Tuesday, March 25, 2014

Sanctions? Russia Is Just Going to Shrug Them Off - TIME

Sanctions? Russia Is Just Going to Shrug Them Off

http://time.com/36614/russia-will-shrug-off-crimea-sanctions/?utm_source=feedburner&utm_medium=email&utm_campaign=Feed%3A+timeblogs%2Fcurious_capitalist+%28TIME%3A+Business%29


An electronic board displays a rising stock index curve at the Russian Micex Stock Exchange in Moscow the day after the Crimean referendum on independence from Ukraine March 17, 2014.Bloomberg—Bloomberg via Getty Images

Russian president Vladimir Putin sees his country’s economic future in the East, not the West.


You’d think that the U.S. and Europe could apply some pretty heavy economic pressure on Russia. After all, the European Union is Russia’s largest trading partner and source of foreign investment, and right now, the country can ill afford any threat to that economic lifeline. The Russian economy, a member of the once high-flying BRICs, clocked meager 1.3% growth in 2013.
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But as the U.S. and E.U. begin to impose economic sanctions on Russia over its grab of Crimea from Ukraine, Putin hasn’t blinked. Perhaps he assumes sanctions from the West will only cut so deep. With Europe as reliant on Russia – for its oil and gas – as Russia is on Europe, Putin has some economic leverage of his own.
And there may be another reason why Putin is unmoved by Western economic sanctions. His gaze has turned East.
Just as U.S. President Barack Obama has been trying to engineer a “pivot” to Asia, so has Putin. And why not? Tying his country’s future to a rapidly expanding Asia instead of a debt-ridden and slow-moving Europe makes perfect sense. In the East, Putin can find eager consumers for Russian raw materials, like China – without the hectoring on human rights he receives from the West. Putin has been signaling this shift to Asia for some time. “We view this dynamic region as the most important factor for the successful future of the whole country, as well as development of Siberia and the far east,”Putin wrote in the Wall Street Journal in 2012.
Putin has been making some progress. In the 1990s, trade between China and Russia was practically nonexistent. Not anymore. According to Asian Development Bank data, total trade between China and Russia increased from $5.5 billion in 1995 to over $88 billion in 2012. The two are cooperating on investment as well. In 2012, Beijing and Moscow formed the Russia-China Investment Fund, a multi-billion-dollar pool of money aimed at investing in projects to enhance economic ties between them. To smooth the flow of people and products between Russia and East Asia, Moscow is undertaking a major upgrade of the Trans-Siberian Railroad, which, Putin said in a recent speech, “will act as a key artery between Europe and the Asia-Pacific region.”
Of course, China and its neighbors are no replacement for Europe, at least not yet. Nearly 80% of Russian crude exports heads to Europe, compared to only 18% to Asia, according to the U.S. Energy Information Administration. But that’s set to change. Igor Shuvalov, Russia’s First Deputy Prime Minister, predicted last year that the country’s trade with Asia would surpass that with Europe over the next five to 10 years. Russia, for instance, has pledged to more than triple the quantity of oil it ships to China annually. In 2013, Russian oil giant Rosneft inked a deal to ship $270 billion of oil to China over the next quarter century. China is also becoming a source of investment. State-owned China National Petroleum Corp. agreed last year to take a stake in a Russian liquefied natural gas project. In 2013, the China Investment Corp., Beijing’s sovereign wealth fund, pledged to up its investments in Siberia.
All of these plans and goals are easier to talk about than achieve, however. Russia has long held on-again, off-again dreams of becoming an Asian power. In the 19th century, the Tsars tried — and failed — to build a massive empire across the northern Pacific stretching from Siberia to California. Today, Russia still plays a minor role in East Asian trade, and the country cannot automatically redirect its exports from Europe to Asia. It isn’t clear, furthermore, how Russia’s oil industry will be able to satisfy its commitments to China. “Unfortunately for Putin, Moscow has limited capacity to make its pivot dreams a reality,” analysts Fiona Hill and Bobo Lo commented.
Still, Putin’s Asia dreams lay bare an uncomfortable truth facing Washington and Brussels and they attempt to resolve the Ukraine crisis. In the new world order, with varied centers of economic power, the West cannot isolate Russia. There’s always someone else ready to ignore politics and do business.

Monday, March 24, 2014

Ukraine crisis: Could Trans-Dniester be next? - BBC NEWS

Ukraine crisis: Could Trans-Dniester be next?

http://www.bbc.com/news/world-europe-26662721

By Humphrey HawksleyBBC News, Tiraspol
Russia's annexation of Crimea has led some to wonder whether any other former Soviet countries could follow. The separatist region of Trans-Dniester has already offered itself to Moscow - a request which Russia has promised to consider.
"It's been getting much worse in the past few months," said a mother of two who didn't want to give her real name and called herself Anna.
"They have closed, let me see...." she counts on her fingers. "Eight blogging sites. The secret police are so active now."
We were having coffee in the centre of Tiraspol, capital of the tiny, unrecognised state of Trans-Dniester that lives in a time-warped other age.
Teams of workers tend street flowerbeds. A statue of Lenin stands in the main square and a red and green national flag with a small yellow hammer a sickle in the corner flies from the roof of an ugly parliament building - known as the Supreme Soviet.
"It's confusing," says Anna. "If I had a choice, I would choose Europe. But a lot of things are better here. There are more opportunities in Russia. Salaries are about the same, but our pensions are much higher - about $180 (£109) a month compared to $75 in Moldova." She smiles. "And our gas is much, much cheaper."
This week the Supreme Soviet sent an official request to Moscow asking if - given Crimea - Trans-Dniester could be allowed to join the Russian Federation. But there's been no celebration and barely an announcement.
Outside, one couple had not heard and when told, the man shrugged and walked on - wary, it seemed, of talking to a foreigner.
Across the wide October 25th Boulevard, a strong wind from the River Dniester scattered flowers laid at a memorial to those killed in recent wars.
Each name is listed on a black stone wall, including more than 800 killed in 1992 when Trans-Dniester, backed by Russia, fought to stop the tiny country of Moldova from becoming independent from a disintegrating Soviet Union.
It mostly failed. A ceasefire created this strip of land wedged between Ukraine and Moldova, that has become what's described as a "frozen conflict".
Trans-Dniester is home to about 300,000 people who live amid a drab and arid agricultural landscape, peppered with checkpoints run by Russian peacekeeping troops. The same soldiers also keep watch over immigration posts on the Moldovan border. More than a thousand are based here.
Fighting between pro-Russians (above) and Moldovan forces in 1992 left hundreds of civilians dead
One of the few tourist attractions is a museum in the old headquarters of a swashbuckling Red Army General Grigory Kotovsky, who held sway over Tiraspol in the 1920s.
"He is magnificent like the Soviet Union," says the curator Nadejda Kostiurina, holding up a Soviet flag underneath his portrait. "That was much, much better than we have now."
She has been watching Russian television on the Crimea crisis and when asked about it says bluntly: "I hope the European Union has enough brains not to start a war. I don't understand why it wants to more bloodshed."
Compared with the ordered tranquillity of Tiraspol, where street lamps are polished and curb sides painted, the Moldovan capital of Chisinau carries the muddle of a new market democracy - pot holed roads, chaotic traffic, and luxury car showrooms blending together in Europe's poorest country.
Its beacon is membership of the European Union, but now, for many here, there's a new fear that Russia will try to stop that by moving on Trans-Dniester - and, therefore, Moldova.
"If Putin will continue in Ukraine, particularly along the Black Sea until Odessa with its connection to Trans-Dniester we could see a very sad scenario," says Oazu Nantoi a political veteran of the Soviet collapse. "If he can be stopped in Crimea, then we have a chance to survive."
A sign in Trans-Dniester reminds people: "We are not Moldova!"
In recent weeks, more Moldovans have been switching to Russian television channels because, according to analysts, it's what they trust in times of crisis. This is creating a new challenge by pitting the bullish Vladimir Putin against Moldova's urbane and cautious prime minister, Iurie Leanca.
"Putin is the most popular political leader in Moldova," remarks a newspaper vendor in central Chisinau, reflecting the view of the still powerful Moldovan communist party.
Continue reading the main story

Trans-Dniester

  • A narrow strip of land between the Dniester river and the Ukrainian border
  • Proclaimed independence from Moldova in 1990
  • The international community does not recognise its self-declared statehood

Mr Leanca accuses his opponents of using propaganda to poison the minds of voters, but he admits that such sentiment has added resolve and speed to his policies.
He wants to sign an EU Association Agreement - similar to the one that sparked the protests in Ukraine - as soon as practicable. He has set himself an optimistic target of 2019 to join the European Union. He also wants to consolidate Moldova's position as a Nato ally, despite its official policy of being militarily neutral.
Yet, as a graduate of one of Moscow's elite universities for diplomats, Mr Leanca believes he has a feel for how far he could go with a head-to-head confrontation against the power of Russia.
"My own experience is that you have to have a very good and intense dialogue with Russia and the more you discuss the more you will see progress," he says.
"If the Ukrainians think this is a good lesson we would be willing to share it because in our situations there is no alternative to dialogue."

Sunday, March 23, 2014

Obama’s Test: Can Penalties Change Russia’s Course? - New York Times

Obama’s Test: Can Penalties Change Russia’s Course?

http://www.nytimes.com/2014/03/19/world/europe/obamas-test-can-penalties-change-russias-course.html?emc=edit_cn_20140318&nl=us&nlid=56381892&_r=0

By PETER BAKERMARCH 18, 2014
WASHINGTON — After Russia invaded Crimea, a senior American official vowed to “make it hurt.” More than two weeks later, Moscow has given no sign that it feels any pain, and the challenge for President Obama is whether he is willing or able to inflict enough to change the Kremlin’s calculus.
When President Vladimir V. Putin signed an annexation treaty on Tuesday, he essentially laughed off the modest sanctions imposed so far by the United States and Europe, all but guaranteeing that Mr. Obama and his allies will follow up with another round. “More is coming,” Jay Carney, the White House spokesman, said after the Moscow ceremony.
But it remained unclear just how much more, not just in the next 24 hours, but in the longer run.
Mr. Obama’s critics and even some supporters were surprised and disappointed that the financial sanctions he imposed on Monday were applied to only 11 Russian and Ukrainian figures who were unlikely to have many assets to freeze in the United States. The president quickly came under pressure from both sides of the aisle on Tuesday to be more assertive.
Continue reading the main storyVideo

 
As President Putin announces the annexation of Crimea, a look at the geopolitical costs and how China is closely watching the situation.
“Putin has dramatically escalated this crisis by taking the decision to annex Crimea,” said Michael McFaul, who was Mr. Obama’s ambassador in Moscow until a couple of weeks ago. “The Obama administration must respond and expand the list of sanctioned individuals well beyond what was announced yesterday.”
David J. Kramer, an assistant secretary of state under President George W. Bush and now the president of Freedom House, a Washington-based advocacy group, said sanctions should target the most senior officials in Moscow, Russian banks and state-owned enterprises, and eventually Mr. Putin himself.
“Until Putin and his circle pay a real price for their actions — and I think the U.S. and E.U. can impose such a price — the Kremlin won’t see a reason to stop,” Mr. Kramer said.
Senior administration officials said they were trying to stage their response, starting relatively modestly to make the point that their punitive actions can grow much more damaging if Mr. Putin does not reverse course. They had hoped that their approach would allow room for Mr. Putin to stop short of actual annexation after a Russian-supported referendum in Crimea on Sunday, a hope that has now proved unfounded.
Realistically, American officials recognize that there is now little chance of prying Crimea out of Moscow’s hands, although that is not something they will admit publicly. Instead, the goal is to make Mr. Putin at least pay a price for Crimea and to deter him from escalating the crisis by further destabilizing the largely Russian-speaking eastern Ukraine or even trying to take control of parts of it outright.
After the annexation treaty signing on Tuesday, the United States and six other industrial powers that belong to the Group of 8 with Russia all but signaled that they will throw it out of the organization. Instead of traveling to Sochi in June, where Mr. Putin was scheduled to host this year’s G-8 meeting, Mr. Obama invited leaders of the rest of the group, reconstituting themselves as the G-7, to meet in The Hague to talk about Ukraine next week on the sidelines of a previously scheduled nuclear summit meeting.

U.S. Imposes New Sanctions on Russia

President Obama announced sanctions aimed at President Vladimir V. Putin’s inner circle.
Mr. Carney said the United States would also expand its sanctions, and noted that the geopolitical uncertainty had already taken a toll on Russia’s currency and markets. “I wouldn’t if I were you invest in Russian equities right now unless you’re going short,” he said.
And yet world markets rose on Tuesday after Mr. Putin’s speech and action, either shrugging off the crisis or interpreting his reassurance that he did not want to split Ukraine as a signal that he would be satisfied after taking Crimea. The ruble, bolstered by Russia’s central bank, backed off the record lows it had fallen to in recent days.
Either way, Mr. Obama was left on the defensive against critics who said he was not being strong enough. Mitt Romney, his Republican challenger in the 2012 election, said Tuesday that Mr. Obama and his team waited too long to project strength and prepare possible punishments before Mr. Putin sent troops into Crimea. “Part of their failure, I submit, is due to their failure to act when action was possible, and needed,” Mr. Romney wrote in The Wall Street Journal.
Mr. Carney said it was “preposterous” and “provably wrong” to suggest, as other critics have, that the president sent a signal of weakness that emboldened Mr. Putin after failing to follow through on threats to retaliate against Syria last year for a chemical weapons attack on civilians. Mr. Carney went on to note that Mr. Bush’s willingness to invade Iraq “didn’t seem to affect Russia’s calculations when it came to its actions in Georgia” in 2008.
Mr. Obama has given himself more tools to use against Russia, if he chooses to do so. An executive order he signed on Monday authorizes sanctions against not just Russian government officials but also the Russian arms industry and Russian oligarchs who support Mr. Putin’s rule.
One Russian who has been on some lists of possible targets circulated in Washington and Brussels is Igor Sechin, a longtime Putin adviser who is now the president of Rosneft, the state oil company.
Rosneft is deeply entwined in a variety of projects with ExxonMobil, including a joint venture signed in December to develop oil reserves in Siberia. If Mr. Sechin is barred from traveling to the United States and has his personal assets frozen, current and former government officials said that could put the partnership between the oil companies in real jeopardy.
Republicans in Washington are also pushing Mr. Obama to be more assertive to break Russia’s energy grip over Ukraine and Europe. “If we are serious about challenging Putin’s aggression,” said Representative Ed Royce, Republican of California, the chairman of the House Foreign Affairs Committee, “the U.S. and our European allies should make an all-out effort to break that grip.”

Saturday, March 22, 2014

Putin Reclaims Crimea for Russia and Bitterly Denounces the West - New York Times

Putin Reclaims Crimea for Russia and Bitterly Denounces the West

http://www.nytimes.com/2014/03/19/world/europe/ukraine.html?emc=edit_th_20140319&nl=todaysheadlines&nlid=56381892

By STEVEN LEE MYERS and ELLEN BARRYMARCH 18, 2014

    People in Simferopol, Crimea, watched an address by President Vladimir V. Putin of Russia on Tuesday. CreditDan Kitwood/Getty Images


    MOSCOW — President Vladimir V. Putin reclaimed Crimea as a part of Russia on Tuesday, reversing what he described as a historic injustice inflicted by the Soviet Union 60 years ago and brushing aside international condemnation that could leave Russia isolated for years to come.
    In an emotional address steeped in years of resentment and bitterness at perceived slights from the West, Mr. Putin made it clear that Russia’s patience for post-Cold War accommodation, much diminished of late, had finally been exhausted. Speaking to the country’s political elite in the Grand Kremlin Palace, he said he did not seek to divide Ukraine any further, but he vowed to protect Russia’s interests there from what he described as Western actions that had left Russia feeling cornered.
    Continue reading the main story

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    “Crimea has always been an integral part of Russia in the hearts and minds of people,” Mr. Putin declared in his address, delivered in the chandeliered St. George’s Hall before hundreds of members of Parliament, governors and others. His remarks, which lasted 47 minutes, were interrupted repeatedly by thunderous applause, standing ovations and at the end chants of “Russia, Russia.” Some in the audience wiped tears from their eyes.
    Photo
    Russians gathered in Red Square under banners hailing President Vladimir V. Putin for his moves to restore Crimea to Russia. CreditJames Hill for The New York Times
    A theme coursing throughout his remarks was the restoration of Russia after a period of humiliation following the Soviet collapse, which he has famously called “the greatest geopolitical catastrophe of the 20th century.”
    He denounced what he called the global domination of one superpower and its allies that emerged. “They cheated us again and again, made decisions behind our back, presenting us with completed facts,” he said. “That’s the way it was with the expansion of NATO in the East, with the deployment of military infrastructure at our borders. They always told us the same thing: ‘Well, this doesn’t involve you.’ ”
    The speed of Mr. Putin’s annexation of Crimea, redrawing an international border that has been recognized as part of an independent Ukraine for 23 years, has been breathtaking and so far apparently unstoppable.
    While his actions, which the United States, Europe and Ukraine do not recognize, provoked renewed denunciations and threats of tougher sanctions and diplomatic isolation, it remained unclear how far the West was willing to go to punish Mr. Putin. The leaders of what had been the Group of 8 nations announced they would meet next week as the Group of 7, excluding Russia from a club Russia once desperately craved to join.
    Certainly the sanctions imposed on Russia ahead of Tuesday’s steps did nothing to dissuade Mr. Putin, as he rushed to make a claim to Crimea that he argued conformed to international law and precedent. In his remarks he made clear that Russia was prepared to withstand worse punishment in the name of restoring a lost part of the country’s historic empire, effectively daring world leaders to sever political or economic ties and risk the consequences to their own economies.
    Mr. Putin, the country’s paramount leader for more than 14 years, appeared to be gambling that the outrage would eventually pass, as it did after Russia’s war with Georgia in 2008, because a newly assertive Russia would be simply too important to ignore on the world stage. As with any gamble, though, the annexation of Crimea carries potentially grave risks.
    Only hours after Mr. Putin declared that “not a single shot” had been fired in the military intervention in Crimea, a group of soldiers opened fire as they stormed a Ukrainian military mapping office near Simferopol, killing a Ukrainian soldier and wounding another, according to a Ukrainian officer inside the base and a statement by Ukraine’s Defense Ministry.
    Photo
    Near Simferopol, Crimea, women watched at lunchtime as Mr. Putin addressed legislators and other officials in Moscow on Tuesday. CreditYuri Kochetkov/European Pressphoto Agency
    The base appeared to be under the control of the attacking soldiers, who like most of the Russians in Crimea wore no insignia, and the ministry said that Ukrainian forces in Crimea were now authorized to use force to defend themselves.
    The episode underscored the fact that the fate of hundreds of Ukrainian soldiers, as well military bases and ships, remains dangerously unresolved.
    In the capital, Kiev, Ukraine’s new prime minister, Arseniy P. Yatsenyuk, declared that the conflict had moved from “a political to a military phase” and laid the blame squarely on Russia.
    Mr. Putin’s determined response to the ouster of Ukraine’s president, Viktor F. Yanukovych, last month has left American and European leaders scrambling to find an adequate response after initially clinging to the hope that Mr. Putin was prepared to find a political solution — or “off ramp” — to an escalating crisis that began with the collapse of Mr. Yanukovych’s government on the night of Feb. 21.
    Within a week, Russian special operations troops had seized control of strategic locations across Crimea, while the regional authorities moved to declare independence and schedule a referendum on joining Russia that was held on Sunday.
    Even as others criticized the vote as a fraud, Mr. Putin moved quickly on Monday to recognize its result, which he called “more than convincing” with nearly 97 percent of voters in favor of seceding from Ukraine. By Tuesday he signed a treaty of accession with the region’s new leaders to make Crimea and the city of Sevastopol the 84th and 85th regions of the Russian Federation.
    The treaty requires legislative approval, but that is a mere formality given Mr. Putin’s unchallenged political authority and the wild popularity of his actions, which have raised his approval ratings and unleashed a nationalistic fervor that has drowned out the few voices of opposition or even caution about the potential costs to Russia.
    Continue reading the main storyVideo

    Putin Justifies Moves in Crimea

    In his speech in Moscow, President Vladimir V. Putin defended Russia’s actions in Crimea by pointing out past Western “interventions,” including Libya and Afghanistan, at length.
    Mr. Putin appeared Tuesday evening at a rally and concert on Red Square to celebrate an event charged with emotional and historical significance for many Russians. Among the music played was a sentimental Soviet song called “Sevastopol Waltz.”
    “After a long, hard and exhaustive journey at sea, Crimea and Sevastopol are returning to their home harbor, to the native shores, to the home port, to Russia!” Mr. Putin told the crowd. When he finished speaking, he joined a military chorus in singing the national anthem.
    He recited a list of grievances — from the Soviet Union’s transfer of Crimea to the Ukrainian republic in 1954, to NATO’s expansion to Russia’s borders, to its war in Kosovo in 1999, when he was a little-known aide to President Boris N. Yeltsin, to the conflict in Libya that toppled Col. Muammar el-Qaddafi in 2011 on what he called the false pretense of a humanitarian intervention.
    Since Russia’s stealthy takeover of Crimea began, Mr. Putin has said very little in public about his ultimate goals. His only extensive remarks came ina news conference with a pool of Kremlin journalists in which he appeared uncomfortable, uncertain and angry at times. In the grandeur of the Kremlin’s walls on Tuesday, Mr. Putin sounded utterly confident and defiant.
    Reaching deep into Russian and Soviet history, he cast himself as the guardian of the Russian people, even those beyond its post-Soviet borders, restoring a part of an empire that the collapse of the Soviet Union had left abandoned to the cruel fates of what he described as a procession of hapless democratic leaders in Ukraine.
    “Millions of Russians went to bed in one country and woke up abroad,” he said. “Overnight, they were minorities in the former Soviet republics, and the Russian people became one of the biggest — if not the biggest — divided nations in the world.”
    He cited the 10th-century baptism of Prince Vladimir, whose conversion to Orthodox Christianity transformed the kingdom then known as Rus into the foundation of the empire that became Russia. He called Kiev “the mother of Russian cities,” making clear that he considered Ukraine, along with Belarus, to be countries where Russia’s own interests would remain at stake regardless of the fallout from Crimea’s annexation.
    Photo
    Russian forces arresting Ukrainian Army officers in Simferopol, Crimea, on Tuesday. The United States and European nations have strongly opposed the Russian takeover of Crimea from Ukraine.CreditAlisa Borovikova/Agence France-Presse — Getty Images
    He listed the cities and battlefields of Crimea — from the 19th-century war with Britain, France and the Turks to the Nazi sieges of World War II — as places “dear to our hearts, symbolizing Russian military glory and outstanding valor.”
    He said that the United States and Europe had crossed “a red line” on Ukraine by throwing support to the new government that quickly emerged after Mr. Yanukovych fled the capital following months of protests and two violent days of clashes that left scores dead.
    Mr. Putin, as he has before, denounced the uprising as a coup carried out by “Russophobes and neo-Nazis” and abetted by foreigners, saying it justified Russia’s efforts to protect Crimea’s population.
    “If you press a spring too hard,” he said, “it will recoil.”
    He justified the annexation using the same arguments that the United States and Europe cited to justify the independence of Kosovo from Serbia and even quoted from the American submission to the United Nations International Court when it reviewed the matter in 2009.
    Mr. Putin did not declare a new Cold War, but he bluntly challenged the post-Soviet order that had more or less held for nearly a quarter-century, and made it clear that Russia was prepared to defend itself from any further encroachment or interference in areas it considers part of its core security, including Russia itself.
    He linked the uprisings in Ukraine and the Arab world and ominously warned that there were efforts to agitate inside Russia. He suggested that dissenters at home would be considered traitors, a theme that has reverberated through society with propagandistic documentaries on state television and moves to mute or close opposition news organizations and websites.
    “Some Western politicians already threaten us not only with sanctions, but also with the potential for domestic problems,” he said. “I would like to know what they are implying — the actions of a certain fifth column, of various national traitors? Or should we expect that they will worsen the social and economic situation, and therefore provoke people’s discontent?”
    Reporting was contributed by Alan Cowell from London; David M. Herszenhorn from Simferopol, Ukraine; Andrew Higgins from Brussels; Peter Baker from Washington; Andrew E. Kramer from Kiev, Ukraine; Alison Smale and Melissa Eddy from Berlin; and Mark Landler from Warsaw.


    Friday, March 21, 2014

    Mt. Gox Bitcoin Exchange Finds Missing Millions - TIME

    Mt. Gox Bitcoin Exchange Finds Missing Millions

    http://time.com/33270/bitcoin-mt-gox-wallet/?utm_source=feedburner&utm_medium=email&utm_campaign=Feed%3A+timeblogs%2Fcurious_capitalist+%28TIME%3A+Business%29

    8:36 AM ET
        

    The Tokyo-based Bitcoin exchange Mt. Gox, which recently filed for bankruptcy protection, says 200,000 missing coins were found in a wallet thought to be empty. The recovered loot accounts for a large portion of the 850,000 coins Mt. Gox said it couldn't locate

    The Tokyo-based Bitcoin exchange Mt. Gox said Thursday that it hadstumbled upon 200,000 missing Bitcoin, worth about $116 million.
    The digital currency was found in an old wallet that Mt. Gox, which has been under fire and recently filed for bankruptcy protection, had thought was empty, the company said in a letter posted on its website.Wallets act as bank accounts for Bitcoin, which has been under increasing scrutiny from authorities around the world as a volatile and unregulated form of currency. The wallet storing the lost Bitcoin used an old format, but was found to have a six-figure balance on March 7.
    The uncovered loot replaces a portion of the 850,000 Bitcoin that Mt. Gox said it could not locate when it declared bankruptcy in February. The majority belonged to customers. Mt. Gox, once the world’s largest Bitcoin exchange, halted withdrawals due to a cyber attack earlier in mid-February. At the end of the month, the company had filed for bankruptcy in the United States and Japan. In March, hackersaccused the company of stealing Bitcoin that had been lost in fraudulent withdrawals.

    Thursday, March 20, 2014

    Japan Posts 20th Straight Monthly Trade Deficit - Associated Press

    Japan Posts 20th Straight Monthly Trade Deficit

    http://time.com/29783/japan-posts-20th-straight-monthly-trade-deficit/?utm_source=feedburner&utm_medium=email&utm_campaign=Feed%3A+timeblogs%2Fcurious_capitalist+%28TIME%3A+Business%29

    12:34 AM ET
        
    (TOKYO) — Japan reported its 20th straight monthly trade deficit in February as soaring energy imports continued to offset the value of exported goods.
    The deficit totaled 800.3 billion yen ($8 billion), up 3.5 percent from a year earlier, according to government figures released Wednesday. It was a record deficit for the month of February but lower than January’s much larger deficit.
    Resource-poor Japan relies heavily on imported oil and natural gas. Those costs have surged following the March 2011 nuclear crisis in Fukushima, which has led to all 48 of the nation’s working reactors going off line.
    The 20-month streak of trade deficits is the longest since the Finance Ministry started keeping comparable records in 1979.
    The number for February was much lower than the deficit of 2.8 trillion yen ($28 billion) racked up in January.
    For February, Japan’s imports rose 9 percent from a year earlier to 6.6 trillion yen ($66 billion), while exports gained nearly 10 percent to 5.8 trillion yen ($58 billion).
    Weakness in the yen since late 2012 has been a boon for exports, which are significant part of the Japanese economy, exemplified in Toyota Motor Corp., the world’s top automaker.
    But a weak yen also increases the costs of imports.
    The ministry said imports of computer chips and electronics goods were higher in February as the economy picked up.

    Wednesday, March 19, 2014

    4 things to expect from Yellen's Fed - CNN

    4 things to expect from Yellen's Fed

    http://money.cnn.com/2014/03/17/news/economy/yellen-fed/index.html

      @AnnalynKurtz March 18, 2014: 5:45 AM ET
    janet yellen fed lookahead
    The Federal Reserve is expected to change its economic goalposts and continue winding down its stimulus program, at Janet Yellen's first meeting as head of the central bank this week.
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    NEW YORK (CNNMoney)

    Get ready for Janet Yellen's first policymaking meeting as head of the Federal Reserve.

    The Fed is set to meet this Tuesday and Wednesday to mull over the latest economic data, issue new forecasts and re-evaluate its plan for winding down its stimulus program. Here are the top things to look for:
    1) Tapering will continue: The central bank has been buying trillions in bonds since late 2008 in an effort to lower long-term interest rates. The goal: Stimulate the economy by making it cheaper to take out loans.
    But the Fed has determined it's time to start winding down that stimulus program. Since December, the central bank has been slowly reducing its bond purchases at each meeting, in a process Wall Street has dubbed "tapering." The Fed was previously buying $85 billion in bonds each month, then reduced the amount to $75 billion in January, and then $65 billion in February.
    Economists expect a similar reduction in bond purchases will be announced at the upcoming meeting, especially given Yellen's comments before a Congressional committee last month. "We expect to continue reducing the pace of purchases in measured steps," she said.
    2) The goalposts will change: The Fed has kept its key short-term interest rate near zero since 2008, also as a way to stimulate more spending.
    Investors have become accustomed to low interest rates but are looking for signals about when the Fed might eventually raise rates as the economy strengthens.
    So far, the Fed has said it wants to see the unemployment rate fall to around 6.5%, or inflation rise as high as 2.5%, before it will be ready to raise rates. But here's the problem: The unemployment rate, at 6.7% in February, is already nearing that point, and Yellen still thinks the economy is too weak.
    She may want to abandon the numerical targets altogether and focus on qualitative information instead.
    The unemployment rate alone is "not a sufficient statistic to measure the health of the labor market," she told Senators last month.
    Meanwhile, New York Fed President Bill Dudley has said the 6.5% unemployment rate "is already obsolete." It's a "reasonable time to revamp" the Fed statement to take out that threshold, he said at a Wall Street Journal event last week.
    3) Weather puts the Fed in wait-and-see mode: Severe winter storms throughout much of the country weighed on economic data over the last few months, making it hard to get a clean reading on the recovery. Retail sales, job growth, housing and manufacturing all seem to have been impacted, but it's unclear whether the slowdown was temporary.
    "The question is how much of this activity comes back in the spring, how much is simply lost, and how much the slowdown reflects other factors..." Julia Coronado, chief North American economist for BNP Paribas, wrote in a research note.
    Coronado expects the Fed will acknowledge the harsh winter in its policy statement and may even nudge some of its economic forecasts lower for the year.
    That said, Yellen is still expected to express some optimism about the economy picking up in the spring.
    Yellen: 'I am a sensible central banker'
    4) Yellen is still focused on jobs, jobs, jobs: Following the Fed's meeting, Yellen will take questions from reporters in a press conference Wednesday afternoon. She's likely to emphasize that she remains deeply concerned about ongoing weakness in the labor market.
    As of February, 3.8 million Americans were unemployed for at least six months, and 7.2 million workers were stuck in part-time jobs, even though they would prefer full-time hours. Yellen looks closely at both measures, and neither has improved much lately.
    Meanwhile, inflation remains well under the Fed's goal for 2% over the long-run, so Yellen is unlikely to view rising prices as a major concern. To top of page


    Tuesday, March 18, 2014

    Consumers Not Powerless in the Face of Credit Card Fraud - New York Times

    Consumers Not Powerless in the Face of Credit Card Fraud

    http://www.nytimes.com/2014/03/15/your-money/credit-and-debit-cards/consumers-not-powerless-in-the-face-of-card-fraud.html?emc=edit_my_20140317&nl=your-money&nlid=56381892&ref=your-money-email&_r=1

    MARCH 14, 2014
      Photo
      CreditRobert Neubecker
      Your Money

      When you think about the security of your credit and debit cards, consider the facts on the ground.
      Industry representatives readily admit that thieves are often one step ahead of them and that data breaches are a fact of life. One bank went rogue and publicly called out MasterCard and Bank of America for not sharing information and for failing to stem card fraud fast enough in Chicago taxicabs.
      Now a for-profit college, sensing opportunity, has found its own angle.Monroe College is currently pitching a minor in cybersecurity. Its ad on New York City subways features a woman in a white coat holding a card that intersects with beams of light. Perhaps she’ll invent a way to solve the payments industry’s problems.
      Until then, you have to help yourself. Most card companies already have custom alerts and other features that not enough consumers use. Then there’s something that all cards should have but most don’t — an on/off switch accessible from a mobile app that could keep most fraud from happening. Finally, there are the microchip cards that most of the rest of the civilized world uses but that barely exist in the United States so far.
      Photo
      A debit card with a microchip for increased security is used at a Paris restaurant. The chip is common in Europe, but not America. CreditEd Alcock for The New York Times
      Let’s take them in order.
      Alerts and Other Tools
      Whether you’re using a debit or credit card, there are all sorts of ways to limit the damage a thief might do, or at least get a quick warning that one is on the loose.
      Capital One offers a typical list: Customers can turn on text or email alerts that will arrive when their balance goes above or below an amount that the customer sets, when a charge occurs above or below a certain amount, when any charge occurs at all, or if a transaction doesn’t go through because there isn’t enough money in the checking account.
      Citibank can ping you if you’re within a set distance from your credit limit. Chase will text you if its systems detect an unusual charge and let you reject it on the spot. When I logged into American Express’s website recently, I found that I could get an alert whenever someone gets a cash advance using the card (something I never do).
      There is no reason not to set at least a few alerts, even if they may only warn you about theft after it has occurred. Some banks, like Bank of America andCitibank, will generate a one-time-use card number for online shopping. That way, you can cross sketchy websites (or sketchy employees at legitimate sites) off your list of things to worry about. Other institutions, like Capital One, don’t offer this service because so few people end up using it.
      Committed debit card users may want to consider the two-account approach that a reader mentioned in the online comments about last week’s column. The strategy here is to use one checking account for everyday spending with a debit card and a separate checking account for recurring payments. Destroy the debit card for the second account, and you won’t have to worry about a thief stealing the card, draining the account and causing your mortgage or other payments to come up short.
      The On/Off Switch
      If everyone turned their debit or credit cards on before each charge and then off again before returning the plastic to the wallet, it would be a lot harder for thieves to do their work.
      This technology actually exists. A company called Malauzai Software built an on/off switch after one of its bank customers sought a solution to the amount of time its representatives were spending on the phone with people whose debit cards had gone missing. It wanted the customers to be able to turn the cards off temporarily via their mobile banking app until they found them again or declared them lost and asked for a replacement.
      Malauzai obliged, but it soon discovered that fraud-wary customers were turning the cards on and off before and after every charge. “The fraud prevention thing was gravy on top of the mashed potatoes,” said Robb Gaynor, Malauzai’s co-founder and chief product officer. “It was unexpected.”
      Now 70 to 80 institutions, all smaller banks or credit unions, have adopted Malauzai’s on/off switch. Capital One has built its own for debit cards, as have USAA and Simple, which was acquired by BBVA last month. Of customers who are active on mobile banking apps and patronize a bank that uses Malauzai’s switch, 3 to 5 percent of them flip it at least once each month. Recurring charges for things like mobile phone bills get a code that allows them to go through even when a customer has turned the card off. A company called TSYS has its own new on/off offering for banks that can geo-fence transactions, keeping any from going through unless they’re relatively close to a user’s mobile phone.
      Ellen Richey, Visa’s chief legal officer, expressed a bit of skepticism about the on/off switch. The right malware could muck it up, and users may forget that their cards are off and get annoyed at the cash register when things aren’t working. “One thing we have found is that consumers are remarkably impatient with anything that gets between them and making a payment,” she said.
      Continue reading the main story

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      Perhaps, but why not let consumers decide whether they mind that friction? So far, Chase, American Express, Citibank and Bank of America have no plans to do so. If enough of you demand it, however, perhaps they’ll see the light. This is what happened with the now ubiquitous tool that lets you deposit checks by taking a picture of them with your phone and zapping them to the bank.
      Chip Cards
      The United States is such a fraud-friendly country in part because we still use old-fashioned magnetic stripes on the back of our cards. This makes it relatively easy for thieves to make counterfeit ones.
      At long last, retailers and banks and the companies that process their payments are preparing to begin to possibly get their acts together on this front. Over the next 18 months, more debit and credit card issuers will issue plastic with a microchip inside that will transmit a unique code each time you use it in person. Presumably, thieves won’t be able to counterfeit that sort of thing easily, at least for a while.
      Then, on Oct. 1, 2015, assuming there aren’t any extensions, most retailers that don’t have terminals to read the chip cards yet will be responsible for certain types of fraud if it occurs. If retailers do have the terminals but a bank hasn’t gotten around to giving a consumer a chip-enabled card, the bank will pay for the fraud as a penalty for lagging the retailers. It’s an elaborate game of chicken, fitting for an industry where the major playersspent years embroiled in a lawsuit.
      Most people will be dipping these new cards in the terminals instead of swiping them, and some banks may eventually make you enter a PIN instead of signing for a purchase. As long as you don’t lose your card or have the actual plastic stolen, the sort of fraud that went on with Target should be a lot harder to pull off.

      That said, the thieves will then immediately migrate online, since many people will still be typing numbers into websites the old-fashioned way for the foreseeable future. There, the bad guys will find a more welcoming environment, at least until everyone involved with card payments agrees on a technology to thwart the scofflaws there, too. A process called tokenization may become the security standard, or perhaps you’ll be inputting codes you receive via text message, similar to the way you might be now if you have activated two-step verification for Gmail.
      Ms. Richey of Visa says she believes that the various industry players will be quick to act online as well. After all, if they do nothing, the rate of online fraud may rise at the same rate that in-person card fraud falls thanks to all those microchips. “It’s so compelling that it will fuel the merchant and bank players’ willingness to proceed,” she said. “Otherwise, they won’t get the benefit of the investments they’ve made in chip cards.”

      That’s a lot of ifs, in an industry that has waited an awfully long time to fix its fraud problems while inconveniencing millions of customers. Let’s hope it happens as they say it will. Until it does, set some alerts and pester your bank to give you all of the technological options that ought to be available right now.