Она утонула

Russia’s credit rating was cut to junk by Standard & Poor’s, putting it below investment grade for the first time in a decade.

Putin's lies are catching up with him. A bond is a promise to pay with an interest schedule attached to it. Who wants to believe promises of a country whose president cannot utter a single sentence without lying twice?

Как Сечин ворует из бюджета

Ведомости пишут о заеме Роснефти в прошлую пятницу:

«Роснефть» установила ставку 1-го купона биржевых облигаций серий БО-18 — БО-23, БО-25 — БО-26 на общую сумму 400 млрд руб. в размере 11,9% годовых, сообщила компания. Сбор заявок прошел в пятницу 23 января с 16.00 до 17.00 мск.
Ставки 2-4-го купонов приравнены к ставке 1-го купона. Срок размещения облигаций составит шесть лет, бумаги имеют квартальные купоны.

ЦБ России на прошлой неделе пытался разместить государственный заем сроком на 1 год под 15%, но его особо никто не хотел брать; продали 20% заявленного объема. При этом у ЦБ есть резервы и все прочее солидное обеспечение (collateral). И тут в пятницу вечером на "рынок" выходит Сечин, у которого компания вся в долгах, и ему (внезапно!) дают 400млрд под 12% :)
Естественно, Сечин разворачивается и выплачивает эти деревянные деньги в счет налогов, а валюту оставляет себе. В то же время ЦБ запрещает другим экспортерам проделывать ту же операцию с частными банками.
- Почему такое непостоянство?
- Бляди, сэр.

Medieval Arabic thinking

This is an important finding about the Arabic "language obsession" in the 11th century, which is consistent with the approach proposed by Russian philosopher Andrei Smirnov.

Most significant, he [Alexander Key] says, is the fact that these scholars were working "with what appear to be basic structural assumptions about words and meanings that we just never had in the West."

"I'm struck by the many points, particularly around metaphor, where the medieval Arabs and Persians may have just done a better job than we have been managing to do with these same questions," Key said.

Key also found that the early scholars benefited from a holistic perspective. The ancients lacked the modern methodological divide between arts and sciences, and so were able to see language as a cognitive function shared between poetry and logic.

For example, we should think about Putin not as a person, but "putin" as a process.

The human aspect of "putin as a process"

The current economic crisis in Russia is going to delay family formation and reduce fertility rate among the 20–35 generation. Popolation-wise, Russia's conflict with Ukraine, which is likely to drag out for years, is going to cost millions of Russian lives, due to premature deaths caused by economic hardship, alcoholism, emigration, and unborn children.

Institutions are not always so important (or easy to measure properly?)

Originally posted by marginalrevtion at Institutions are not always so important (or easy to measure properly?)

http://feedproxy.google.com/~r/marginalrevolution/feed/~3/Bcs6sIC0iYQ/institutions-are-not-always-so-important.html

http://marginalrevolution.com/?p=64982

Jinfeng Luo and Yi Wen from the St. Louis Fed have a new working paper (pdf), “Institutions Do Not Rule: Reassessing the Driving Forces of Economic Development”:

We use cross-country data and instrumental variables widely used in the literature to show that (i) institutions (such as property rights and the rule of law) do not explain industrialization and (ii) agrarian countries and industrial countries have entirely different determinants for income levels.

In particular, geography, rather than institutions, explains the income differences among agrarian countries, while institutions appear to matter only for income variations in industrial economies.  Moreover, we find it is the stage of economic development (or the absence/presence of industrialization) that explains a country’s quality of institutions rather than vice versa.

The finding that institutions do not explain industrialization but are instead explained by industrialization lends support to the well-received view among prominent economic historians — that institutional changes in 17th and 18th century England did not cause the Industrial Revolution.

I am reminded of a puzzle which I think was first posed by Jeff Sachs.  Go back to 1960 and choose any measure of institutional quality you want.  Then see how well it predicts cross-national growth since then.  And that is doing the exercise knowing how the answer comes out!

Чья Победа?

- A baby in Russia, UK, Ukraine, or USA is born without any concept of her share in the Великая Победа;
- The baby acquires her share through cultural indoctrination;
- Depending on the culture, the baby acquires X shares in Великая Победа;
- Each of the shares entitles the baby to Y units of moral cash stream when she grows up;
- The moral cash is paid on а special day, e.g. день Победы;
- When we try to take the shares away from the baby she is going to experience the Endowment effect;
- The indoctrinating culture is interested in creating the Endowment effect, but not in paying the moral cash;
- The indoctrinating culture wants Other countries to pay the moral cash;
- Who are the Others? Losers; other winners; other beneficiaries of the Великая Победа.

We can test the Великая Победа Endowment effect by standard behavioral economics methods, except that the values taken away are moral, not physical.

Победобесие - a process established by an indoctrinating culture to demand a greater share of moral cash from the Others.

(no subject)

Curtesy akteon, who posted links to Davos videos, we can see how top Russian officials make fools of themselves in front of an international audience.

First, Kudrin says all the right things:
1. The Central Bank should be independent of the Government, and avoid the temptation to print money because it will kill business and consumer confidence.
2. The Government should reduce its social obligations because the policy doesn't make people better off. Instead, the bureaucrats (inefficiency) grow stronger and stronger. Furthermore, the bureaucrats impose additional regulations on businesses, which kills investor confidence.
3. The Government should not increase military expenditures because they are extremely counterproductive in inflationary times.
4. The Government should introduce measures to support an independent judiciary, so that businesses feel confident investing, etc.
5. The Government should not take any steps that lead to more sanctions.
6. The Government should invest in infrastructure projects, but get out of innovation projects.

Second, Shuvalov says that he agrees with everything and the Government is already doing everything that Kudrin recommends.

Hallelujah! We have a pro-business consensus!

Third, during the same week,
1. the Central Bank prints 400 billion rubles and hands them over to Putin's buddy Sechin - more inflation-fanning cleptocracy
2. Putin tells the Government that it should stick to its social obligations and strengthen food price controls - more bureaucracy.
3. Putin wows to maintain a strong military and says all kinds of nonsense about NATO - more military spendings
4. The Navalny court sentence turns out to be a copy-paste from the Prosecutor's office - more power to siloviki
5. The LNR/DNR thugs, armed and supported by Russia, bomb Mariupol - a greater probability of sanctions
6. who cares... innovation is dead in Russia anyway.

There's no Government in Russia. All these smooth-talking expensive suits — Shuvalov, Dvorkovich, Medvedev, Kostin, etc. — look like a bunch of Putin's clowns.

Арифметика сталинских репрессий

Timothy Snyder,

Five-year Gulag sentences in 1930, 1931, and 1932 meant mass releases of Gulag survivors in 1935, 1936, and 1937.
The kulaks were returning to a social order that was traditional in many ways. Stalin knew, from the 1937 census that he suppressed, that a majority of adults still defied the athe- ism of the Soviet state and believed in God.
The NKVD reported in June 1937 that exiled kulaks in Siberia constituted a “broad base on which to build an insurgent rebel- lion.”