The US And Europe May Have Just Sent A Ton Of Their Russian Business To China

china russia vladimir putin xi jingping

On Tuesday, President Obama announced additional, “major” sanctions against Russia due to the country’s continued involvement with Ukraine and their support of pro-Russian separatist groups.

The sanctions target Russia’s energy, arms, and finance sectors.

This is on top of existing sanctions against a series of large banks and energy firms including Rosneft, the world’s largest oil company, and Gazprombank, Russia’s largest private bank. 

Sanctions are intended to hurt the economy of the targeted country, with the hope that businesses and workers pressure policymakers to alter their behaviour in order to restore the economic status quo.

However, sanctions often come with unintended consequences.

“We see a significant risk of a more fundamental shift in Russian economic policy, away from the market and global institutions in response to more serious sanctions connected to the situation in Ukraine and toward a greater focus on developing domestic markets and links with non-Western economies, particularly China,” said Morgan Stanley analysts Jacob Nell and Alina Slyusarchuk.

Nell and Slyusarchuk note that the recent decision by the Hague, which is calling Russia to award the shareholders of defunct oil company Yukos $50 billion, only adds to the geopolitical rifts.

“The Yukos award could well strengthen Russian sentiment to further isolate itself from the West,” they said

Sanctions have a long history of not working. A study by Gary Hufbauer, Jeffrey Schott, and Kimberly Ann Elliot (HSE) found that only 34% of sanctions that they reviewed between 1914 and 1990 were effective.

Additionally, back in March, Morgan Stanley’s Russia economics and strategy team wrote that, “Typically, sanctions have been applied against much smaller countries, such as Iran, Iraq, Libya and North Korea, with significantly fewer resources” than Russia, which is a “large country, with extensive resources”.

Will it be different this time?

HOUSE VOTES TO SUE OBAMA

Barack Obama surprised

House Republicans on Wednesday passed a resolution authorizing them to sue President Barack Obama for what they call an overreach of constitutional authority. 

The resolution passed the Republican-controlled House in a party-line vote of 225-201 on Wednesday. All but five Republicans voted for the measure, while all 199 Democrats voted against it. 

The coming lawsuit will accuse Obama of exceeding his constitutional authority as president by making unilateral changes to the Affordable Care Act — specifically, in twice delaying implementation of the law’s so-called employer mandate. 

House Speaker John Boehner has hinted at the lawsuit for a little more than a month. Republicans have argued that Obama has continually overstepped his constitutional authority through executive actions on Obamacare and other areas, including his 2012 order to ease deportations of some young undocumented immigrants.

Late last month, Boehner sent a memo to the House Republican conference, informing them of his plans to file legislation in July that would allow the House of Representatives to file suit to compel Obama to “faithfully execute the laws of our country.” Almost three weeks ago, Boehner’s officereleased a draft resolution focusing on the employer mandate as the basis of the lawsuit.

Obama on Wednesday dismissed the lawsuit as a “political stunt,” and he playfully urged congressional Republicans to work with him and “stop just hatin’ all the time.” He said he takes unilateral action because he can’t wait for Congress to act in certain areas, including equal pay and student-loan interest rates.

“So some of the things we’re doing without Congress are making a difference, but we could do so much more if Congress would just come on and help out a little bit,” Obama said during the Wednesday speech in Kansas City. “Just come on.  Come on and help out a little bit. Stop being mad all the time. Stop just hatin’ all the time.”

The White House and some Democrats have suggested the lawsuit could be a prelude to the House eventually attempting to impeach Obama. But Boehner and others have said those claims originated from a “scam” for Democrats to raise money ahead of the midterm elections.

The Obama administration first delayed a year ago the employer mandate of the Affordable Care Act, which requires most businesses with 50 or more full-time employees to provide health insurance meeting certain minimum criteria — or pay a penalty of $2,000 per worker.

In February, the administration announced it will delay the mandate’s penalty another year for small businesses with 50-99 workers. It said it would also adjust some of the requirements for larger employers. 

Under the new Treasury Department rules, businesses with 100 employees or more must offer coverage to at least 70% of full-time workers in 2015 and 95% in 2016, or face a penalty. 

One Cop In Seattle Has Issued 80% Of The Citations For Marijuana

pot smokers co

SEATTLE (Reuters) – The Seattle Police Department has reassigned an officer who single-handedly issued about 80 percent of the marijuana tickets handed out in the city during the first half of this year, authorities said on Wednesday.

Seattle Police Chief Kathleen O’Toole said staff reviewing data to prepare the department’s first biannual report on marijuana enforcement found that 66 of 83 citations for public pot use were given out by just one officer.

“In some instances, the officer added notes to the tickets,” O’Toole said in a statement, adding that some of the notes requested the attention of City Attorney Peter Holmes and were addressed to “Petey Holmes.”

In one case, she said, “the officer indicated he flipped a coin when contemplating which subject to cite.”

In another, O’Toole added, he referred to Washington’s voter-approved changes to marijuana laws as “silly.”

Washington state voted in 2012 to legalize the sale of cannabis to adults for recreational use but does not allow it to be used in public places.

She said the officer’s actions were reported to the police’s Office of Professional Accountability, and that he will not perform patrol duties while an investigation takes place.

The six-month report, which was released last week, found African Americans in Seattle were ticketed disproportionately to their population for using pot in public.

The police department said 36 percent of the tickets were issued to African-Americans, who make up just eight percent of the city’s population.

A spokesman said the SPD recognized the numbers were disproportionate, and O’Toole reiterated on Wednesday that the study was designed to provide more oversight and to flag “anomalies or outliers” in Seattle’s marijuana enforcement.

(Reporting by Eric M. Johnson in Seattle; Writing by Daniel Wallis; Editing by Michael Perry)

A Small Town in Tennessee Has The Big Cable Companies Terrified

While the nation’s largest internet service providers have been making lots of noise recently, the country’s fastest network has stayed quiet, just like the Tennessee town it services.

The small, southern city of Chattanooga, Tennessee, boasts internet speeds up to a whopping gigabit per second, thanks to a local municipal fiber internet network, and has since last year. That’s the same speed as Google Fiber, only there’s no legacy tech giant pumping technology into the project.

The city of Chattanooga and the publicly owned electric utility EPB did it by themselves.

Big telecom companies like AT&T and Comcast put off plans to outfit southeastern Tennessee with high-speed internet, essentially forcing the city to look for internet solutions elsewhere, Motherboard reports. This is actually a trend. Though Chattanooga’s internet is notable for its blinding speed, many small communities around the country are similarly taking on high-speed internet without the help of big-name ISPs.

In fact, often the ISPs are holding these neglected communities back. In 2011 Longmont, Colorado, passed a ballot referendum that lifted a 2005 state law stopping municipalities from selling services that rely on publicly owned infrastructures, the Denver Post reported. Cable companies like Comcast originally pushed for the law in 2005 because they felt it was “unfair to let tax-supported entities compete with tax-paying businesses,” the Post said.

There are more than 20 states that still have laws like this one on the books, Motherboard reported. The FCC recently said it would help small communities get past these laws if it means faster internet for them. This was in June.

Earlier this month, Rep. Marsha Blackburn (R-Tennessee) proposed an amendment that would make the FCC’s move illegal. Almost every House Republican voted yes. Now the amendment is in the largely Democratic Senate where it’s not likely to pass, though still could, perhaps with a little help from big cable companies.

“Ultimately what it comes down to is these cable companies hate competition,” said Chris Mitchell, the director of community broadband networks for the Institute for Local Self Reliance.

As director, Mitchell watches over issues like municipal networks, net neutrality, and the consolidation of cable companies, advocating for the public’s bets interest. “It’s not about [cable’s] arguments so much as their ability to lobby very well,” he said.

He said that both Republicans and Democrats receive a lot of money from cable companies every year. Blackburn herself has recieved five-figure donations from AT&T, Verizon, and the National Cable, and Telecommunications Association, opensecrets.org says.

Marsha BlackburnRep. Marsha Blackburn (R-Tennessee)

Of course the anti-municipal fiber network crowd does have arguments. A common one is that local government-backed fiber networks are often failures that put tax dollars at risk, which Mitchell says is factually inaccurate. The other is that it’s unfair to allow private companies to compete with government-backed entities, which Mitchell agrees is worth debating.

Municipal fiber internet networks certainly don’t fit in every community. They’re expensive to build — the Washington Post says Chattanooga’s cost $330 million — and a handful have failed. Mitchell says most governments don’t really want to have to build and run their own networks, despite their quality and popularity. Ideally, he says, local governments across the nation could fund the construction of a fiber network and then partner with a third party to run the service. This is happening in several cities nationwide, and it works well, though the number is climbing slowly.

“The first reason a community builds a network tends to be jobs. It helps existing businesses, and draws in new ones,” Mitchell said. “Most of these laws were passed in 2004, 2005. People didn’t think the internet was essential for business.”

This is why for Mitchell and others who oppose Blackburn’s amendment, the most important thing is giving the communities the choice of whether to pursue a network of their own or hand the keys over to Comcast and company.

“Localities are in the best position to decide the broadband needs of their own communities,” Rep. José E. Serrano (D-New York) said in an email statement to Business Insider. He voted against the amendment in the House. “The FCC is poised to help these localities by overruling harmful state policies that prevent innovation and competition.”

While the amendment isn’t likely to make it past the Senate, which has a history of voting down proposals like Blackburn’s, Mitchell knows the issue will remain even if the legislation doesn’t.

“The fight with the FCC is something I think we’re going to see for a while,” he said.

We have reached out to Rep. Blackburn and will update this post if we hear back.

The Trigger Points For World War III Are In Place

obama putin

Pessimism is a useful prism through which to view the affairs of states. Their ambition to gain, retain, and project power is never sated. Optimism, toward which Americans are generally inclined, leads to rash predictions of history’s ending in global consensus and the banishment of war. Such rosy views accompanied the end of the Cold War. They were also much in evidence a century ago, on the eve of World War I.

Then, as now, Europe had lived through a long period of relative peace, after the end of the Napoleonic Wars. Then, too, rapid progress in science, technology, and communications had given humanity a sense of shared interests that precluded war, despite the ominous naval competition between Britain and Germany. Then, too, wealthy individuals devoted their fortunes to conciliation and greater human understanding. Rival powers fumed over provocative annexations, like Austria-Hungary’s of Bosnia-Herzegovina in 1908, but world leaders scarcely believed a global conflagration was possible, let alone that one would begin just six years later. The very monarchs who would consign tens of millions to a murderous morass from 1914 to 1918 and bury four empires believed they were clever enough to finesse the worst.

The unimaginable can occur. That is a notion at once banal and perennially useful to recall. Indeed, it has just happened in Crimea, where a major power has forcefully changed a European border for the first time since 1945. Russia’s act of annexation and its evident designs on eastern Ukraine constitute a reminder that NATO was created to protect Europe after its pair of 20th-century self-immolations. NATO’s core precept, as the Poles and other former vassals of the Soviet empire like to remind blithe western Europeans, is Article 5, by which the Allies agreed that “an armed attack against one or more of them in Europe or North America shall be considered an attack against them all,” triggering a joint military response. This has proved a powerful deterrent against potential adversaries. Vladimir Putin, the Russian president, has been most aggressive in the no-man’s-lands of Georgia and Ukraine, nations suspended between East and West, neither one a member of NATO. Had Ukraine been a member of NATO, the annexation of Crimea would have come only at the (presumably unacceptable) price of war. Article 5, until demonstrated otherwise, is an ironclad commitment.

When a 19-year-old Bosnian Serb nationalist, Gavrilo Princip, assassinated the heir to the Austro-Hungarian throne in Sarajevo, on June 28, 1914, he acted to secure Serbia’s liberty from imperial dominion. He could not have known that within weeks, Austria-Hungary would declare war on Serbia, goading Russia (humiliated in war a decade earlier by Japan) to mobilize in defense of its Slavic ally, which caused the kaiser’s ascendant Germany to launch a preemptive attack on Russia’s ally France, in turn prompting Britain to declare war on Germany.

Events cascade. It is already clear that the nationalist fervor unleashed by Putin after a quarter century of Russia’s perceived post–Cold War decline is far from exhausted. Russians are sure that the dignity of their nation has been trampled by an American and European strategic advance to their border dressed up in talk of democracy, the rule of law, and human rights. Whether this is true is irrelevant; they believe it. National humiliation, real or not, is a tremendous catalyst for war. That was the case in Germany after the Treaty of Versailles imposed reparations and territorial concessions; so, too, in Serbia more than 70 years later, after the breakup of Yugoslavia, a country Serbia had always viewed as an extension of itself. Russia, convinced of its lost greatness, is gripped by a Weimar neurosis resembling Germany’s post–World War I longing for its past stature and power. The Moscow-backed separatists taking over government buildings in eastern Ukraine and proclaiming an independent “Donetsk People’s Republic” demonstrate the virulence of Russian irredentism. Nobody can know where it will stop. Appetite, as the French say, grows with eating.

Let us indulge in dark imaginings, then, in the cause of prudence. Here is one possible scenario: Clashes intensify between Ukrainian government forces and paramilitary formations organized by Russian fifth columnists. The death toll rises. The ongoing NATO dispatch of troops and F‑16s to Poland and the Baltic states, designed as a deterrence, redoubles anger in Russia—“a great and humble nation besieged,” a Russian general might declare. The American president, saying his war-weary country will not seek conflict, imposes sanctions on the entire Russian oil-and-gas sector. European states dependent on Russian energy grumble; a former German chancellor working in natural gas says his country’s interests lie with Moscow. Then, say, an independence movement of the Russian minority gains momentum in Estonia, backed with plausible deniability by Moscow’s agents, and announces support for the Donetsk People’s Republic. A wave of cyberattacks disables Estonian government facilities, and an Estonian big shot calls the Russian leader an “imperialist troglodyte trapped in a zero-sum game.” After an assassination attempt on the Estonian foreign minister at a rally in the capital, calls grow louder for the American president to invoke Article 5. He insists that “drawing red lines in the 21st century is not a useful exercise.”

Let us further imagine that shortly after the president delivers his speech, in a mysterious coincidence, a Chinese ship runs aground on one of the uninhabited Senkaku Islands, administered by Japan, in the East China Sea. China dispatches a small force to what it calls the Diaoyu Islands “as a protective measure.” Japan sends four destroyers to evict the Chinese and reminds the American president that he has said the islands, located near undersea oil reserves, “fall within the scope” of the U.S.-Japan Treaty of Mutual Cooperation and Security. A Republican senator, echoing the bellicose mood in Washington, declares that “Estonia is more than a couple of rocks in the East China Sea” and demands to know whether “the United States has torn up the treaty alliances in Europe and Asia that have been the foundation of global security since 1945.” The president gives China an ultimatum to leave the Japanese islands or face a military response. He also tells Russia that another act of secessionist violence in Estonia will trigger NATO force against Russian troops massed on the Estonian border. Both warnings are ignored. Chinese and Russian leaders accuse the United States of “prolonging Cold War hostilities and alliances in pursuit of global domination.” World War III begins.

It could not happen; of course it couldn’t. Peace, if not outright pacifism, is now bred in the bones of Europeans, who contemplate war with revulsion. Europe is politically and economically integrated. America, after two wars without victory, is in a period of retrenchment that may last a generation. Wars no longer happen between big land armies; they are the stuff of pinpoint strikes by unpiloted drones against jihadist extremists. Putin’s Russia is opportunistic—it will change the balance of power in Ukraine or Georgia if it considers the price acceptable—but it is not reckless in countries under NATO protection. China, with its watchword of “Harmony,” is focused on its own rising success and understands the usefulness of the United States as an offsetting Pacific power able to reassure anxious neighbors like Japan and Vietnam. For the time being, Beijing will not seek to impose its own version of the Monroe Doctrine. It will hold nationalism in check even as the Asian naval arms race accelerates. Unlike in 1914 or 1939, the presence of large American garrisons in Europe and Asia sustains a tenacious Pax Americana. The United Nations, for all its cumbersome failings, serves as the guarantor of last resort against another descent into horror. The specter of nuclear holocaust is the ultimate deterrent for a hyperconnected world. Citizens everywhere now have the tools to raise a cacophony in real time against the sort of folly that, in World War I, produced the deaths of so many unidentifiable young men “known unto God,” in Kipling’s immortal phrasing.

Convincing? It would certainly be nice to believe that, as President Clinton suggested in 1997, great-power territorial politics are a thing of the past. A new era had dawned, he said, in which “enlightened self-interest, as well as shared values, will compel countries to define their greatness in more-constructive ways.” In fact, the realization that the Russian bear can bite as well as growl is timely. It is a reminder that a multipolar world in a time of transition, when popular resentments are rising over joblessness and inequality, is a dangerous place indeed.

The international system does not look particularly stable. The Cold War’s bipolar confrontation, despite its crises, was predictable. Today’s world is not. It features a United States whose power is dominant but no longer determinant; a one-party China that is a rising hegemon; an authoritarian Russia giddy on nationalism and the idea of a restored imperium; and a weak, navel-gazing, blasé Europe whose pursuit of an ever closer union is on hold and perhaps on the brink of reversal.

Pacifist tendencies in western Europe coexist with views of power held in Moscow and Beijing that Bismarck or Clausewitz would recognize instantly. After the genocides in Rwanda and Bosnia, the UN General Assembly ratified the concept that governments have a “responsibility to protect” their citizens from atrocities. But in the face of Syria’s bloody dismemberment and Ukraine’s cynical dismantlement, idealism of that kind looks fluffy or simply irrelevant. The Baltic countries are front-line states once again. The fleeting post–Cold War dream of a zone of unity and peace stretching from Lisbon to Vladivostok has died. As John Mearsheimer observes in his seminal The Tragedy of Great Power Politics, “Unbalanced multipolar systems feature the most dangerous distribution of power, mainly because potential hegemons are likely to get into wars with all of the other great powers in the system.”

In this context, nothing is more dangerous than American weakness. It is understandable that the United States is looking inward after more than a decade of post-9/11 war. But it is also worrying, because the credibility of American power remains the anchor of global security. The nation’s mood is not merely a reflection of economic hardship or the costs of war; it is also determined by the president’s decisions and rhetoric. There was no American majority for involvement in World War I or World War II—until the president set out to forge one (helped decisively in Franklin D. Roosevelt’s case by Pearl Harbor). As Jonathan Eyal of Britain’s Royal United Services Institute says, “If a president stands up and says something, he can shift the debate.”

President Obama has made clear he does not believe in military force. His words spell that out; so does his body language. He asks, after Iraq and Afghanistan, what force accomplishes. These are fair questions; the bar must be very high for unleashing military power. But when an American president marches allies up the hill to defend his “red line”—as Obama did regarding Syria’s use of chemical weapons—and then marches them back down again, he does something damaging that the world does not forget. And when Obama, in response to a recent question about whether declaring that the United States would protect the Senkaku Islands risked drawing another “red line,” gives an evasive answer, he does something so dangerous that his words are worth repeating:

The implication of the question, I think, … is that each and every time a country violates one of these norms, the United States should go to war or stand prepared to engage militarily, and if it doesn’t, then somehow we’re not serious about these norms. Well, that’s not the case.

If these treaty obligations do not constitute a red line triggering a U.S. military response—the only way to prove the seriousness of “these norms”—all bets are off in a world already filled with uncertainties. A century ago, in the absence of clear lines or rules, it was just this kind of feel-good hope and baseless trust in the judgment of rival powers that precipitated catastrophe. But that, it may be said, was then. The world has supposedly been transformed.

But has it? Consider this article in my father’s 1938 high-school yearbook:

The machine has brought men face to face as never before in history. Paris and Berlin are closer today than neighboring villages were in the Middle Ages. In one sense distance has been annihilated. We speed on the wings of the wind and carry in our hands weapons more dreadful than the lightning … The challenge of the machine is the greatest opportunity mankind has yet enjoyed. Out of the rush and swirl of the confusions of our times may yet arise a majestic order of world peace and prosperity.

Optimism is irrepressible in the human heart—and best mistrusted. Our world of hyperconnectivity, and the strains and aspirations that accompany it, is not so novel after all. The ghosts of repetition reside alongside the prophets of progress. From the “rush and swirl” of 1938 where “distance has been annihilated” would follow in short order the slaughter of Stalingrad, the mass murder of European Jewry, the indiscriminate deaths in Hiroshima and Nagasaki, and the anguish of all humanity. We should not lightly discard a well-grounded pessimism or the treaties it has produced.

Energy Companies Rethinking Russia After New Sanctions

London — The downing of Malaysia Airlines Flight 17 over eastern Ukraine — and the tougher round of sanctions against Russia that followed — is prompting some big multinational energy companies to take a fresh look at the ramifications of the crisis.

For months, American and European energy players have continued to sign deals with Russia, maintaining a posture that business was proceeding as usual. But top industry executives are now starting to acknowledge that the escalating tensions could sharply hurt Western oil and gas giants with major investments in Russia, as well as the service companies that are key technology suppliers.

Vladimir Putin and deputy prime minister Dmitry Rogozin, left

“We are in the heat of a very emotional stage,” Robert W. Dudley, BP’s chief executive, told reporters on Tuesday. The company warned that further economic sanctions could harm BP’s income, production and reputation.

France’s oil giant, Total, which had been among the most committed to Russia, said that since the plane disaster it had stopped regularly adding to its stake in its Russian partner Novatek, a gas producer that was placed under sanctions by the United States this month. Total’s chief financial officer, Patrick de La Chevardière, also indicated on Wednesday that the company was considering how the sanctions might affect other projects like a multibillion-dollar natural gas facility it is building with Novatek.

The industry’s tenor has changed as Western governments directly target Russia’s economic prospects, notably its energy industry. After months of settling for measures that seemed largely symbolic, the United States and the European Union on Tuesday agreed on a new round of sanctions that appear as if they may have real teeth.

“The companies are facing the harsh reality that the United States and the European Union have united on sanctions in a way that two weeks ago would have been inconceivable,” said John Lough, a Russia analyst at Chatham House, a London-based research organization.

In a previous round of sanctions, the United States placed some financial restrictions on Russian energy companies like Rosneft and Novatek. The latest sanctions go further, however, as they try to curb the export of highly specialized equipment needed to develop Russia’s new energy frontiers, including the Arctic and shale rock formations in West Siberia.

Companies like Total and Royal Dutch Shell have poured money into Russia in recent years. And a drilling rig to be operated by Exxon Mobil and Rosneft is being transported to Russian Arctic waters.

But Western oil and gas executives, along with their teams of lawyers, are now pondering the impact of the sanctions. It is uncertain what types of equipment or software they may be prohibited from bringing to Russia. “Technology is a very hard thing to define,” said Mr. Dudley of BP. “So we will have to read it very carefully.”

Mr. Dudley also said that it was unclear whether BP would be allowed to proceed with a joint venture on shale oil with Rosneft; the companies reached a preliminary agreement over the deal this year. Exxon Mobil, Shell and Total also have shale ventures in the country.

As the companies assess the murky situation, Russia’s energy future remains in limbo.

Russia rivals Saudi Arabia as the world’s leading oil producer, and it was second in natural gas production last year to the resurgent United States. But Russia’s traditional oil fields in West Siberia, which have sustained the country’s output for decades, are in decline.

To avoid further drops in production, Russia’s industry, which is not yet fully modernized, needs access to the Western technology that has transformed the global oil business in recent decades, allowing oil companies to push into ocean waters more than a mile deep, or produce oil from shale rock. That technology is the main reason Russia has sought help from the global oil majors like Exxon Mobil, which is producing oil off Sakhalin Island in eastern Russia.

Oil rigs

“If the new sanctions stay in place for an extended period of months or years they will have an impact on Russia’s ability to grow or even maintain oil production, ” said Richard Mallinson, an analyst at Energy Aspects, a research firm based in London.

Perhaps Russia’s greatest short-term hope for increasing production is to extract oil from shale rock. Russia is considered to have huge, albeit unproven, potential.

But the latest Western actions target shale gas. Any efforts to make the most of these shale formations would be slowed if the sanctions block service companies like Halliburton from bringing technologies including hydraulic fracturing and horizontal drilling that have changed the energy industry in the United States.

The processes are mostly highly adapted versions of practices that have been around for decades, like hydraulic fracturing, or the pumping of water and other liquids down wells at high pressure to break oil and gas free from the surrounding rock. Some analysts say the shale technologies may be hard to block through sanctions because they are essentially adaptations of decades-old techniques.

Pro-Russian rebels ride on a tank flying Russia's flag, on a road east of Donetsk, Monday

Arctic and deepwater drilling equipment may be easier to restrict, analysts say. The European Union plans to prohibit not only the sale but also the transfer of specially adapted drilling rigs and machinery to Russia, according to an official who briefed reporters on the details of the sanctions.

The official estimated that Russia relied on the European Union for 30 to 60 percent of these technologies. While they represent just 150 million euros in annual sales, they are crucial for projects worth billions.

Russian flag with President Putin's face

The European Union is walking a fine line. Heavily dependent on Russian energy, particularly gas, the European Union wants to use the sanctions to target big future projects in shale and in the Arctic without hurting existing production and disrupting global markets. The gas sector will be excluded, which could lead to complications because in many cases oil and gas are produced with much of the same equipment and from the same locations.

Over the last 10 to 15 years, Western companies have become increasingly enmeshed in Russia with the blessing of their governments. Unlike Saudi Arabia, which largely prohibits foreign participation in oil and gas exploration and production, Russia has welcomed Western investment. Without production from Russia, the oil export market would be even more dominated by the Saudis and other OPEC producers.

City of London and Gherkin

Among the Western players, BP may have the most to lose in Russia. In the second quarter of 2014, BP’s stake of almost 20 percent in Rosneft produced nearly one-third of the company’s oil and gas production and nearly 20 percent of its profits. Total has an 18 percent stake in Novatek.

Exxon Mobil has also plunged into Russia. It has a joint venture with Rosneft to drill in the Kara Sea in the Russian Arctic, which some oil executives think could be a frozen Gulf of Mexico in terms of the oil it holds. The rig operated by the two companies, now sailing toward the Kara Sea from Norway, is expected to drill the first well for the joint venture this summer.

“We are assessing the impact of the sanctions, said Alan T. Jeffers, an Exxon spokesman.

Orban Says He Seeks to End Liberal Democracy in Hungary

Hungarian Prime MinisterViktor Orban said he wants to abandon liberal democracy in favor of an “illiberal state,” citing Russia and Turkey as examples.

The global financial crisis in 2008 showed that “liberal democratic states can’t remain globally competitive,” Orban said on July 26 at a retreat of ethnic Hungarian leaders in Baile Tusnad, Romania.

“I don’t think that our European Union membership precludes us from building an illiberal new state based on national foundations,” Orban said, according to the video of his speech on the government’s website. He listed Russia, Turkey and China as examples of “successful” nations, “none of which is liberal and some of which aren’t even democracies.”

Orban, who was re-elected in April for a second consecutive four-year term, has clashed with the EU as he amassed more power than any of his predecessors since the fall of the Iron Curtain in 1989, replacing the heads of independent institutions including the courts with allies, tightening control over media and changing election rules to help him retain a constitutional majority in Parliament.

Orban, a former self-described liberal, anti-communist student leader in the 1980s, has championed relations with Russian President Vladimir Putin and the leaders of China, Azerbaijan and Kazakhstan since 2010 to boost trade.

NGO Crackdown

The Hungarian prime minister is distancing himself from values shared by most EU nations even as his government relies on funds from the bloc for almost all infrastructure-development financing in the country.

Orban said civil society organizations receiving funding from abroad need to be monitored as he considers those to be agents of foreign powers.

“We’re not dealing with civil society members but paid political activists who are trying to help foreign interests here,” Orban said. “It’s good that a parliamentary committee has been set up to monitor the influence of foreign monitors.”

Orban’s steps mirror those of Russia under Putin, where non-governmental organizations that accept foreign money must register as “foreign agents.” Putin orchestrated a crackdown on NGOs in 2012 after he faced the biggest street protests in more than a decade after elections.

“Orban’s comments are very controversial and closer to what we’re used to hearing from President Putin of Russia than from a leader of a European democracy,” Paul Ivan, an analyst at the Brussels-based European Policy Centre, said by phone today. “It’s also an extremely bad moment to cite Russia and Turkey as examples, with Russia becoming much more imperialistic and nationalistic and with serious attacks on the freedom of speech in Turkey.”

‘Workfare’ State

In Hungary, Orban’s government this year raided organizations that received funds from Norway, accusing one group of channeling money to members of an opposition party, a claim rejected by the organization, Okotars.

In May, Norway suspended 153 million euros ($205 million) in grants to Hungary after the government shifted the distribution of funds to a state company from the government. The country has also protested Hungary’s intimidation of civil society groups.

Orban, who has fueled employment with public works projects, said this weekend that he wants to replace welfare societies with a “workfare” state. He has earlier said more centralized control was needed to confront multinational companies such as banks and energy firms, to escape from “debt slavery,” and to protect Hungarians from becoming a “colony” of the EU.

Orban said his “illiberal democracy” won’t deny the “fundamental values” of liberalism, such as “freedom.”

“The point of the future is that anything can happen,” Orban said. “That means it could easily be that our time will come.”

ARGENTINA DEFAULTS

cristina fernandez de kirchner

Argentina has defaulted.

Argentine Finance Minister Axel Kicillof delivered the news to the world from Argentina’s consulate in New York City on Wednesday.

Kicillof had just finished a meeting in which he and a delegation from The Republic failed to satisfy the demands of a group of hedge fund creditors negotiating over $1.3 billion worth of debt owed to them for over a decade.

“The Argentine Republic has filed for a stay [on payment] with Judge Griesa… The Judge decided that if the vulture funds said there could be a stay there would be a stay,” said Kicillof. “The vulture funds were not willing to grant the stay.”

Without the stay and without payment, Argentina is in default.

“Notwithstanding any claim to the contrary, Default is not a mere “technical” condition, but rather a real and painful event that will hurt real people: these include all ordinary Argentine citizens, the exchange bondholders (who will not receive their interest ) and the holdouts ( who will not receive payment of the judgments they obtained in Court),” said Daniel Pollack the Court’s appointed mediator.

Pollack also said he would continue to make himself available for more discussions.

In Argentina’s defense, Kicillof repeated the same argument that the administration has been making for months — that paying the “vultures” would be a violation of Argentine law. That’s because there is a clause in The Republic’s bond agreements called the RUFO — Rights Upon Future Offering — clause. It expires in 2015.

According to RUFO, if Argentina negotiates better terms with some bondholders, all bondholders have a claim on those terms. That would open the country to up to $15 billion worth of payments. Earlier this month, the Court didn’t buy that, and refused Argentina’s request for a stay on payment until negotiations could be worked out (ideally with a payment to NML due in 2015).

axel kicillof

Argentine Economy Minister, Axel Kicillof

“This was a situation of extortion,” said Kicillof. “We will not just sign anything that could lead to more external debt for Argentina… We will avoid it with all of our weapons.”

The “vulture funds” are investors known collectively as NML Capital and led by hedge fund billionaire Paul Singer. They would not take haircuts on debt dating back to Argentina’s last default in 2001 like over 90% of their fellow bond holders.

To Argentina that refusal made them vultures, and you don’t pay vultures. Instead you sue them all the way up to the Supreme Court and lose.

What’s off about all this is that the $15 billion from RUFO is chump change compared to what the country might have to pay if it goes into default. Default opens the country up to “acceleration clause” claims — in which bondholders sue for all their money at once, and immediately — worth $29 billion. That’s everything in Argentina’s Central Bank.

Earlier today, Argentine bankers put together a last ditch rescue package. They offered to put down $250 million as collateral — a show of good faith that the country was willing to pay (and avoid triggering RUFO) in 2015. Another option would have been for banks to buy NML’s debt, and then request a stay on payment themselves.

But for any of that to happen there would have had to be a stay on payment, and hedge funds would not allow that to happen.

Indeed, even before Kicillof said a word Standard & Poors cut the country’s rating to “selective default” — meaning Argentina chose to renege on some of its payments, but not all of them.

“We are… lowering our long-and short-term foreign currency sovereign credit ratings on Argentina to selective default (‘SD’) from ‘CCC-/C’,” said the agency’s release, “indicating that Argentina defaulted on some of its foreign currency obligations. At the same time, we are removing the ‘CCC-/C’ foreign currency ratings from CreditWatch, where they were placed with negative implications on July 1, 2014.”

In his address, Kicillof said that he would not be surprised if NML held sway over rating agencies, and would try to use its power to make things very uncomfortable Argentina.

But so be it. He said that the country would continue on doing what it’s been doing — trying to pay “exchange bondholders” (the 92% of bondholders who did restructure their debt) without paying the “vultures.”

That flies directly in the face of the Supreme Court, which upheld a lower Court’s ruling in favor of NML. New York Judge Thomas Griesa ruled that Argentina could not favor some bondholders over others according to a clause in Argentina’s called pari passu. In Latin, it means “equal step.”

When Argentina tried to pay exchange bondholders earlier this month, Griesa sent that money right back to The Republic. And there it sits in a Bank of New York Mellon custodial account.

“First we’re not going to sign any agreement that hurts Argentina’s future,” said Kicillof. “Second, we’re going to defend the 92% of bondholders that did restructure… In third place, we’re going to take every measure… we have to make sure this situation is not perpetuated. Argentina is ready to talk, to come to an agreement. Let’s come to a just, fair… ruling for 100% of our investors. But do not make us do anything illegal… Do not make us do anything unjust… Do not make us do anything that will make us put Argentina’s economy at risk…. We won’t allow it.”

The full statment from Pollack is below.

This morning and this afternoon, representatives of the Republic of Argentina, led by Minister of the Economy, Axel Kicillof, and representatives of its large bondholders held further face-to-face meetings in my office and in my presence.

Unfortunately, no agreement was reached and the Republic of Argentina will imminently be in Default. Today, July 30, was the last day of the grace period for the Republic of Argentina to pay many hundreds of millions of dollars of interest to its “exchange” bondholders, i.e. those who took bonds in 2005 and 2010 in exchange for the bonds they held following the Default of 2001.

In order to make that payment of interest, however, the Republic of Argentina was also required, simultaneously, to make a “ratable” payment to the bondholders who declined to accept the exchanges of 2005 and 2010, i.e. the “holdouts”. The Republic of Argentina did not meet those conditions and, as a result, will be in Default.

Notwithstanding any claim to the contrary, Default is not a mere “technical” condition, but rather a real and painful event that will hurt real people: these include all ordinary Argentine citizens, the exchange bondholders (who will not receive their interest ) and the holdouts ( who will not receive payment of the judgments they obtained in Court).

The full consequences of Default are not predictable, but they certainly are not positive. This case has been highly publicized and highly politicized for many weeks. What has been perfectly clear to me all along, however, in my capacity as the neutral Special Master, is that the laws of the United States must be obeyed by all parties. The courts of the United States (both the United States District Court and the United States Court of Appeals), after full briefings and hearings, ruled that the Republic of Argentina could not lawfully make the interest payments to the exchange bondholders unless it simultaneously made the payments due the holdouts.

I have worked relentlessly, over a five-week period, to bring the Republic of Argentina and its bondholders together in an agreement that would allow the June 30 interest payment of many hundreds of millions of dollars to be made, and to be made lawfully, thereby avoiding Default. It is not my role or intent to find fault with either side. I will continue to be available to the parties to aid them in reaching a resolution which they must reach in the interests of all concerned.

Default cannot be allowed to lapse into a permanent condition or the Republic of Argentina and the bondholders, both exchange and holdouts, will suffer increasingly grievous harm, and the ordinary Argentine citizen will be the real and ultimate victim.

Bolivia Claims Israel a ‘Terror State’

Anti-Israel boycott movement

Anti-Israel boycott movement

Bolivia on Wednesday renounced a visa exemption agreement with Israel in protest over its offensive in Gaza, and declared it a terrorist state, according to AFP.

President Evo Morales announced the move during a talk with a group of educators in the city of Cochabamba.

It “means, in other words, we are declaring (Israel) a terrorist state,” he said.

The treaty has allowed Israelis to travel freely to Bolivia without a visa since 1972.

Morales said the Gaza offensive shows “that Israel is not a guarantor of the principles of respect for life and the elementary precepts of rights that govern the peaceful and harmonious coexistence of our international community.”

Bolivia broke off diplomatic relations with Israel in 2009 over a previous military operation in Gaza.

In mid-July, Morales filed a request with the UN High Commissioner for Human Rights to prosecute Israel for “crimes against humanity.”

But the UNHRC – like much of the international community – has blatantly ignored Hamas’s tactics.

Hamas, the ruling party in Gaza, has openly boasted about the “success” of its strategy of using civilians as human shields during Operation Protective Edge, and the IDF has published extensive evidence of the practice.

By contrast, the IDF has dropped leaflets, sent phone messages, and issued general warnings to all civilians within range of upcoming airstrikes to prevent further harm.

Five additional Latin American countries – Brazil, Peru, Ecuador, El Salvador, and Chile – have recalled their envoys over misconceptions regarding the operation, in a move Israel condemned Wednesday as showing “encouragement for Hamas.” 

Sheer Carnage At UN School As Israel Pounds Gaza

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REUTERS/Finbarr O’Reilly

Palestinians gather near the minaret of a mosque that police said was destroyed by an Israeli airstrike in Gaza City July 30, 2014.

Israeli shelling killed at least 15 Palestinians sheltering in a U.N.-run school and another 17 near a street market on Wednesday, Gaza’s Health Ministry said, with no cease-fire in sight after more than three weeks of fighting.

Israel’s security cabinet decided to continue its offensive in the enclave and there was no sign of a halt to a 23-day conflict in which 1,326 people, mostly civilians, have died.

Some 3,300 Palestinians, including many women and children, were taking refuge in the school in Jabalya refugee camp when it came under fire around dawn, the United Nations Relief and Works Agency (UNRWA) said.

“Our initial assessment is that it was Israeli artillery that hit our school,” UNRWA chief Pierre Krahenbuhl said in a statement after representatives of the agency visited the scene and examined fragments, craters and other damage.

Blood-splattered floors and mattresses inside classrooms at the Jabalya Girls Elementary School and survivors picked through shattered glass and debris for flesh and body parts to bury.

“I call on the international community to take deliberate international political action to put an immediate end to the continuing carnage,” Krahenbuhl said.

The Gaza Health Ministry put the number of dead in the school attack at 15, with more than 100 wounded. The United Nations said 16 people were killed in the attack.

An Israeli military spokeswoman said militants had fired mortar bombs from the vicinity of the school and troops shot back in response. The incident was still being reviewed.

The army said three Israeli soldiers were killed on Wednesday when a booby-trap bomb exploded in a tunnel shaft they had uncovered in a residence in the southern Gaza Strip.

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REUTERS/Siegfried Modola

Hospital workers and Israeli soldiers carry a stretcher with an Israeli soldier, wounded during Israel’s offensive in Gaza, into Soroka hospital in the southern Israeli city of Beersheba July 30, 2014.

UNRWA said on Tuesday it had found a cache of rockets concealed at another Gaza school — the third such discovery since the conflict began. It condemned unnamed militant groups for putting civilians at risk. Krahenbuhl said the Jabalya school’s precise location and the fact that it was sheltering thousands of displaced people had been communicated to the Israeli military 17 times, with the last notification just hours before the fatal shelling.

U.N. Secretary-General Ban Ki-moon, speaking in Costa Rica, condemned the killing. “It is outrageous. It is unjustifiable. And it demands accountability and justice,” he said.

At the White House, National Security Council spokeswoman Bernadette Meehan said: “We are extremely concerned that thousands of internally displaced Palestinians who have been called on by the Israeli military to evacuate their homes are not safe in U.N.-designated shelters in Gaza.

“We also condemn those responsible for hiding weapons in United Nations facilities in Gaza,” she said.

“EARTHQUAKE-LIKE RESPONSE”

In a separate incident, Israeli shelling killed at least 17 people and wounded about 160 others near a fruit and vegetable market in Shejaia, a heavily bombarded neighbourhood on the eastern outskirts of the city of Gaza, the Health Ministry said. Witnesses said the crowd had gathered to watch a petrol station, hit earlier, burn in the distance.

The Israeli military had no immediate comment. “Such a massacre requires an earthquake-like response,” Hamas spokesman Fawzi Barhoum said. The army said more than 50 rockets were fired from the teeming coastal enclave into Israel on Wednesday, causing no reported casualties or damage.

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REUTERS/Mohammed Salem

A Palestinian man reacts next to the body of his relative, whom medics said was killed by Israeli shelling near a market in Shejaia, at a hospital in Gaza City, July 30, 2014.

Israeli Communications Minister Gilad Erdan, a member of the Security Cabinet, said the forum had instructed the military to press on with its campaign to locate and destroy tunnels that militants have built under the Gaza border and have used to launch attacks inside Israel.

“In the coming few days we’ll be giving the IDF (Israel Defence Forces) full operational freedom to strike against terrorism and complete neutralizing and destroying the tunnels,” Erdan told Channel Two.

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The head of the military’s southern command, Major General Sami Turgeman, told reporters the army was “but a few days away from destroying all the attack tunnels”. He added that the offensive against militants in the Hamas Islamist-dominated enclave had been broadened to include more targets in the central and southern Gaza Strip.

According to the Gaza Health Ministry, 1,326 Palestinians, mostly civilians, have been killed since Israel began its offensive on July 8 with the declared aim of halting cross-border rocket fire and tackling Hamas’s tunnel network.

Ninety-nine Palestinians were killed on Wednesday alone. On the Israeli side, 56 soldiers and three civilians have been killed. Public support remains strong for continuing the military operation in the hope of preventing future flare-ups.

Mohammed Deif, the shadowy leader of Hamas’s armed wing, said in a broadcast message on Tuesday that Palestinians would continue confronting Israel until its blockade on Gaza — which is supported by neighbouring Egypt — was lifted.

Israel has balked at freeing up Gaza’s borders under any de-escalation deal unless Hamas’s disarmament is also guaranteed.

“We are not looking for a ceasefire, though of course military manoeuvres are supposed to be followed by diplomatic manoeuvres,” Erdan said. “But a ceasefire must fulfill Israel’s terms, a long-term calm and the demilitarization of Gaza.”

PROPOSAL REVISED

Egypt said on Tuesday it was revising an unconditional cease-fire proposal that Israel had originally accepted but Hamas rejected, and that a new offer would be presented to Palestinian representatives.

Egyptian officials said an Israeli delegation had held brief talks in Cairo on Wednesday, but gave no further details.

In previous bouts of fighting between Israel and its neighbours, the U.S. has often leaned on the Israelis to stop after incidents that caused high civilian casualties. Washington appears to have less sway with either side this time.

Israel says Hamas is ultimately responsible for such casualties because its fighters, including rocket-launching squads, operate in densely populated residential areas. The army has warned civilians to evacuate whole neighbourhoods before military operations.

israel gaza hamas

REUTERS/Baz Ratner

Israeli soldiers from the Givati brigade return to Israel from Gaza (seen in background) near the border fence, July 30, 2014.

The U.N. said Israeli bombing over the past three weeks has destroyed or severely damaged 4,000 Palestinian homes, scores of schools and almost two dozen health facilities. Some 240,000 people in the Gaza Strip had sought refuge in U.N. schools or with relatives or friends, the U.N. said.

Both President Obama and the U.N. Security Council have called for an immediate cease-fire to allow relief to reach Gaza’s 1.8 million Palestinians, followed by negotiations on a more durable end to hostilities.

Amidst the bloodshed, Switzerland said on Wednesday it was taking soundings about the possibility of holding a Middle East peace conference later this year following a request from Palestinian President Mahmoud Abbas.

The Swiss Foreign Ministry said in a statement that as custodian of the 1949 Geneva Conventions laying down the rules of war, “Switzerland transmitted this request to the states parties and is currently carrying out informal consultations,” but it noted a broad consensus would be needed on the terms of reference and the expected results.

[Additional reporting by Ari Rabinovitch in Jerusalem; Noah Browning in Ramallah; Yasmine Saleh in Cairo; Tom Miles in Geneva; Michelle Nichols in New York; Writing by Jeffrey Heller; Editing by Paul Taylor and Will Waterman]

Magnolia Is Applying Nanotechnology To Boost Solar Cell Performance

Nano-structured coatings to cut reflection losses and trap more light in CIGS and III-V cells

Magnolia Solar has announced that it is pioneering the application of nanotechnology for both flexible CIGS and III-V solar cells in order to boost performance and lower costs, using nano-structured optical coatings that can minimise reflection losses and enhance light trapping.

The US company also says it is developing a way to apply novel nano structured designs to the absorber layer of high-performance III-V and CIGS solar cells in order to reduce recombination losses and increase the capture of low-energy photons.

“Emerging technical approaches for achieving flexible photovoltaic power include the growth of copper indium gallium diselenide (CIGS) cells on flexible substrates and the epitaxial liftoff (ELO) of III-V devices onto thin metal film,” said Roger Welser, Magnolia’s CTO.

The company is working closely with the newly merged SUNY College of Nanoscale Science and Engineering (CNSE) / SUNY Institute of Technology (SUNYIT) institution. “Our office in the Albany NanoTech complex allows our technical staff to work very closely with top researchers at the CNSE/SUNYIT facilities which have directly led to innovative patent pending designs using nanotechnology. This is helping us to meet our goals of high-efficiency thin film solar cells,” said Ashok K. Sood, president and CEO of Magnolia Solar Corporation

Based in Albany, NY and Woburn MA, Magnolia is targeting a variety of civilian and defense applications for its photovoltaic solar cells. 

Anton Chekhov on the 8 Qualities of Cultured People

“In order to feel comfortable among educated people, to be at home and happy with them, one must be cultured to a certain extent.”

What does it mean to be “cultured”? Is it about being a good reader, or knowing how to talk about books you haven’t read, or having a general disposition of intellectual elegance? That’s precisely the question beloved Russian author Anton Chekhov (1860-1904) considers in a letter to his older brother Nikolai, an artist. The missive, written when Anton was 26 and Nikolai 28 and found in Letters of Anton Chekhov to his Family and Friends (public domain; public library), dispenses a hearty dose of tough love and outlines the eight qualities of cultured people — including honesty, altruism, and good habits:

MOSCOW, 1886.

… You have often complained to me that people “don’t understand you”! Goethe and Newton did not complain of that…. Only Christ complained of it, but He was speaking of His doctrine and not of Himself…. People understand you perfectly well. And if you do not understand yourself, it is not their fault.

I assure you as a brother and as a friend I understand you and feel for you with all my heart. I know your good qualities as I know my five fingers; I value and deeply respect them. If you like, to prove that I understand you, I can enumerate those qualities. I think you are kind to the point of softness, magnanimous, unselfish, ready to share your last farthing; you have no envy nor hatred; you are simple-hearted, you pity men and beasts; you are trustful, without spite or guile, and do not remember evil…. You have a gift from above such as other people have not: you have talent. This talent places you above millions of men, for on earth only one out of two millions is an artist. Your talent sets you apart: if you were a toad or a tarantula, even then, people would respect you, for to talent all things are forgiven.

You have only one failing, and the falseness of your position, and your unhappiness and your catarrh of the bowels are all due to it. That is your utter lack of culture. Forgive me, please, but veritas magis amicitiae…. You see, life has its conditions. In order to feel comfortable among educated people, to be at home and happy with them, one must be cultured to a certain extent. Talent has brought you into such a circle, you belong to it, but … you are drawn away from it, and you vacillate between cultured people and the lodgers vis-a-vis.

Cultured people must, in my opinion, satisfy the following conditions:

  1. They respect human personality, and therefore they are always kind, gentle, polite, and ready to give in to others. They do not make a row because of a hammer or a lost piece of india-rubber; if they live with anyone they do not regard it as a favour and, going away, they do not say “nobody can live with you.” They forgive noise and cold and dried-up meat and witticisms and the presence of strangers in their homes.
  2. They have sympathy not for beggars and cats alone. Their heart aches for what the eye does not see…. They sit up at night in order to help P…., to pay for brothers at the University, and to buy clothes for their mother.
  3. They respect the property of others, and therefor pay their debts.
  4. They are sincere, and dread lying like fire. They don’t lie even in small things. A lie is insulting to the listener and puts him in a lower position in the eyes of the speaker. They do not pose, they behave in the street as they do at home, they do not show off before their humbler comrades. They are not given to babbling and forcing their uninvited confidences on others. Out of respect for other people’s ears they more often keep silent than talk.
  5. They do not disparage themselves to rouse compassion. They do not play on the strings of other people’s hearts so that they may sigh and make much of them. They do not say “I am misunderstood,” or “I have become second-rate,” because all this is striving after cheap effect, is vulgar, stale, false….
  6. They have no shallow vanity. They do not care for such false diamonds as knowing celebrities, shaking hands with the drunken P., [Translator’s Note: Probably Palmin, a minor poet.] listening to the raptures of a stray spectator in a picture show, being renowned in the taverns…. If they do a pennyworth they do not strut about as though they had done a hundred roubles’ worth, and do not brag of having the entry where others are not admitted…. The truly talented always keep in obscurity among the crowd, as far as possible from advertisement…. Even Krylov has said that an empty barrel echoes more loudly than a full one.
  7. If they have a talent they respect it. They sacrifice to it rest, women, wine, vanity…. They are proud of their talent…. Besides, they are fastidious.
  8. They develop the aesthetic feeling in themselves. They cannot go to sleep in their clothes, see cracks full of bugs on the walls, breathe bad air, walk on a floor that has been spat upon, cook their meals over an oil stove. They seek as far as possible to restrain and ennoble the sexual instinct…. What they want in a woman is not a bed-fellow … They do not ask for the cleverness which shows itself in continual lying. They want especially, if they are artists, freshness, elegance, humanity, the capacity for motherhood…. They do not swill vodka at all hours of the day and night, do not sniff at cupboards, for they are not pigs and know they are not. They drink only when they are free, on occasion…. For they want mens sana in corpore sano[a healthy mind in a healthy body].

And so on. This is what cultured people are like. In order to be cultured and not to stand below the level of your surroundings it is not enough to have read “The Pickwick Papers” and learnt a monologue from “Faust.” …

What is needed is constant work, day and night, constant reading, study, will…. Every hour is precious for it…. Come to us, smash the vodka bottle, lie down and read…. Turgenev, if you like, whom you have not read.

You must drop your vanity, you are not a child … you will soon be thirty.
It is time!
I expect you…. We all expect you.

A. P. Chekhov (left) with Nikolai Chekhov (right), 1882; public domain image via Wikimedia Commons

For more epistolary notes on the building of character, complement withhistory’s finest letters of fatherly advice.

Jude Law stars in new Johnnie Walker ad

Johnnie Walker Blue Label has released a new ad-cum-short film online, which features actors Jude Law and Giancarlo Giannini engaging in a ‘gentlemen’s wager’ over the ownership of a beautiful sail boat…

Blue Label is Johnnie Walker‘s luxury whisky product, and this film is duly steeped in wealth and extravagance. Shot by Jake Scott, it opens on board the boat, moored off the British Virgin Islands, where we see the wager proposed, before the action moves to London and the bet plays out.

This is not the first time Johnnie Walker has engaged top acting talent to market its whisky. Back in 2009, the brand released The Man Who Walked Around The World, a charming short starring Robert Carlyle that was originally meant only for internal use at the company but proved a hit with the public when it was leaked online.

This film is a more elaborate offering than the Carlyle piece, as perhaps befits the luxury side of the brand. It is not just an ad for Johnnie Walker either, with the YouTube version of the film featuring an ad-within-an-ad via clickthroughs to Mr Porter where viewers can purchase the clothes that Law and Giannini are wearing in the film.

The Gentleman’s Wager is released at a time when the ad industry is obsessed with the notion of ‘content’ and ‘storytelling’ (see a recent speech from Stefan Sagmeisterfor more on this subject), and would certainly tick the box as an example of these forms. Or you could just call it a good old-fashioned short film, with a heap of branding thrown in. The audience won’t care either way, of course, but the combination of Jude Law and an enjoyable – if rather tame – story seems likely to make it a hit.

Credits:
Agency: Anomaly New York
Creatives: Mike Byrne, Dave Douglass
Agency producer: Winslow Dennis
Production company: RSA
Director: Jake Scott
Music: Eclectic
Composers: Smith & Elms

Fighting Political Islam, Arab States Find Themselves Allied With Israel

U.S. Secretary of State John Kerry spoke to Israeli Prime Minister Benjamin Netanyahu from his hotel in Cairo last week. Credit Charles Dharapak/Associated Press

CAIRO — Battling Palestinian militants in Gaza two years ago, Israel found itself pressed from all sides by unfriendly Arab neighbors to end the fighting.

Not this time.

After the military ouster of the Islamist government in Cairo last year, Egypt has led a new coalition of Arab states — including Saudi Arabia, the United Arab Emirates and Jordan — that has effectively lined up with Israel in its fight against Hamas, the Islamist movement that controls the Gaza Strip. That, in turn, may have contributed to the failure of the antagonists to reach a negotiated cease-fire even after more than three weeks of bloodshed.

“The Arab states’ loathing and fear of political Islam is so strong that it outweighs their allergy to Benjamin Netanyahu,” the prime minister of Israel, said Aaron David Miller, a scholar at the Wilson Center in Washington and a former Middle East negotiator under several presidents. “I have never seen a situation like it, where you have so many Arab states acquiescing in the death and destruction in Gaza and the pummeling of Hamas. The silence is deafening.”

Although Egypt is traditionally the key go-between in any talks with Hamas — deemed a terrorist group by the United States and Israel — the government in Cairo this time surprised Hamas by publicly proposing a cease-fire agreement that met most of Israel’s demands and none by the Palestinian group. Hamas was tarred as intransigent when it immediately rejected it, and Cairo has continued to insist that its proposal remains the starting point for any further discussions.

But as commentators sympathetic to the Palestinians slammed the proposal as a ruse to embarrass Hamas, Egypt’s Arab allies praised it. King Abdullah of Saudi Arabia called President Abdel Fattah el-Sisi of Egypt the next day to commend it, Mr. Sisi’s office said, in a statement that cast no blame on Israel but referred only to “the bloodshed of innocent civilians who are paying the price for a military confrontation for which they are not responsible.”

“There is clearly a convergence of interests of these various regimes with Israel,” said Khaled Elgindy, a former adviser to Palestinian negotiators who is now a fellow at the Brookings Institution in Washington. In the battle with Hamas, Mr. Elgindy said, the Egyptian fight against the forces of political Islam and the Israeli struggle against Palestinian militants were nearly identical. “Whose proxy war is it?” he asked.

The dynamic has inverted all expectations of the Arab Spring uprisings. As recently as 18 months ago, most analysts in Israel, Washington and the Palestinian territories expected the popular uprisings to make the Arab governments more responsive to their citizens and therefore more sympathetic to the Palestinians and more hostile to Israel.

But instead of becoming more isolated, Israel’s government has emerged for the moment as an unexpected beneficiary of the ensuing tumult, now tacitly supported by the leaders of the resurgent conservative order as an ally in their common fight against political Islam.

Egyptian officials have directly or implicitly blamed Hamas instead of Israel for Palestinian deaths in the fighting. And the pro-government Egyptian news media have continued to rail against Hamas as a tool of a regional Islamist plot to destabilize Egypt and the region, just as it has since the military ouster of President Mohamed Morsi of the Muslim Brotherhood one year ago. (Egyptian prosecutors have charged Hamas with instigating violence in Egypt, killing its soldiers and police officers, and even breaking Mr. Morsi and other Brotherhood leaders out of jail during the 2011 uprising.)

The diatribes against Hamas by at least one popular pro-government talk show host in Egypt were so extreme that the government of Israel broadcast some of them into Gaza.

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“They use it to say, ‘See, your supposed friends are encouraging us to kill you!’  ” Maisam Abumorr, a Palestinian student in Gaza City, said in a telephone interview. Some pro-government Egyptian talk shows broadcast in Gaza “are saying the Egyptian Army should help the Israeli Army get rid of Hamas,” she said.

At the same time, Egypt has infuriated Gazans by continuing its policy of shutting down tunnels for cross-border smuggling into the Gaza Strip and keeping border crossings closed, exacerbating a scarcity of food, water and medical supplies after three weeks of fighting.

“Sisi is worse then Netanyahu, and the Egyptians are conspiring against us more than the Jews,” said Salhan al-Hirish, a storekeeper in the northern Gaza town of Beit Lahiya. “They finished the Brotherhood in Egypt and now they are going after Hamas.”

Egypt and other Arab states, especially the Persian Gulf monarchies of Saudi Arabia and the United Arab Emirates, are finding themselves allied with Israel in a common opposition to Iran, a rival regional power that also has a history of funding and arming Hamas.

For Washington, the shift poses new obstacles to its efforts to end the fighting. Although Egyptian intelligence agencies continue to talk with Hamas, as they did under former President Hosni Mubarak and Mr. Morsi, Cairo’s new animosity toward the group has called into question the effectiveness of that channel, especially after the response to Egypt’s first proposal.

As a result, Secretary of State John Kerry turned to the more Islamist-friendly states of Turkey and Qatar as alternative mediators — two states that had grown in regional stature with the rising tide of political Islam after the Arab Spring, and that have suffered a degree of isolation as that tide has ebbed.

But that move has put Mr. Kerry himself in the incongruous position of appearing to some analysts as less hostile to Hamas — and thus less supportive of Israel — than Egypt or its Arab allies.

For Israeli hawks, the change in the Arab states has been relatively liberating. “The reading here is that, aside from Hamas and Qatar, most of the Arab governments are either indifferent or willing to follow the leadership of Egypt,” said Martin Kramer, president of Shalem College in Jerusalem and an American-Israeli scholar of Islamist and Arab politics. “No one in the Arab world is going to the Americans and telling them, ‘stop it now’  ” as Saudi Arabia did, for example, in response to earlier Israeli crackdowns on the Palestinians, he said. “That gives the Israelis leeway.”

With the resurgence of the anti-Islamist, military-backed government in Cairo, Mr. Kramer said, the new Egyptian government and allies like Saudi Arabia appear to believe that “the Palestinian people are to bear the suffering in order to defeat Hamas, because Hamas cannot be allowed to triumph, and cannot be allowed to emerge as the most powerful Palestinian player.”

Egyptian officials disputed that characterization, arguing that the new government is maintaining its support for the Palestinian people despite its deteriorating relations with Hamas, and has grown no closer to Israel than it was under Presidents Morsi or Mubarak.

“We have a historical responsibility toward the Palestinians and that is not related to our stance on any specific faction,” said a senior Egyptian diplomat, speaking on condition of anonymity because of the sensitivity of the talks. “Hamas is not Gaza and Gaza is not Palestine.”

Egyptian officials noted that the Egyptian military and the Red Crescent have delivered medical supplies and other aid to Gaza. Cairo continues to keep open lines of communication with Hamas, including allowing a senior Hamas official, Moussa Abu Marzouq, to reside in Cairo.

Other analysts, though, argued that Egypt and its Arab allies were trying to balance their own overriding dislike for Hamas against their citizens’ emotional support for the Palestinians, a balancing act that could grow more challenging as the Gaza carnage mounts.

“The pendulum of the Arab Spring has swung in Israel’s favor, just like it had earlier swung in the opposite direction,” said Mr. Elgindy, the former Palestinian adviser. “But I am not sure the story is finished at this point.”

URGENT: ISIL leader al-Baghdadi escapes to Syria after serious injury

Abu Bakr al Baghdadi Al Qaeda Iraq ISIL 400x330 URGENT: ISIL leader al Baghdadi escapes to Syria after serious injury
Abu Bakr al-Baghdadi, leader of ISIL, the Islamic State of Iraq and the Levant.

(IraqiNews.com) According to Iraq news TV network, Al Sumaria, a representative of the International Parliament for Safety and Peace revealed, on Friday, the escape of the leader of the organization of the Islamic State of Iraq and the Levant, Abu Bakr al-Baghdadi to Syria after he was seriously injured in a raid in the west of Anbar. IraqiNews.com has not verified this claim reported by Al Sumaria news.

According to Al Sumaria news, the representative of the International Parliament in Iraq, Dr. Haidar al-Shara said, in an interview that “The Iraqi security forces carried out an operation in the city of Qaim on the border with Syria based on accurate intelligence and with the help of the Air Force where the leader of ISIL, Abu Bakr Al-Baghdadi was seriously injured.”

Shara added that “after being hit, al-Baghdadi, with a range of elements of his organization fled into Syrian territory because of its proximity to Qaim,” indicating that “al-Baghdadi might be killed as a result of the severity of his injuries.”

According to Al Sumaria TV the Iraqi security sources speculated earlier today, Friday, that the injury of the leader of ISIL, Abu Bakr al-Baghdadi was incurred by aerial bombing carried out by Iraqi troops on Wednesday night, in Qaim in west of Anbar.

 

Israel-Gaza conflict: UN accused Israel of possible war crime after shelling of one of its schools kills 19 and injuries more than 100

Palestinians collect body parts in a classroom at the Abu Hussein U.N. school in Jebaliya refugee camp, northern Gaza Strip, hit by an Israeli strike earlier, on Wednesday, July 30, 2014 (AP Photo/Lefteris Pitarakis)
Palestinians collect body parts in a classroom at the Abu Hussein U.N. school in Jebaliya refugee camp, northern Gaza Strip, hit by an Israeli strike earlier, on Wednesday, July 30, 2014 (AP Photo/Lefteris Pitarakis)

Faiza Al-Tanboura had not spoken for 21 days since a missile strike destroyed her home. In the early hours of this morning she found her voice: “The children. Don’t let them kill the children,” she shouted as she ran out into the playground of a UN school under Israeli tank fire.

Today’s attack on the Jabaliya Elementary Girls School has been described as a possible war crime by the UN. The Israeli authorities, it said, had been told no less than 17 times that it was full of refugees, the last warning message delivered on 8.50 on Tuesday evening.

But, seven and half hours later, a series of shells smashed into the building, destroying two of the classrooms, killing 19 and injuring more than a hundred others. Pierre Krahenbuhl, the commissioner for UN agency for Palestinian refugees, described the killings as “a source of universal shame”. Investigations clearly showed, he maintained, that Israeli fire was to blame, condemning “in the strongest possible terms this serious violation of international law by Israeli forces.”

The Israeli military stated that militants had been firing mortar rounds from the vicinity of the school and troops had returned fire; a spokeswoman added that an investigation was under way to ascertain what had happened. Hamas and Islamic Jihad had been accused repeatedly of storing and using weapons in civilian areas; and the Israelis have produced photographs showing, they said, rockets being stored in mosques.

This evening, after Israel had declared a four hour humanitarian ceasefire, came another attack, on a busy market in Shijaiyah, between Gaza City and the Israeli border, leaving 15 dead and 150 injured.

Earlier, Mr Krahenbuhl wanted to stress that those at the school had been placed in the line of fire after they “were instructed to leave their homes by the Israeli military. The precise location of the school and that it was housing thousands of people was communicated to the Israeli army 17 times to ensure its protection.”

The Independent met some of the families at the shelter 10 days ago. “I told you that you would come back here,” said Mohammed Abu Jarad this morning amid the destruction. “You remember me saying something like this would happen? Many of us felt this way, but we stayed on, where else could we go? There’s nowhere safe”, he added as we watched UN workers gather body parts and remove fragments of ordnance.

Eight members of the Abu Jarad family had been killed in a missile strike at their home in the town of Beit Hanoun 10 days ago. Four of them were children, the youngest Moussa, a baby of seven months. At the funeral his body, and that of two and half year old Hania, with blood on their shrouds and faces, were carried by relays of men. Mahmoud Abu Jarad, an uncle had said: “We want the Israelis to see what they have done. Perhaps they will feel some pity and stop this slaughter.”

The Jabaliya shelter was already full and overflowing when 10 members of the Abu Jarad family arrived there on 19 July, to move into a classroom already hosting 30 people.

One of the other families there were the Al-Tanboura, they were deeply worried about Faiza, a woman in her mid-30s, who had barely uttered a word since fleeing her burning house in the town of Al-Atrat. “We will have to take her to a doctor when all this is over, they are busy treating the wounded now”, Somaya, a cousin, had observed.

“Our capacity is around 700, now we are having to cope with more than 1,600,” the UNRWA director of the school, Nassar Al-Jadiyan had said at the time; now it stands at 3,300. The total death toll for Palestinians on the day was 340, it stands today at around 1,210.

Palestinians gather outside a classroom at the Abu Hussein UN school
Palestinians gather outside a classroom at the Abu Hussein UN school

There had been an attack on a UN school in Beit Hanoun last week in which 15 were killed with recriminations afterwards between the UN and Hamas over the failure to carry out an evacuation. “Here there was no warning from the Israelis and I am very surprised this has happened” said Mr Jadiyan. “I thought Beit Hanoun, well it was closer to the border, but I don’t understand why this should happen here.

“Having an attack was always going to lead to a lot of casualties. We have had the numbers build up here, people were very frightened so they kept coming in, we couldn’t turn them away.”

The pressure of numbers meant that many, all of them men, were sleeping outside in a courtyard which was used as the playground when the school was open. Among them were Talal al-Ghamayem and his three sons, five-year-old Ahmed, Younis, 15, and Mohammad, 11, a family from Beit Hanoun who had spoken in previous meetings about how eager they were to get back home and then discovered, on returning during a temporary ceasefire, that there was no home left to go back to.

When the first explosion came, demolishing a classroom at the front of the building where the majority of the deaths had taken place, Halima al-Ghamayem had run out to look for her husband and sons. The next shell landed in the courtyard, hitting her with flying shrapnel and also injuring five-year-old Ahmed.

Ghader, 17, had tried to stop her mother running out. “But I couldn’t, she was so desperate. We managed to pick her up after she was injured and drag her inside. She just wanted to know about Ahmed. But, very luckily, he wasn’t too badly hurt. But what will happen next time?”

Ola Abu Jarad lay on her mattress on the floor listening to the approaching sound of shells landing thinking, she said, of members of her family who had already died. At one point she heard what she thought were cries of pains and feared that an attack had already taken place on the school.

What had happened, in fact, was that paddock nearby had been hit and the screams were from injured donkeys and horses. They had been used by refugees to bring them to the shelter, fuel for cars having long run out in some of the border areas.

The school was hit minutes later; the Abu Jarads spent the next hour trying to find each other in the smoke and confusion. This afternoon Mohammed Abu Jarad was desperately trying to find somewhere else to stay.

“We need to get out of here, everyone needs to get out of here. Otherwise you and the other journalists will have to come back here, they will hit this place again. But we can’t find anywhere, it’s impossible.”

People were rushing in and out of the classrooms, asking about the injured, anxiously wondering whether there was any place at all in Gaza which was safe. Faiza al-Tanboura was oblivious to it all, sitting in a corner, hands clasped around her knees, gently rocking to and fro. “She has stopped talking again,” said a cousin.