By John Helmer, Moscow

The International Monetary Fund’s senior officials have known that Stepan Kubiv, Governor of the National Bank of Ukraine, was removed six years ago for his involvement in a massive bank loss and loan diversion, when Kubiv was in charge of Kredobank, a west Ukrainian bank owned by PKO Bank Polski, the leading bank of Poland. The affair cost Bank Polski at least $350 million in 2008 and 2009. Another $144 million was provided by Bank Polski to save Kredobank from insolvency. At the time, Kubiv’s management performance led to his replacement by the chief executive of Bank Polski, Jerzy Pruski. The bank scandal was discussed officially, Bank Polski has reported, with the National Bank of Ukraine (NBU) and with the Central Bank of Poland.

The Kubiv dossier resurfaced in Warsaw after February 24, when Kubiv was named by the new Ukrainian Government to head the National Bank of Ukraine (NBU). In that role, Kubiv has been identified by the head of the IMF Ukraine Mission, Nikolay Gueorguiev, as the key Ukrainian official, under President Petro Poroshenko, who will decide what audits will be conducted of Ukraine’s commercial banks, and how much IMF money will be requested to bail them out.
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by John Helmer - Monday, June 9th, 2014
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By John Helmer, Moscow

Last year Russia’s six major steelmakers cut 33,500 jobs from their payrolls, because, they explain, they are struggling to reduce losses and cut bank debt. That amounted to a loss of almost one in ten jobs in the Russian steel sector. At the end of 2013, the headcount of steelworkers was 355,900, down 9.4% from 2012.

Government officials and sector analysts acknowledge that five years ago during the collapse in steel trade in the last months of 2008 and first half of 2009, such a job cull would have been impossible because the Kremlin warned the mill proprietors against mass layoffs. Magnitogorsk Metallurgical Combine (MMK) announced it was reducing its steel output by 15% in October 2009 after earlier claiming the cutback would be 25%. Alexander Mastruev, head of personnel at MMK, said at the time: “It is not necessary to dramatise the situation, and to panic.” MMK was considering a furlough of employees, not dismissal and job cuts, he added. At Mechel, it was claimed at the time there was no plan to review production plans “for now” but the length of the working day might be cut. According to Mechel, “we are making all effort to save all working places and our employees.”
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by John Helmer - Monday, June 9th, 2014
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By John Helmer, Moscow

The International Monetary Fund (IMF) is preparing to release Privatbank, the largest commercial bank in Ukraine, from independent tests of its solvency and capital adequacy, and allow a bailout of the bank with Ukrainian public funds, backed by the IMF. The Ukraine mission of the IMF has also revealed this week that it is allowing Igor Kolomoisky (image above), the control shareholder of Privatbank, to direct his own audit and stress test of the bank. This is despite independent evidence of large related-party lending in which the bank has been engaged; and despite judgements recently issued in the UK courts that Kolomoisky presents evidence that is “false or materially incorrect.”

The bank, headquartered in the Dniepropetrovsk region of eastern Ukraine, is rated E, according to Moody’s Investors Service, the worst of its ratings for “Ownership and Organizational Complexity, Key Man Risk [and] Insider and Related-Party Risks”. Kolomoisky has been the governor of the Dniepropetrovsk region since March 2, when he was appointed by the new government in Kiev. The record of his attacks on Russia, and on President Vladimir Putin, can be read here.
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by John Helmer - Friday, June 6th, 2014
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By John Helmer, Moscow

Nudelman is the real name of Victoria Nuland, co-author of the February 21 coup d’etat in Kiev; and author of the four-letter expletive by which she disposed, almost, of Germany’s objections to the war against Russia which has followed.

In Yiddish, Nudelman is generally thought to refer to the culinary trade of making “lokshen”, the Yiddish form that’s closer to the Russian лапша than to the German “nudel”. It’s also related to the verb “nudyen”, which means to whine, nag, or push. The Yiddish “nudzh”, Polish “nudzik”, and the pseudo-Russian “nudnik” are related too. They mean a pestering bore — or a boring pesterer, depending on what she whines about. In the history of the Nudelman family, the name change was initiated by Shepsel Ber Nudelman (Sherwin B. Nuland, Victoria’s father), before he got to study at Yale University. Sherwin’s autobiography reveals his father, Victoria’s grandfather, to have been a “nudzh” with syphilitic symptoms. That autobiography also introduces the Nudelman habit of saying “Fuck you” at moments of disagreement with others. When Sherwin reports saying it on page 8 of his life, “my sea of troubles had receded”. When his daughter said it this past February, the sea of troubles became a tsunami. That is, if you are Ukrainian, Russian, European.
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by John Helmer - Tuesday, June 3rd, 2014
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By John Helmer, Moscow

Stealth warfare against the Russian economy may be encouraging capital outflows, but for Russians on the home front, glasses are still being raised with a growing volume of sparkling wine or champagne going down the hatch. Abrau-Durso, the only Russian winemaker listed on a public stock exchange, is also going up, and like the bubbles, defying threats from Washington.

Even if falling consumer incomes and worsening economic prospects threaten the rate of growth in Russian consumption, Russia is “still the most promising country in the world for the consumption of wine products,” declares Vadim Drobiz, director of the Centre for Research on Federal and Regional Markets for Alcohol (TsIFRRA) in Moscow. “This remains the fact even if the entire world is tired of wine, and economic crisis is pushing down on consumption. Seventy years ago, in France, Italy, Spain, Portugal, Argentina, and Chile annual wine consumption was between 120 and 150 litres per capita. Now they drink 40 litres. In principle, this decline will continue, as wine is replaced by beer and strong alcohol. In 1985 in Russia, we consumed 21 litres, but now 4.5. We’ve declined by almost five times over the 25 years. Although the figures have been even lower: in 1995 the consumption was 3 litres of wine per capita. So we are improving since then.”
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by John Helmer - Monday, June 2nd, 2014
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By John Helmer, Moscow

The US Navy’s current Russia containment tactic in the Black Sea has been unable to negotiate refuelling from naval or civilian fuel tankers while under way at sea, and requires port calls for fuel every seven days. The Navy has announced that its missile cruiser, USS Vella Gulf, put into the Bulgarian port of Varna on May 30. The vessel entered the Black Sea, 180 nautical miles to the south, on May 23. The illustration from the bridge of the Vella Gulf as it approached Varna is a US Navy photograph by Mass Communication Specialist 3rd Class Edward Guttierrez III For the delay of the Vella Gulf in reaching the Black Sea, click.

According to the US Navy press release, Vella Gulf’s presence in Bulgaria reaffirms the United States’ commitment to strengthening ties with NATO allies and partners, while working toward mutual goals of promoting peace and stability in the region. While in Bulgaria, the Navy says the Vella Gulf crew will participate “in community relations events at the Bulgarian Naval Academy and a local orphanage, visit the Bulgarian Naval Museum and tour the historic city of Varna.”
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by John Helmer - Sunday, June 1st, 2014
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by John Helmer - Thursday, May 29th, 2014
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By John Helmer, Moscow

There has long been a fear on the Russian side that South Africa will sell as much platinum and palladium as it can mine, threatening the market price of both metals, and leaving Russia holding very large, very secret stocks of dwindling value. From the Russian point of view, that’s not a unilateral sacrifice Russia should accept; nor a unilateral advantage South Africa should be allowed to take.

Together, Russia and South Africa (SA) produce almost 90% of the world’s platinum supply (5.7 million ounces); 80% of the palladium supply (6.4 million oz). So there has been a natural inclination for the principal producers – Norilsk Nickel in Russia; Anglo Platinum, Impala, Lonmin and Northam in South Africa – to test the scope for price-supportive cooperation in the market, instead of price-damaging competition. The Russian and South African governments have naturally inclined in the same direction.
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by John Helmer - Thursday, May 29th, 2014
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By John Helmer, Moscow

Radoslaw Sikorski (Radek for short) commenced his campaign to be elected High Representative for Foreign Affairs and Security Policy for the European Union in 2009. For openers, he engaged an American graduate student to pronounce him “a strong contender for the position”, “steely-eyed”, and “a dark horse candidate”. Five years is a long time in politics, and in the meantime Sikorski’s campaign to be elected NATO secretary-general, replacing the Dane, Anders Fogh Rasmussen, was lost.

From the jaws of this defeat Sikorski has now engaged the deputy editor of the Financial Times, John Thornhill, to promote Sikorski as a runner for Catherine Ashton’s post as the current High Representative (aka foreign minister). According to Thornhill’s promo, published on May 24, Sikorski has suffered so much for his all-European convictions recently, he now has “a slight tic under his right eye”.
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by John Helmer - Monday, May 26th, 2014
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By John Helmer, Moscow

Russian Customs reports this week that imports of steel pipes from Ukraine have dropped by 50% or more, compared to 2013. Steel industry sources in Moscow are predicting the Russian market may have closed to Ukrainian steelmakers, as Gazprom and Rosneft, the largest buyers of pipes, are directed by the Kremlin to buy instead from domestic pipemills.

By contrast, Interpipe, based in Dniepropetrovsk and owned by Victor Pinchuk (image), is reporting that within two years it expects the current conflict to have blown over. Sales to the Russian market, Pinchuk’s principal income-earner, will recover to the tonnage and revenue levels the company was achieving before July of 2013, according to the latest Interpipe forecast. That is when the Kremlin halted favourable import-quota arrangements for Ukrainian pipes, and imposed penalty import duties. Interpipe was already loss-making before the Russian market began to close. The year-end loss for 2013 has not yet been released by Interpipe. Counting both operating losses and writedowns of asset value, industry analysts and traders say this week the loss figure is between $100 and $200 million. “A perfect storm” is the way Interpipe is describing its financial situation to creditors.
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by John Helmer - Thursday, May 22nd, 2014
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