. …

However, the whole idea of government is that there are some things individuals can’t do, some things we can only do together, some problems that are too big to solve one grain of sand at a time. We’re decent people, but we can’t do it alone. I‘m worried for my country.



Economic fears are weighing heavily on Americans, with a large majority saying the United States is on the wrong track and nearly half believing the worst is yet to come, a Reuters/Ipsos poll said Wednesday. …

The Reuters/Ipsos poll found 73 percent of Americans believe the United States is “off on the wrong track”, and just one in five, 21 percent, think the country is headed in the right direction. The survey found that 47 percent believe “the worst is yet to come” in the US economy, an increase of 13 percentage points from a year ago when this question was last raised. This is the highest measure since March 2009, when concern peaked at 57 percent, at the height of the recession. Ipsos pollster Julia Clark said the wrong-track measure reflects widespread unhappiness with the economy and frustration at both political parties, but “you can’t say it’s a predictor of how Obama will fare” in 2012. The level of discontent was 10 points higher than a July survey and is the highest in an Ipsos poll since it reached 73 percent in October 2008, at the height of the financial crisis. The polling organisation found 77 percent felt the country was on the wrong track in July 2008, during Bush’s final year in office. Gallup found even higher levels of dissatisfaction at various points over the past 30 years, but it’s rare.



Obama’s failure to challenge the idiocy demanded by S&P, along with the Republicans… that government spending be dramatically cut in the face of an economic crisis… cast his remarks as terminally tepid. How dare a credit rating agency that got it so wrong, one that we should investigate for malfeasance in the creation of the banking meltdown, dictate public policy? For S&P to insist on massive government cuts that would only increase joblessness is like a burglar shifting blame for his crimes to the poor quality of locks. This from a credit rating agency that, as NYT columnist Joe Nocera pointed out, “has consistently fallen short”. S&P judged Enron to be an exemplary company until shortly before the corporation imploded, and it gave its triple-A seal of approval to the toxic securitised mortgage debt that caused the great recession. There are serious problems with the US economy, but they aren’t the ones that Standard & Poor’s outlined when it sent the stock market into a tizzy. We don’t need draconian cuts in government spending at a time when the economy remains mired in deep unemployment, when state and municipal governments are shedding jobs, and when the housing market is on life support. If some Americans thought that we did, so they voted to put irresponsible Republicans in charge of the House of Representatives, isn’t it the duty of the president and his fellow Democrats in control of the Senate to fight back? That’s called democracy, and we need more of it, not the false unity for which Obama settled.

Sure, it would’ve been much better if a phoney populist movement (the Tea Party), financed by fat cats out to preserve their unseemly tax breaks, hadn’t gained control of the House. That undermined what S&P termed “the effectiveness, stability, and predictability of American policymaking and political institutions that have weakened at a time of ongoing fiscal and economic challenges…” However, as S&P acknowledged with its downgrade after the congressional vote on the debt ceiling, the fact that the president caved was of no help. The result is that Obama agreed to effectively remove the elected federal government from the battle to restore economic health; instead, he left us to the tender mercies of the banker-dominated Federal Reserve, which, like the folks at S&P, condoned the reckless Wall Street policies that got us into this mess. At a time when we need a full-throated defence of the role of government in protecting the interests of a majority of Americans, suddenly made deeply vulnerable by the chicanery of the financial oligarchy, we’re denied even the logical clarity of a former community organiser who once promised hope.



Fareed Zakaria, the brilliant CNN/Time foreign policy analyst, really hit the unthinkable head-on. It didn’t make him popular or liked. In short, Zakaria dared to ask whether we should not cut our mammoth military budgets. “It’d be a much-needed adjustment to an out-of-control military-industrial complex. … The Pentagon’s budget has risen for 13 years, which is unprecedented. Between 2001 and 2009, overall spending on defence rose from 412 billion USD (12.178 trillion Roubles. 290 billion Euros. 254 billion  UK Pounds) to 699 billion USD (20.66 trillion Roubles. 491 billion Euros. 431 billion UK Pounds), a 70 percent increase, which is larger than in any comparable period since the Korean War. Including the supplementary spending on Iraq and Afghanistan, we spent 250 billion USD (7.39 trillion Roubles. 176 billion Euros. 154 billion UK Pounds) more than average US defence expenditures during the Cold War… a time when the Soviet, Chinese, and Eastern European militaries were arrayed against the United States and its allies. “Over the past decade, when we had no serious national adversaries, US defence spending has gone from about a third of total worldwide defence spending to 50 percent. In other words, we spend more on defence than the planet’s remaining countries put together”.

This enormous spending on defence… and the phoniness with which we embrace virtually anything military, in which we now go out looking for wars, like Iraq, Afghanistan, Yemen, and Somalia… has led to a tragic imbalance between the military and diplomacy. Robert Gates liked to point out that there are more members of military marching bands than men and women in the entire Foreign Service. Therefore, yes, ladies and gentlemen, it’s time to start thinking things through. It’s not just a matter of forming “supreme” councils to tell us what to do… we already know what to do. We need to cut back on all levels, particularly, in military spending. We need to raise revenues from the Americans who are making fortunes off of this country. We need to bring home the earnings of companies such as General Electric, who live off the American body but invest overseas. The question is whether our complaisant young president can do this, for it demands making, well, demands. Nevertheless, if he can’t do it, then, we must.



Finally, a descent into the Jabberwockian world of the rightwing:

Former Alaska Governor Sarah Palin, who plans to announce whether she will run for president sometime next month, said Monday night that she predicted the credit rating downgrade long ago.


In a pig’s arse… there’s nothing else to say of such arrant rubbish… if anything deserves the description of “bollocks on stilts”, this does. It does illustrate the mindset of the ‘baggers… reality need not apply.


Editor’s Afterword:

Let’s say that I want you to think on all of that above. If we were to cut the defence budget by 50 percent, it would still be one-third of total world spending on war material and war. S&P thought Enron was a good deal… why should we trust their “credit rating?” It does stink of a partisan coshing of a political opponent, doesn’t it? Only government can do MANY things… a society of over 300 million individuals can’t have a “minimal” government… if it did, anarchy would result, and only the ruthless and evil would prosper. That’s why a “Reuters/Ipsos poll found 73 percent of Americans believe the United States is ‘off on the wrong track’, and just one in five, 21 percent, think the country is headed in the right direction. The survey found that 47 percent believe ‘the worst is yet to come’ in the US economy”. Sobering stuff, eh? Note the Palin idiocy… however, there ARE ignoranuses who eat that up… don’t turn your back on them. They’re ignorant… they’re fanatics… and they have leaders who know what they want… and what they want is a theocracy where all non-Born Againers would suck hind tit (if they’d allow us to live at all). It’s up to us to fight them and kill their Satanic movement. It’s our God-given duty…


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