Out last week, an interview I did with Bloomberg BNA on Russia's economic woes. Enjoy!
Well, two things: one, my absence, as I moved from Moscow to Warsaw. Secondly, the attitude of the Head of the National Bank of Poland Marek Belka on what central bank independence really means. Swing and a miss, I would say.
And apologies for that, but some good news - I'll be moving to Poland next month to take up the position of President of CASE (www.case-research.eu), the prominent Polish think tank. More as it develops, but my first day is May 19, and I'm excited about this opportunity!
I've written much on Eurasian Integration, and it's really gone into overdrive with the Ukraine crisis. Here's a new piece for Russia Direct on how Ukraine is killing integration... and how China is benefiting.
In case you haven't been following closely, war is bad, threats of war are bad, and threats of war are especially bad when a) you're doing the threatening and b) you have absolutely nothing left in the tank to back it up. And by that, I don't mean gas (Russia has huge natural reserves, obviously) nor do I mean an actual tank (Russia has plenty of them poised to come down on Ukraine as well)... I mean if your economy is already teetering on the bring of recession, all people need is a little push to turn it into a rout. Well, the Crimea escapade is doing just that.
I will have a look more in-depth in Russia Direct either later today or Monday, but let's recap:
1. Markets were bearish on Russia anyway
2. Russia moved its troops into another sovereign nation in breach of its treaty obligations with that nation and others
3. Markets ran away.
Indeed, as Bloomberg news has pointed out, two Putin cronies lost $3.2 billion in one day in the market plunge, while the entire market loss on March 3 was more than the entire amount spent on the Sochi Olympics (remember them? Seems so far away). The market closed yesterday lower than the Bloody Monday close on March 3, and the ruble is in free-fall. There is no way that Russia comes out of this in any way, shape, or form a winner. Especially if the daffy economic policy in Crimea appears to be Russian-inspired.
In short, way to go! It's not often you can find a government institutionally capable enough to create a perfect policy, but this one appears to have absolutely no upside. Congrats are in order!
It's been tough to keep up the blog when everything is going kablowey in Ukraine. but yesterday's crash in Russian markets meant I had to give a lot of commentary on the fly. For your edification, you can check me out here on RT talking about "Black Monday" and here on Dukascopy Swiss Financial TV talking about the same thing (slanted a bit more heavily to interest rates).
Also, I've been fighting twitter trolls who apparently can't quite get that free speech means "you can say what you want" and not "if you don't say things are are unabashedly pro-Russia and anti-Western you are some kind of Nazi and we will track you down at your employer and spam everyone you work with." I think that's the price of fame these days, and I'm not even famous. Russia is a funny place sometimes, but the internet remains the last bastion of nutjobs, wingnuts, trolls, and Stalinist loonies. Either way, enjoy my commentary!
Ukraine, already a state barely held together with Soviet-era tape, is in utter and complete disarray. I am re-tweeting and re-facebooking what I can from people on the ground, but I implore you all to check out the following feeds:
I will have more thoughts later, but the situation is too fluid and tenuous to comment. Prayers for EuroMaidan and prayers for Ukraine.
Available here. Long and short of it, as I posted here in real-time, the world is becoming a more dangerous place, and the currency markets are the biggest manifestation of the gathering storm.
It's no secret that governments fudge and manipulate numbers, but the process has gotten more blatant of late. Argentina has outlawed independent inflation forecasts, and now China has decided that only friendly and "trustworthy" economists or banks should be spoken to. Expect a raft of stories telling us how China's debt problem isn't as bad as imagined.
This could be why freedom of speech is the most important liberty. Well, that and the right to own a firearm. One to say what you think to be true, and the other to stop others from shutting you up!
While I'd love to debate the conspiracy theories all around me here in Russia about how the US beat the home team in Sochi in hockey on Saturday (and, at least according to the hand-wringers at Time Magazine, apparently were oh so vulgar about it), I'm more content to start your Monday off with a piece I did at the Bank of Finland last year on institutional volatility and financial markets. It just went up this morning, so please enjoy!
Dr. Christopher Hartwell is an institutional economist and President of CASE Warsaw. All commentary on this page is exclusively his own and in no way represents the views of CASE, his wife, his dog, or anyone else. Especially not his wife or his dog.