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Russia and Japan just became friends

Summit meetings between Russian President Putin and Japanese and South Korean leaders promise rapid warming of relations as Russia’s Asian pivot bears fruit.

Alexander Mercouris

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Whilst Russia’s relations with the US and Europe remain fraught, Russia’s relations with the three Far Eastern giants – China, Japan and South Korea – are moving rapidly from “very good” to “even better”.

Whilst US President Obama’s arrival at the G20 summit in Hangzhou in China was fraught with scandal, the Chinese have made clear they consider Russia’s President Putin to be the guest of honour.  This is of course consistent with the reality of the Russian-Chinese alliance (or “grand strategic partnership”), which it is clear is becoming underpinned by increasingly friendly personal relations between Putin and China’s President Xi Jinping.

If Putin’s triumphant reception in Hangzhou was to some extent predictable, of possibly greater annoyance to Washington is the enthusiasm for better ties with Russia of the US’s two key Far Eastern allies, Japan and South Korea.

Both Japanese Prime Minister Shinzo Abe and South Korean President Park Geun-hye attended Russia’s Eastern Economic Forum in Russia’s Pacific port city of Vladivostok.  Both had very friendly meetings with Putin during which they discussed the full range of their relations.  Both spoke enthusiastically of the future of their countries’ relations with Russia.

There are practical reasons why the Japanese and South Korean leaders would see stronger relations with Russia. 

Firstly there are the obvious economic benefits, with Russia possibly becoming an important future provider of energy and raw materials to these countries, and a possible market for their goods.  Looking further ahead, with its highly educated and well-disciplined workforce, its considerable industrial base, its traditionally very strong scientific base, and its very low and very competitive cost structure, Russia is an obvious partner in future industrial projects.

Shinzo Abe at the Forum talked about all this in almost rhapsodic terms, floating once more the possibility of a Peace Treaty between Japan and Russia

“Let us make the Far East Russia region a base for exports to Asia and the Pacific region while raising productivity by moving forward with the diversification of Russian industries…..

Let us meet once a year in Vladivostok to confirm with each other the state of progress of these eight points….

I cannot help but say that it is an unnatural state of affairs that the important neighbours of Russia and Japan, which surely have unlimited potential, have to this day not yet concluded a peace treaty.  Putting an end to the unnatural state of affairs that has continued these 70 years, shall we not together carve out a new era for Japan and Russia going forward?

Vladimir, in order to carve out towards the future bilateral relations overflowing with unlimited potential, I am resolved to putting forth all my strength to advance the relationship between Japan and Russia, together with you”.

The “eight points” Abe was referring to was an eight-point economic cooperation plan focused on development of Russia’s Far East region, which Abe presented to Putin at a summit meeting the two men held in May.

The Peace Treaty to which Abe was referring to is a vexed issue between Russia and Japan which has persisted since the 1950s. 

As a result of the Second World War Russia gained control of a number of islands in the Kuril archipelago which are claimed by Japan.  Japan has made a condition for a Peace Treaty between Russia and Japan – ending the state of hostility which has in theory existed between these two countries since the Second World War – the return of these islands to Japan.  In the 1950s Russia (or to be more precise the USSR) offered to return the two southerly islands to Japan, an offer which Japan came close to accepting.  However Japan eventually rejected the offer under US pressure, causing the dispute to continue ever since.

Russia has made it repeatedly clear that it is not prepared to return the islands to Japan in return for a Peace Treaty.  In an interview with Bloomberg given shortly before the meeting with Abe Putin again made that clear

We do not trade territories although concluding a peace treaty with Japan is certainly a key issue and we would like to find a solution to this problem together with our Japanese friends.”

(Bold italics added)

Putin undoubtedly knows that returning the islands to Japan is unacceptable to Russian public opinion.  In 1992 Russia’s then President Yeltsin was forced to call off at the last moment a planned trip to Japan because of public outrage and fears that just a year after the USSR broke up he was preparing to hand the islands over to Japan.  There is no evidence Russian popular feeling on this issue has moderated since then.  In addition the islands are strategically important to Russia since they guard entry points to the Sea of Okhotsk, an assembly and patrol area of Russian strategic nuclear submarines that form part of Russia’s Pacific Fleet.

By contrast both Putin and Abe know that despite noisy demands for the islands from Japanese nationalists, Japanese public opinion has long since written off the islands and is no long much exercised by this issue.

Whilst it is unlikely that Abe will drop the demand for the islands, and he must know that Putin is not going to give them up, his floating of the idea of the Peace Treaty, and the negotiations to achieve it which he has now restarted, is probably his way of putting the islands issue to one side as he and Japan forge closer ties with Russia.

Importantly Abe did not merely discuss closer economic relations with Putin.  He also sought stronger political and even military ties, apparently even agreeing exchanges between the two countries’ defence authorities and floating the idea – for the first time in their history – of joint drills by the two countries’ navies.  The latter would be something of huge symbolic significance for both countries given that this would be the first major contact between their navies since the Battle of Tsushima – an iconic event in the modern histories of both countries.

More prosaically but more practically, Abe apparently also proposed more talks between his senior national security adviser, Shotaro Yachi, who heads the secretariat of Japan’s National Security Council, and Nikolay Patrushev, secretary of Russia’s all-powerful Security Council.

Behind all the enthusiastic talk from Abe – and the equally enthusiastic talk from South Korean President Park Geun-hye – is the overwhelming reality of the rapid growth of Chinese power.  With both Japan and South Korea having fraught relations with China, it makes sense for both countries to develop good relations with China’s great ally Russia in order to obtain through Russia some influence and capacity to restrain Beijing. 

This is now becoming the increasing pattern across the whole Asia-Pacific region, with Russia seeking and accepting offers of good relations from an increasing number of countries falling under China’s shadow: India, Vietnam, South Korea and Japan.

The Russians for their part have shown great skill leveraging the advantage their undeclared alliance with China gives them to improve relations with these countries, including countries like South Korea and Japan that have never previously been their friends.

As for the Chinese, it is equally in their interest that a country close to them – Russia – should develop relations with countries that might otherwise all too easily simply become their enemies.

As for the US, as the farcical events surrounding Obama’s arrival at Hangzhou shows, it is increasingly being left out in the cold, looking on with frustration as Russia expands its links across Eastern Asia, and as its attempts to isolate Russia turn to dust.

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FBI recommended Michael Flynn not have lawyer present during interview, did not warn of false statement consequences

Flynn is scheduled to be sentenced on Dec. 18.

Washington Examiner

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Via The Washington Examiner…


Former FBI Deputy Director Andrew McCabe, who arranged the bureau’s interview with then-national security adviser Michael Flynn at the White House on Jan. 24, 2017 — the interview that ultimately led to Flynn’s guilty plea on one count of making false statements — suggested Flynn not have a lawyer present at the session, according to newly-filed court documents. In addition, FBI officials, along with the two agents who interviewed Flynn, decided specifically not to warn him that there would be penalties for making false statements because the agents wanted to ensure that Flynn was “relaxed” during the session.

The new information, drawn from McCabe’s account of events plus the FBI agents’ writeup of the interview — the so-called 302 report — is contained in a sentencing memo filed Tuesday by Flynn’s defense team.

Citing McCabe’s account, the sentencing memo says that shortly after noon on Jan. 24 — the fourth day of the new Trump administration — McCabe called Flynn on a secure phone in Flynn’s West Wing office. The two men discussed business briefly and then McCabe said that he “felt that we needed to have two of our agents sit down” with Flynn to discuss Flynn’s talks with Russian officials during the presidential transition.

McCabe, by his own account, urged Flynn to talk to the agents alone, without a lawyer present. “I explained that I thought the quickest way to get this done was to have a conversation between [Flynn] and the agents only,” McCabe wrote. “I further stated that if LTG Flynn wished to include anyone else in the meeting, like the White House counsel for instance, that I would need to involve the Department of Justice. [Flynn] stated that this would not be necessary and agreed to meet with the agents without any additional participants.”

Within two hours, the agents were in Flynn’s office. According to the 302 report quoted in the Flynn sentencing document, the agents said Flynn was “relaxed and jocular” and offered the agents “a little tour” of his part of the White House.

“The agents did not provide Gen. Flynn with a warning of the penalties for making a false statement under 18 U.S.C. 1001 before, during, or after the interview,” the Flynn memo says. According to the 302, before the interview, McCabe and other FBI officials “decided the agents would not warn Flynn that it was a crime to lie during an FBI interview because they wanted Flynn to be relaxed, and they were concerned that giving the warnings might adversely affect the rapport.”

The agents had, of course, seen transcripts of Flynn’s wiretapped conversations with Russian then-ambassador Sergey Kislyak. “Before the interview, FBI officials had also decided that if ‘Flynn said he did not remember something they knew he said, they would use the exact words Flynn used … to try to refresh his recollection. If Flynn still would not confirm what he said … they would not confront him or talk him through it,'” the Flynn memo says, citing the FBI 302.

“One of the agents reported that Gen. Flynn was ‘unguarded’ during the interview and ‘clearly saw the FBI agents as allies,'” the Flynn memo says, again citing the 302.

Later in the memo, Flynn’s lawyers argue that the FBI treated Flynn differently from two other Trump-Russia figures who have pleaded guilty to and been sentenced for making false statements. One of them, Alexander Van der Zwaan, “was represented by counsel during the interview; he was interviewed at a time when there was a publicly disclosed, full-bore investigation regarding Russian interference in the 2016 election; and he was given a warning that it is a federal crime to lie during the interview,” according to the memo. The other, George Papadopoulos, “was specifically notified of the seriousness of the investigation…was warned that lying to investigators was a ‘federal offense’…had time to reflect on his answers…and met with the FBI the following month for a further set of interviews, accompanied by his counsel, and did not correct his false statements.”

The message of the sentencing memo is clear: Flynn, his lawyers suggest, was surprised, rushed, not warned of the context or seriousness of the questioning, and discouraged from having a lawyer present.

That is all the sentencing document contains about the interview itself. In a footnote, Flynn’s lawyers noted that the government did not object to the quotations from the FBI 302 report.

In one striking detail, footnotes in the Flynn memo say the 302 report cited was dated Aug. 22, 2017 — nearly seven months after the Flynn interview. It is not clear why the report would be written so long after the interview itself.

The brief excerpts from the 302 used in the Flynn defense memo will likely spur more requests from Congress to see the original FBI documents. Both House and Senate investigating committees have demanded that the Justice Department allow them to see the Flynn 302, but have so far been refused.

In the memo, Flynn’s lawyers say that he made a “serious error in judgment” in the interview. Citing Flynn’s distinguished 30-plus year record of service in the U.S. Army, they ask the judge to go along with special counsel Robert Mueller’s recommendation that Flynn be spared any time in prison.

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Macron offers crumbs to protestors in bid to save his globalist agenda (Video)

The Duran Quick Take: Episode 36.

Alex Christoforou

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The Duran’s Alex Christoforou and Editor-in-Chief Alexander Mercouris take a quick look at French President Macron’s pathetic display of leadership as he offers protestors little in the way of concessions while at the same time promising to crack down hard on any and all citizens who resort to violence.

Meanwhile France’s economy is set for a deep recession as French output and production grinds to a halt.

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Via Zerohedge


As if Brussels didn’t have its hands full already with Italy and the UK, the European Union will soon be forced to rationalize why one of its favorite core members is allowed to pursue populist measures to blow out its budget deficit to ease domestic unrest while another is threatened with fines potentially amounting to billions of euros.

When blaming Russia failed to quell the widespread anger elicited by his policies, French President Emmanuel Macron tried to appease the increasingly violent “yellow vests” protesters who have sacked his capital city by offering massive tax cuts that could blow the French budget out beyond the 3% budget threshold outlined in the bloc’s fiscal rules.

Given the concessions recently offered by Italy’s populists, Macron’s couldn’t have picked a worse time to challenge the bloc’s fiscal conventions. As Bloomberg pointed out, these rules will almost certainly set the Continent’s second largest economy on a collision course with Brussels. To be clear, Macron’s offered cuts come with a price tag of about €11 billion according to Les Echos, and will leave the country with a budget gap of 3.5% of GDP in 2019, with one government official said the deficit may be higher than 3.6%.

By comparison, Italy’s initial projections put its deficit target at 2.4%, a number which Europe has repeatedly refused to consider.

Macron’s promises of fiscal stimulus – which come on top of his government’s decision to delay the planned gas-tax hikes that helped inspire the protests – were part of a broader ‘mea culpa’ offered by Macron in a speech Monday night, where he also planned to hike France’s minimum wage.

Of course, when Brussels inevitably objects, perhaps Macron could just show them this video of French police tossing a wheelchair-bound protester to the ground.

Already, the Italians are complaining.  Speaking on Tuesday, Italian cabinet undersecretary Giancarlo Giorgetti said Italy hasn’t breached the EU deficit limit. “I repeat that from the Italian government there is a reasonable approach, if there is one also from the EU a solution will be found.”

“France has several times breached the 3% deficit. Italy hasn’t done it. They are different situations. There are many indicators to assess.”

Still, as one Guardian columnist pointed out in an op-ed published Tuesday morning, the fact that the gilets jaunes (yellow vest) organizers managed to pressure Macron to cave and grant concessions after just 4 weeks of protests will only embolden them to push for even more radical demands: The collapse of the government of the supremely unpopular Macron.

Then again, with Brussels now facing certain accusations of hypocrisy, the fact that Macron was pressured into the exact same populist measures for which Italy has been slammed, the French fiasco raises the odds that Rome can pass any deficit measure it wants with the EU now forced to quietly look away even as it jawbones all the way from the bank (i.e., the German taxpayers).

“Macron’s spending will encourage Salvini and Di Maio,” said Giovanni Orsina, head of the School of Government at Rome’s Luiss-Guido Carli University. “Macron was supposed to be the spearhead of pro-European forces, if he himself is forced to challenge EU rules, Salvini and Di Maio will jump on that to push their contention that those rules are wrong.”

While we look forward to how Brussels will square this circle, markets are less excited.

Exhausted from lurching from one extreme to another following conflicting headlines, traders are already asking if “France is the new Italy.” The reason: the French OAT curve has bear steepened this morning with 10Y yields rising as much as ~6bp, with the Bund/OAT spread reaching the widest since May 2017 and the French presidential election. Though well below the peaks of last year, further widening would push the gap into levels reserved for heightened political risk.

As Bloomberg macro analyst Michael Read notes this morning, it’s hard to see a specific near-term trigger blowing out the Bund/OAT spread but the trend looks likely to slowly drift higher.

While Macron has to fight on both domestic and European fronts, he’ll need to keep peace at home to stay on top. Remember that we saw the 10Y spread widen to ~80bps around the May ’17 elections as concerns of a move toward the political fringe played out in the markets, and the French President’s popularity ratings already look far from rosy.

And just like that France may have solved the Italian crisis.

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Watch: Democrat Chuck Schumer shows his East Coast elitism on live TV

Amazing moment in which the President exhibits “transparency in government” and shows the world who the Democrat leaders really are.

Seraphim Hanisch

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One of the reasons Donald Trump was elected to the Presidency was because of his pugnacious, “in your face” character he presented – and promised TO present – against Democrat policy decisions and “stupid government” in general.

One of the reasons President Donald Trump is reviled is because of his pugnacious, “in your face” character he presented – and promised TO present – in the American political scene.

In other words, there are two reactions to the same characteristic. On Tuesday, the President did something that probably cheered and delighted a great many Americans who witnessed this.

The Democrats have been unanimous in taking any chance to roast the President, or to call for his impeachment, or to incite violence against him. But Tuesday was President Trump’s turn. He invited the two Democrat leaders, presumptive incoming House Speaker Nancy Pelosi, and Senate Minority Leader Chuck Schumer, and then, he turned the cameras on:

As Tucker Carlson notes, the body language from Schumer was fury. The old (something)-eating grin covered up humiliation, embarrassment and probably no small amount of fear, as this whole incident was filmed and broadcast openly and transparently to the American public. Nancy Pelosi was similarly agitated, and she expressed it later after this humiliation on camera, saying, “It’s like a manhood thing for him… As if manhood could ever be associated with him.”

She didn’t stop there. According to a report from the New York Daily News, the Queen Bee took the rhetoric a step below even her sense of dignity:

Pelosi stressed she made clear to Trump there isn’t enough support in Congress for a wall and speculated the President is refusing to back down because he’s scared to run away with his tail between his legs.

“I was trying to be the mom. I can’t explain it to you. It was so wild,” Pelosi said of the Oval Office meet, which was also attended by Vice President Pence and Senate Minority Leader Chuck Schumer (D-N.Y.). “It goes to show you: you get into a tinkle contest with a skunk, you get tinkle all over you.”

This represented the first salvo in a major spin-job for the ultra-liberal San Francisco Democrat. The rhetoric spun by Mrs. Pelosi and Chuck Schumer was desperate as they tried to deflect their humiliation and place it back on the President:

With reporters still present, Trump boasted during the Oval meeting he would be “proud” to shutdown the government if Congress doesn’t earmark cash for his wall before a Dec. 21 spending deadline.

Pelosi told Democrats that Trump’s boisterousness will be beneficial for them.

“The fact is we did get him to say, to fully own that the shutdown was his,” Pelosi said. “That was an accomplishment.”

The press tried to characterize this as a “Trump Tantrum”, saying things like this lede:

While “discussing” a budgetary agreement for the government, President Donald Trump crossed his arms and declared: “we will shut down the government if there is no wall.”

While the Democrats and the mainstream media in the US are sure to largely buy these interpretations of the event, the fact that this matter was televised live shows that the matter was entirely different, and this will be discomfiting to all but those Democrats and Trump-dislikers that will not look at reality.

There appears to be a twofold accomplishment for the President in this confrontation:

  1. The President revealed to his support base the real nature of the conversation with the Democrat leadership, because anyone watching this broadcast (and later, video clip) saw it unedited with their own eyes. They witnessed the pettiness of both Democrats and they witnessed a President completely comfortable and confident about the situation.
  2. President Trump probably made many of his supporters cheer with the commitment to shut down the government if he doesn’t get his border wall funding. This cheering is for both the strength shown about getting the wall finished and the promise to shut the government down, and further, Mr. Trump’s assertion that he would be “proud” to shut the government down, taking complete ownership willingly, reflects a sentiment that many of his supporters share.

The usual pattern is for the media, Democrats and even some Republicans to create a “scare” narrative about government shutdowns, about how doing this is a sure-fire path to chaos and suffering for the United States.

But the educated understanding of how shutdowns work reveals something completely different. Vital services never close. However, National Parks can close partly or completely, and some non-essential government agencies are shuttered. While this is an inconvenience for the employees furloughed during the shutdown, they eventually are re-compensated for the time lost, and are likely to receive help during the shutdown period if they need it. The impact on the nation is minimal, aside from the fact that the government stops spending money at the same frenetic pace as usual.

President Trump’s expression of willingness to do this action and his singling out of the Dem leadership gives the Democrats a real problem. Now the entire country sees their nature. As President Trump is a populist, this visceral display of Democrat opposition and pettiness will make at least some impact on the population, even that group of people who are not Trump fans.

The media reaction and that of the Democrats here show, amazingly, that after three years-plus of Donald Trump being a thorn in their side, they still do not understand how he works, and they also cannot match it against their expected “norms” of establishment behavior.

This may be a brilliant masterstroke, and it also may be followed up by more. The President relishes head-to-head conflict. The reactions of these congress members showed who they really are.

Let the games begin.

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