And the United States Government is Helping
There is a group of Jewish American billionaires who are apparently doing their best to make sure that negotiations with Iran go nowhere in the mistaken belief that they are doing what is best for Israel. And they would also appear to be assisted in their efforts by the White House, which is at the same time claiming that it wants the talks to be successful. The odd relationship is currently playing out in a Manhattan courtroom where the Justice Department is seeking to quash a lawsuit that it fears might expose the extent to which the government has hypocritically played fast and loose with classified information while simultaneously sending journalists and whistleblowers to jail over allegations that they have done the same.
The power and wealth of the anti-Iran groups as well as their unrivaled access to the United States government means that a policy of détente with Iran, which would be a no brainer based on both American and Iranian interests, only proceeds by fits and starts with the US Congress and much of the media lined up solidly to stop the effort. The American Israel Public Affairs Committee (AIPAC) and its affiliated educational foundation, which have focused on the “Iranian threat” over the past three years, have a combined budget of more than $90 million while AIPAC’s spin-off the Washington Institute for Near East Policy (WINEP) has $8.7 million.
The American Enterprise Institute’s (AEI) efforts are more diversified but uniformly hawkish when it comes to the Middle East. It has a budget of $45 million. Identified multi-million dollar donor/supporters of AIPAC, AEI, and WINEP include Sheldon Adelson of Las Vegas Sands, Paul Singer of Elliot Management hedge fund and Bernard Marcus of Home Depot.
Other right wing think tanks including Heritage and Hudson in Washington also support unrelenting pressure directed against Iran. Even the more centrist Brookings Institute is hard core when it comes to Middle Eastern politics by virtue of its Saban Institute funded by Israeli-American billionaire Haim Saban. And then there are the mainstream Jewish organizations to include the Anti Defamation League, the Conference of Presidents of Major Jewish Organizations and the American Jewish Congress, all of which have vast resources and unparalleled access to the White House, Congress and the media.
All the pro-Israel anti-Iran groups engage in pressure tactics on Capitol Hill and have been effective in dominating the political debate. Of thirty-six outside witnesses brought in to testify at seven Senate hearings on Iran since 2012 only one might be characterized as sensitive to Iranian concerns. The enormous lobbying effort enables the anti-Iran groups to define the actual policies, move their drafts of legislation through congress, and eventually see their bills pass with overwhelming majorities in both the House and Senate. It is democracy in action if one accepts that popular rule ought to be guided by money and pressure groups rather than by national interests.
Less well known is United Against Nuclear Iran, which has a budget just shy of $2 million. UANI is involved in the New York lawsuit. The group, which has somehow obtained a 501[c]3 “educational” tax status that inter alia allows it to conceal its donors, has offices in Rockefeller Center in New York City. It is active on Capitol Hill providing “expert testimony” on Iran for congressional committees, to include “help” in drafting legislation. At a July Senate Foreign Relations Committee hearing on Iran all three outside witnesses were from UANI. It is also active in the media but is perhaps best known for its “name and shame” initiatives in which it exposes companies that it claims are doing business with Tehran in violation of US sanctions.
UANI is being sued by a Greek billionaire Victor Restis whom it had outed in 2013. Restis, claiming the exposure was fraudulent and carried out to damage his business, has filed suit demanding that UANI and billionaire Thomas Kaplan turn over documents and details of relationships regarding UANI donors who it is claimed are linked to the case. Kaplan, a New York City resident, made his initial fortune on energy exploration and development. More recently he has been involved in commodities trading in precious metals. His wife Daphne is Israeli and his involvement in various Jewish philanthropies both in the US and in Israel have invited comparison with controversial deceased commodities trader Marc Rich, who reportedly worked closely with the Israeli government on a number of projects.
The Justice department would like to the see the UANI lawsuit go away as it is aware that what is being described as “law enforcement” documents would include both privileged and classified Treasury Department work product relating to individuals and companies that it has investigated for sanctions busting. Passing either intelligence related or law enforcement documents to a private organization is illegal but the Justice Department’s only apparent concern is that the activity might be exposed. There is no indication that it would go after UANI for having acquired the information and it perhaps should be presumed that the source of the leak is the Treasury Department itself.
Who or what provided the documents to a private advocacy group that is also a tax exempt foundation supported by prominent businessmen with interests in the Middle East is consequently not completely clear but Restis is assuming that the truth will out if he can get hold of the evidence. The lawsuit claims that UANI intimidates its targets by defaming their business practices as well as by demanding both examination of their books and an audit carried out by one of its own accountants followed by review from an “independent counsel.”
Kaplan is named in the suit as he appears to be the gray eminence behind UANI. He once boasted “we’ve (UANI) done more to bring Iran to heel than any other private sector initiative.” Kaplan also employs as a director or officer in six of his companies the Executive Director of UANI Mark Wallace and reportedly arranged the awarding of the Executive Director position at Harvard’s Belfer Center to its President Gary Samore.
Kaplan is a business competitor to Restis, whose lawyers are apparently seeking to demonstrate two things: first, that the US government has been feeding sometimes only partially vetted information to UANI to help in its “name and shame” program and second, that UANI is itself supported by partisan business interests like Kaplan as well as by foreign sources, which apparently is meant to imply Israel. Or even the Israeli intelligence service Mossad. Meir Dagan, former head of Mossad, is on the UANI advisory board, which also includes ex-Senator Joseph Lieberman and former Senior Diplomat Dennis Ross, both of whom have frequently been accused of favoring Israeli interests and both of whom might well have easy access to US government generated information.
And then there is the Muhadedin-e-Khalq, the Iranian terrorist group that has assassinated at least six Americans and is now assisting the Israeli government in killing Iranian scientists, a prima facie definition of what constitutes terrorism. The group was on the State Department terrorist list from 1997 until 2012, when Secretary of State Hillary Clinton de-listed it in response to demands coming from friends of Israel in Congress as well as from a large group of ex government officials, many of whom were paid large honoraria by the group to serve as advocates. The paid American shills included former CIA Directors James Woolsey and Porter Goss, New York City Mayor Rudolph Giuliani, former Vermont Governor Howard Dean, former Director of the Federal Bureau of Investigation Louis Freeh and former United Nations Ambassador John Bolton. The promoters of MEK in congress and elsewhere claimed to be primarily motivated by MEK’s being an enemy of the current regime in Tehran, though its virulent anti-Americanism and terrorist history make it a somewhat unlikely poster child for the “Iranian resistance.”
Supporters of MEK also ignore the fact that the group is run like a cult, routinely executes internal dissidents, and has virtually no political support within Iran. But such are the ways of the corrupt Washington punditocracy, lionizing an organization that it should be shunning. MEK’s political arm is located in Paris and it has long been assumed that it is funded by the Israeli government and by at least some of the same gaggle of billionaires, possibly including their Israeli counterparts, who support the anti-Iranian agenda in the United States.
Iranian negotiators have accepted that their country should have only limited uranium enrichment capabilities coupled with a rigorous inspection regime but the talks in Geneva drag on and on as the United States continues to hesitate, raising new objections regularly in spite of claims that it operates in good faith and seeks a settlement. That an agreement is within reach is undoubtedly true and it would even be good for Israel as it would remove the regional nuclear option while making much less likely another pointless and devastating war. But the men who write the checks do not see it that way and, unfortunately, they are the ones who all too often both pay the piper and call the tune.
A US court has scrapped an order to seize one million barrels of oil, disputed between the Iraqi government and the autonomous Kurdistan region.
“Kurdistan’s unauthorized export of oil over land -– and later overseas –- may violate Iraqi law, but it does not violate US maritime law,” US District Judge Gray Miller said on Monday.
A tanker carrying crude oil from Iraq’s Kurdistan region has been waiting in international waters off the coast of Texas for a month now.
The ruling follows a long-running dispute between Erbil and Baghdad over the ownership of the cargo. With the new ruling, the Kurdish government will be able to sell $100 million worth of crude oil.
Judge Miller said “he lacked authority under federal laws governing property stolen at sea to decide the dispute.”
Miller threw out a seizure order issued July 28 by a Houston magistrate judge, who questioned US jurisdiction in the matter while agreeing to store the cargo onshore at Iraq’s expense as the debate continued in that nation’s Supreme Court.
Iraq had failed to convince the district judge that “the oil was misappropriated when it was loaded into a tanker in the Mediterranean Sea after being pumped across Turkey in an Iraq-owned pipeline.”
Russia doesn’t want to escalate tit-for-tat sanctions with the West, but is ready to do whatever is necessary to protect its legitimate interests, including those of national security in all its dimensions, Russia’s FM told The Daily Telegraph.
Peace in Ukraine can only be attained through a broad national dialogue that includes all regions and its terms cannot simply be dictated by a “government of the winners,” Russian FM Sergey Lavrov said in an interview with The Daily Telegraph.
“The point is for Kiev to stop war games and to abandon the illusion that the deep crisis in Ukraine can be resolved by winning the war against your own people,” Lavrov said, reiterating that with support from US and EU, Kiev continues to ignore its numerous commitments to a “government of national unity.”
“Unfortunately, the logic of “the winner takes it all” remains the thrust of Kiev’s actions resulting in thousands of victims among civilians, hundreds of thousands of refugees and displaced persons, as well as almost totally destroyed social infrastructure in many cities and towns in Eastern Ukraine.”
A house in Donetsk destroyed by shelling. (RIA Novosti / Maks Vetrov)
Speaking further on the humanitarian catastrophe, Lavrov once again said it is “crucial to ensure immediate supply of humanitarian aid to the people of south-eastern Ukraine.”
The first convoy of Russian aid was ready to move as early as 17 August, but was delayed “primarily due to procrastination tactics employed by Kiev authorities,” he added, urging the Ukrainian government “to deliver on its promises and to facilitate safe and unhindered passage of future humanitarian assistance.”
Lavrov also spoke about the “meaningless tit-for-tat vicious circle” started by unilateral sanctions imposed on Russia, and called them “counterproductive” and “contradicting” the norms and principles of the international law.
“It is absolutely unacceptable to talk to Russia – and to anyone, for that matter – in the language of ultimatums and coercive measures,” the minister said, emphasizing that Russia’s response was balanced.
“It is not at all our choice, but there should be no doubt that we will do whatever is necessary to protect our legitimate interests, including the interests of national security in all its dimensions.”
Lavrov also touched on the topic of the dragging Malaysian MH17 airliner tragedy, reminding that a number of simple questions which could shed some light on the incident still remain unanswered.
“Unfortunately, from the very beginning we have been witnessing attempts to conceal evidence and to hinder the implementation” of the resolution adopted by the UN Security Council, the minister said. “Russia is the only country which officially presented to the international community the data related to the incident as received through our space monitoring capacity.”
“We hope to get answers to these and other questions both from the states which took the leading role in the international investigation and from those who made unsubstantiated public statements,” Lavrov said. “We must not allow the investigation of MH17 crash to be manipulated into oblivion like already happened to investigations of many Ukrainian tragedies, including the sniper assault against civilians in Kiev in February, massacres in Odessa and Mariupol in May and others.”
In the meantime, Lavrov once again rejected groundless speculation about Russian troops crossing into Ukrainian territory as obviously “part of an information war.”
“Unfortunately, the mass media continue to spread rumours, distorted information and even outright lies. Recently there were claims by Ukraine that its artillery destroyed an armoured column that had allegedly crossed from Russia into Ukraine,” he said. “No evidence, however, was presented, and even the US State Department could not confirm the incident.”
The Obama Administration actively pressured Europe to impose harsh sanctions on Russia in order to defend the violent takeover (‘regime change’) in the Ukraine. England, France, Germany and the rest of the European regimes gave in to Washington’s demands.
Russia responded by imposing reciprocal sanctions, especially on agriculture goods, and is establishing alternative trading partners and increasing trade with China, Iran, Latin America and Africa.
The sanctions policies occur at a time when Europe’s economies are in deep economic crisis, exacerbating long-term stagnation and chronic recession. This paper will identify and analyze the crisis and how US-led sanctions policy is fracturing the European Union. Secondly, we will analyze how Washington’s militarist imperial policies undermine Europe economically and destabilize the rest of the world militarily. Thirdly, we will discuss how the European leaders are prodded by Washington, to put it crudely, through an aggressive ‘buggering process’, to surrender their economic sovereignty and how capitulation to the US project in the Ukraine will lead to their long-term decline and decay. Finally, we will discuss the long-term perspectives for a re-aligned world economy where military conflicts can result in large-scale changes.
From Stagnation to Recession from Sanctions to Depression
Across Europe, without exception, recession stalks the economies. The dominant countries, Germany, France and Italy are mired in recession, acutely exacerbated by the sanctions against Russia dictated from Washington. From Nordic Finland, passing through the Baltic States to Central and Southern Europe, the Eurozone ‘recovery’ is ‘kaput’! The ‘triple whammy’ of capitalist disinvestment, economic sanctions and wars has provoked a deepening economic crisis.
Germany: Regime ‘Lick-Spittle’ Scares Industry and Financial Sectors
The German financial market’s confidence is collapsing as a result of Chancellor Merkel’s support for economic sanctions against Russia and President Putin’s reciprocal response. Several hundred thousand German industrial jobs are at risk; imports of Russian oil and gas are in danger; large-scale, long-term German investments and lucrative export markets are at stake. These fears and uncertainties have led to declining investment and an unprecedented negative growth of 0.2% in the German economy in the second quarter of 2014. The recession in Germany ripples throughout Europe – especially affecting Poland, the Czech Republic, Hungary and Southern Europe.
Merkel’s servile capitulation to the US President’s command to sanction one of Germany’s major trade partners, Russia, may seriously harm its economic future. Germany’s industrial exports to Russia amount to 36 billion Euros; there are 20 billion Euros in annual investments; and over 400,000 German workers are employed in companies exporting to Russia . . . Joe Kaeser, CEO of Siemens, pointedly argued that “political tensions posed serious risks for Europe’s growth this year and next”. Sales in some sectors are down 15% since June 2014. Germany’s economy was already facing stagnation even before the coup in Kiev . . .but machinery exporters are especially concerned about losing the Russian market because other markets have declined. For example, German sales to Brazil are down nearly 20%.
In addition, German farmers suffer: Export of German meat and meat products to Russia amount to 276 million Euros or 21% of their non-EU exports. German dairy farmers earned $160 million Euros from trade with Russia, 14% of total exports to non-EU countries.
Merkel knowingly sacrificed German industry, agriculture and employment by submitting to Obama’s policy of ‘buggering his European allies’. On the other hand, Obama’s sanctions against Russia have virtually no impact on US economic interests. Only the Europeans will feel the pinch. Merkel’s support for the US-NATO coup in Kiev and the ongoing military assault against the anti-coup democrats in Eastern Ukraine is leading to a revival of the Cold War confrontational policies toward Russia, and has alienated the majority of German producers and exporters as well as the German public.
Italy: Capitalist Crises and Sanctions
Italy is stuck in a half decade of profound recession continuing throughout 2014. Its GDP fell by 0.2% in the second quarter, bringing the GDP below the level in the year 2000! The sanctions against Russia have cost Italy over $1 billion in lost exports, hitting Northern Italy most acutely and provoking the ire of the conservative Northern League. Big Italian energy companies, with major investments in Russia, face even bigger losses. Italian farmers, from Tuscany to Sicily, are experiencing major losses in agricultural exports. In other words, with sanctions Italy’s chronic sick economy has lost any chance for recovery and will likely pass from recession into depression.
France: From Zero Growth to Recession
France has entered a period of perpetual regression: Unemployment exceeds 11%, underemployment and ‘make work’ exceeds 20% . . . GDP hovers at recession levels, between zero and 0.5% . . . Austerity, involving large-scale cuts in social programs and tax write-offs for business, has eroded consumer spending without increasing capitalist investment. And Obama’s sanctions against Russia will further damage French exporters, especially its agricultural sector and weapons manufacturers. And ‘Hyper-Militarist-Socialist’ President Hollande has exacerbated France’s balance of payments and budget problems by sending the air force and ground troops to intervene on three continents. This has caused over 82% of French voters to choose alternative parties, propelling the nationalist right party, National Front, to the lead.
The ‘Backside of Europe’: Spain, Greece and Portugal
Deeply buried in a near decade-long depression with unemployment ranging from 26% in Greece and Spain to 16% in Portugal, Russia’s reciprocal sanctions against agricultural exports has hit their agro-export sectors most severely, causing mountains of grapes, tomatoes and other perishables to rot in the fields. Tons of Southern Europe’s produce will end up as compost. Tens of thousands of farmers face even greater problems and more will be forced into bankruptcy because of Washington’s dictates.
Spanish farmers stand to lose 158 million Euros from the sanctions against their fresh fruit and nuts, or 22% of their total exports to non-EU countries; Greek farmers will lose 107 million Euros, 41% of exports to non-EU countries. Spanish meat exporters will lose 111 million Euros or 13% of their non-EU markets.
The European Union, for its part, offers meager relief – expecting thousands of hard-pressed farmers to submit to Obama’s demands. In the meantime, as Russia establishes alternative markets in Latin America, the EU has sent its emissaries overseas to beg the Latin American governments to reject multi-billion dollar agro-business deals with Russia and comply with the US-EU sanctions. So far, every country in Latin America has rejected the EU’s ‘charm’ offensive. Ecuadorean President Correa heaped scorn on the EU: “We do not have to ask anyone’s permission to export to friendly nations. As far as I know, Latin America is not part of the European Union”. Egypt and Turkey are stepping in to replace the farmers of Europe and the US by exporting their agricultural produce to Russia.
Hungary, Bulgaria, Poland, Finland, Lithuania, Denmark and the Netherlands
Hungary’s President Viktor Orban rages at the sanctions and threatens to break ranks, as Budapest tallies up its losses in exports, and the threat to its energy-dependent country. Bulgaria’s compliant President caved in to Brussels’ pressure and reneged on a $40 billion dollar pipeline deal signed between Russia and local Bulgarian business leaders precipitating a major banking crisis and the collapse of its second largest bank – Corbank. The deposits of hundreds of thousands of Bulgarians were frozen or just disappeared. When Brussels buggers the Bulgarians, they bankrupt their own banks.
Finland, once the poster-child of the ‘Third Way’ ideologues, is in a long-term depression. Its economy has shrunk for the past 4 consecutive years and even regime optimists estimate that they will need 10 years to recover. Finnish Prime Minister, Alex Stubbs, a free market ideologue, is a staunch supporter of sanctions against Russia although these will drastically cut into agricultural exports (dairy goods, meat, fish, etc.). Stubbs defends his catastrophic capitulation to NATO’s power grab in the Kiev by proclaiming that “our principles (sic) are not for sale; we believe in international institutions; we believe in the rule of law”.
Finland, under its ‘law-abiding’ President, will lose at least 253 million Euros this year or 68% of its exports to non-EU countries. In other words this political marionette has sacrificed the welfare of hundreds of thousands of Finnish dairy farmers and growers to support a NATO-imposed regime in Kiev, which has been sending units of neo-Nazis to slaughter Ukrainian resistance fighters and civilians.
Poland’s billion dollar agricultural export trade with Russia has collapsed, causing Warsaw to beg Washington and Brussels for emergency subsidies and pleading with the apple-exporting Americans to ‘eat Polish apples’. Polish fruit growers will lose 317 million Euros in sales or 61% of their exports to non-EU countries. Their meat exporters will lose 162 million Euros, 20% of its trade with non-EU countries. Dairy farmers will lose 142 million Euros, 32% of exports to non-EU countries.
The Poles, who at every turn have assumed the most reactionary Russophobic posture and were deeply implicated in organizing and training the neo-fascist gangs which overthrew the elected Ukraine government, are now pushing carts down the streets of Warsaw peddling apples and sausages, instead of stocking the supermarket shelves of Russia – and whining that New Yorkers should forsake Upstate apples to take up the slack!
Lithuania will lose 308 million Euros in fresh fruit exports to Russia or 81% of their exports to non-EU countries; dairy farmers will lose 161 million Euros in sales or 74% of non-EU exports. Denmark and Holland will lose over 800 million Euros in agro-exports to Russia –deepening their recession.
While the ever-persuasive con-man in Washington, President Obama has buggered EU leaders into pushing their own economies even deeper into recession, so he can launch a new Cold War with Russia, the US plunges deeper into military confrontations in Iraq, Ukraine and Syria. Obama appears to have lost control over military aid programs in the chaos: Netanyahu’s Zionist allies in Congress managed to by-pass the White House and State Department and approve additional shipments of Pentagon arms to Israel, undercutting any administration leverage over the ongoing Israeli genocide in Gaza.
Japan joins the US-EU sanctions against Russia exacerbating its own economic crisis: In 2014 Japan experienced its worst contraction since 2009, with a 7.1% drop in the second quarter. The increasingly unpopular, Japanese Prime Minister Abe is committed to a military build-up. More Japanese politicians visit Yasukuni Shrine, the militarist temple honoring its war criminals, re-awakening the horrific memories of Imperial Japan’s victims. There are increasingly bellicose Japanese confrontations with China over disputed piles of rock in the South China Sea . . . As Obama’s military pivot to Asia increases, so Japan’s economy sinks.
No European country can benefit from embracing the failed regime in Kiev. . . Ukraine’s currency is in free-fall – ranking below toilet paper. Its major industries, totally dependent on trade with Russia, are bankrupt or have been bombed by the NATO-putsch regime in Kiev. Its agricultural exports are devastated. Meanwhile Ukrainian families are advised to chop their own wood or dig their own coal in anticipation of a winter totally cut off from Russian gas because the oligarchs in Kiev have been unable or unwilling to pay the huge energy debt. For their staunch support of this bankrupt regime, ruled by a ‘Billionaire Oligarch’ in Kiev, for upholding the ‘principles’ so lauded by Finnish President Stubbs, one million European farmers will bury their own apples, pour their own milk in the streets and dump their grapes, oranges and tomatoes in rotting heaps. . . And this is so their leaders, Obama, Cameron, Merkel and Hollande can uphold their real ‘principles’ of territorial expansion, extend their military operations to the borders with Russia and posture as warriors while destroying their countries productive economies, bankrupting their farmers and manufacturers, driving millions more into unemployment and deepening the pains of recession.
Ukraine will join a growing list of countries, Libya, Egypt, Syria, Iraq, Afghanistan, Pakistan, Somalia and Yemen, that Washington and NATO have “saved” (to paraphrase an American general) . . . by being destroyed.
Once again the US military-driven empire-building policy trumps economic development: Destructive wars and sanctions destroy viable markets and impoverish entire sectors of the economy. Imposing sanctions abroad invites retaliation – the boomerang effect cripples domestic producers. As world trade and investment shrink, internal stagnation becomes endemic, recessions deepen and recovery becomes a distant chimera. The financial press, the Wall Street Journal and The Financial Times, which have become megaphones for the western warlords, no longer publish paeans to the free market but unleash vitriolic screeds crying for war and sanctions… which close markets and destroy investor confidence.
Buggered by Obama, European bootlickers bankrupt their own economies and then pass around the begging cup.
Italy faces the reality of a decade of stagnation.
Portugal’s economy crashes and crawls.
Germany’s manufacturing machinery grinds to a halt.
Finland’s ‘principled’ brown-nosing boomerangs.
England is converted into a money-laundering bankers’ city-state where one-third of its children live in poverty.
Poland consumes itself, drunk with weapons and rotting apples.
In a word, by submitting to Washington’s doctrine of permanent wars, Europe eschews the only road out of permanent crisis: peaceful co-existence. The mega-buggers in Washington and the bootlickers in Europe have chosen sanctions over trade and destruction over prosperity. They are paying a price: domestic unrest, displacement from markets by emerging economies and the ascendancy of chaos as a way of life in Western Europe.
While the US government touted its “record” settlement reached this week with Bank of America for mortgage fraud that helped fuel the 2008 recession, the details of the agreement indicate yet another light punishment for an offending Wall Street titan.
Bank of America agreed to a $16.65 billion settlement with federal authorities for selling toxic mortgages and misleading investors, the US Justice Department announced Thursday.
“This historic resolution – the largest such settlement on record – goes far beyond ‘the cost of doing business,’” Attorney General Eric Holder said in a statement.
“Under the terms of this settlement, the bank has agreed to pay $7 billion in relief to struggling homeowners, borrowers, and communities affected by the bank’s conduct. This is appropriate given the size and scope of the wrongdoing at issue,” Holder added.
Yet the $7 billion in “relief” is considered a “soft money” fine, in which the bank will reduce some homeowners’ mortgages. Very few homeowners are eligible for the refinancing pursuant to the settlement, AP reported. Those who are eligible may need to wait years to see any settlement aid, as payouts will be ongoing through 2018.
Those already in the hole following a lost home due to foreclosure or a short sale – when a lender takes less money for a home than what the borrower owes – are unlikely to benefit from the terms of the settlement.
Outside of the $7 billion for consumers, the Bank of America settlement includes a $5 billion cash penalty and $4.6 billion in remediation payments. Large portions of the deal will be eligible to claim as business expenses, allowing the mega bank to treat them as tax write-offs.
The Bank of America settlement includes the appointment of an independent monitor to review the consumer relief portion of the agreement. It is yet to be determined when the monitor will be named.
The deal echoes similar agreements the government reached with other Wall Street players, like JPMorgan Chase and Citigroup, for crimes committed surrounding the recent economic recession.
JPMorgan Chase came to a $13 billion settlement in November. The $4 billion supposedly offered to homeowner relief has yet to benefit many in need, according to the advocacy group Home Defenders League. Citigroup reached a $7 billion deal with the government.
Critics of these deals have blasted the US government for its ongoing, lax attitude regarding mass crimes committed by powerful banks that, they say, are not adequately punished for wrongdoing.
“[T]he latest round of settlements deals with misconduct that even though the banks are getting off on the cheap again, the underlying abuses don’t strike at the heart of the too big to fail mortgage securitization complex,” said Yves Smith at Naked Capitalism.
“So the [Obama] Administration can feign being a little more bloody-minded. Even so, the greater and greater proportion in recent deals of funny money relative to real dough show that this is simply another variant of an exercise in optics.”
No major bank executive has faced criminal charges following the mortgage crisis. Without significant retribution for banks and executives that knowingly passed off fraudulent mortgages, Wall Street players will continue to act with impunity, argued Dean Baker, economist and director of the Center for Economic & Policy Research.
“Knowingly packaging and selling fraudulent mortgages is fraud. It is a serious crime that could be punished by years in jail,” Baker wrote. “The risk of jail time is likely to discourage bankers from engaging in this sort of behavior.”
William D. Cohan, a former senior mergers and acquisitions banker, wrote in the New York Times that, not only has the government barely punished those on the hook for Wall Street crimes, the Justice Department has also offered “sanitized” versions of events that led up to the crimes in its accounts given to the public following investigations.
“The American people are deprived of knowing precisely how bad things got inside these banks in the years leading up to the financial crisis, and the banks, knowing they will be saved the humiliation caused by the public airing of a trove of emails and documents, will no doubt soon be repeating their callous and indifferent behavior,” Cohan wrote.
Bank of America resisted the settlement at first, claiming nearly all bad mortgage securities under scrutiny came from Countrywide and Merrill Lynch. Both firms were purchased by Bank of America amid the 2008 financial crisis.
A federal judge in Manhattan ruled in a separate case that Bank of America was liable for the pre-merger mortgages, issuing a penalty of $1.3 billion. The ruling pushed the bank to agree to the settlement. Bank of America CEO Brian Moynihan said Thursday that the deal is “in the best interests of our shareholders and allows us to continue to focus on the future.”
Meanwhile, consumers advocates said the faulty mortgages will continue to haunt homeowners and their own vision of the future.
“It is hard to see how these settlements provide relief commensurate with the harm caused,” said Kevin Stein, associate director of the California Reinvestment Coalition, according to AP. “Countless families and communities have been devastated by predatory loans that should not have been made.”
Following the Thursday announcement of the settlement, Bank of America’s stock rose more than 4 percent.
Russia’s biggest oil company Rosneft has agreed to purchase a stake in Norway’s North Atlantic Drilling (NADL) through an asset swap, which appears to show businesses remain undeterred by political sanctions.
Rosneft has agreed to take a 30 percent of North Atlantic in return for 150 onshore drilling assets in Russia, and some cash. The final terms of the deal, including the amount of investments in the Norwegian company, will be set after it passes due diligence, which is expected to be done by the end of the year, Rosneft said in a statement Friday.
Rune Magnus Lundetrae, Chief Financial Officer of Seadrill, which owns 70 percent of North Atlantic, told Bloomberg Rosneft would also buy 100 million new shares at $9.25 apiece.
The deal comes amidst sanctions tension between Russia and the West and shows that foreign businesses still want to cooperate with Russia, leaving politics aside.
“We’re very pleased with the execution of this important transaction and welcome Rosneft as an equity partner and to our board of directors,” Alf Ragnar Lovdal, CEO of North Atlantic, said in a statement.
“We’re not very worried” that the sanctions will affect any part of these deals, Lundetrae told Bloomberg by phone. “Rosneft is a very good and constructive partner for us.”
Friday’s deal marks the second step under a framework agreement signed in May. Last month, just days before the EU imposed tighter economic sanctions against Russia; the two companies completed the lease of offshore rigs. Under the July agreement, Rosneft and NADL will cooperate in shelf drilling, with the Norwegian company providing Rosneft with six sea drilling units till 2022 to conduct shelf drilling in harsh weather conditions.
ExxonMobil and Norway’s Statoil have also confirmed they would continue offshore Arctic drilling with Rosneft, despite politicians in the EU and the US seeking to make Russia change its policy over Ukraine by putting on economic pressure.
On Thursday, the Financial Times reported Vitol, the world’s largest independent oil trader, was shelving its $2 billion deal with Rosneft.
Vladimir Putin and Petro Poroshenko’s upcoming summit in Minsk will be the first in-depth meeting between the leaders of Russia and Ukraine in six months. During that period Ukraine has become embroiled in a civil war and teeters on the verge of an economic meltdown – but officials in Kiev continue to blame everything on Russia. Is there any point in holding a meeting with a hostile Poroshenko?
On August 26 Minsk will host a summit between the leaders of the Customs Union (soon to be known as the Eurasian Economic Union) and the president of Ukraine. Putin, Lukashenko, and Nazarbayev will meet with Petro Poroshenko, who will not arrive on his own, but will be accompanied by representatives of the European Union.
Instead of European Commission President Barroso, those representatives will consist of three European Commissioners, led by Baroness Ashton, the European diplomatic leader. The agenda has yet to be announced – but during a time of war (a hot one in Ukraine and a cold one between Russia and the West), it would obviously be ridiculous to limit the discussions to the purely economic issues stemming from the new association between Ukraine and the EU. Especially since this will literally be the first opportunity for Poroshenko and Putin to meet – that 15-minute quadrilateral meeting with Merkel and Hollande in Normandy can hardly be considered an in-depth encounter. Even if no separate bilateral meeting is held in Minsk, negotiations between the Eurasian troika and Poroshenko will make it possible for everyone to look one another right in the eye and state exactly what it is they really want. What will the presidents of Russia and Ukraine talk about? Will they be able to reach any kind of agreement? And if not – what is the point of such a meeting?
Ukraine considers itself to be in a state of war against Russia – if not legally, then in fact. “We are defending ourselves against Russian aggression” is the position of the Ukrainian government and a sentiment shared by a majority of the Ukrainian population. And Kiev is requesting help – financial, military, and also political – from the West, claiming that the aggression from Moscow was provoked by the European leanings of the Ukrainian people. Poroshenko is threatening Russia with sanctions from Ukraine and demanding that Western sanctions against Russia be beefed up in order to force Moscow to withhold support from the insurgents in eastern Ukraine. Kiev cannot eradicate the rebels on its own – after flexing its military muscle for over three months, the only result is that the civil war in Ukraine can now unequivocally and conclusively be labeled a protracted and bloody affair. But Kiev cannot abandon its military operation because the personal interests of the ruling elite, as well as the position of the United States, encourage attempts to resolve the issue by force. Poroshenko does not run the country single-handedly – but in some manner he seems to personify the entire nation.
It’s no use talking about Ukraine with the one entity – Washington – upon which the government in Kiev is truly dependent. The US will not acknowledge its own momentous influence on Poroshenko, and it is easy to see that America will not only make no move to dampen Kiev’s bellicose fervor, but, on the contrary, is diligently fanning it. Given this environment, Russia can only speak with two of Washington’s vassals – the EU and Kiev. But it would be wrong to refuse to engage in a conversation even of this nature. War is war and talks are talks. Besides, it’s worth it, if only to remind Kiev once again what awaits them in the near future.
What will Poroshenko hear from Putin in Minsk? That the Ukrainian state stands poised between life and death. By spurning peace talks with Novorossiya, Kiev is digging its own grave. By committing herself to an armed response, Ukraine will not only be unable to preserve the unity of the country, she is destroying the last chances for her nation to be resurrected in any guise. Continuing down her path toward integration with Europe, which the Ukrainian parliament should conclusively ratify in September, will deal a mortal blow to the Ukrainian economy that is collapsing as a result of the war and the decline in trade with Russia. Even before the war began, we warned you that if you signed this agreement we would defend our markets. Ukraine is threatening us with sanctions? Are you trying to put the kiss of death on your export trade to Russia? And where are you going to sell your products? You think help will come from overseas? No, they don’t have that kind of money (so claim the European Commissioners with utter dejection). You’re threatening to block the passage of our gas into Europe, while at the same time preparing to have it shipped to you via Slovakia? How will you feed your people this fall, President Poroshenko?
And this is just a small sample of what Putin might say to Poroshenko – and what if he brings up the thousands of dead residents of Donetsk and Luhansk? After all, there must ultimately be some reckoning for all those Ukrainian citizens who have died and for the civil war.
Obviously Putin will be treated to a response citing Crimea and a demand for the return of the former border, or else … However, Poroshenko will be perfectly well aware that his proclamations are absolutely meaningless even as he speaks them – he can only recite his lines perfunctorily, for in fact he has no answers to Putin’s questions. No money, no country, and no exit strategy from this crisis that has already turned into such a calamity. He has nothing – except the hope of victory in his “anti-terrorist operation.” But if that does not materialize – and if Poroshenko finally figures that out from the look on Putin’s face – what can he do? There is no backup plan to rescue the country. Unless one counts the hope that the US and EU will help Kiev out by coming up with one – after all, we (pro-European Ukrainians) go joining them, or to be more precise, they come and fetch us.
And what could the US do? Contacts with Russia have for all practical purposes been severed, new sanctions won’t help, and the attempt to isolate Russia has come to naught. Europe wants only one thing – to wrap up this Ukrainian misadventure as quickly as possible and arrange a ceasefire with the Russians. Poroshenko’s belligerence will soon become an irritant for Europe – and even though she will remain submissive to the United States, EU leaders in many countries will find it increasingly difficult to curb the discontent of their national elites and the general public. In addition, at some point even Berlin will realize that the situation at the front in Novorossia could rapidly change in an extremely dangerous way for Kiev. And Poroshenko has poorly timed the new elections – at that point no one will have any idea who is in charge in Kiev. Putin will just wait for Ukraine to disintegrate and then move in and snatch up everything – that’s the fear in Europe. And they’re right – and that means that they themselves will push Kiev into talks to reach an agreement on a ceasefire at least, if nothing else.
The main question is whether Kiev has already perceived the full extent of the threat or whether they will continue to place their hopes in the West. If Poroshenko has already grasped the whole picture and will not wait for a disaster on the eastern front in order to recognize the necessity of negotiating – that means Putin’s reminders could serve as the final straw that brings Kiev back to reality. If not – that means we should soon expect to see serious losses at the front, the further decline of the hryvna (Ukrainian currency), the meltdown of the economy, and coercion from Berlin. And there’s no chance that Moscow will just sit idly by and wait.
* Translation by Oriental Review
Source in Russian: VZ.RU
A tanker carrying crude oil from Iraqi Kurdistan reappeared unladen on 19 August nearly 30 km from the coast of Israel, Reuters Live AIS ship tracking system showed.
Al-Quds newspaper reported that this is the second time that the Kamari oil tanker has appeared in the region during the past two weeks loaded with Kurdish oil. The monitoring system showed the Kamari partially unloaded north of Egypt’s Sinai on 17 August before turning off its satellite communication device until 19 August.
A spokesperson for the Kurdistan Regional Government Ministry of Natural Resources was not available on Wednesday for comment, but the Kurdistan government has denied selling oil to Israel in the past, either directly or indirectly.
According to Al-Quds, the tanker was loaded with Kurdish crude oil at the Turkish port of Ceyhan on 8 August and delivered part of its cargo to Croatia via a ship-to ship transfer last week. The Hungarian MOL Group said on Monday that it had bought 80,000 tons, or slightly less than 600,000 barrels, of Kurdish crude, which was unloaded at Croatia’s Omisalj port during the weekend. The company has exploration and production assets in Kurdistan.
Nearly two weeks ago the same one million barrel tanker was loaded with Kurdish crude oil at Ceyhan port before sailing to a point nearly 200 kilometres off the Israeli and Egyptian coasts. Reuters Live AIS ship tracking revealed that the ship was fully loaded based on its draft in the water. The tanker turned off its satellite-tracking device on 1 August, before reappearing four days later with much less draft, indicating it had unloaded its disputed oil.
However, it was not possible to determine the port where the Kamari unloaded its cargo of oil nor who the buyers were.
In June, Israel reportedly received a shipment of Kurdish oil from the Ceyhan port aboard the United Emblem Suezmax tanker, after receiving a ship-to-ship transfer.
The “right steps” politicians in the West and Russia are now taking against each other are very similar to what was happening before World War I, Latvian MEP Andrejs Mamikinsh warned EC President Jose Manuel Barroso in a letter Tuesday.
It’s crucial to stop reciprocal sanctions before they throw people into poverty and ruin the economies altogether, the European Parliament member wrote.
“In 2014 exactly 100 years have passed since the beginning of World War I that killed millions of people and left Europe in ruins. On the eve of that war similar processes occurred when countries took “the right” steps against each other and eventually were not able to stop. It is doubtful that in the end of that war anyone remembered for what good intentions it had started,” Mamikinsh wrote in his letter.
These would be ordinary people, not politicians, who’ll be hit first and hardest by a so called “risky poker” played by politicians in the West and Russia, the Latvian MEP, added.
Latvia is expected to suffer the most from the tit for tat sanctions imposed by the West and Russia, Mamikinsh said.
Further escalation of a “sanctions war” would erode about 10 percent of Latvian GDP, which means thousands of people could be left out of work with shrinking living standards.
All operations on Russia’s Gazprom-led project South Stream have been suspended, as they do not meet the requirements of the European Commission, Bulgaria’s Ministry of Economy and Energy said on its website.
“Minister of Economy and Energy Vasil Shtonov has ordered Bulgaria’s Energy Holding to halt any actions in regards of the project,” the ministry said. This specifically means entering into new contracts.
There has been mounting pressure from the EU to put the project on hold, and now the European Commission will be consulted each step of the way to make sure it complies with EU law.
European ‘anti-monopoly’ laws prohibits the same company to both own and operate the pipeline. However, Gazprom and Bulgaria had previously struck a bilateral agreement regarding that aspect of the project.
This is the second time Bulgaria has called for a suspension of the South Stream project. In early June, the country’s Prime Minister Plamen Oresharski ordered the initial halt.
Bulgaria is the first country traversed by the pipeline on land, after a section that runs beneath the Black Sea from Russia. The branch that begins in Bulgaria is planned to continue through Serbia, Hungary, Slovenia and Austria.
Other participating countries have confirmed their commitment to the South Stream’s construction.
Gazprom’s $45 billion South Stream project, slated to open in 2018 and deliver 64 billion cubic meters of natural gas to Europe, is a strategy by Russia meant to bypass politically unstable Ukraine as a transit country, and help ensure the reliability of gas supplies to Europe.
“We are made miserable . . . not just by the strength of our beliefs, but by the weight of hard and all-too real situations, as they bear downward, robbing us of control . . . unhappiness treated by clinicians has much more to do with the sufferer’s situation than with anything about themselves, and for those with few privileges, this unhappiness is pretty well beyond the reach of therapeutic or any other conversation.” – Paul Moloney “The Therapy Industry”
Robin Williams’s body was scarcely cold when liberal commentators began using the tragedy of his death as publicity for suicide hotlines and professional mental health intervention in general. He had long-standing depression, we were told, and his “mental illness” was manifest in his decision to take his own life. Depression sufferers were urged to “be honest” and avail themselves of the services of professional therapists and counselors.
Days later Williams’s widow informed the world that her husband had been diagnosed with Parkinson’s disease, a degenerative disorder that even people with no prior history of depression can find impossible to face. Parkinson’s is chronic, and its symptoms worsen over time, leading to body tremors, muscle stiffness, and the loss of coordinated movement. No one knows why the disease develops, and it is incurable.
We do not know what went through Williams’s mind, of course, but it is not difficult to entertain the idea that the lifelong actor made an understandable decision to take an early exit from life’s stage rather than suffer the appalling loss of body control that the disease entails for its sufferers. Surely there is something more than “mental illness” involved in the desire to avoid such a fate.
Even if Williams’s well-known depression, which long-predated his Parkinson’s diagnosis, was involved in his decision to end his life, the liberal notion that we can and ought to rely on mental health professionals to guide us to health and sanity is more than a little suspect. There is no evidence that this group suffers lower rates of depression than the rest of the population, nor any that any kind of therapy has a cure for it. In fact, the evidence suggests that the mental health profession plays a crucial role in perpetuating a status quo within which depression is said to be growing by leaps and bounds.
Psychoanalyst Joel Kovel demonstrated in the early 1980s that psychotherapy and counseling had become indispensable parts of the capitalist economy, especially in the United States, where turning socially induced misery into false questions of self-improvement long ago reached the status of a quasi-religious movement. Subsequent to Kovel’s published insights came the “diseasing” and drugging of hyper-active American schoolchildren due to what eventually came to be known as “ADHD.” In more recent years, we have seen how “happiness psychology,” particularly the work of conservative academic and writer Martin Seligman, a former chairman of the American Psychological Association and adviser to the U.S. military, informed the Bush Administration’s torture program at Guantanamo Bay. All of this should make us quite skeptical about claims that therapy and counseling have the answer to our mental woes.
Having said that, the challenge of effectively treating mental disorders is surely formidable. According to surveys and clinical data, rates of depression in the U.S. have increased ten-fold since the 1950s, although it must be admitted that individuals of quite divergent symptoms are routinely classified under this broad umbrella, calling into question the validity of the category itself. However, even if some of the increase is due to an increased tendency to define common dissatisfaction as illness, it seems likely that at least some of the increase is genuine, given soaring inequality and an attendant increase in chronic illness, social isolation and reported loneliness, and suicide, especially during the periods of economic crisis that have become a nearly constant feature of U.S. capitalism in recent years.
Contrary to therapeutic claims that a “positive” attitude is the key to mental health, a growing body of evidence supports the claim that the principal influence on people’s mental health is their circumstances, both past and present. We can now say with some assurance that the larger and more obvious the gaps between rich and poor in developed societies – and the more exploitive the relations required to maintain and expand them – the greater the likelihood of violent conflict, mutual distrust, and degraded health, both mental and physical. Features of a particular location in the social hierarchy such as prestige, conditions of work, material circumstances, and wealth largely determine one’s likelihood of enjoying mental and physical health or illness. And to the extent that one belongs to a stigmatized, exploited group, and especially if one is poor, the more likely one is to experience life’s hardest blows – more often, more painfully, and with fewer joyful experiences to compensate for them.
Conventional counseling and therapy isn’t even focused on this problem, much less is it offering a solution to it. Because of its conviction that attitude is everything, conventional approaches put the onus of responsibility on the poor for their poverty. Thus they are given parenting training and other judgmental interventions when what they really need is decent housing, food, recreation, medical care, and above all, money. The assumption is that the poor deserve to be poor owing to their allegedly deficient character, made manifest in poor impulse control, hypersexuality, and a general lack of integrity. If it weren’t for these defects, the theory goes, the poor would be contented members of the middle class. This is one of the most damaging features of therapy, because it teaches exploited people that they are deficient or substandard instead of abused. Unfortunately, the crude stereotypes blaming the poor for their plight are promoted by a wide spectrum of members of the so-called “helping” profession: community leaders, social work educators, and quite a few academic researchers. If this is “help,” what might hindrance be?
Therapists and counselors with a genuine interest in finding a cure for mental illness would do well to investigate the income inequalities hypothesis of population health. Based on the common sense assumption that high levels of inequality are unhealthy (directly for the poor, indirectly for the rich), the thesis is that for modern industrialized countries, the average health, well-being, and longevity of the population depends not on the level of absolute poverty that exists, but on the spread of wealth, and especially on the gap between rich and poor.
As income differentials widen, the theory goes, people start to feel more competitive, and begin to look on others with increasing suspicion and distrust. Wariness, envy, shame, fear, and anger become more pronounced and take on a self-perpetuating thrust, undermining the basis for affectionate and caring relationships. A life of perpetual insecurity (which former Fed Chairman Alan Greenspan declared in Congressional testimony was the principal reason for the 1990s boom years) and perceived threat triggers the release of cortisol and other “stress” hormones into the bloodstream, lowering our capacity to fight infection and ward off heart disease and other degenerative conditions. It should be emphasized that the theory maintains that this harms even the rich, who, amidst increasingly unjust conditions, have less and less opportunity to enjoy their wealth in ease. The public health implications are substantial: an increase of 7% in the share of income going to the bottom half of the population allegedly yields two additional years of life expectancy. [Note: The U.S. has the most unequal distribution of wealth in the developed world. According to the most recent survey by the Federal Reserve, the top decile own 71% of the country's wealth, while the bottom half claims just one percent.]
One of the more intriguing mental health research findings undermines the “positive attitude” theorists. It shows that moderately depressed people have a more accurate perception of their abilities and their capacity to control events than do “healthy” people. A 2002 study found that mildly depressed women were more likely to live longer than non-depressed or severely depressed women. A longitudinal study of more than 1000 California schoolchildren concluded that optimism was more likely to lead to premature death – possibly because the optimists took more risks. Another study among pre-teenagers found that kids who were more realistic about their standing among their peers were less likely to get depressed than those who had illusions about their popularity. And a 2001 study co-authored by the guru of happiness psychology himself – Martin Seligman – found that among older people pessimists were less likely to fall into depression following a negative life event such as the death of a family member than were optimists.
These findings should provoke a complete reorientation of, not just the helping professions, but the entire society. After all, psychologists have long convinced us that we are all “CEOs” of self, rationally testing our ideas against reality, and that we become disturbed to the extent that we cannot accept the verdict that reality delivers. In short, to the extent that our ideas are unrealistic we are mentally ill, which should mean that President Obama, the Supreme Court, top executives on Wall Street, and virtually the entire Congress are certifiable lunatics.
But of course it doesn’t mean that. WE who cannot make our peace with a social order dedicated to plunder and destruction are mentally suspect, because responsible adulthood entails setting aside the childish notion that the world can be transformed into something within which a decent person would want to live, in order to concentrate on the supremely important matter of reproducing an increasingly imperiled social order dedicated to getting and spending. This is the reigning definition of sanity in our times. God help anyone who insists that social and political reality, not personal attitudes and reactions, is what needs to be adjusted.
Barbara Ehrenreich, “Bright-Sided – How The Relentless Promotion of Positive Thinking Has Undermined America,” (Metropolitan Books, 2009)
Paul Moloney, “The Therapy Industry – The Irresistible Rise of the Talking Cure, and Why It Doesn’t Work,” (Pluto Press, 2013)
Thomas Piketty, “Capital in the Twenty-First Century,” (Harvard University Press, 2014)
Forget Visa and MasterCard. After the two American credit system payment companies froze accounts without notice in March, Russia has been looking for an alternative in China UnionPay.
China UnionPay plans to have 2 million cards in Russia in the next three years.
Instead of seeing the small Visa and MasterCard logo on credits cards, ATMs, and retail outlets, Russians will start to see the three words “China. Union. Pay.”
China UnionPay first emerged in 2002 on the domestic Chinese market as an alternative to Visa and MasterCard, but quickly expanded internationally, and now is already number one in terms of quantity of cards in the world.
Russia’s biggest banks – VTB- Gazprombank, Promsvyazbank, Alfa Bank, MTS, and Rosbank- are already making technical preparations, running tests on Union Bank cards.
“VTB24 already serves China UnionPay cards in its ATM network and now the bank is in negotiations with this payment system to start acquiring retail merchants,” VTB24’s press office said in a statement.
Most banks just began their relationship with China by offering clients corresponding services- none of the bankers imagined that they would be issuing Chinese credit cards.
In March, both Visa and MasterCard blocked the accounts of cardholders at BankRossiya and SMF Bank, both which were sanctioned by the US over Russia’s involvement in Crimea.
Russian financiers who used to keep their assets in dollars and euros were shocked by the event, and moved their capital back to Russia out of fear one day all their assets would be blocked by politicians in Washington DC.
“Visa and MasterCard have 100 percent trust, but right now, there is no trust in the system, and many, even our clients, have shifted their transactions from American dollar and Euro to Yuan. They are eager to receive this card- we already have a big list of people waiting to get this card instead of MasterCard and Visa,” Denis Fonov, Deputy Chairman at LightBank, a small Moscow-based bank, told RT.
LightBank was working with UnionPay long before it knew the cards would be coming to the Russian market – and ordered 10,000 cards pre-emptively as a side service for clients.
As a result of the freeze, Visa and MasterCard will now have to pay a security deposit to Russia’s Central Bank, which is estimated to be billions for each company. Similarly, once UnionPay begins operating in Russia, it will also put down a security deposit with Russia’s Central Bank, about $3-4 billion, Fonov said.
$5.3 trillion in payments
There are already 20,000 cards in circulation in Russia, and a second order of 100,000 cards is planned for September. In Russia many banks accept UnionPay cards, but not merchants, that’s the next step.
By the beginning of 2014, the payment system had already issued 4.2 billion cards, mostly in China.
In terms of total world trade turnover, China UnionPay is the leader in debt cards, with over $5.3 trillion in payments, or about 47 percent of the market share, whereas Visa has 40.6 percent, and MasterCard only 12.2 percent, according to the Nilson Report.
In overall transactions, Visa is still the leader with $4.6 trillion, and China UnionPay comes in second with $2.5 trillion in transactions in the first half of last year.
UnionPay already successfully operates in Australia and Canada, with their deposits tied to both the local currency and the yuan. In total, UnionPay operates in 142 countries.
China’s UnionPay will be a temporary solution for Russia to detach from the West while it prepares to launch its own payment system, which officially isn’t slated to begin operating for another 16 months, and according to sources in the industry, it could even be 2-3 years out.