America is a spectator in its own fate

Jill Kelley for secretary of state

She is the woman Hillary Clinton can only dream of being – poised at the confluence of all the great geostrategic currents of the age

By MARK STEYN 

Let us turn from the post-Thanksgiving scenes of inflamed mobs clubbing each other to the ground for a discounted television set to the comparatively placid boulevards of the Middle East. In Cairo, no sooner had Hillary Clinton's plane cleared Egyptian air space then Mohammed Morsi issued one-man constitutional amendments declaring himself and his Muslim Brotherhood buddies free from judicial oversight and announced that his predecessor, Hosni Mubarak, would be retried for all the stuff he was acquitted of in the previous trial. Morsi now wields total control over Parliament, the Judiciary, and the military to a degree Mubarak in his jail cell can only marvel at. Old CIA wisdom: He may be an SOB but he's our SOB. New post-Arab Spring CIA wisdom: He may be an SOB but at least he's not our SOB.

But don't worry. As America's Director of National Intelligence, James Clapper, assured the House Intelligence Committee at the time of Mubarak's fall, the Muslim Brotherhood is a "largely secular" organization. The name's just for show, same as the Episcopal Church

Which brings us to Intelligence Director Clapper's fellow Intelligence Director, Gen. David Petraeus. Don't ask me why there's a Director of National Intelligence and a Director of Central Intelligence. Something to do with 9/11, after which the government decided it could use more intelligence. Instead, it wound up with more Directors of Intelligence, which is the way it usually goes in Washington. Anyway, I blow hot and cold on the Petraeus sex scandal. Initially, it seemed the best shot at getting a largely uninterested public to take notice of the national humiliation and subsequent cover-up over the deaths of American diplomats and the sacking of our consulate in Benghazi. On the other hand, everyone involved in this sorry excuse for a sex scandal seems to have been too busy emailing each other to have had any sex. The FBI was initially reported to have printed out 20,000 to 30,000 pages of emails and other communications between Gen. John Allen, U.S. commander in Afghanistan, and Jill Kelley of Tampa, one-half of a pair of identical twins dressed like understudies for the CENTCOM mess hall production of "Keeping Up With The Kardashians." Thirty thousand pages! The complete works of Shakespeare come to about three-and-a-half-thousand pages, but American officials can't even have a sex scandal without getting bogged down in the paperwork.

Here Comes the Regulatory Flood

Costly rules held up for the election are about to roll over the economy

WSJ Editorial

President Obama's hyperactive regulators went on hiatus in 2011 to get through Election Day. Now with his second term secure, they're about to make up for lost time and then some.

The government defines "economically significant" rules as those that impose annual costs of $100 million or more, and the Bush, Clinton and Bush Administrations each ended up finalizing about 45 major rules per year. The average over Mr. Obama's first two years was 63 but then plunged to 44 for 2011 and 2012 so far. The bureaucracies didn't slow down. They merely postponed and built up a backlog that is about to hit the Federal Register.

We'd report the costs of the major-rule pipeline if we had current data. But the White House budget office document known as the unified agenda that reveals the regulations under development hasn't been published since fall 2011. The delay violates multiple federal laws and executive orders that require an agenda every six months, so we thought readers might like a rough guide to the regulatory flood that is about to roll through the economy.

• Health care. It begins with the Affordable Care Act, which has been in hibernation because it was the largest campaign liability. Since Election Day, the Health and Human Services Department has submitted a raft of key health rules for White House review that it has been sitting on for months.

Hiding the details paid off politically but also undermined ObamaCare's already slim prospects for success. Ahead of the law's go-live date of October 2013, states and industries will have less than a year to prepare to meet the new mandates.

None Dare Call It Default

A nicer term for what's about to sock the middle class is 'entitlement reform.'

By HOLMAN W. JENKINS, JR.

To call Greece First World may be a stretch, but Greece has defaulted once already, and it is only a matter of time until Greece defaults again. Welcome to default-o-rama, the next chapter in the First World's struggle for fiscal sustainability.

Japan is piling up debt in the manner of a nation beyond hope. France, Belgium, Spain and Italy are defaults waiting to happen unless Europe can somehow generate the kind of growth that has eluded it for decades.

America's fiscal cliff is an artificial crisis. We have no trouble borrowing in the short term. But at some point the market will demand evidence that long-term balance is being restored. President Obama said in his first post-election press conference that he doesn't want any proposals that "sock it to the middle class." He knows better. A long-term socking is exactly what's coming to the middle class, which must pay for the benefits it consumes.

A few years ago, when the economy was humming, a common estimate held that federal taxes would have to rise 50% immediately to fully fund entitlement programs. Today, a 50% tax increase would be needed just to meet the government's current spending, never mind its future obligations.

One way or another, then, entitlements will be cut. Don't call it default. The correct term is entitlement reform.

You saw this day coming and saved for your own retirement. Don't call it default when Washington inevitably confiscates some of your savings, say, by raising taxes on dividends and capital gains. Taxpayers accept the risk of future tax hikes that may make the decision to save seem foolish in retrospect.

Quote of the Day

Majority Rule vs Rule of Law

"Imagine if all of life were determined by majority rule. Every meal would be a pizza. Every pair of pants, even those in a Brooks Brothers suit, would be stone-washed denim. Celebrity diet and exercise books would be the only thing on the shelves at the library. And -- since women are a majority of the population -- we'd all be married to Mel Gibson." -- P. J. O'Rourke, 1991

Big Brother Strikes Again

We Wouldn't Want to Make Things Too Difficult for the Minions of the State

by Pater Tenebrarum

'Constitutions' are Nothing But Words

Sometimes we wonder why the US political establishment doesn't simply copy the Nazi or the Stasi security legislation word for word and be done with it. Oh wait, that could actually be what they're doing.

Does anyone remember the mock outrage of the Left when Bush was caught  in flagrante delicto, letting his security apparatus tap the communications of US citizens without a warrant? Readers of this blog know how cynical we are when it comes to politicians uttering protestations of rectitude and righteousness, regardless of their party affiliation. The fact remains that most modern-day politicians – apart from a very few exceptional individuals such as e.g. Ron Paul – are thoroughly wedded to statism in all its forms. Moreover, as a recent study shows, most of them are probably psychopaths to boot, that would be doing God knows what if they hadn't gone into politics.

If there is anything that we could mildly reproach Dr. Paul for it is his unwavering belief in the constitution.  A good argument can be made that the very moment this piece of paper was signed, it all went downhill with nary an interruption. Epistula non erubescitas Cicero told us ('paper doesn't blush').

Shocking News. Read All About It

U.S. Postal Service on a ‘Tightrope’ Lost $15.9 Billion

By Angela Greiling Keane

The U.S. Postal Service said its net loss last year widened to $15.9 billion, more than the $15 billion it had projected, as mail volume continued to drop, falling 5 percent.

Without action by Congress, the service will run out of cash on Oct. 15, 2013, after it makes a required workers compensation payment to the U.S. Labor Department and before revenue typically jumps with holiday-season mailing, Chief Financial Officer Joe Corbett said today.

The service, whose fiscal year ends Sept. 30, lost $5.1 billion a year earlier. It announced the 2012 net loss at a meeting at its Washington headquarters.

“We are walking a financial tightrope,” Postmaster General Patrick Donahoe said at the meeting. “Will we ever stop delivering the mail? It will never happen. We are simply too important to the economy and the flow of commerce.”

The Postal Service uses about $250 million a day to operate and will have less than four days of cash on hand by the end of the fiscal year, Corbett said.

The service is asking Congress to enact legislation before it adjourns this year that would allow the Postal Service to spread future retirees’ health-benefit payments over more years, stop Saturday mail delivery, and more easily close post offices and processing plants.

Optimism Bias - What Keeps Us Alive Today Will Kill Us Tomorrow

Being the modern people we are, we can't help but wait for Godot

By Tim Price

So yeah, people lie. They, we, all do. Some of us understand the extent to which this is true better than others, but that's probably just because we haven't all spent equal time wondering when it was we first started doing it. Let alone why. Interesting questions. After the fact, it's blindingly obvious why we would want to lie: accomplished liars get to mate faster and more often. Which still is the purpose of life, even though it may not be terribly fashionable to phrase it that way these days.

But we couldn't have known that before we began lying, so that's not what got us started. Another interesting question is who we first lied to, ourselves or others. I personally lean to the former option lately, since we couldn't have known the advantages of lying to others beforehand. Whereas fooling ourselves could potentially have developed as a much more insidious, secretive, step by step feature.

Likely purely as a survival mechanism, after extremely traumatic experiences. To have such experiences, you need awareness, consciousness, either/or. Probably a sense of belonging to a group, a family, as well as a sense of what's right and what's not. If, in that state, you see your friends and family get killed off by a natural disaster or the cruelty of other humans, you need some sort of selective memory, some kind of denial mechanism, in order to survive both mentally and physically, and to find meaning in your life, a pre-requisite for who has awareness and is not a full-fledged psychopath.

America, Israel, Gaza, the World

On Taking Sides

By WALTER RUSSELL MEAD

As Israeli airstrikes and naval shells bombarded Gaza this weekend, the world asked the question that perennially frustrates, confuses and enrages so many people across the planet: Why aren’t the Americans hating on Israel more?

As in Operation Cast Lead, the last big conflict between Israel and Hamas, and as during the operation against Hezbollah in Lebanon, much of the world screams in outrage while America yawns. If anything, many of Israel’s military operations are more popular and less controversial in the United States than they are in Israel itself. This time around, President Barack Obama and his administration have issued one statement after another in support of Israel’s right to self defense, and both houses of Congress have passed resolutions in support of Jerusalem’s response.

Commentators around the world grasp at straws in seeking to explain what’s going on. Islamophobia and racism, say some. Americans just don’t care about Arab deaths and they are so blinded by their fear of Islam that they can’t see the simple realities of the conflict on the ground. Others allege that a sinister Jewish lobby controls the media and the political system through vast power of Jewish money; the poor ignorant Americans are the helpless pawns of clever Jews. Still others suggest that it is fanatical fundamentalists with their carry on flight bags packed for the Rapture who are behind American blindness to Israel’s crimes.

More Trouble in Jordan

Arab discontent is heading east

by Mudar Zahran

Last week, protests broke out in Jordan after a government decision to raise fuel prices. While protests have been taking place in Jordan for almost two years now, for the first time there is major involvement from Jordan's Palestinians, with open calls for toppling the regime. With the future of Jordan's King Abdullah in jeopardy, so is regional stability as well as Jordan's peace with Israel. 

The protesters, last week, started openly to call for the king to step down. The Independent noted that previously the protests had been "peaceful and rarely targeted King Abdullah II himself," and reported that this time crowds "chanted slogans against the king and threw stones at riot police as they protested in several cities."

Al Jazeera, as well, reported that protests have been taking place "across the width and the length of the country," with "most chanting for toppling the regime." Several of the king's photographs – regularly displayed in public places in Jordan – were set on fire.

What came as a surprise in the recent protests, according to Al Jazeera, is that Palestinian refugee camps have been also participating to the fullest. These protests apparently broke out in the Al-Hussein refugee camp, close to Jordan's capital, Amman. Protesters were seen calling for toppling the regime.

The March of Scandal from Pericles to Petraeus

The love of a good woman is best enjoyed one woman at a time

By Barry Strauss

General David Petraeus ended his term as the director of the CIA after it turned out that the world’s leading spymaster had cast discretion to the wind to have an extramarital affair. Nor was the other woman shy and retiring about sharing alleged state secrets (although it appears that no security was in fact breached). For what it’s worth, history offers Petraeus this consolation: he’s in good company.

There's nothing new about a powerful man being brought down by sex. It's as old as Adam and Eve, Samson and Delilah, or Helen and Paris. Just imagine what email between Caesar and Cleopatra would have looked like! What's new is that there are no secrets anymore. There’s no hope of confidentiality because everything is traceable. The stone trail became a paper trail and now a cyber trail -- and that’s impossible to lose.

Pericles of Athens (ca. 495-429 B.C.) was the leading politician of Greece’s Golden Age in the fifth century B.C. With his mistress, Aspasia, he made one of history’s first power couples. Aspasia was a brilliant and beautiful foreigner who attracted both intellectuals and criticism. She was -- or at least she was accused of being -- a courtesan.

When Athens clashed with Sparta in the conflict that became the long and bitter Peloponnesian War, the comic poets turned their fire on Aspasia. The cause of war, they said, wasn’t Athens’ rivalry with Sparta or Sparta’s alliance with Athens’ neighboring state, Megara. It was Aspasia and her business. The real quarrel was over some prostitutes.

The New Anti-Semitism

Why does the international community hate Israel so much?

by Victor Davis Hanson

Not long ago, the Economist ran an unsigned editorial called the “Auschwitz Complex.” The unnamed author blamed serial Middle East tensions on both Israel’s unwarranted sense of victimhood, accrued from the Holocaust, and its unwillingness to  “to give up its empire.” As far as Israel’s paranoid obsessions with the specter of a nuclear Iran, the author dismissed any real threat by announcing that “Iran makes an appealing enemy for Israelis,” and that “Israelis have psychologically displaced the source of their anxiety onto a more distant target: Iran.”

It is hard to fathom how a democracy of seven million people by any stretch of the imagination is an “empire.” Israel, after all, fought three existential wars over its 1947 borders, when the issue at hand was not manifest destiny, but the efforts of its many enemies to exterminate or deport its population. I would not otherwise know how to characterize the Arab promise of more than a half-century of “pushing the Jews into Mediterranean.”

While it is true that Israeli forces stayed put on neighboring lands after the 1967 war, subsequent governments eventually withdrew from the Sinai, southern Lebanon, and Gaza—areas from which attacks were and are still staged against it. The Economist’s choice of “appealing” is an odd modifying adjective of the noun “enemy,” particularly for Iran, which has both promised to wipe out Israel and is desperately attempting to find the nuclear means to reify that boast.  

Canada rises to Top Five in world economic freedom ranking as U.S. plummets to 18th

Canada really started moving up in economic freedom under a prime minister that was supposedly from the left side

By Sarah Boesveld

Canada has taken its place among the Top 5 countries with the most economic freedom, according to a new Fraser Institute report — now leaps and bounds ahead of the United States thanks to the gradual shrinking of the Canadian government since the mid-1990s as America’s just got bigger.

The annual Economic Freedom of the World report, released Tuesday, has Canada tied in fifth place with Australia — up one spot from last year. Hong Kong remains at the top, Singapore’s next, then New Zealand.

Meanwhile, the United States, once a “standard bearer” of economic liberty among industrial nations, spiralled 10 spots from the 2011 rankings to 18th place — its lowest position ever, and a huge drop from its second place spot in 2000.

There is much more to resilience than simple strength

Whatever the weather

Antifragile: How to Live in a World We Don’t Understand, by Nassim Nicholas Taleb

by Gillian Tett

In recent weeks Mervyn King, governor of the Bank of England, has taken to quoting Nassim Nicholas Taleb, the maverick Lebanese-American trader-cum-author-cum-statistician. Taleb shot to fame five years ago with The Black Swan, which explained why modern societies are apt to be hit by low-probability surprises that can sometimes (but not always) be damaging. The timing of that book was either brilliantly canny or lucky, since it emerged just as the world was about to plunge into a financial crisis. Taleb’s work became a bestseller, a literary black swan in itself.

Now Taleb is back. Antifragile goes much further in developing his Black Swan idea. Little wonder that men such as King are paying attention: after pouring a vast amount of taxpayers’ money into the financial system, British regulators, like those elsewhere in the western world, urgently need to know whether or not the economy is any less prone to violent shocks.

So what advice can Taleb offer? His central argument is encapsulated in the title. Until now, Taleb says, modern society has generally assumed that people, systems or institutions fell into two camps: either they were fragile (and likely to break when shocks occur) or robust (and thus able to resist shocks without being impacted at all). Taleb insists there is a third category of people, institutions and systems that are resilient in a way we have been unable to articulate: they survive shocks not because they are immovable but precisely because they do change, bending in the face of stress; adapting and learning. This is the quality that he describes as “antifragile”. (In the US the book is being published with the rather more explicit subtitle “Things that Gain from Disorder”.)

An Israeli-Palestinian zugzwang

Shock the Casbah

by ADAM GARFINKLE

Again I come late to the gabfest, this time about the Hamas-IDF confrontation in and around Gaza. So much has already been said, and it falls in the usual categories: the thinly didactic, the fatuous, the banal, the shrewd and, especially, the emotional. The usual irrational Jewcentric crap, of all four sorts, too, can be readily identified: the anti-Semitic, the philo-Semitic, the chauvinist and the self-hating. For those who have endured this conflict in its several manifestations for a wilderness of forty years (or more), the whole thing—the Jewcentric mutterings very much included—is still as heartbreaking as ever. It is also something well worth ignoring for the sake of one’s sanity, which helps explain why I am so late to the keyboard. I tried mightily to resist writing this note; I failed.

So what is there to say after all? I can think of three, possibly useful, things to discuss.

First, in this age of instantaneous amnesia in the segmented American cyberswirl, where the backstory to any telegenic foreign event has long since disappeared into the historical ether, it’s useful to restate for the inexpert observer a little of the relevant history. Not knowing the basics makes it seem like both sides of the conflict are made up of a bunch of hateful and insane yet regrettably determined extremists. As appealing as this description may be to those with no dog in the fight and who have an appetite for violent entertainment, and as apt as it may seem upon substituting the words “one side” for “both sides” to pro-Israel or pro-Palestinian partisans, it is not really accurate. Knowing the history shows why what’s going on is a tragedy rather than a simple, if protracted, act of mutual madness. Both sides are adept at making highly rational tactical calculations, but they find themselves trapped in a merciless strategic framework that turns every temporary advantage into a pointless sacrifice of blood and hope.

Second, it is worth pointing out what is both new and true in essence about the current round of fighting. This round of fighting both is and is not the same ‘ol same ‘ol.

Germany and Russia: The End of Ostpolitik?

Not a happy partnership anymore

By LILIA SHEVTSOVA & DAVID J. KRAMER

Germany’s role in the ongoing Euro crisis is a reminder of its economic superpower status in Europe. But Germany plays another leading role: defining European policy toward Russia. Brussels and other European capitals often follow Germany’s lead when it comes to dealing with Russia. And with the United States distracted with its recent election and other priorities, and with the reset not what it used to be, Germany’s role in defining the “Eastern strategy”—and specifically the agenda toward Russia—is likely to increase (even if Berlin tries to keep a low profile).

Until recently, the German-Russian relationship was viewed as the model of a happy, albeit weird, marriage of incompatible bedfellows. No longer: German public opinion has grown increasingly critical of Vladimir Putin’s regime and its clampdown on human rights and the political opposition. While this shift in public attitude has not had a major impact on the official Berlin line, it has reinforced the push by some Bundestag deputies, especially the German Greens, the only party that has consistently raised the issue of human rights in Russia.

A Mirage of Mideast Peace

Is real peace between Palestinians and Israelis possible?

By PATRICK J. BUCHANAN

With the truce in the week-long Gaza war, Barack Obama is being prompted by right and left to re-engage and renew U.S. efforts to solve the core question of Middle East peace.

Before he gets re-involved in peacemaking, our once-burned president should ask himself some hard questions.

Is real peace between Palestinians and Israelis even possible?

Is there any treaty that could be agreed to, or imposed, that would be acceptable to Israel and the Palestinian Authority on the West Bank, let alone to Hamas, which has emerged from its defiance of one of the most intensive bombardments of modern time with new prestige?

What are the obvious impediments to such a treaty?

First, Bibi Netanyahu, who has presided over the expansion of Israel settlements and joined Avigdor Lieberman, a supporter of ethnic cleansing of Israeli Arabs, in a coalition of the Israeli hard right.

Sibel Edmonds’s Secrets

Classified Woman: The Sibel Edmonds Story

By PHILIP GIRALDI

Sibel Edmonds is no stranger to longtime TAC readers. I wrote an article exploring some of her claims back in January 2008, a blog item in August 2009, and Kara Hopkins and I did an interview with her for the November 2009 issue of the magazine. It was featured on the cover as “Who’s Afraid of Sibel Edmonds?”

Edmonds has recently written a book entitled Classified Woman detailing her journey from FBI translator to whistleblower, finally emerging as an outspoken advocate of free speech and transparency in government through her founding of the National Security Whistleblowers’ Coalition and her always informative Boiling Frogs Post website.

As Edmonds ruefully notes, her tale of high level mendacity has always found a better reception in the European and Asian media than in the United States, though her odyssey has included an appearance on “60 Minutes” in October 2002 and a feature article inVanity Fair called “An Inconvenient Patriot” in September 2005.

Greek Rescue Deal Falters on Loan Rate Cut

The show must go on

By Jonathan Stearns

The main obstacle to unlocking international loans for Greece is a plan to reduce the interest rates charged by euro-area creditors as the sides agreed to ease debt-reduction targets, a Greek official said.

A cut in interest rates would put them below the cost of funding for some euro-area countries, the official told reporters late yesterday in Brussels on the condition of anonymity. Policy makers will continue work on an updated aid package for Greece into this weekend in preparation for a Nov. 26 meeting of euro finance ministers, said the official.

An agreement, which would unlock an aid payout of at least 31 billion euros ($40 billion), may raise Greece’s debt target to 124 percent of gross domestic product in 2020 from a previous goal of 120 percent, said the official. The cost of reaching the new target from a currently projected trajectory of 129 percent of GDP that year is about 10 billion euros, according to the official.

Argentina angry at hedge fund court win

Neither a borrower nor a lender be, For loan oft loses both itself and friend

By Robin Wigglesworth and Jude Webber

Argentina has angrily criticised a US court decision that has awarded hedge fund creditors more than $1.3bn as “a kind of legal colonialism”.

“All we need now is for [Judge Thomas] Griesa to send us the Fifth Fleet,” Hernán Lorenzino, economy minister, said.

The victory for several hedge funds against Argentina has sparked fears that the country could be plunged into yet another debilitating sovereign default and threatens to make government restructurings more difficult in the future.

In what has been dubbed the “trial of the century” for sovereign debt restructurings, a US District Court judge on Wednesday ordered Argentina to pay the hedge fund creditors – led by Elliott Associates and Aurelius Capital – in mid-December.

The Biggest Winners From President Obama's Re-Election: Crony Capitalists

Some people never seem to lose no matter what the result of the election

By Joel Kotkin

President Obama’s re-election does not, as some conservatives suggest, represent a triumph of socialism. Instead, it marks the massive endorsement of an expanding crony capitalism that ultimately could reshape the already troubled American economic system beyond recognition.

Nowhere is this clearer than in the President’s victory in the Great Lakes states of Ohio, Michigan, Ohio and Wisconsin. All four of these states are highly dependent on manufacturing and, in particular, the auto industry. Without the bailout, it seems doubtful that Obama — who lost the white working class decisively in most of the country — could have won these critical states.

The auto bailouts have resulted in industrial production growth since February 2010. Furthermore, there has been an industrial revival in the Ohio River valley, with rising output of steel, although much of this has to do with expansion of oil and gas production, which Obama has also taken credit for.

Thanksgiving & Capitalism

The message of Thanksgiving is more timely than ever

by Richard Ebeling

In good economic times or bad, Thanksgiving is when Americans gather with their families and friends and enjoy the most special meal of the year. The event remembers those early Pilgrim Fathers who crossed the uncharted ocean from Europe to make a new start in Plymouth, Massachusetts.

What is less appreciated is that Thanksgiving also is a celebration of the birth of free enterprise in America.

The English Puritans, who left Great Britain and sailed across the Atlantic on the Mayflower in 1620, were not only escaping from religious persecution in their homeland. They also wanted to turn their back on what they viewed as the materialistic and greedy corruption of the Old World.

Prospects for 2013 look ominous for Europe

Euro zone faces deepest downturn since early 2009

By Andy Bruce

The euro zone economy is on course for its weakest quarter since the dark days of early 2009, according to business surveys that showed companies toiling against shrinking order books in November.

Service sector firms like banks and hotels that comprise the bulk of the economy fared particularly badly this month, and laid off staff at a faster pace.

While the monthly rate of decline that manufacturers reported eased far more than economists anticipated, Markit's latest Purchasing Managers' Indexes (PMIs) pointed to little change overall for a recession-hit euro zonethis month.

The flash service sector PMI fell to 45.7 this month, its lowest reading since July 2009, the survey showed on Thursday, failing to meet the expectations of economists who thought it would hold at October's 46.0.

It has been rooted below the 50 mark that divides growth and contraction for 10 months now, and survey compiler Markit said it was too soon to say if this marked the nadir.

With more austerity on the way, and a reminder of the festering sovereign debt crisis in this week's failure of lenders to agree more aid for Greece, prospects for next year look ominous.

IMF and Eurocrats in Clinch

Wrangling Over Greece

by Pater Tenebrarum

Make no mistake, they are doing everything they can to keep Greece in the euro area. There have after all been many opportunities to just say 'game over' and they were never taken. We suspect there is a good reason for this: if Greece were to default and leave the euro zone, it would be proof that the euro is not 'irreversible'. It may well result in a chain reaction, with others leaving as well. So apparently the decision has been made to just keep bailing Greece out.

However, an unexpected delay has popped up. Greece still hasn't received its €31.5 billion aid tranche, in spite of fulfilling all the 'troika' demands – some of which almost caused the new coalition government to break apart.

The problem in a nutshell is this: everybody, including the IMF, knows that Greece cannot reach the long term debt targets that were set out in its bailout. It 'needs more time', but that means it also needs more money. Even if it gets both, it will under no circumstances be able to reach the debt/GDP ratio targets set out, even though the initial long term target is twice as high as the maximum level allowed according to the Maastricht treaty. In other words, not even that farcical target is anywhere near the realm of the possible.

Why Russians and the World Dislike the Ruble

It takes time to build credibility once it has been lost

By Martin Gilman

Russians have long had an ambivalent relationship with the ruble. Even now, Russian companies and individuals by and large seem to prefer to save in dollars or euros, carry out large financial operations offshore and minimize their exposure to ruble assets when they can.

This seems odd. Generally in the modern world, most people have sufficient confidence in their own currencies to keep most of their assets denominated in them. It is sometimes called a home-currency bias. For example, Japanese residents hold yen despite low interest rates. Usually, it is only when significant risks are perceived that people flock to monetary hedges such as gold. The phenomenon was also evident in the case of Greece, when the collapse in domestic bank deposits signaled a fear that people's euros would soon become drachmas.