Streetwise Professor

In a burning ring of fire?  One can hope.  I refer to the price of Rusal stock, which has tanked even further since its inauspicious reverse pop immediately after the IPO:

United Co. Rusal Ltd., the world’s largest aluminum producer, fell for a third day in Hong Kong trading, extending its drop since last month’s initial public offering to 20 percent.

The shares slumped 4.5 percent to close at HK$8.66 ($1.11) on the Hong Kong Stock Exchange. They cost HK$10.80 each in the IPO. Today marked the eighth slide in nine sessions for Rusal, controlled by billionaire Oleg Deripaska, since trading began.

“Hedge funds that participated have been disappointed with the dynamics of the IPO and are closing the trade and taking the loss,” said Joseph Dayan, head of international sales and trading at Otkritie Securities Ltd. in London. “The fact that liquidity is drying up is another negative.”

Now, part of this decline can be laid to the decline in world markets and the related news regarding the increasingly bleak prospects for the world economy in the past couple of weeks.  But it also arguably reflects that the Rusal IPO had more than a little pump and dump aspect to it.

Speaking of Rusal, Oleg Kozlovsky and I discussed Deripaska during our conversation.  Oleg said that it was widely perceived that Deripaska is willing to abase himself any way Putin desires in order to maintain his position, and that most of the public interactions between the two (e.g., Pikalyovo) are only so much theater.

The massive snowstorm that buried DC had one favorable outcome: it gave me an opportunity for me to meet courageous Russian civil society advocate and opposition figure Oleg Kozlovsky.  Oleg had spoken at Principia College across the Mississippi from St. Louis in its Lectures in Moral Courage series.  He was scheduled to fly back to Moscow via DC, but his flights were cancelled due to the storm.  I found out about this via Facebook, and messaged Oleg that I would be in St. Louis for the weekend, so we were able to get together for breakfast this morning.

Oleg is a very polite, unassuming, and articulate young man.  He has demonstrated his moral courage many times on the streets of his home country, but his is not the courage of bravado or confrontation.  He is dedicated to non-violence; he spent a good deal of his time while waiting out the delay in St. Louis in bookstores looking for books on non-violent protest.

We had a wide-ranging conversation about all sorts of matters, from Putin, to the controversy over his passport, to energy, to Europe and energy, to Kaliningrad, to the effects of the economic crisis, to the militia and OMON, to the military and the effects of the reforms, to Khodorkovsky.  After a while, he smiled and said that he didn’t want to sound so negative, so I suggested that we talk about politics and economics in the US instead–which ended with me apologizing for negativity.

I then took Oleg on a brief tour of some of the sites in St. Louis, notably Forest Park.  Hopefully he’s now boarding his flight back home.

All in all, an enjoyable morning.  One amusing moment came when he asked me about how my blog came to be named “Streetwise Professor.”  I told him that it derived from a combination of (a) the fact that “the Street” refers to the financial markets that I had originally intended to blog about exclusively, (b) the fact that I’m a professor, and (c) my punk rock inclinations.  He smiled and said that he liked the title because it makes him think of street protests.

It was a privilege to meet Oleg, and I wish him Godspeed.  I look forward to seeing him again soon, perhaps in Texas this spring.

The unsavory reputations of Russian “investors” continue to impede their ability to make deals outside their own commercial cesspools (H/T MJ):

The U.S. Government participated in stopping General Motors from selling Saab to a Dutch automaker in December due to possible involvement in the deal by the Russian Mafia, a Swedish media outlet is reporting.

According to the Dagens Industri newspaper, the Swedish government asked its security force, the Sapo, to investigate the financial affairs of the Convers Group, a Russian investment group owned by the family of billionaire Alexander Antonov that was one of the major shareholders of Spyker when the Dutch automaker made the offer to buy Saab in December. That investigation reportedly turned up a “strong suspicion” of ties between the Antonovs and organized crime, information that was passed on to the FBI. The report goes on to say the the board of General Motors was then contacted by the U.S. Government and told to stop the sale.

Supposedly, the workaround was for Spyker’s founder to “assume ownership” of the Antonov/Convers stake.  It was originally reported that GM’s reluctance related to IP issues (as was ostensibly the case with Opel).  But, apparently IP is code for “infamous persons” rather than “intellectual property.”

A Spyker spokesman issued a hissy-fit denial, but GM’s Planning VP lent credence to the story: “as part of finding a sustainable solution for Saab, we are happy with the structures of the company that [founder] Victor Muller has put in place for Saab Spyker and I’ll just leave it at that.”  If you can’t say anything nice . . .

More rampant Russophobia, no doubt.  Wonder why that is?

I think this calls for a little Joan Jett, don’t you?  And Marky & Dee Dee Ramone & Joan Jett too.

Henry Paulson’s new book alleges that Russia attempted to convince China to join it in selling large quantities of Fannie Mae and Freddie Mac (government supported entity, or GSE) bonds in order to force the US government to prop up the GSEs:

Russian officials had made a top-level approach to the Chinese, suggesting that together they might sell big chunks of their GSE holdings to force the US to use its emergency authorities to prop up these companies,” he said.

. . . .

“The Chinese had declined to go along with the disruptive scheme, but the report was deeply troubling,” he said. A senior Russian official told the Financial Times that he could not comment on the allegation.

Bloomberg has more:

Paulson learned of the “disruptive scheme” while attending the Beijing Summer Olympics, according to his memoir, “On The Brink.”

The Russians made a “top-level approach” to the Chinese “that together they might sell big chunks of their GSE holdings to force the U.S. to use its emergency authorities to prop up these companies,” Paulson said, referring to the acronym for government sponsored entities. The Chinese declined, he said.

Russia’s five-day war with U.S. ally Georgia started on Aug. 8, the same day as the opening ceremonies of the Beijing Games. Prime Minister Vladimir Putin told U.S. President George W. Bush during those ceremonies that “war has started,” according to Dmitry Peskov, Putin’s spokesman.

“The report was deeply troubling — heavy selling could create a sudden loss of confidence in the GSEs and shake the capital markets,” Paulson wrote. “I waited till I was back home and in a secure environment to inform the president.”

Putin spokesman Peskov denies the allegation:

Russia never approached China about dumping U.S. bonds, Peskov said today. “This is not the case,” he said by phone.

Note that Peskov is quoted in Bloomberg as a source of information about Putin telling Bush that war had begun; he is not necessarily a definitive source about this other allegation.  Note further that the FT could not get official comment one way or the other.

This occurred about a month before the Feds seized the GSEs, and 5-6 weeks before it all hit the fan in mid-September.  Although there were clouds on the horizon in the late-summer of 2008, there was little to suggest the severity of the impending tempest.  Thus, the Russians should be congratulated for their perspicacity.  I wonder what information led them to this conclusion, and how they obtained it.  (Although, their foresight was not perfect.  Even though the Russian market had already begun to show serious cracks post-Mechel and with the onset of the Russo-Georgian War, the official attitude was that Russia was becoming an economic juggernaut that was immune from adverse economic shocks from abroad.  Not exactly, as events proved.)

Of course, there is a single source for this allegation–Paulson–and he doesn’t provide any real detail as to how he came to know of this gambit, or what information led him to this conclusion.

That said, it is eminently believable.  Combine mercenary motives with the Putinists’ raging complexes and resentments of the US, and their desire to knock America down a few pegs, and to that add the “I wish my neighbor’s cow would die” element of the Russian character, and you can easily see this happening.

If it did happen, it says a lot about the Russian M.O. Clearly, Russia had 65.6 billion reasons to be concerned about Fannie and Freddie.  Moreover, they were rightly anxious about the financial condition of the GSEs, and the potential for a substantial loss in the value of their investment.  But, if Paulson is right, rather than behaving in a constructive and forthright way, Russia instead acted the manipulative gangster, and attempted to play Machiavellian Great Games and score geopolitical points.

Such attitudes should be kept in mind when dreaming about resets, and negotiating arms control agreements, Afghanistan logistics arrangements, and actions against Iran.

Most IPOs “pop” on their first day of trading.  Their prices typically rise, and often by a lot, above the offering price.  The pops tend to be bigger on less developed markets.

Daring to be different, Oleg Deripaska’s Rusal had a negative pop.  Indeed, it was down 10.6 percent below the offering price.  Now, some of this can be attributed to the fact that the Chinese market has been trending down, and went down between the pricing date and the first trading date.  The Chinese aluminum firm Chalco went down 9.7 percent between the day that the Rusal issue was priced, and the first trading day.

But however you measure it, Rusal was a big underperformer, relative to typical IPOs.

In some sense this isn’t a surprise.  UralSib’s Chris Weafer suggested the issue was as much as 50 percent overpriced.

So why did the issue sell out when it was arguably overpriced?  Well, one possibility is that this was a combination of a state bailout of Deripaska/Rusal, and a debt restructuring.  Russian state owned bank VEB took about a third of the issue, and Sberbank and VTB, also Russian state banks took down pieces as well (though I haven’t been able to find out how much).  Moreover, participation was limited by the HKSE to big institutional investors, including many banks who had lent Rusal a large amount of money, some of which was to be repaid with IPO proceeds.  Overpaying by the state banks would effectively provide state support for Rusal.  Overpaying by those who had lent Rusal money, who were then paid for their debt using the IPO proceeds, would be a backdoor way of making the banks take a haircut on the debt.

Given that this whole IPO was pushed by the banks as a way of reducing their exposure to Rusal, overpaying 10 percent for the equity can reasonably be seen as a small price t0 pay to take a few pieces out of the Rusal albatross hanging around their necks.

This is a black eye for the Hong Kong Stock Exchange, though.  The negative pop is just the culmination of a very ugly, ugly process.  I don’t know if there’s soap strong enough to wash the Deripaska/Rusal stench from the HKSE.

Not that they weren’t warned, and not that they should have needed a warning to know.  Deripaska is P-O-I-S-O-N.

ExxonMobil is at loggerheads with the Russian government over the Sakhalin I project.  The issue is the one that eventually spelled Shell’s doom in Sakhalin II: development costs under the production sharing agreement (PSA):

The government rejected a proposal by ExxonMobil, the world’s largest company by market value, to invest $3.5 billion this year in the Sakhalin offshore fields, putting the oil producer’s plans at risk again, Sakhalin Governor Alexander Khoroshavin said Thursday.

Higher expenses in production sharing agreements — such as Sakhalin-1, which is operated by an Exxon-led consortium — would delay the government in receiving its share of revenues until the companies that develop fields recoup their investment.

“We believe it is an inflated amount,” Khoroshavin told reporters after a Cabinet session Thursday that discussed unrelated issues. “The consortium can’t substantiate it for us, this $3.5 billion.”

Exxon said it had to suspend work on a Sakhalin field for several weeks at the start of last year as it argued with the government about the 2009 investment budget for the project that it co-owns with Rosneft, Japan’s Sodeco and India’s ONGK Videsh. The consortium has been producing oil at a field off Sakhalin for a few years and is investing in another field.

An ExxonMobil spokesman said the company was working to respond to the government’s concerns and hoped to return to discussions on the matter in the spring.

Khoroshavin said Exxon would submit a revised spending plan to the government in March.

This negotiation takes place, of course, in the shadow of Gazprom, which needs the Sakhalin gas to meet its own commitments, and to achieve its ambitions to control the supply of gas to China:

The spending dispute has been recurring as Gazprom seeks to buy all future gas from Sakhalin-1 to prevent it from flowing to China, which would create competition for Gazprom’s own plans to sell gas on that market. Exxon has said the project would sell gas to the highest bidder.

Gazprom also needs the Sakhalin-1 gas to fill a pipeline that it is constructing from the island to Vladivostok to supply clean fuel in time for the Asia-Pacific Economic Cooperation forum in the port city in 2012.

“Much will depend on Sakhalin-1, that is, whether Gazprom can buy their gas for the pipeline,” Khoroshavin said, referring to the prospect of fully loading the pipeline by 2012.

ExxonMobil currently has the right to market the gas itself, an exception from Gazprom’s gas export monopoly that grates on the Russian behemoth.  Given these circumstances, there is good reason to be suspicious of these standoffs.  They are quite likely pretexts to holdup XOM, and wrest control of Sakhalin I gas.  Given the experience of Shell, it is hard to imagine that a canny company like XOM would inflate costs, knowing that this would give Putin the perfect excuse to crank up the “these unfair PSAs were negotiated when Russia was on its knees and now we’re standing tall and will take back what’s ours” rhetoric.  That may be coming regardless, but Exxon has every incentive not to provide Putin any ammunition.

This isn’t over.  It’s almost certain that the pressure will intensify, especially as the 2012 APEC date approaches, and Gazprom becomes more desperate for gas to cover its own falling production.

Hasn’t been anything major coming out of Russia that justified a post, but I’ve collected a few items that warrant some comment.

• The FSB first banned Oleg Kozlovsky from leaving Russia, then reversed itself after its action unleashed a storm of international protest.  Further evidence of the retrograde nature of Putinism, but an illustration of the difficulties of reverting to a full-blown police state when there are some channels of communication outside of the government’s control.  All the more evidence of the vital importance of keeping the internet independent in Russia–which, of course, will also serve as a spur to the authorities to strangle it.
• Russia announced that it would hold some of its currency reserves in Canadian dollars.  Although the desire to diversify is understandable, and there is no doubt a political component to this (given Russia’s strident rhetoric against the dollar), the choice of the $C is, well, a little loony.  (Sorry.  Couldn’t resist.)  Russia will most likely want to draw down on its reserves in response to a sharp decline in energy and other resource prices.  But those conditions will be adverse for the $C, meaning that $C assets will provide bad payoffs in the states when they are most needed, and good payoffs when they are least needed.  That’s a very poor investment strategy.
• Putin issued a ukase approving the reopening of a Deripaska-owned paper mill on Lake Baikal that will dump toxins into the world’s largest source of fresh water.  This disgusting outcome is, in large part, a manifestation of the Russian monogorod problem, as such a town is dependent on the mill.  This is a tragedy, and moreover, an illustration of the intellectual bankruptcy of the Russian government.  The monogrod problem is serious, and not going away.  It should be a priority issue, and is a ticking political time bomb. The mill was the major employer in the 17K town of Baikalsk, and supplies its heat.  Rather than viewing this as a perfect opportunity to come up with a new approach to monogords, the government just lurches along, zombie like, perpetuating the dead past.  The fact that this is also a sop to Deripaska makes the whole episode even more disgusting.  I guess all the Pikalyovo pen throwing is behind them now; that piece of theater has served its purpose, and Deripaska is back in Putin’s good graces.  One only wonders just what he’s done to get there, and what he’s doing to remain there.
• Russia eked out a population increase of 15K-25K in 2009, due to a combination of higher birth rates, lower death rates, and immigration.  Absent immigration, population would have declined, but the changes in the birth and death rates are good news for Russia.  The question is whether this is a temporary abatement in an inexorable decline, or a harbinger of a brighter demographic picture.  For a case of the former view, see this: “Anatoly Vishnevsky, director of the Moscow Institute of Demography, says, this year’s figure reflects a conjunction of positive developments that will not last and that within five years, Russia will again see its population fall, unless Russian can attract and are prepared to accept more immigrants.”  Vishnevsky also states that the country is on the “edge of a demographic abyss.”  For a more optimistic view, see, AK’s/SO’s/whateverhescallinghimselfthesedays’ extended post.
• Russia fired the head of its Ground Forces, and the commander of the North Caucasus Military District.  The commander of the 58th Army, which was the main force in the Russo-Georgian War is apparently also at risk of being sacked.  Predictably, Russia gave a risible official reason for the firings, claiming the two generals had reached the age limit for service–even though neither had, as anybody with access to their biographies would know.  Unofficially, it is rumored that the men were sacked for corruption, but that would be at most a pretext, for virtually everyone in the military or the Defense Ministry could be fired for corruption.  It is more likely that the terminations reflect intense dissatisfaction with the performance of the Russian military during the war with Georgia.  All the chest thumping about that glorious feat of arms evidently does not comport with reality, by a long shot.

Further my post on the Gromov-Rogozin agitprop published courtesy of the NYT, here are a couple of items of direct relevance to my argument.

First, re civilian casualties, the UN–yes, the UN–clearly places blame for the vast bulk of the civilian casualties there on the Taliban:

KABUL, Afghanistan — Last year was the most lethal for Afghan civilians since the American-led war began here in late 2001, with theTaliban and other insurgent groups causing the vast majority of noncombatant deaths, according to a United Nations survey released Wednesday.

The report said 2,412 civilians were killed in 2009, a jump of 14 percent over the previous year. Another 3,566 were wounded.

The growing number of civilian deaths reflects the intensification of the Afghan war over the same period: American and NATO combat deaths jumped to 520 last year, from 295, and the Taliban are more active than at any point in the past eight years.

But the most striking aspect of the report was the shift in responsibility for the deaths of Afghan civilians. The survey found that the Taliban and other insurgents killed more than twice the number of civilians as the American-led coalition and Afghan government forces did last year, mostly by suicide bombings, homemade bombs and executions.

The 1,630 civilians killed by insurgents — two-thirds of the total — represented a 40 percent increase over the previous year.

By contrast, the number of civilians killed by the NATO- and American-led coalition and Afghan government forces in 2009 fell 28 percent, to 596, about a quarter of the total number. The cause of the 186 other deaths could not be determined.

The report attributed the drop to measures taken by the American-led coalition to reduce the danger to civilians. Since taking over in June as commander of American and NATO forces in Afghanistan, Gen. Stanley A. McChrystal has issued several directives aimed at winning over the Afghan population, sometimes at the cost of forgoing attacks on Taliban fighters.

Principal among these directives was the tightening of the rules governing airstrikes, the main cause of civilian fatalities caused by the American and other NATO forces.

Under the new rules, coalition forces caught in a firefight with insurgents may not order an airstrike on a house in a residential area unless they are in danger of being overrun. In the past, airstrikes carried out in the heat of battle in residential areas accounted for several widely publicized episodes of civilian deaths.

I would also note that the total number of civilian deaths, though obviously tragic, is low compared to the numbers in comparable conflicts.  Moreover, a goodly number of the deaths blamed on US/NATO forces were due to Taliban use of civilians as shields.

And re the Gromov-Rogozin slur about the cowardly Americans fighting from the air, as opposed to the brave Soviets who fought face-to-face, this from StrategyPage:

It’s not by chance, but because of better equipment, weapons, tactics and leadership. The lower casualty rate makes troops bolder, less stressed, and more effective. The older Taliban, with experience fighting the Russians in the 1980s, noted this early on, and warned their young associates to be careful when fighting the American and NATO troops. These new foreigners are much more aggressive, and dangerous, than the Russians (who were mostly poorly trained conscripts). The Taliban old timers remember that the Russians had some aggressive, and effective, troops in the form of Spetsnaz commandos and paratroopers. There weren’t many of them, but with the Americans, everyone seems to be a commando. So the Taliban rely more on roadside bombs and mines. And the Americans come right after the people who make and employ this new weapon. Some Taliban are getting discouraged by all this. Especially with the Pakistani Taliban getting hammered by the Pakistani Army. It wasn’t this way back in the 1980s, when the Russians were lousy fighters, and safe base camps in Pakistan were full of rich Arabs giving out equipment, weapons and cash. These days, there’s no safe haven, and you have to protect drug dealers in order to make the payroll or buy new gear. Worse, most Afghans hate the Taliban. The good old days are really gone, and more Taliban are just giving it up.

The Taliban also know that more American troops are on the way. The American tactics of spreading these new troops out, in territory the Taliban thought they controlled, has worked. The Taliban are searching for new ideas, because without much support from the population, and an enemy you cannot defeat in combat, the prospects don’t look so good. Thus the Taliban are increasing their Information War efforts, by planting more atrocity stories (some invented, some taking actual incidents and altering them). This obviously works. While the Taliban kill five times as many civilians as government and foreign troops, most of the media coverage is of Afghans killed by foreigners. [Emphasis added.]

I’m sure you’ve read about Putin and/or Medvedev reacting with high dudgeon to Ukrainian failures to pay for gas in full and on time.  Oh, the lectures they can give.  The moral outrage!  How dare they not pay what they owe!  The nerve!  The idea!

Keep that image in mind when you read this:

Poland and Russia have yet to sign a gas delivery deal for 2010 due to Gazprom owing Warsaw around 410 million dollars.

Poland still has not signed a deal on gas supplies with Russian energy giant Gazprom, which should have been agreed at the end of last year. Poland is delaying the signing because the Russian company owes it over one billion zloty (410 million dollars).

Gazprom’s debt of 350 million dollars results from paying lower tariffs for gas transit in Poland as required by the Energy Regulatory Office. Additional 60 million dollars debt results from not delivering gas to Poland by Gazprom’s middleman company RosUkrEnergo in 2008. Later, the Russian gas giant took over the company’s debt.

As for now, Gazprom is willing to sign a new agreement on condition that Poland will cancel a part of its debt. The Polish gas company EuRoPol Gaz, however, does not want to make concessions, claiming that it would violate Polish law.

Just another example of the for-thee-not-for-me Russian commercial mentality, as if we needed another.  (The Producers episode in which Gazprom cut off gas imports from Turkmenistan, causing a pipeline blowup rather than meet its take-or-pay obligations is another great example.)  Keep that in mind the next time you hear Putin or Sechin or Medvedev or anybody in the Russian government caterwauling about somebody being a deadbeat.

Moscow Region Governor Boris Gromov and the Russian Federation’s Ambassador to NATO Dmitry Rogozin published an oped in the NYT today.  It is a farrago of tendentious falsehoods.  Not that one should be surprised, considering the source.

A few of the lowlights:

• Gromov and Rogozin state that the Soviet army “accomplished its tasks” and did not make “a shameful escape accompanied by the hooting of the mjahadeen.”  They further state that this was “unlike the US in Viet Nam,” thereby insinuating that the US (a) did not accomplish its tasks, and (b) fled, tail between its legs, with the hoots of the NVA ringing it its ears.  False.  No, I let me rephrase that.  BULLSHIT.  That’s better.  Fact: virtually all US troops had withdrawn from Viet Nam by 1973, having accomplished its tasks far better than the Soviet Army did, having destroyed the Viet Cong in Tet in 1968 and secured a far more stable situation on the ground throughout South Viet Nam than the Soviets ever did in Afghanistan.  Indeed, most US ground troops were gone by 1972, and the ARVN defeated the NVA’s Eastertide Offensive with virtually no US ground support, but with considerable help from US airpower.  Airpower that Congress prevented the US from using when the NVA attacked again in 1975.  If GR are interested in some, you know, real history, I suggest Lewis Sorley’s A Better War.  (Instead of doing bongs with Oliver Stone, which appears to be how they learned their Viet Nam War history.)
• They state that the Soviet army fought “against the fathers of today’s Taliban militants face-to-face, whereas Western armies prefer to fight from the air.”  Facts: (a) the Soviets employed airpower extensively (indeed, the tide turned primarily because the provision of Stinger AA missiles sharply limited the Soviet ability to use airpower, especially helicopters), (b) the US military (and other NATO forces, especially the British, Australians, Canadians, and French) have gone “face-to-face” against the Taliban, drug lords, Al Qaeda elements, etc., on numerous occasions.
• RG shed crocodile tears for Afghan civilians, blaming the NATO/American reliance on airpower for “tragic mistakes that kill and wound civilians” and “the suffering of civilians.”  No mention of civilian casualties resulting from Soviet action.  Facts: (a) yes, there are tragic mistakes, but they are just that, mistakes, (b) the US/NATO rely heavily on precision munitions and have restrictive rules of engagement that sharply reduce civilian death tolls, (c) the Soviets did not use precision munitions, employed airpower and artillery indiscriminately, and did not have restrictive rules of engagement, thereby killing large numbers of civilians.  Not to mention that the USSR and its Afghan allies employed mines promiscuously, resulting in massive human carnage, especially among children, whereas US/NATO forces do not.  The mines continued to kill long after the last Soviet soldier turned his back on Afghanistan.  There is no doubt that the Soviets inflicted far more casualties on civilians than has US/NATO.  If you want an indication of the effects of the two wars on civilians, look at the flow of humanity: refugees left in droves during the Soviet invasion, and returned in droves after the US routed the Taliban.  There has been no mass exodus since the US invaded in October, 2001.
• Gromov and Rogozin break their arms patting themselves on the back for the Soviet’s being “the first to defend Western civilization against the attacks of Muslim fanatics.”  In fact, the initial Soviet invasion had nothing to do with “Muslim fanatics.”  If anything, the Soviet invasion catalyzed Muslim fanaticism, and its militarization–admittedly with the assistance of the US in the 1980s.  But no Soviet invasion, and that wouldn’t have happened either.  To portray the Soviet invasion as some sort of attack against Islamic fanaticism on behalf of the Western world (a sort of reprise of the meme in which Russia saved the West by absorbing the attention of the Mongols and bearing the Tatar Yoke) is a sick joke.  It was a Cold War power play, pure and simple.
• They claim that Russia is “ready to help NATO implement its UN Security Council Mandate in Afghanistan” and insist that NATO troops stay in the country “until the necessary conditions are provided to establish stable local authorities.”  Help, my foot.  Is a sincere desire to help NATO why Russia tried to bribe Kyrgyzstan to deny NATO the use of the Manas Airbase that it used to supply the Afghan mission?  Russian logistical assistance for the NATO mission has been niggardly, slow–and sold in an extremely mercenary fashion.  (I’m sure the latter is a big surprise to y’all.)

I could go on, but I’ll do my blood pressure a favor.

The post title is something of an exaggeration, because there are, in fact, two true sentences in this screed: “withdrawl without victory might cause a political collapse in Western security structures.  This troubles Russia far less than the consequences for the region itself.”  I’ll bet.

I understand that this is an oped, by high officials of a member of the UN Security Council.  But doesn’t the NYT have any standards whatsoever?  Will they publish anything, no matter how flagrantly false, as long as it is penned by government officials?  This piece is as outrageous as one would expect from Kim Jong Il or Hugo Chavez–or Soviet propagandists.  Which is revealing in its own way.