Zelensky [green] vs. Poroshenko [red] via @vybory_91
Raw results here.
With 99.74% of votes counted as of the time of writing, Zelensky is at 73.22% to 24.46% to Poroshenko. The sole region where Poroshenko won was in Lvov oblast.
Zelensky [green] vs. Poroshenko [red] abroad via @vybory_91.
Raw results here.
Poroshenko’s best performance: Canada, where Chrystia Freeland lives – 74%; USA – 72%, UK – 70%. Diaspora is even more svidomy than Lvov, but they are hardly representative. While they are good commenters, this is something to bear in mind wrt AP and Mr. Hack.
Even in Poland & Czechia more Ukrainian Gastarbeiters voted for Zelensky than for Poroshenko. I had an explanation as to why in my post on Ukraine’s (near) unique status as a place where better educated people lean more nationalist (after adjusting for geographic patterns, age structure, etc).
So successful American-Ukrainian professionals vote for Poroshenko through the same underlying mechanisms that Russian-Americans tend to favor liberal anti-Putin candidates, or why American year abroad students in Europe feel ashamed about Trump. While more redneck type Ukrainians toiling on construction sites in Poland don’t care as much.
This is a good map. It shows that the Ukraine’s political division is still very much alive. I saw a lot commentary from Western pundits, to the effect that Zelensky’s dominant performance means that the country is now united around Western values, or something.
http://www.unz.com/wp-content/uploads/2019/04/map-ukraine-elections-2019.png
Zelensky is the new Kuchma.
https://upload.wikimedia.org/wikipedia/commons/thumb/d/d6/%D0%92%D0%B8%D0%B1%D0%BE%D1%80%D0%B8_1994-uk.png/1024px-%D0%92%D0%B8%D0%B1%D0%BE%D1%80%D0%B8_1994-uk.png
I’d also wager a guess that the Ukrainian workers in Poland, the Czech Republic etc. are disproportionately from Eastern Ukraine (since the East was hit harder by the post-Maidan recession; note all the direct flights from Warsaw and Krakow to out-of-the-way eastern industrial shitholes like Kharkiv and Zaporhizia), which further tipped the vote in those countries in Zelensky’s favor.
Lviv is the region that benefited the most from Maidan: beyond being in the driver’s seat with regards to culture and political control, it was only mildly affected by the post-Maidan collapse and is becoming rather prosperous (by Ukrainian standards) due to the IT industry. Tourism is also booming there: Lviv is about the only city in Ukraine worth visiting for touristic reasons and not just because you’re a Turkish sex pest or American incel looking to get laid. It’s also close to Krakow (three hours by train) so it’s easy to fit into a backpacker’s itinerary.
So Lviv has plenty of reasons beyond nationalism to be pleased with Poroshenko’s presidency. Ivano-Frankivsk and Ternopil, on the other hand, haven’t received nearly as much in return.
Like I said before, the more things change, the more they stay the same. Ze will be the sixth Ukrainian president since 1991. So far, the corruption got worse with every new one. My bet is, this tendency will continue. Stay tuned.
How to interpret it? We have had a disagreement whether Zelinsky’s triumph reaffirms Maidan, undermines it, or whether it is a desperate scream in the dark by people at the end of their wits.
Probably all of the above. What is clear is that Maidan core supporters have retreated to Lviv, parts of central Kiev, (and Canada). The lukewarm Maidanistas threw up their arms and went for ‘anything new’, preferably with less corruption. The Russian leaning east and south gave a big fat finger to the Kiev elite status quo, anyone not seeing it is deluded. And the current status quo and Kiev elite is based on Maidan. One can argue that they want a ‘real’ Maidan, or more Maidan, but what they clearly don’t want is the Maidan they got.
Let’s look at ‘corruption’: every single politician runs against corruption, it is a given. Some might even mean it. But corruption is inherent in complex, unequal, chaotic societies like Ukraine. It also makes lives easier: services can be obtained, trade facilitated, capital accumulated. Having oligarchs and corruption is an inevitable consequence of a badly managed society.
Zelinsky can do some flashy anti-corruption moves, but he doesn’t have a plan on how to change Ukraine’s economy. Money generates money, large sums of money lead to contempt for countrymen and laws. This is not going to change, the oligarchs are not going to share their wealth, courts in general are not going to hold them accountable. Ukraine needs an economic reset of assets, ownership and incomes. Once that is balanced then corruption will decline and it would be easier to suppress. Until then, this is a fool’s errand that will be selective, ineffective and temporary. Is Mr. Z going to investigate Kolomoisky?
Regardless of what the election has meant (we can disagree), the chances are that Z. will be a disappointment. He can’t square a circle, people projected too much into him. The key question is whether next time Ukrainians will choose an even more anti-system Z., go back to one of the elite oligarchs, or the country disintegrates. Another option would be a strongman rule – possibly from military, that is actually most often how these unresolvable situations end. Some frustrated young officer on the Donbass front might be checking out history manuals as we speak, and then all bets are off.
Saker>> Considering how clueless and non-presidential Zelenskii looks (and sounds every time he opens his mouth), I think that keeping him basically silent was not only the most effective technique, it was the only possible one.
It was also not an invention.
Before 2013 coup it was boxer Klitschko who was “campaigning” exactly this way, and was leading the scoretables. Until he opened his mouth….
Ukraine is a wonderland where the less politician speaks – the better are his ratings 😀
Truly the ultimate cucks, it’s not enough that they turn their land into a zio puppet, they now have to make their puppet in chief a jew as well.
To be honest, I’m impressed with Poroshenko performance – didn’t previous Ukrainian neoliberal viceroy (Yuschenko), get like 6%? Neoliberal/neocon faction is so clueless in the empire management business, 24% is a major accomplishment here.
Anyway, I congratulate Ukrainian people and wish them all the best with Zelensky. One comment though – you probably want to keep a few things as low profile as possible and not piss off the IMF. I mean, Zelensky is not even sworn in yet, and Kolomoisky is already a happy guy.
https://intellinews.com/kyiv-court-rules-nationalisation-of-privatbank-was-illegal-159896/
Money shot:
“If PrivatBank is returned to Kolomoisky then Tim Ash, senior sovereign strategist at BlueBay Asset Management, says that would be a “deal breaker” for the IMF and its $3.8bn stand-by agreement, which could plunge Ukraine back into crisis.”
Great victory for Kolomoisky for sure, but IMF still owns your nether regions, and will make your life miserable if you disobey.
I don’t even have to look it up to know that this Kolomoisky is going to be a jew. Every single time.
Not so sure of how much an actual reality that is as polling can be misleading. Russian-Americans meaning what specifically? Some Russian-American be the bigoted anti-Russian Julia Ioffe as a case in point. Sensing that folks of a Russian Orthodox Christian background are generally counter to the contemporary Democratic Party establishment line.
Likewise know Ukrainian-North Americans who don’t take a svido line. These folks are probably underrepresented in the polling. Ditto those of a Russian-Jewish background running counter to Ioffe types. Consider the kind of Russian and Ukrainian views typically getting favored in North American mass media. Such a slant could very well extend to polls subscribing to that bias.
She is neither Russian or American, the reasons for her hatred should be (((obvious))).
She’s called such and (if I correctly recall) at times has referred to herself as Russian and/or Russian-Jewish.
Her hypocritical bashing of Ilhan Omar and bigoted anti-Russian comments indicate that she’s not Russian in terms of having pride with that background. Concerning this matter:
https://www.eurasiareview.com/19022019-putting-the-new-cold-war-and-russia-bashing-into-proper-perspective-oped/
https://www.strategic-culture.org/news/2019/02/18/putting-new-cold-war-into-proper-perspective.html
Mind you, there’re Russian-Jews, who don’t take her stance on Russia.
ROTFL
Get a load of this.
https://www.youtube.com/watch?v=l3adfOEhmY4
Ukraine’s economy is slowing now, but GDP is still growing (predictions of 2-3% GDP growth this year). Combined with falling or emigrating population, per capita growth rate could be closer to 1% higher than the GDP growth rate.
There’s a lot of simple things you can list, where a new government could improve Ukraine if more sensible people would be appointed, even without being able to reduce corruption.
In domestic policy – stopping this new Ukrainian language as the state language law, reducing corporation tax (which is still quite high), improving non-corruption related aspect of “ease of doing business”, investing in marketing their country for tourism, eliminating taxes for high-tech companies.
In foreign policy – improving relations with Russia and neighbouring countries (and trying to solve energy crisis), implementing Minsk II, projecting less “crazy image” to the world.
Then other things they could try to achieve – applying for more EU “humanitarian funding”?
Some PC on the English language spelling of Zelensky’s name:
https://www.rferl.org/a/poroshenko-concedes-after-exit-polling-shows-zelenskiy-taking-ukraine-presidency/29894814.html
“projected” is an interesting word. Personally, I was taught that it’s unwise to count your chickens before they hatch.
As long as Ukraine remains the US colony, it cannot improve relations with Russia. The US is determined to use it against Russia to the last Ukrainian: the US never takes the losses of aborigines into account.
You can bet your last penny that shameless begging (for “humanitarian aid” and “loans”) will continue. You also can bet your last penny that whatever “aid” or “loans” Ukraine gets will be stolen, exactly as before. The only difference will be in the personages allowed to the trough: Porky and his team are out, new thieves are in. Rinse and repeat.
Quoting Shakespeare: “What’s in a name?”
There really isn’t much mystery as to why the Ukrainian diaspora in the west, and more educated Ukrainians in general, voted for Poroshenko. For those among them who were concerned with superficial things, like talking tough on Russia and creating an independent church, Poroshenko was actually pretty good. The fact that he presided over difficult economic times and failed to make any serious progress on corruption wasn’t so significant for them because they don’t have to deal with the consequences of this as much as poor and middle class Ukrainians who are actually in the country do. With regards to Poroshenko’s support inside Ukraine, as AP routinely points out, western Ukraine is doing much better than the rest of the country, so it’s no surprise that they support Poroshenko more than the rest of the country would, given that they would have fewer complaints about the economic situation.
Even for those in the diaspora who are less easily swayed by vocal patriotism, and are more concerned with practical progress on corruption, the economy, and resolving the war, it makes sense for them to support Poroshenko. There don’t seem to be many substantial differences between Poroshenko and Zelensky in terms of policies; the only major differences appear to be in their presentation. If Poroshenko were to win a second term in a clean election, then it would have been a strong indicator of stability and continuity, which would have been helpful for the economy on its own. Regarding corruption, re-election would have given Poroshenko a somewhat stronger position from which to target oligarchs, although I doubt that he ever had any interest in doing so. Zelensky, as a newcomer, might have a more difficult time taking anti-corruption measures than a re-elected Poroshenko would have, though I am equally skeptical that he intends to take any action on the matter.
Hi Beckow,
This is completely off-topic, but I’ve been meaning to ask you about some comments you made on the March 31 thread about the Ukrainian elections. If I recall correctly, you argued that the original homeland of the ancient Slavs was the Carpathian basin and the Danube region. This is a very interesting theory, but the only sources I can find for it are the Russian Chronicle and some obscure papers with obvious nationalist bias. Do you have any sources for it? I would be very interested to read more.
Thank you!
Who the heck is that “Julia Ioffe” personage?
Things are much simpler: Kolomoisly replaced Porky as top Godfather. Don Corleone would be proud.
The best book on this is by C. Hromnik: ‘Sloveni‘, it summarises a huge amount of data and sources, uses etymology, local geographic names, Greek sources, DNA research, etc… Unfortunately it has not to my best knowledge been translated from Slovak. There are a number of other books along the same lines, but less well researched. There is also the 18.-19. century history that assumed that was the case (Palacky, Safarik, etc…).
It is a controversial argument and I only agree with it up to a point: the original ethno-genesis of Slav tribes included at least some portion of the Carpathian basin, probably the northern half. And it goes further back, to 2.-3. millenia BC (bronze age). The north of the Carpathians was definitely also a part of it, maybe the dominant part. The miraculous emergence of 40% of Europeans from the ‘Pripyat marshes’ in the 5th century is on its face stupid – and yet most Western history still basically says so, check their encyclopedias.
The Russian Primary Chronicle, early Czech and Polish chronicles – all stated as a fact that long-long time ago all Slav tribes spread out from the middle Danube area. It makes more sense geographically: Slavs were farmers, and farming spread from the south, not vice-versa. But there needs to a be a lot more research. Most old DNA tested in the middle Danube area is R1a1 subclade that is a direct ancestor of most today’s Slavs. But there could also be a linguistic shift. It is intriguing, but hard to prove – but so is the ‘Pripyat marshes’ theory.
Would be fun to watch other greedy swine, such as Akhmetov, Levochkin, Pinchuk, etc., wiggle for a place at the trough.
I find the debate over whether this was a vote against the Maidan movement rather pointless. Ukraine’s drift into Brussel’s orbit was written in stone the moment the EU forced Ukraine to take sides. Simple economics dictated it. Even under a Yanukovich regime, I strongly believe that Ukraine would have taken the same path, only with a very slight lag*. The one difference the Maidan movement brought was that we saw civil war and some Russian landgrabs, both of which turbocharged svidomism.
That svidomism, I do think this election was a vote against. Zelensky coming out against Bandera (although I don’t remember his exact words) and speaking Russian on stage were acts of defiance in post-Maidan Ukraine (and so was, I duly noted, addressing the Rada in Russian in his TV series; this must have ruffled some feathers). On the topic of svidomism, we should also never forget that Zelensky is Jewish, which means (1) that his ancestors would very likely have been pluralist Russophones and (2) that those grisly pictures of the Galician pogroms must feel very personal to him.
Russia’s place in all this I find quite straightforward. It should first resolve the Donbass and NATO questions, then seek to remove all barriers to Russian companies doing business in Ukraine, and after that focus all its energy on making Russia the great country it was always meant to be.
The path forward in the Donbass conflict, I think, is to insist on a new Minsk agreement and to enter the negotiations with a loud and clear message that any non-resolution or non-compliance means that Russia is morally forced to hand out Russian passports to all DNR/LNR citizens and arrange local referenda on Russian accession. This will meet international outcry, of course, and Ukraine is sure to turn down any workable settlement, but it’s better to get it over with now than to kick the can down the road. The Washington consensus isn’t going anywhere, and the sooner the healing processes get going in Russia and Ukraine, the better. Related to this point is that Russia must somehow stop Ukrainian NATO membership. I’m not so sure that this is the end of the world, but I know Russians feel differently. What to do? I would explore two routes. The first, the soft option, is to give Ukraine favorable trading conditions (preferential energy prices or some such) in exchange for non-membership. The second, the hard option, is to respond asymmetrically and put the heat on Israel. Here Russia might threaten to ship some fancy weapon systems to Iran or Syria in the event of Ukrainian NATO talks. The details are not so important. My point here is simply that the (credible) threat should be directed at a country that Washington truly cares about (Israel) rather than at their pawn (Ukraine).
Back in the Yanukovich days, an Ernst & Young report (I think it was) showed that Ukraine’s 100 richest people sat on some 85% of the country’s wealth. It wouldn’t surprise me if this figure still holds today.
Oh dear. To be honest, I don’t really see where IMF is coming from here. As I remember it, the understanding at the time was that this takeover was a flagrant breach of property rights.
A lot of simple things that would help. But what is different with Z. vs. Porky? None of it has been done in the last 5 years. When things don’t happen, they often don’t happen for a reason. Kiev is a Western strategic asset and its value is exactly in not doing what you suggest.
Improving living standards in Ukraine is not even among top 10 objectives for the Western sponsors. Those are Crimea, wars, geo-politics, weakening Russia, close by missiles, assets, arable land, LGBT outreach, potential place for Third World migrants, loan repayments, cheap women, capital flight to Western banks – all of those are a much higher priority.
Zelinsky is staring into an abyss of how to square this circle – he will probably be politely told not to rock the boat. So he will return Kolomoisky’s assets, set up his relatives in Marbella villas, get some spare passports, travel a lot, yell at Kremlin, speak to Congress – and then return to comedy or simply vanish. If Trump couldn’t move Western geo-politics even one inch, how would a silly clown in a far away province do it?
Maybe they can do better ‘tourist outreach’, more tech, lower taxes. But some of it has downsides – creditors like to collect their loans and higher living standards cut into the profits. Having better managers is neither here nor there, it is like saying we should have better weather. It is what it is.
“There are doubtless heroes. Stepan Bandera is a hero for a certain percentage of Ukrainians, and that’s perfectly cool and normal. He is one of the people who defended Ukraine’s freedom.“
He’s bad at Ukrainian (like Poroshenko was 5-6 years ago, and Tymoshenko never became fully comfortable with it either.
But I think this issue only really triggers the more svidomy Galicians.
http://www.unz.com/akarlin/31-steps-for-ukraine/
I’ll have a poast on that eventually, but for a variety of reasons, Belorussia’s “Russophile” quotient is similar to that of the Donbass. It’s still probably a couple of decades away from ascendant svidomism (zmagarysm, in their case).
She’s an anti-Trump and anti-Putin, Jewish journalist, who speaks Russian (you can see her interview for Echo of Moscow in YouTube). We all follow her in the comments, because she was the main person who invented the Trump-Russia conspiracy theory in the media.
When you investigate her, she doesn’t seem to know any important people. But she had a strong imagination and was creating a lot of the Trump-Putin conspiracy theory last year.
You make some good points, but even you say:
That seems obvious, then what is the point of going through negotiating the settlement? Just so Russia can claim that ‘they tried‘? Western media dominance makes all such cosmetic moves moot, any discussions would be misrepresented, the narrative would stay the same.
Regarding Nato: Ukraine cannot join until the mid-level European countries agree, Germany, France, Italy. They might be pushed but only in circumstances were Nato and Russia are in a de facto low level military conflict already.
My point is that neither Kiev nor Russia are in a position to impact what is going on too much. It was a bold strategic move by the West – long planned, quite rational, and not undertaken lightly. As long as West pushes forward only a massive escalation that could lead to a nuclear catastrophe would stop it.
Russia looks like they are stuck, hoping for the best, waiting for time to solve it: maybe an economic crisis in the West, some other crisis around the world, or an asteroid. In the meantime Russia is preparing for an autarky economy, in that sense they are better off than in 2014. They also have China siding with them, that was not a given in 2014 either. What they don’t have is initiative – that is still with Washington.
This is a game of chicken with sanctions, NGO’s and nukes. And chickens are nervous animals for a reason…
Wow, she must have good imagination to invent Trump-Russia conspiracy theory. MSM like lies, and this was one of the best. Quite a few libtards still believe it.
Zelensky has less power, because no political parliament party. However, political base is different, so we should hope at least very slightly different policy with Russia.
It’s true, it depends a lot on how relations with the West will go. In addition, there is anti-Russian radicalization in Ukraine of the last 5 years, which limits possibilities.
But I think there will be some reduction with tension between America and Russia in the next few years, which could help the situation in Ukraine.
It’s like Schopenhauer’s pocupines. Moving closer until the spikes into each other, and then moving away, and then moving closer again, etc.
Trump has been already successful in most things he said he would do in the political campaign. I just think people were not hearing what he was saying in 2016, sometimes because they did not like Trump for other reason and wanted to lose him votes (i.e. Trump-Russia conspiracy theory)
And sure, some lies, like the border wall with Mexico they would pay for. But overall, he has been unusually accurate to his campaign statements.
Even with Russia, Trump never said he would accept status of Crimea as Russia.
What he was saying, was always more comments (accurately) that Putin is better than Obama:
https://twitter.com/realDonaldTrump/status/760095370185674752
https://twitter.com/realDonaldTrump/status/760095370185674752
https://twitter.com/realDonaldTrump/status/447191888630927360
https://twitter.com/realDonaldTrump/status/447191888630927360
Lol, yes she was not untalented. But you’re lucky you did not waste time knowing about her.
She thinks all the most pro-Western Jewish oligarchs (Petr Aven, Mikhail Fridman, Yuri Milner, German Khan) are the centre of a sinister Trump-Russia conspiracy. When really, they wanted to live in America, or at least London, and not receive sanctions.
In reality, they are the pro-Western oligarchs, which were meeting with the Americans, just to try to say they didn’t have a link to the Kremlin, and to ask “please don’t sanction me because my bank account is in London and I like money”.
Anyway, I first started reading her article 2 years ago, and imagined they might be informative to learn about these oligarchs for a few seconds… and then in a few paragraphs it was “wtf!”
https://www.theatlantic.com/international/archive/2017/11/yuri-milner-paradise-papers/545483
https://www.politico.com/magazine/story/2016/09/the-mystery-of-trumps-man-in-moscow-214283
The sad thing, is she can’t even do the journalism that amateurs can. (For example, it’s true Fridman and Khan are more closely associate to Putin than they pretend – for example, they donated $100 million to create the foundation of Putin’s endocrinologist daughter is leader of).
In general weaker leaders don’t take bold initiatives. Zelensky is weak. He will reach out to Moscow, probably meet, then he will cover his behind with some tough talk. He is not in a position to do one thing that would work: give the f…ing Donbass an autonomy. He could turn Ukraine into a federation, simply delegate most contentious issues like language, education, statues, local power structure to the provinces. But after Crimea that would be possible very destabilizing – the secession would be always a threat. And Washington doesn’t want it, it could complicate placing missiles in some eastern places and it would lower the tensions with Russia. Not optimal.
There is a low-level war in Donbass because Washington wants to have one. Ukraine can’t recover economically as long as it is not trading with Russia. West sanctions Russia and Russia effectively sanctions Ukraine. We have a competition of pain – who can last longer. Zelensky will hardly change it. There will be some initial good will, some meetings, and then back to the stalemate – most likely worse than today.
Something Zelensky might be able to achieve, is just some reduction of aggressive cultural Ukrainization.
For example, he was speaking Russian in the debate, and has easily won the election even in the West Ukraine.*
So if you view it just as a symptom and that he is unlikely to change the main vector of Ukrainian orientation (especially with pressure from their Western partners), at least we can say that there could be a sign of some normalization of political culture.
–
” In Western Ukraine 56% voted for the showman of Zelensky, and 44% voted for the current president of Ukraine Poroshenko. In the center of the country, the votes were distributed as follows: for Zelensky – 72%, for Poroshenko – 27%. Also in southern Ukraine, 72% of Ukrainians sent their vote for Zelensky, and 28% for Poroshenko. In the east of the country, 89% of residents preferred Zelensky, the remaining 11% – Poroshenko.”
That’s certainly damning. I should have made clear that it was my understanding of his comments in this interview (sorry, don’t remember the exact time point):
https://www.youtube.com/watch?v=AkZxVmwrx_E
Have a look at her Wikipedia entry. This is a top-notch resume for an American journalist:
https://en.wikipedia.org/wiki/Julia_Ioffe
Yes, that’s exactly the idea. The reason I wrote that Russia should make a lot of noise about this is that it will make it harder for Western media to make the accessions look like annexations. But it will be a wild ride for sure, yes.
Yes, I agree. Were it not for “the Rise of the Rest,” things would look hopeless for Russia. But the relative power of the Washington-Brussels axis will decline sharply in a decade or two, perhaps even sooner if we see another financial crisis, and then who knows what happens.
Sure, he probably will. He will probably allow more Russian artists to visit and vice versa. Those are things that Western advisors pushed from the very beginning – in 2014 they thought that the anti-Russian language law was idiotic and badly-timed (it wasn’t signed after that).
But those are details. Maybe they will improve the overall atmosphere, but the stalemate will go on. People didn’t vote for Z. to keep things as they are – so he is sure to disappoint.
Both camps are right since Trump’s comments on the campaign trail were all over the map. For instance, did he not also say, to general media outrage, that the people of the Crimea speak Russian and voted to join Russia?
Some fact checker. See:
https://www.strategic-culture.org/news/2018/07/12/more-mumbo-jumbo-on-russia.html
Excerpt –
She’s also a big time hypocrite:
https://www.strategic-culture.org/news/2019/02/18/putting-new-cold-war-into-proper-perspective.html
Excerpt –
So much for Ioffe’s paper credentials. I’ve yet to see her really challenged in a point-counterpoint media format.
That is the 800-pound gorilla in the room that everybody is ignoring. In 2008-9 it took dropping interest to zero and a complete, all-hands-on-deck, global collaboration to stabilize the financial system (and the economy). Nobody tried to go rogue and take advantage of the US weakness. They could have.
Both are gone: you can’t do another drop to zero, they would have to go to minus 2 or 3 to stir up the economy – they might try, but it is absurd on its face. Why not just print tons of money and drop it from helicopters? And the idea that China-Russia, or even EU and some others, would not try to protect themselves as a first priority in the next crisis is laughable. There is a huge amount of resentment behind the scenes that the 100% obedience to US in 2008-9 was rewarded with wars, coups and ‘MAGA’. Next time it will be for real.
The overall debt ratios today are slightly worse than in 2008. The claim is that these are ‘higher quality loans’, but it is only higher quality as long as the economy is good and as long as people have a stake in paying them back. The reality is that a large chunk of those loans are unpayable and will not be paid back. That means that we have double counting of assets, double consumption and that is not good for anybody.
ZIRP is not that effective because banks can’t lend when there is no demand for credit. And even with low interest rates, borrowers themselves must be creditworthy enough to be able to service the debt.
The relative failure of ZIRP led to the Quantitative Easing experiments and for some countries to try out negative interest rates. These had certain limited successes, but did not provide much in the way of stimulus. One problem with such programs is that they’re actually deflationary because they reduce income to the financial system.
So yes, “magic helicopters” (as Bernanke called them) is the right approach. In other words massive fiscal stimulus supported by central banks as required. One of the major reasons for the slow recovery from the Great Financial Crisis was the premature scaling back of fiscal stimulus in both the US and Europe. The morons at the ECB even hiked interest rates in 2011 (not fiscal policy but you get the point).
Also it’s worth pointing out that while bad economic policy is…bad…generally speaking economies do always return to growth. So even if the next time (if there is one, which I’m highly skeptical of) the policy response is more like 1929 than 2008, economies will still recover eventually.
In the USA at least it’s completely true that the credit quality of household borrowers is dramatically superior to the 2000s. Corporate credit quality is down (though manageable) and government debt is up (and continues going up…).
ZIRP worked well in the first phase by cutting back on the variable loan payments. That provided stability for the QE to kick in. A lot of creditworthy people also jumped in a got the heavily discounted loans – they would had to be fools not to.
Credit worthiness of US consumers is not that good – they don’t have enough security to depend on if things go badly. What was different in 2008 were the under-water mortgages, that obviously got better with the defaults. But there are large consumer, corporate, student loan, government debts that can only be serviced (not even paid back, just serviced) as long as the economy is doing well, incomes grow, etc… They are also at risk if interest rates go up.
It is never the same: there will be no replay of 1929 or 2008, or anything in between. There are only two mathematical ways to avoid a debt default driven financial collapse: writing down some of the debt, or inflation. Of course, any rational politician will choose inflation. That’s why assets have been climbing in anticipation. But when income-to-assets ratios got out of whack (e.g. US coastal real estate), all kinds of weird things start to happen. It devalues work and creates perverse incentives to be a deadbeat. Relatively open borders also create a labor arbitrage problem and more and more people will simply game the system. All of this is lurking right under the surface and if there is a financial shock (large defaults), it will reinforce the downward pressures. Very different from 2008 when a certain noblesse oblige still prevailed. You never step in the same river twice – it got a lot muddier since 2008.
Do you think that Zelensky can secure the Donbass back for Ukraine? Personally, I strongly doubt it.
It’s true ZIRP helped with ARMs, though the damage was already done since MBSes blowing up collapsed the wholesale Dollar lending market–even for high quality corporate borrowers like General Electric (not high quality anymore, but it was then) and McDonald’s. The main benefit was in cutting borrowing costs for government borrowers, but bear in mind that reduced income to the financial sector and was thus deflationary. Another example of how supposed monetary stimulus isn’t necessarily stimulating (the federal government was obviously going to blow out the deficit regardless).
QE was another mixed benefit. The main benefit, once again, was to cut costs for borrowers. Since private sector borrowing was not strong, the primary beneficiary was sovereigns. Another deflationary “stimulus”–at least in the advanced economies. The main beneficiary of QE was in fact emerging markets, who couldn’t necessarily afford their Dollar borrowing without it (recall the Taper Tantrum causing major problems for EM borrowers).
The household credit situation has absolutely improved. Total household debt today is about the same as it was right before the crisis:
http://www.mybudget360.com/wp-content/uploads/2016/09/household-debt-2016q1c2.png
Seems bad, but after ten years the US economy, population, workforce, wages, salaries, housing stock, motor vehicles, etc. are all larger. So household debt per capita is down.
Household debt service ratio is way down:
http://defoeredmount.com/wp-content/uploads/2017/12/Household-Debt-Service-ratio-3Q-2017.jpg
And the quality of mortgage borrowers (by far the largest share of household debt) is way up:
https://www.zerohedge.com/sites/default/files/images/user5/imageroot/2017/02/08/mortgage%20originations%20q1%20fico.jpg
Note that in the US a score of over 720 is generally considered “prime” and a score of under 620 is generally subprime.
It’s not desirable for debts to be paid back as this destroys money. You’re looking for debts to roll over and expand–just not beyond the capability of the underlying economy to service them.
Coastal real estate values are certainly a problem for people living there (or who want to live there), but their high prices largely make sense. These are the most prosperous parts of the country, and thanks to NIMBYism and green faggotry it has become extremely difficult to add to the supply of housing there. Fortunately in the US this problem is contained to a few metropolitan regions instead of covering most of the country as in CANZUK and Sweden.
Other assets are up for similarly rational reasons. The growth in the stock market for instance tracks closely with the growth in corporate profits and dividend payments. Contrary to what doomsayers warned, stocks continued to climb after Quantitative Easing ended. They’ve plateaued now, but that’s what you would expect in a rising rate environment after a long bull run–and corporate earnings growth is slowing as well since we’re late in the economic cycle.
All in all I don’t see serious financial dangers in the USA other than long term ones like the solvency of pension funds for public sector parasites. We seem to be headed for a “normal” recession not caused by financial overexuberance, of the sort we last experienced in 1990-1991. There might be serious problems elsewhere in the global financial system of course. Godfree Roberts’ Sinotriumphalism aside, there seem to be serious problems brewing in China as Polish Perspective has written about before. A major financial blowout in China would obviously have profound effects all over the world.
I was only referring to Dmitry’s statement that “she doesn’t seem to know any important people.” Her Wikipedia entry suggests otherwise, and I’m sure a few minutes’ research would confirm this.
IMF has a very nice interactive map of global debt on their blog (although some of the circles, including Sweden’s, are wrongly positioned)
https://blogs.imf.org/2019/01/02/new-data-on-global-debt/
That blog post also has a chart of global debt over time
https://blogs.imf.org/wp-content/uploads/2018/12/eng-december-26-global-debt-1.png
Total debt level doesn’t tell you much about whether or not there’s a financial crisis brewing. Japan for instance is at nearly 400% of GDP according to this visualization, but it’s rock solid.
The most common feature of financial crises is that they’re proceeded by a financial mania in which debt levels rise rapidly. Usually but not always in the private sector.
That said China clearly stands out in the EM group.
Some odd problems with this as well. According to this Taiwan has…zero private debt.
Maybe not in itself, but is it not a risk factor if other events set a crisis in motion?
I don’t think it is, except to the extent that all else equal zero debt safer than having debt. Remember that one man’s debt is another man’s asset.
But realistically the country with debt is a much richer one and with far greater ability to borrow.
If you dig into the structure of debt in any particular country you’ll no doubt find problems. Will higher corporate indebtedness today force deeper deleveraging by the business sector in a future recession? Perhaps.
High levels of state debt seem to be somewhat concerning with respect to fiscal headroom in an economic crisis, but limits to state indebtedness are largely theoretical. The Japanese state is today the most indebted government ever (as a share of GDP) in the history of the world and yet the Japanese government has so little trouble selling bonds that 10 year JGBs have a negative yield: https://www.bloomberg.com/quote/GJGB10:IND
Glad to hear. For what it’s worth, friends of mine who work in Sweden’s finance sector share your views and are not at all worried about our country’s debt levels.
I’d be curious to know Mikael Synding’s view.
Housing prices have certainly climbed to a very high level in Sweden:
https://www.zerohedge.com/sites/default/files/images/user235761/imageroot/2017/11/04/DLSnvqJX0AAP82b.jpg
Though lately there’s been some moderation: https://www.thelocal.se/20181205/properties-in-sweden-cost-less-than-they-did-a-year-ago
Is there a genuine shortage of supply in housing, or is it just a financial mania? Perhaps both?
Did you see the video of him trying to say “digitilisation” in an English speaking business forum?
I know he has done alot of embarrassingly dumb acts of stupidity when opening his mouth…..but this was on another level
Thank you for the source. It sounds like a perfectly believable theory, and it gels with everything else I know on the subject. I’ll look for more in-depth sources.
It’s surprising to me that most western works basically ignore this theory. The fact that it is mentioned in the Slavic chronicles should merit some kind of discussion.
Never heard of him before, but his blog looks interesting.
This is not my strong suit, but from reading around, it seems that the shortage is a mix of mismatch problems (too little affordable housing) and lack of residential construction. Overall, in 2018, 243 out of 290 Swedish municipalities faced shortages, so they are by no means limited to urban areas. Still, OECD, in its latest report on the Swedish economy (summary), specifically points to high housing costs in the cities as Sweden’s greatest economic risk going forward.
Left unsaid in the reports I looked at, but well enough known to middle-class Swedes, is that there is strong white flight away from utanförskapsområden (in effect, immigrant-heavy areas) and their surroundings to less diversified municipalities, which drives up prices in inner-city Stockholm and its wealthy eastern and nothern suburbs. A house (villa) in Stockholm’s southern suburbs can be 20% cheaper or more than a corresponding one in the northern suburbs. (There is some gentrification working in the other direction, but on the whole, this picture still stands in 2019.)
Seems like the housing crisis could be solved at a stroke by expelling all the skraelings not currently in useful employment.
Has SD or any of the other nationalist parties taken up this issue?
Yes, of course, immigration is by far the main driver of the shortage
https://fof.se/sites/fof.se/files/styles/full_no_crop/public/170232_2.jpg?itok=qS4q11fi
But Sweden lags the rest of Europe in residential construction, so it’s a safe guess that we would face housing shortages even had we only allowed EU immigrants
https://fof.se/sites/fof.se/files/styles/full_no_crop/public/170232_3.jpg?itok=hQPwJ4NB
Percent of housing stock built after the year 2000 (EU average is 9.8%) [Eurostat data]
Yes, they mainly put the blame on immigration and anvisningslagen. The latter is a controversial law that forces all Swedish municipalities to accept and offer housing to a certain amount of immigrants, which drives up housing costs in attractive municipalities. This is akin to the federal government in Washington ordering New York City to reserve Manhattan real estate for newly-arrived immigrants.
Thanks.
Less housing construction than the UK…embarrassing.