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Tom Keene Channels Dostoevsky To Describe The Ruble Meltdown

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The Russian ruble fell to record lows against the euro and the dollar on Wednesday.

Bloomberg TV's Tom Keene uses Dostoevsky's "Crime and Punishment" to describe what's going on.

When Business Insider asked Keene for what he considered to be the most important chart in the world, he sent us a long-term chart of the crashing ruble. It goes all the way back to the 1998 Russian financial crisis. In his words:

"Here is USD-RUB with a decimal-point-shift depreciation, call it 4.10 to 41.0. Much was accomplished within the yellow rectangle ... a painful devaluation. From here? My particular question with currency angst always, always comes from domestic surprise. With Russia, the calculus is evermore complex. For 2015, USD-RUB 45 or 50 or 55 may be crime and punishment, enough."

cotd russia currency tom keene

SEE ALSO: WALL STREET'S BRIGHTEST MINDS REVEAL THE MOST IMPORTANT CHARTS IN THE WORLD

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The Kremlin Is Taking Its Information War Against The West To A Whole New Level

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Russian media

MOSCOW — Rossiya Segodnya, Russia's state-run media conglomerate, is reportedly preparing to open local bureaus in 29 world capitals, a move expanding the Kremlin's global media presence amid what senior Russian officials call an "information war" with the West.

The new bureaus are set to facilitate local-language radio programming and news websites, though their locations have yet to be formally announced, Serbian media reported.

Rossiya Segodnya would neither confirm nor deny the reports, saying details would be released at a launch event in Moscow next month. 

The cities in question, however, appear to include Tajikistan's capital, Dushanbe, and the Serbian capital Belgrade.

RFE/RL's Tajik Service reported in August that Rossiya Segodnya was set to open a branch in Dushanbe that would be staffed by 25 locally hired reporters. 

Balkan Insight and B92 reported this week on the imminent launch of a Belgrade bureau, which will apparently be headed by Ljubinka Milincic, a former Moscow correspondent for Serbian media outlets. 
 
The reports follow Russian President Vladimir Putin's recent visit to the Serbian capital to much fanfare on the occasion of a colossal military parade, affirming Moscow's deep ties with the Balkan nation. 

'Information War'

Rossiya Segodnya was established by a Kremlin decree last December. The media holding company integrates the state news agency RIA Novosti and state radio station Voice of Russia into a single media monolith helmed by controversial pro-Kremlin news anchor Dmitry Kiselyov. 

Rossiya Segodnya, or "Russia Today," is a different organization than RT, the lavishly funded pro-Kremlin TV network that broadcasts in English, Arabic and Spanish.

On October 28, "The Guardian" reported that RT is launching a specially tailored television channel to be aired in Britain. 

Russia has increased spending on its foreign media operations, earmarking 15.38 billion rubles ($362.2 million) for RT in 2015, an increase of nearly 30 percent from last year. Next year's budget for Rossiya Segodnya has been almost tripled to 6.48 billion rubles ($152.6 million). 

Western officials have called RT and other state-controlled Russian news outlets instruments of Kremlin "propaganda" deployed to shape the media narrative in the Ukraine crisis.

Russian officials, in turn, have accused the Western media of carrying out an "information war" against Russia and its interests.

Andrei Kolesnikov, a political analyst and columnist for the opposition-minded "Novaya Gazeta" newspaper, said the Rossiya Segodnya expansion is intended to complement the Kremlin's use of RT as a "propaganda" tool to burnish Russia's image abroad.  

Kolesnikov also suggested Rossiya Segodnya could potentially be used as a "cover" to improve Russian espionage networks or contacts in foreign countries. 

He cited the recent case of Leonid Sviridov, a Russian reporter working for Rossiya Segodnya in Poland, who on October 25 was stripped of his accreditation at the request of Polish security services. 
   
Kiselyov has demanded an explanation for the move, though Polish authorities have yet to make such an explanation public. 

SEE ALSO: Here's how the Ukraine crisis is deepening military ties between China and Russia

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There It Goes Again — Russian Ruble Falls To New Record Lows

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The ruble fell to a record low against the dollar and euro in early trading Wednesday despite a $2.5 billion intervention from the Russian central bank to prop up the currency.

RUBUSD

The Russian central bank has been forced to intervene once more in currency markets by using foreign exchange reserves to purchase rubles as the currency continued its slide. The ruble has fallen about 20% since January. Elvira Nabiullina, head of the bank, acknowledged earlier this month that if markets turned against the ruble it would not "be able to restrain them" but is nevertheless compelled to act to protect Russian businesses from the impact of sharp falls.

Sharp falls hurt firms with foreign suppliers or foreign currency debt obligations and could further undermine already weak economic growth in the country. The Russian central bank has tried to smooth the transition to a weaker exchange rate through its interventions, but it is paying a high price.

Russia's international reserve stockpile has fallen from $464.2 billion at the start of September to $443.8 billion as of Oct. 17, and it will have dropped even lower because of further intervention in recent days.

As a signal of how big a problem the ruble's collapse has become for policymakers, the central bank announced plans to pump an additional $50 billion into the country's banking system through currency repo auctions (whereby the central bank exchanges rubles for dollars at a fixed rate). The first auction is scheduled to be held Wednesday.

SEE ALSO: Russian Ruble Hits An All-Time Low Against The Euro

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Obama Hasn't Fulfilled His Promises On Nuclear Weapons Reduction

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nuclear artillery mushroom cloud explosion

President Obama has long talked the talk of reducing the dangers of nuclear weapons, but the administration has been slow to walk the walk in terms of nuclear weapons reductions in recent years.

A recent study by Federation of American Scientists pointed out that in terms of number of stockpiled warheads and percentage of reduction, Obama has done less than all other post-cold war presidents.

President George W. Bush reduced the US nuclear stockpile by 50% during his tenure in office, surprisingly, qualifying him for the prize of greatest nuclear disarmer by percentage since 1945.

President Bush senior claims second prize with 41% reduction. President Eisenhower had the greatest escalation of all time with an increase of 2,117%, although the times were certainly different back then and the United States was starting from a small stockpile. Meanwhile, President Obama has retired 507 warheads or a 10% reduction of the total stockpile.

However, it’s important to put these numbers into context.

Throughout his presidency, Obama has reduced our nuclear weapons stockpile each year. While stockpile numbers diminished more drastically under President Clinton and President Bush, President Obama took on the job when the stockpile was the smallest in decades.

For instance, President Bush reduced the nuclear weapons stockpile by 5,304; which is 654 more nukes than the total of 4,650 nuclear weapons the US has today.

The Obama administration got a strong start on reducing the threat of nuclear weapons. In his 2009 foreign policy address in Prague president Obama spoke of“America's commitment to seek the peace and security of a world without nuclear weapons.”

In 2011, he secured the historic New START Treaty with Russia which necessitates significant nuclear weapons stockpile reductions on both sides and calls for more rigorous verification and inspection protocols.

The three Nuclear Security Summits initiated by President Obama helped to focus world attention on the proliferation of nuclear weapons and materials. According to a New York Times editorial, “[s]ince Mr. Obama took office, he has pushed the international community to improve nuclear security.  The result is that 14 countries have eliminated their nuclear materials stockpiles and 15 others removed or disposed of portions of theirs.”

It is also looking more and more (fingers crossed) like the US and its negotiating partners, the five permanent members of the UN Security Council as well as Germany collectively known as P5+1, are close to a historic deal with Iran to prevent it from getting a nuclear bomb.

He’s certainly done well. Just not quite as well as advocates of reducing nuclear weapons stockpile size and importance would have hoped.

For one, Obama’s record on investing in nuclear non-proliferation programs hasn’t been great as of late.

According to a July 2014 analysis of the Obama administration’s security spending out of Harvard’s Kennedy School of Government, the administration chose to cut the National Nuclear Security Administration’s (NNSA) non-proliferation programs by $399 million and increase spending for weapons activities by $534 million. This was the second straight year of reductions in the US non-proliferation budget.

And this reduction in spending to rein in nuclear weapons has been met by an increase in spending on nuclear weapons.

In order to get the go-ahead from opponents in Congress on the New START Treaty with Russia, Obama agreed to spend $84 billion in nuclear weapons modernization over the next decade, a number the Congressional Budget Office estimates will likely come in at $355 billion with others estimating $1 trillion over 30 years.

This is unnecessary spending on modernization that isn’t needed to meet today’s threats.

Nevertheless, the President did try again for nuclear reduction in 2013. But Vladimir Putin, President of the only country besides the US with thousands of nuclear weapons, rejected Obama’s 2013 proposal to cut Russian and US deployed strategic nuclear warheads beyond the 1,550 agreed upon in New START, down to 1,000.

But the deal hasn’t been sealed yet. Ultimately, the President’s legacy on nuclear issues depends on what gets done over his last two years in office.

The President still has a chance to make strides on the nuclear front. Both Russia and the US have to cut their deployed nukes stockpile to 1,550 by 2018 under the New START accord. Obama could accelerate those reductions in the next two years without waiting for 2018.

He could also scrap some of the expensive and arguably unnecessary modernization plans like fitting the F-35 for a nuclear weapon and building a new generation of land-based missiles.  

Those of us who are working to reduce the threat of nuclear weapons are eager to see Obama do more and fulfill his Prague promise.

SEE ALSO: Senior US official: Benjamin Netanyahu is "a chicken---t"

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NATO Has Intercepted 26 Russian Jets In The Past Two Days

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eurofighter typhoon

NATO has scrambled fighter jets to intercept an unusually high number of Russian military aircraft on Oct. 28 and 29. The incidents have taken place throughout Europe, from the Atlantic Ocean to the Black Sea, according to NATO Allied Command Operations. 

Over this two-day period, NATO jets responded to at least 26 Russian jets that were flying in international airspace adjacent to NATO territory. 

"These sizable Russian flights represent an unusual level of air activity over European airspace," NATO said in an official statement.

On Oct 28, seven Russian combat aircraft flew over international airspace in the Baltic Sea. The aircraft were intercepted by German Typhoon fighters over the Gulf of Finland, but the jets did not change course. The Russian fighters were also intercepted by Danish, Swedish, and Finnish forces before landing in the Russian province of Kaliningrad on the Baltic Sea. 

On Oct 29, NATO intercepted three separate groups of Russian fighters. Portuguese fighters that were part of the Baltic Air Policing Mission were scrambled to intercept at least seven Russian jets over the Baltic Sea. Simultaneously, Turkish fighters intercepted two Russian bombers and two fighters over the Black Sea. 

NATO also intercepted eight Russian aircraft over the North Sea on Oct 29. After interception, the formation split, with the fighters and a tanker returning to Russia while two bombers continued towards the Atlantic where they were intercepted by the Portuguese. 

“We see Russian aircraft near our airspace on a regular basis but what was unusual is that it was a large number of aircraft and pushed further south than we normally see,” an unnamed Norwegian military spokesman told Reuters.

Worryingly, the bomber and tanker aircraft from Russia did not file flight plans, maintain radio contact with civilian air traffic control, or make use of transponders. This poses a serious risk to civil aviation as they would be undetectable and could lead to a mid-air collision. 

Russia has been particularly aggressive in sending their aircraft abroad over the course of the year. NATO has sent more than 100 intercepts against Russian aircraft to date in 2014. This is about three times more interceptions than occurred in all of 2013, and it comes in the wake of increased tension over Russia's actions in Crimea.

Aside from an increase in air traffic, Russia may also have sent a submarine into Swedish waters. This would seem to be a revival of Cold War tactics in which Russia attempted to assert its influence in the Baltic Sea through continual submarine excursions. 

Meanwhile, Russia has also ramped up its espionage attempts in Europe. The Czech secret service has warned that there is an "extremely high" number of Russian agents operating out of the embassy in Prague. Likewise, Poland has recently arrested Russian spies in October that were highly placed within the country. 

In August, Russian President Vladimir Putin said"it's best not [for foreign states] to mess with us." The stepped up flights may be part of an effort to underline that message. 

SEE ALSO: Here's how the Ukraine crisis is deepening military ties between China and Russia

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Russia Offers To Help Resupply The International Space Station

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A NASA video image shows an Orbital Sciences Corporation unmanned spacecraft exploding on October 28, 2014 at Wallops Island, Virginia, six seconds after launch

Moscow (AFP) - Russia on Wednesday offered to help the United States with deliveries to the International Space Station after an unmanned American supply rocket exploded on lift-off. 

"If a request is made for the urgent delivery of any American supplies to the ISS with the help of our vessels then we will fulfill the request," Russian space agency official Alexei Krasnov told state-run RIA Novosti news agency, adding that NASA had not yet asked for assistance.

An unmanned rocket owned by private firm Orbital Sciences Corporation exploded Tuesday in a giant fireball and plummeted back to Earth just seconds after a launch from Wallops Island, Virginia on what was to be a resupply mission.

Orbital's Cygnus cargo ship was carrying 5,000 pounds (2,200 kilograms) of supplies for the six astronauts living at the research outpost, a US-led multi-national collaboration.

Officials said the cost of the rocket and supplies was over $200 million, not including the damage caused on the ground.

Europe stopped delivering supplies to the ISS this summer, and the outpost is now resupplied by Russia and two NASA-contracted private American firms -- Space X and Orbital Sciences.

Russia on Wednesday successfully launched its own supply mission from the Baikonur launch site in Kazakhstan. 

The Russian cargo ship Progress took off for the ISS on a planned mission to replace a sister vessel.

Krasnov said that the impact of the loss of the rocket on Russian operations at the space station would be "minimal." 

 

 

 

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The Russian Currency Collapse Just Wiped Out Nearly $3 Billion Of Rosneft's Profits

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Igor Sechin

Rosneft, Russia's biggest oil producer, reported a net profit of just 1 billion rubles ($23 million) in the third quarter, down from 172 billion rubles ($3 billion) in the previous quarter.

The company, which is headed by close Putin ally Igor Sechin, has been hammered by a combination of international sanctions and a huge rise in the value of its foreign currency debt. Its net debt position reached a staggering 1.77 trillion rubles.

As a testament to its recent struggles, Rosneft had earlier seen a request for 2 trillion rubles from the state National Wealth Fund to help it weather current market turmoil turned down. Last week Russia's Finance Minister Anton Siluanov said the scale of the request was impossible to meet without putting huge strain on the country's reserves.

He said:

The overall volume of the Fund is a little more than 3 trillion rubles and there is not enough unused, inactive capital to meet the request. Therefore, undoubtedly, the offer [from the government] will differ significantly from the request.

Rosneft's woes show just how damaging sharp falls in the ruble can be for the Russia's vital commodities sector. The central bank now faces the difficult decision of whether to raise rates in an effort to stem capital outflows at the risk of damaging the country's fragile economy.

The bank's board is due to meet Friday, when it will attempt to balance the demands of an economy that is seeing 8% inflation and flagging growth. The board's decision could mean the difference between the country falling into a recession or avoiding an even worse slump.

SEE ALSO: Russia Will Be Plunged Into A Recession If Oil Prices Fall Further

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Russia: The EU Must Guarantee Ukraine Will Pay Its Massive Gas Bill

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russia gas

Russia says its dispute with Ukraine over natural-gas supplies will not be resolved unless the European Union guarantees cash-strapped Kyiv pays up front for gas it wants from Russia this winter.

After three-way talks in Brussels that began on October 29 and dragged on into the night, Russian Energy Minister Aleksandr Novak said the sides had agreed on the "basic parameters" of documents setting out prices, volumes of gas deliveries to Ukraine in November and December, and a mechanism for restructuring Kyiv's multibillion-dollar debt to Russia for previous supplies.

But he said Russia, which halted deliveries to Ukraine in June, will not turn on the taps unless it is certain it will be paid for future deliveries.

"If there's money, there will be gas," Novak said.

He said the sides had agreed to resume the talks in Brussels later on October 30.

But the chief of state-controlled Russian exporter Gazprom, Aleksei Miller, said the talks would take place only if EU and Ukraine agreed on a protocol guaranteeing payments.

"If such an agreement is not reached, there will be no meetings or negotiations tomorrow [October 30] and no documents will be signed," Miller said.

The latest gas dispute between Moscow and Kyiv is tied to the geopolitical turmoil former Ukrainian President Viktor Yanukovych set off in November 2013 when he scrapped plans to sign landmark political and economic agreements with the EU and turned toward Russia instead.

Yanukovych's about-face sparked street protests that led to his ouster in February in what Moscow claims was a coup d'etat and the rise of a pro-Western government in Kyiv that has denounced Moscow's annexation of Crimea in March and sent government forces into eastern Ukraine to fight pro-Russian rebels it says are armed and reinforced by the Russian military.

Russian President Vladimir Putin promised gas price cuts in December 2013 to dissuade Yanukovych from moving Ukraine closer to Europe, but raised the price Moscow charges Kyiv after Yanukovych's downfall and, in June, halted all supplies meant for domestic consumption in Ukraine when Kyiv failed to pay the higher price.

At the time, Russia said Ukraine owed $5.1 billion for gas.

Russia is the EU's biggest external gas supplier, providing about one-third of the gas consumed there, and previous price disputes between Moscow and Kyiv have led to supply cuts that have chilled Europeans in wintertime.

Ukraine relies on Russia for about half of the gas it consumes, and despite storage has a winter shortfall of around 3 billion to 4 billion cubic meters (bcm), depending on the weather.

Ukrainian President Petro Poroshenko said on October 18 that Kyiv and Moscow had agreed Ukraine would pay $385 per 1,000 cubic meters of gas delivered through March 31 of this year.

He said Kyiv had proposed paying $325 per 1,000 cubic meters for gas used by Ukraine in May and June and $385 for gas delivered this winter, while Russia was insisting on $385 for all parts of the year.

After Yanukovych's ouster, Russia was demanding Ukraine pay $485 per 1,000 cubic meters, substantially higher than any other Gazprom client.

russian energy Minister Alexander NovakUkraine is in discussions with existing creditors the EU and the International Monetary Fund, and German Chancellor Angela Merkel -- concerned about vital Russian gas supplies to the rest of Europe -- has spoken of possible financing for Kyiv.

But the Russian negotiators in Brussels said they wanted to see a firm agreement on EU financing for Ukraine.

"We were told today that Ukraine will see financing to provide for prepayment for 4 billion cubic meters of gas. But this is not a guarantee, it is only a declaration by the Ukrainian side," Novak said.

The gas negotiations come amid persistent tension over the conflict in eastern Ukraine, which has killed more than 3,700 people since April, and driven East-West ties to their lower point since the Cold War.

Hostilities continue despite a September 5 cease-fire, and Russia has angered Ukraine by saying it would recognize elections the separatists who hold large swathes of the Donetsk and Luhansk regions plan to hold on November 2 in defiance of Kyiv and the West.

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The Bizarre Story Behind Thursday's Sudden Ruble Rally

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On Thursday, the Russian ruble reversed its recent trend of breaking record lows against the dollar and the euro and came surging back.

Rumors quickly circulated about the cause of the unexpected rally. 

Here's what we know so far:

After falling to yet another record low in early trading, the ruble suddenly began regaining lost ground from about 6 a.m. ET. 

RUBUSD

The first thing to note here is that over the past week the volume of trading in ruble markets has fallen off sharply. As Reuters' Eric Burroughs (who provided the chart below) said on Twitter, this suggests that the ruble falls have been increasingly built on fragile foundations. It also indicates that Thursday's rally could reflect low volume of trades rather than a genuine change in sentiment.

However, there are a few reasons to believe that the rally may ultimately have some legs.

USD RUB trade volume

The Russian central bank is due to meet Friday to decide whether to move interest rates.

At the top of the list of concerns will be ruble movements, which have forced the central bank to spend $15 billion of foreign exchange reserves buying up the currency in an attempt to limit the scale of its collapse. However, the central bank will also be painfully aware that it has to deal with the competing problems of inflation at 8%, well above its 5% target, and an economy stuck in the doldrums because of international sanctions and weakening domestic demand.

Markets appear to be anticipating a modest move by the central bank to keep inflation in check and help slow capital outflows, with analysts in the latest Reuters poll predicting a 50 basis point rise. If currency traders believe higher rates might succeed where foreign exchange have failed in stemming the outflows, which have so far seen more than $86 billion of capital flee the country in 2014, then the rally could well become more entrenched.

The risk, of course, is that a rate rise also chokes off what little growth the Russian economy is forecast to achieve this year, sending the country into recession.

Another rumor swirling Thursday was that Bogdan Yaremenko, a Ukrainian diplomat, was briefing journalists that Russian President Vladimir Putin had struck a deal with his Ukrainian counterpart Petro Poroshenko over gas supplies to the country and the disputed territory of Crimea.

EU-brokered talks between the two sides appeared to have stalled earlier this week over Moscow's demand that Brussels and Kiev come up with a plan for Ukraine to pay off its gas debts before entering into negotiations. The talks were supposed to ease tensions ahead of elections planned this weekend by pro-Moscow rebels in the parts of eastern Ukraine under their control.

Signs of de-escalation in the conflict would be welcomed by markets, not only as it reduces the chances of further destabilization in the region, but also because it could be used as a reason to soften or remove sanctions against Russia when they come up for review next year.

The European Union is scheduled to review its sanctions package in March. Extending the sanctions requires a unanimous vote by member states, an eventuality that would be much less likely if there were tangible evidence of tensions cooling. This would provide a big boost to Russia's economic outlook and help improve investor confidence in the country — most likely leading to a strengthening ruble.

So is this what we're seeing in the ruble market? Perhaps. But this latest rumor looks to have little to support it. Dmitry Peskov, Putin's spokesperson, has been quoted as saying, "I have no idea who Bogdan Yaremenko is, we have more than 3,000 such diplomats."

His comments were reaffirmed by Alexei Miller, chief executive of Russia's state-owned gas behemoth Gazprom, who said that if there were no agreement over debt repayment, "naturally, there will be no meetings, no talks tomorrow, and no documents will be signed."

What's underpinning the ruble rally may simply be a perception that the currency had become oversold in recent weeks, but the situation remains precarious. Concerns now will be focused on Russia's corporate sector, with Rosneft reporting that the ruble collapse effectively wiped out third-quarter profits and prompted it to request a (likely unrealistic) 2 trillion ruble bailout from Russia's sovereign wealth fund.

Russian companies still have $140 billion in foreign debt repayments due by the end of 2015, and further ruble weakness could cause this problem to become a self-feeding cycle. If it does, the ruble flash rally may quickly be forgotten about.

SEE ALSO: The Russian Currency Collapse Just Wiped Out Nearly $3 Billion Of Rosneft's Profits

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Poland Is Preparing For A Potential Russian Invasion

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Polish F-16

As Vladimir Putin’s Russia continues to threaten Ukraine after stealing Crimea in the spring and exerting de facto Kremlin control over much of the Donbas this summer, war worries are mounting on NATO’s eastern frontier.

New reports of Russian troop movements on the Ukrainian border this week are not reassuring to those Atlantic Alliance members who suffered Soviet occupation for decades, and still live in Moscow’s neighborhood.

Neither are Russian air force incursions into Western airspace calming nerves with their reborn Cold War antics: yesterday, NATO fighters intercepted no less than nineteen Russian combat aircraft, including several heavy bombers.

No NATO countries are more worried about Kremlin aggression than the Baltic states, with their small militaries and lack of strategic depth — countries that are frankly indefensible in any conventional sense without significant and timely Alliance assistance.

But Poland is the real issue when it comes to defending NATO’s exposed Eastern frontier from Russian aggression.

Only Poland, which occupies the Alliance’s central front, has the military power to seriously blunt any Russian moves westward. As in 1920, when the Red Army failed to push past Warsaw, Poland is the wall that will defend Central Europe from any westward movement by Moscow’s military.

To their credit — and thanks to a long history of understanding the Russian mentality better than most NATO and EU members — Warsaw announced a revised national security strategy emphasizing territorial defense this past fall, a point when the violent theft of Crimea was still just a Kremlin dream.

Eschewing future American-led overseas expeditions like those to Iraq and Afghanistan that occupied Poland’s Ministry of Defense (MoD) during the post-9/11 era, this new doctrine makes defending Poland from Eastern aggression the main job of its military.

Presciently, then-Foreign Minister Radek Sikorski, contradicting optimistic European and NATO presumptions of our era that conventional war in Europe was unthinkable, stated in May 2013, “I’m afraid conflict in Europe is imaginable.”

Particularly in light of the fact that both NATO and the Obama administration rejected my advice to seriously bolster Alliance defenses in the East with four heavy brigades, including the two brigades that Warsaw explicitly asked NATO — meaning, in practice, the United States — for after this year’s Russo-Ukrainian War began in earnest, the issue of Poland’s military readiness is of considerable importance to countries far beyond its borders.

Instead of creating a militarily viable NATO tripwire that would deter Russian aggression, the Alliance, and Washington, DC, have opted for symbolic gestures — speeches, military visits, small exercises — that impress the Western media, but not the Russians.

Could Poland Resist Russia?

Simply put: Can Poland defend itself if Putin decides to move his aggression westward? Even if NATO rides to the rescue, as they would be required to under Article 5 — and that is now an “if” question to many in Warsaw — will the Polish military be able to buy sufficient time for the Alliance to come to its aid?

Notwithstanding that Poland (and Estonia) are the only “new NATO” members that take their Alliance obligations fully seriously, spending more than the required two percent of GDP on defense — a standard almost all longstanding NATO members can’t manage to meet — there are serious doubts about the ability of Poland’s armed forces to defend against a major Russian move to the West.

Poland Spies ArrestedThere is good news.

When it comes to resisting what I term Special War — that shadowy amalgam of espionage, terrorism, and subversion at which the Kremlin excels — Warsaw, with its long acquaintance with sneaky Russian games, is probably better equipped than almost any NATO country to deter and defeat Putin’s secret offensive.

The recent arrests of two Polish agents of Russian military intelligence (GRU), one of them a Polish military officer assigned to the MoD, sent a clear message to Moscow that Special War will be met with aggressive counterintelligence.

When it comes to conventional defense, however, the news from Poland appears less rosy. Despite the fact that no one questions the basic competence of the Polish armed forces, nor the impressiveness of their current defense acquisition program, there is the matter of size. 

The recent MoD announcement that it is moving thousands of troops closer to the country’s borders with Belarus and Ukraine, where any threat would emerge, is encouraging but not sufficient (thanks to the Cold War, when Poland’s Communist military was directed westward, most of its major military bases are closer to Germany than they are to the East).

Since the abandonment of conscription five years ago, a cumbersome process that caused readiness problems for some time, Warsaw’s armed forces come to only 120,000 active duty troops, with less than 48,000 in the ground forces (i.e. the army). That number is insufficient to man the army’s structure of three divisions with thirteen maneuver brigades (ten of them armored or mechanized).

A solution to this manpower shortfall was supposed to be found in the establishment of the National Reserve Forces (NSR), with 20,000 fully trained part-time volunteers who would flesh out the order of battle in a crisis.

Yet the NSR, which was announced by the MoD five years ago with much fanfare, has had considerable teething problems, with shortages of recruits and inadequate training budgets. Recent reports indicate both morale and readiness are low among NSR soldiers, who feel poorly treated by the regular military, while none dispute that the force has only recruited and trained 10,000 troops, half the target figure.

Quality can compensate for deficient quantity to an extent, and Poland’s recent acquisition of more late-model Leopard II tanks from Germany, adding to the 124 it already has, means they will be able to replace most of their Soviet-model legacy armor, and meet any Russian incursion on an equal footing in terms of quality, if not quantity.

By approximately 2020, the air force will have wholly replaced its Soviet-era helicopters, buying 150 modern airframes, while the MoD plans to purchase thirty-two late-model attack helicopters by 2022, which would pose a significant threat to Russian armor.

The "Polish Fangs"

More interesting still are plans taking shape to give Warsaw asymmetric deep-strike capabilities to resist Russian aggression. The navy and the army intend to acquire long-range missiles to counter superior Russian numbers, but the cornerstone of the deterrence concept called “Polish Fangs” by Warsaw is the AGM-158 Joint Air-to-Surface Standoff Missile (JASSM), to be carried by the air force’s F-16 fleet (the wing of forty-eight F-16’s is the backbone of Polish airpower).

Combined with drones and Poland’s excellent special operations forces, which are among the best in NATO, Warsaw believes that the American JASSM on the American F-16 will give them an important qualitative advantage over the Russians, including the ability to precisely hit targets up to 370 kilometers behind enemy lines.

Yet even the most optimistic forecasts predict that “Polish Fangs” will not be fully operational for three more years — five seems a more realistic estimate — so there is the pressing matter of deterring Putin’s rising aggression right now.

To provide additional deterrence, Warsaw is taking the remarkable step of creating home guard forces to harass the Russians in the event of occupation, a condition that Poles are only too familiar with. Unlike Ukraine, Poland plans to be prepared should Putin opt for war.

The Creation Of A Home Army

Ever since Moscow’s aggression against Kiev became overt in the spring, the Polish MoD began quietly standing up volunteer forces to bolster the armed forces, should the Russians come again. Word of this became public this week with a story in the Polish edition of Newsweek that details what’s been going on behind the scenes.

Polish Airborne Infantry army

Building on shooting clubs that exist all over the country, possessing several hundred thousand members, the MoD has been supporting the establishment of paramilitary units that would bolster the army if needed. Their intent would be to counter Russian irregulars, GRU’s “little green men” that caused such havoc in Crimea a few months ago.

How many volunteers have already been enrolled is unclear, though it’s evident that the number far exceeds the 10,000 belonging to the NSR.

In late September, and explicitly invoking the legendary Home Army (Armia Krajowa — AK) that resisted Nazi occupation in the Second World War, the first volunteer unit was sworn in at Świdnik, near the eastern border, with modest public fanfare, despite the fact that the MoD considers the existence of this new shadow army to be officially classified.

Advocates of the reborn Home Army speak of finding 100,000 volunteers soon, but that seems a rather long-term goal.

While this project has attracted the support of some Polish right-wingers — the sort who tend to join rifle clubs — its MoD manager is Major General Bogusław Pacek, the director of the National Defense Academy, a veteran of Poland’s Cold War Communist military not known for dirigiste views. Pacek’s quiet enthusiasm for a new Home Army has been noted and it can be expected that before long “AK 2.0″ may constitute more than a nuisance to any invader.

This begs the question of why Poland, a leading member of the Atlantic Alliance, thinks it needs to worry about an actual Russian invasion.

In the first place, the Poles have been invaded and occupied by Moscow too many times over the centuries, including twice during the last one, to think this is just a fantasy. Putin’s harsh and threatening language gets more attention in Warsaw than just about anywhere else.

Doubting NATO

The Poles also understand that Article 5 only works as a deterrent if everyone understands that NATO will actually go to war to defend a member under threat. Here, again, recent history gives room for doubt. All of Europe was happy to sit back and watch Poland fight off the Red Army in 1920, alone, while Kremlin sympathizers in Western Europe blocked desperately needed arms shipments headed to Warsaw.

More germanely, the joint Nazi-Soviet invasion of Poland in 1939 brought none of the Allied help that Poland was obligated to receive under treaty. Although both Britain and France were supposed to come to Poland’s direct military aid, they were content to declare war on Germany and essentially do nothing, letting Hitler and Stalin dismember Poland completely.

Warsaw’s war plans assumed they needed to buy time — perhaps six weeks — until the British and French arrived. That promised rescue force never came, and every Pole today knows it.

obamaHence NATO assurances are met with a certain skepticism in Warsaw, including — perhaps especially — in defense circles.

Then there is the touchy issue of President Obama.

The Polish Right was never enamored of him, noting with disgust how Obama in 2009 cancelled a US/NATO missile defense system in the country, a move termed a “betrayal” by Poland’s president. Making the announcement on September 17, the seventieth anniversary of Stalin’s invasion, added insult to injury.

More than a few Polish right-wingers have doubted the staying power of Obama, particularly given his youthful dislike of President Reagan, a revered figure to many Poles for his major role in ending the Cold War and regaining Poland’s freedom.

Obama’s talky dithering on foreign and defense issues and his rough dealings with America’s friends have led to Polish worries spreading well beyond the country’s right wing.

I deal regularly with Polish defense and intelligence officials, and over the last few years their doubts about Washington, DC’s courage and wisdom have mounted steadily.

Poles understand that without American leadership there is no NATO in any military sense. Since the onset of Putin’s aggression against Ukraine, those fears have multiplied and there are now many in Warsaw who wonder if Obama would really honor Article 5 in a crisis.

Yesterday I spoke with a top Polish MoD official, a man of sober and strongly pro-American views whom I’ve known for years. Referring to this week’s needless White House crisis with Israel, another American ally who has doubts about the current administration, he noted, “I didn’t need the Beltway media to tell me who the real chickens--- is.” 

"They really have no idea what they are doing,” he opined about Obama and his national security staff, “and we know it. You have no idea how many promises we’ve been given, even by the President himself, but there’s never any follow-up, it’s all talk. He thinks he’s on Oprah.”

When I asked if he thought America would come to Poland’s aid in a crisis, he said laconically, “I’d flip a coin.”

In a similar vein, a senior Polish intelligence official, another veteran of long collaboration with Washington, DC, expressed his skepticism to me.

“Is it 1939 again? I don’t know,” he explained, “but I think Obama isn’t even a Chamberlain,” citing the British prime minister who left Poland in the lurch at the beginning of World War Two.

Given such doubts, combined with Putin’s obvious desire to break the Atlantic Alliance, Poland will prepare to resist the Russians alone, while hoping and praying it does not have to.

SEE ALSO: NATO has intercepted 26 Russian jets in the past two days

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Ukraine Spared A Winter Of Discontent After The EU Brokers A Gas Deal With Russia

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Alexander Novak, Russian Energy Minister, arrives at the European Union Commission headquarters in Brussels on October 30, 2014

Russia agreed to resume gas deliveries to Ukraine through the winter in an EU-brokered deal reached by the three parties in Brussels on Thursday, an EU source said.

The details will be outlined by European Commission head Jose Manuel Barroso as well as the Russian and Ukrainian energy ministers during a press conference announced for 2045 GMT, the source said on condition of anonymity.

Ukraine's debt of $3.1 billion (2.5 billion euros) will be settled in two installments, one immediately and the other at the end of the year, another source said.

"The Ukrainians have the money to pay," the source added.

The deal sets a price of $385 per 1,000 cubic metres for the duration of the contract, which runs from November this year to the end of March 2015, the source said.

Payments will be made in advance for the following month.

Kiev sought and obtained a guarantee that the price would not change during the contract, the source added.

 

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The Russian Central Bank Raises Rates In A Desperate Effort To Halt Ruble Declines

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Elvira Nabiullina

The Russian central bank raised rates by 150 basis points to 9.5% in a gamble that higher rates will halt the ruble's slide against the dollar and the euro.

The bank's board decided to raise rates despite a weak economy after the ruble hit historic lows against the dollar and the euro this month. Over October the central bank burned through more than $15 billion of Russia's foreign exchange reserves buying rubles in an effort to soften the impact of falls on the country's businesses.

Since the start of the year the country's international reserve stockpile has dropped over $30 billion to $439.1 billion from $469.5 billion.

The ruble, however, is still falling:

RUBUSD

By raising interest rates the central bank is effectively wagering that the positive impact of stabilizing the currency and looking tough on inflation (which is currently running at 8%) will outweigh the potential economic hit of raising the cost of capital in an already sluggish economy. The International Monetary Fund forecasts growth in Russia of a meager 0.2% this year as international sanctions over the crisis in Ukraine and falling oil prices weigh on activity.

Announcing its decision, the central bank acknowledged that price pressure had diverged from the underlying economy, meaning further rate hikes may be necessary despite evidence of economic slack (emphasis added):

According to the Bank of Russia estimates, annual GDP growth rate in 2014 Q3 was 0.2%. Economic slack does not have considerable restraining effect on consumer prices increase as it is mostly caused by structural factors ... Consumer prices growth is very likely to persist at the current level till the end of Q1 2015 due to remaining sizeable impact of restrictions on the import of certain food items and ruble depreciation in August-October 2014 on prices.

SEE ALSO: The Bizarre Story Behind Thursday's Sudden Ruble Rally

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FIFA Is Sorry For Publishing A Video With Crimea As Part Of Russia

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FIFA Video Crimea

Geneva (AFP) - FIFA has apologised for an embarrassing diplomatic faux-pas when its video launching the 2018 World Cup logo portrayed the Crimean peninsula as part of Russia.

The disputed clip was beamed on to the facade of Russia's historic Bolshoi Theatre at the official unveiling of the 2018 logo in the Russian capital on Tuesday.

The strategic peninsula of Crimea, long home to Russian military bases, was annexed from Ukraine by Russia in March, sparking the worst crisis between Russia and the West since the Cold War.

World football's governing body issued a statement blaming the blunder on a local video production agency.

"Unfortunately the map of Russia selected and used during the projection by the local service provider escaped our attention and the short sequence in question has been removed," a FIFA spokesman said.

The slip-up came at a sensitive time with FIFA trying to find a solution to the Crimea club crisis.

Russia has incorporated teams based in Crimea in its third division, a move hotly disputed by the Ukrainian football federation.

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That Recent Spike In Russian Air Force Activity May Be A Reaction To A US Nuclear Readiness Exercise

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B 52H_static_display_arms_06On Oct. 29, the US Strategic Command concluded its largest yearly exercise. On the very same day, the Russian Air Force launched three air force packages which included a mix of bombers and escort fighters for a total of 19 warplanes (26 if we consider also the close encounter on Oct. 28).

NATO considered this number of Russian missions flown close to European air spaces “unusual.

Was this a random uptick? Maybe, but maybe not.

Exercise Global Thunder 15 (the exercise took part in fiscal year 2015, hence the 15) “is a command-and-control exercise designed to train Department of Defense forces and assess joint operational readiness across all of US Strategic Command (USSTRATCOM) mission areas with a specific focus on nuclear readiness.”

Conducted in coordination with North American Aerospace Defense Command and US Northern Command’s Exercise Vigilant Shield 15 (attended by tactical warplanes with the aim to train homeland defense forces), Global Thunder 15 is a realistic exercise during which nearly every USSTRATCOM component, task force, unit, command post and bomb wing takes part in the training events.

The events are aimed at improving all the various command capabilities: space, cyber, intelligence, surveillance and reconnaissance, global strike, and ballistic missile defense.

On a 24-hour period, Global Thunder sees B-52 and B-2s fly up to the Arctic and back, escorted by several E-6B Mercury aircraft.

Some strategic bombers route up over Nova Scotia and up past Thule/Greenland and either go all the way around the north of Canada and back down through Canada and Alaska, or they turn round and go back the way they came. Other waves go up over Alaska first and come back down over Greenland.

All of this simulates a potential nuclear war.

Richard Cliff, a reader of The Aviationist and military aviation expert noticed that, the Russians seem to launch similar long-range bomber missions after every Global Thunder, as those that caused the alert scrambles by NATO QRA (Quick Reaction Alert) cells across Europe.

Global Strike aims to prove that Russian bombers are not the only ones to fly in the Arctic or perform simulated long-range nuclear missions. At the same time, the exercise may be one of the reasons behind the spike in the Russian activities in Europe

Even then, we can’t help noticing that the amount of close encountershas increased in the last couple of years regardless to whether there was a US Strategic Command exercise in the same period or not.

SEE ALSO: NATO has intercepted 26 Russian jets in the past two days

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Here's What Lies Behind Vladimir Putin's Biggest Anti-American Rant Yet

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putinWhen Russia's president, Vladimir Putin, gave a belligerent anti-Western speech in Munich seven years ago he was tense and angry.

But on October 24th he was reportedly relaxed and happy as he delivered his most anti-American diatribe so far.

He joked and smiled. He enjoyed flaunting his characteristic toughness in front of foreign journalists and experts who are members of the Valdai discussion club, leaving them stuck for words by his ability to twist facts and distort meanings.

In substance the speech contained little new. Mr Putin blamed America's "unilateral diktat" for the world's disorders, and accused the West of double standards and hypocrisy towards Russia, which was only "protecting the interests of the Russian-speaking population in Crimea" against "neo-fascists" when it annexed the peninsula and stirred conflict in the east.

The message was clear: if America breaks rules in Kosovo, so can Russia in Ukraine. "The bear will not even bother to ask permission. Here we consider it the master of the taiga. It does not intend to move to any other climatic zones. However, it will not let anyone have its taiga either."

Mr Putin recalled Khrushchev banging his shoe at the UN as a way to command attention. "The whole world, primarily the United States and NATO thought: this Nikita is best left alone, he might just go and fire a missile — they have lots of them, we had better show some respect for them."

Yet the Soviet Union and America saw each other as equals not just because of their arsenals, but also because they were joint victors in the second world war. The Soviet Union helped to create the post-war order that Mr Putin now wants to destroy. Soviet leaders were hostile to the West but not irresponsible; they harboured deep fears about using nuclear weapons.

Mr Putin is not open to a change of view. "In the past he did everything in his power to change the situation, but now all this is in the past," says Dmitri Trenin, head of Carnegie Moscow Centre, a think-tank. "He clearly does not trust America and sees no point in talking to it," says Fyodor Lukyanov, editor of Russia in Global Affairs. The question is why he bothered to make the speech at all.

The answer may have more to do with Mr Putin's domestic situation than with the West. Anti-Americanism is now a pillar of the Kremlin's ideology. In 2007 Mr Putin's Munich speech was a complement to Russia's strong growth. His latest effort is a substitute for it.

Blaming Russia's economic troubles, including falling oil prices, on America diverts criticism from the Kremlin. Opinion polls show that the Russian public first and foremost credits Mr Putin with the restoration of Russia's place in the world.

putin olympics sochi

On this basis the Valdai meeting in Sochi, site of this year's winter Olympics, provided a perfect setting for him to demonstrate his strength and agility while the club's members inadvertently played the part of a television audience. Fittingly, Valdai is now organised by Dmitry Kiselev, a television propagandist who hosts a weekly talk show.

This does not mean that Mr Putin is ready for a real war with the West. The withdrawal of Russian troops from Ukraine suggests that his actions are constrained both by sanctions and by the unwillingness of Russians to lose more soldiers' lives. But Mr Putin's meddling in Ukraine is far from over.

In many ways it is Russia's weakness, not its strength, that is now the biggest danger.

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Russia Is Doubling Down On Its Disastrous Ukraine Adventure

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Ukraine vote

The Russian government has officially recognised elections in rebel-held Donetsk and Luhansk regions in eastern Ukraine despite UN warnings that they violate the peace agreement in the country.

Russia also looks like it is beginning another military buildup on the Ukraine border.

While the votes are pro-Russian, they could also become a huge headache for President Vladimir Putin. Further escalation in the region could dash Moscow's hopes of a loosening of international sanctions next year and plunge the country into a recession.

Results in this morning show Aleksandr Zakharchenko, the prime minister of the self-proclaimed, pro-Russian, Donetsk People's Republic, comfortably won with 765,340 votes, or around 80% of total ballots cast. The result in Luhansk is due in later today but is also widely expected to go in favour of the incumbent leader of the pro-Russian Luhansk People's Republic, Igor Plotnitsky.

Despite condemnation from the Ukraine government in Kiev of the votes, Russian officials have already announced their intention to recognise the result. The Foreign Ministry issued an official statement saying:

“The elections in the Donetsk and Luhansk regions were held in an organised way in general and with high voter turnout. We respect the will expression of the citizens of the south-east.”

However, Russian Foreign Minister Sergey Lavrov's claim that the elections were held in line with the Minsk agreements was contradicted by the international community. Russian news service Tass reports that UN Secretary-General Ban Ki-moon believes the votes were incompatible with the peace deal while both the US and the European Union have also refused to recognise the elections, dubbing them "illegal and illegitimate".

More worryingly, over the weekend, a Ukraine government spokesperson briefed journalists that there had been "intensive deployment of military equipment and personnel of the enemy from the territory of the Russian Federation onto territory temporarily controlled by insurgents".

The story appeared to be given credence on Monday with Mark Stroh, a spokesman for the White House National Security Council, telling Tass that he had information suggesting that Russian military personnel are returning to the Ukraine border. The White House has issued a warning to Russia against using the elections as a pretext for moving troops into rebel-held areas.

The Russian economy is already teetering on the brink of a recession, with the IMF forecasting growth of only 0.2% this year and 0.5% next year. A tightening of international sanctions would be a big blow to the country, which is already facing significant budget pressures due to the collapsing oil price.

After a week that finally saw Ukraine and Russia reach an EU-brokered gas deal to secure crucial winter supplies to the country these votes could not have been worse timed. While Moscow may be publicly supporting the result, getting dragged back into the conflict will be the last thing they want.

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The Portuguese Air Force Intercepted And Photographed Russian Bombers In Europe

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PoAF intercept Tu 95

On Friday, two F-16 Fighting Falcon jets of the FAP (Portuguese Air Force) were scrambled to intercept two Russian Air Force Tu-95 Bear strategic bombers.

The Russian planes were detected by Portugal’s Air Defense System (DA) as they approached the nortwestern part of Portugal’s FIR flying southbound, not in contact with any Air Traffic Control agency.

The two F-16s on permanent alert at Monte Real Air Base were launched to perform a visual identification of the two “intruders.”

The QRA (Quick Reaction Alert) fighter jets performed a very similar mission to that they had flown on Wednesday; however, this time the intercepted aircraft kept heading toward the south until they turned north.

The two Portuguese interceptors escorted the Bears until they departed the airspace of Portugal’s responsibility.

Another pair of F-16s was readied for takeoff just in case the Russian aircraft reversed their northboud route.

H/T Armando “Squid” Leitao for the heads-upPoAF intercept Tu 95 2

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Russians Tore Down A Memorial To Steve Jobs After Tim Cook Said He Was Proud To Be Gay

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Dismantling of memorial to Steve Jobs

Residents of Saint Petersburg have reportedly torn down a giant interactive iPhone memorial that commemorated the death of Apple founder Steve Jobs after the company's current CEO, Tim Cook, came out as gay on Thursday.

Business FM Radio reports that the company that originally funded the memorial, ZEFS, decided to tear it down after Cook said he was proud to be gay.

Homophobia is rife in Russia, and many LGBT people living in the country have been subjected to harassment and violence.

The six-foot tall memorial was erected in 2013 to celebrate Steve Jobs' life. It featured a large screen that showcased moments from Jobs' life, as well as scrolling quotations from his speeches and a QR code on the back that would take people who scanned it to a website.

Steve Jobs memorial in Russia

Speaking in a press release sent to Russian media outlets, ZEFS chairman Maxim Dolgopolov explained that the memorial was torn down for two reasons: Tim Cook coming out as gay and Edward Snowden's revelations about NSA spying. (Snowden's documents suggest Apple products were used by the NSA to conduct surveillance.) He didn't rule out reinstalling the memorial, however, but said that it would only return if it could be modified to instruct Russian citizens to use products from companies other than Apple.

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Troops Surge Into Ukraine From Russia As Separatists Reveal Election Winners

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Ukraine vote

As pro-Russian winners were announced Sunday after an election in Donetsk and Luhansk, concerns intensify over a major military movement of troops and equipment from Russia into Ukraine. The movements, which began Sunday and were witnessed by numerous Western journalists, included up to 40 trucks of military equipment and troops.

"There is intensive deployment of military equipment and personnel of the enemy from the territory of the Russian Federation onto territory temporarily controlled by insurgents," Ukrainian military spokesman Andriy Lysenko told a briefing in Kiev.

The scenes were initially witnesses by AFP reporters who claim to have seen some trucks carrying anti-aircraft guns heading toward the government-held airport.

The movement of the trucks was just hours before election results confirming the new leaders of Donetsk and Luhansk.

The scenes echo those witnessed in Crimea in March 2014 when unidentified militias appeared to patrol the streets in the leadup to a referendum on independence. The men were later confirmed as Russian soldiers.

In the controversial elections, which the West has called "illegal," Aleksandr Zakharchenko was elected head of the self-proclaimed Donetsk People’s Republic, and Igor Plotnitsky won the vote in the Luhansk People’s Republic. While critics said no real opposition existed in either regions to challenge the two men, Russian has framed the Sunday elections as the “will of the people,” and like the referendum in Crimea in March 2014, the results are likely to go unchallenged despite condemnation from the Kiev and the West. 

Other witnesses to the troop movements included reporters from BuzzFeed and Mashable, whose correspondents both tweeted that they saw a large military column traveling toward Donetsk. BuzzFeed’s Max Seddon wrote: "31 unmarked Kamazes (military trucks) just drove past towards Donetsk. Anti-aircraft weapons, ammunition boxes, radar systems, a bus of gunmen."

Mashable’s Christopher Miller pegged the figure to be closer to 40.

pro russian separatist donetsk election 2Unverified footage of the troop movements was shown on Ukraine’s channel 5, as a large column of trucks meander through what can be indentified only as an eastern European city.

Russia has repeatedly denied assisting pro-Russian rebels in eastern Ukraine but was part of the Sept. 5 cease-fire that has seen fighting largely decrease in the east, with the exception of Donetsk airport, where clashes have continued. Western concerns over Russian influence were raised when pro-Russian rebels were witnessed using advanced and sophisticated weaponry and have had no apparent difficulty in acquiring ammunition.

But now that Russia has said it would respect the results of the elections held Sunday, the troops' movements could legitimize the use of a more visible Russian force, should the new leaders of the regions invite them to do so. It is yet to be seen whether the two newly independent regions will be merged with Russia. 

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Joe Biden Corrects Himself After Saying Russia 'Invaded' Ukraine

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joe biden

Vice President Joe Biden appeared to accidentally deviate from the White House's official line on Russia's annexation of territory in Ukraine by actually calling it an invasion during a Monday morning interview on CNN.

Speaking on CNN, Biden listed overseas crises like the Ebola virus that he said the US government had dealt with successfully. Biden said this proved the US public "should not be as anxious as they are" about the world right now.

"When the Russians invaded — crossed the border — into Ukraine. It was, 'My god. It's over,'" Biden said, pausing for less than a second before switching the word "invaded" to "crossed the border."

"We've put it under control," Biden assured.

President Barack Obama's administration initially awkwardly and repeatedly refused to use the word "invasion," preferring to instead deploy terms like "incursion" to describe Russian troops crossing the Ukrainian border over the summer in support of Moscow-backed separatists.

According to some foreign policy experts, the terminology debate can be important because certain loaded words could demand direct US action when the White House would prefer a more cautious approach.

"Some words have both legal and emotional effects. And in the case of invasion, it's emotional and political," Elliott Abrams, a senior fellow at the Council on Foreign Relations, told CBC News in August. "I think they don't want to use the word invasion because it makes harder the next question: And what are you going to do about it?"

View Biden's comments on CNN below.

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