RUSSIAN FEDERATION SITREP 31 December 2015

TRUMPUTIN MANIA! Putin said some nice things about Donald Trump; not an "endorsement": he said that was none of his business. The WMSM went nuts – two obsessions at once! (My favourite: ("Putin supports Donald Trump because of the threat that Trump poses to the U.S." But, in fairness, the author still resents Putin's attempt to steal her laundry.) But he kills journalists! Trump sticks to his guns and faces down the anti-Putinists. In the process, WMSM consumers hear something other than the usual innuendo; a perfect example here on "killing journalists": "not been proven" but still... "creating an environment". Trump continues the attack: why do we need problems with Russia?

CORRUPTION. A criminal case has been launched against officials in the Defence Ministry involved in taking bribes on contracts. On the other hand, Serdyukov has a new job. I must say again that getting the little guys is good, but getting the big guys is better.

PUTIN DERANGEMENT SYNDROME. Anatoly Karlin has produced a map of the world-wide distribution of this condition. I note – he's too polite to – that it's strongest in areas blessed with Independent© Media.

MORE SANCTIONS. Anybody know why? Minsk, they say. But there is nothing in the agreement that obliges Russia to do anything and, even if you think Russia controls the Donbass, it's Kiev that's lagging on fulfilment. But, never mind, Europe extends them and the US adds some more. Note, of course, that while a Southstream is a terrible thing and sanctions are necessary, another Nordstream is a good idea. Speaking of Germany, an interest group reports German exports to Russia were down €6.5 billion in 2014 and would drop another €8.5 billion in 2015. Russians are also voting with their feet: it's estimated Germany has lost about €275 million in tourism. But, still, they continue and Russia's counter-sanctions will stay as long as they do. I agree that sanctions, on balance, are good for Russia Inc.

SYRIA. Russian MoD summary of activities here.

UNGOVERNED CONFUSION. Who is in charge in Washington? Just after Kerry says Washington is not seeking regime change in Syria, Obama says "Assad must go" and Kerry then dutifully echoes him. On the other hand, the UN agreements (Washington takes the credit here!) say nothing about his going. Meanwhile, Seymour Hersh says the Pentagon ignored Obama. Getting to be as chaotic as a failed state, don't you think? Hard to negotiate with such an unreliable partner.

OIL WARS. Oil prices are low, seem to be set to stay that way and everyone is pumping as much as possible. Here's my theory (not that I know what's really going on either). Knowing that Washington is 1) exceptionally ignorant about Russia and 2) hostile to it, my theory is that the White House incompetents (see above – or indeed anywhere else on the planet) thought it would be clever to persuade Saudi Arabia to pump so much oil that the price fell and Russia, that "gas station masquerading as a country", collapsed. Riyadh signed on thinking that, at the same time, low prices could hurt Iran and kill off US shale oil and fracking and, at the end, it would be the last man standing. But it's not working out; Russia keeps pumping: even a new record this last week. What these geniuses missed was that Russia produces its oil in rubles but sells it in dollars; today its production costs are among the lowest in the world. Meanwhile the US shale and fracking business is failing and Saudi Arabia is hurting; to say nothing of its catastrophic war in Yemen. So, my guess is that, while it would prefer higher prices, Moscow calculates it can tough it out and, in the end, might even be the last man standing.

HOW DID WE GET INTO THIS MESS? Stephen Cohen tells us: NATO expansion; missile defence; "democracy promotion"; ignoring multilateral reality. Moscow is not responsible for any. How do we get out?

RUMOURS. Don't believe them but they are things to keep an eye on. Chinese troops in Syria and aircraft carrier at Tartus are fakes, but Beijing has authorised the use of troops externally. Likewise the story that Erdoğan has been overthrown (off the Web now I see). But perhaps, one day.

UKRAINE. Torch-light parade in Mariupol, parliamentarian toasts Hitler, neo-nazi mayor. Life in Kiev. Gallup poll shows extreme disillusionment with everything. Summary of the disaster. How much longer?

INDIA. PM Modi visited and had the usual warm reception and a couple of meetings with Putin. Many deals were signed.

© Patrick Armstrong Analysis, Ottawa, Canada Websites: ROPV, US-Russia, Russia Insider