Ukraine: High voter turnout propels Poroshenko to presidency

Ukrainians elected Petro Poroshenko to be their fifth president in a vote that was dubbed "the second independence referendum."

Poroshenko won his presidency in the first round, according to two exit polls. The poll conducted by four TV channels showed that he received 57.8 percent of the vote. His main rival, former Prime Minister Yulia Tymoshenko received 12.8 of the vote.

The turnout was expected to be around 60 percent nationwide and much higher in western parts of the country where 52 percent voted by 4 p.m., according to OPORA, the biggest election watchdog. There were fears that many will not be able to vote at all because of long queues.

Andriy Magera, deputy head of the Central Election Commission, advised people to get inside polling stations by 8 p.m. to make sure that its officials are obliged to give people ballots.

People waited in long queues for hours in crowded polling stations, especially in Kyiv and other cities where mayoral and local elections were held on the same day. Because of the whopper turnout, the  vote was dubbed “the second referendum for independence” by users of social networks in Ukraine as people proudly posted selfies of themselves voting in national clothes.

Eastern Ukrainian regions Luhansk and Donetsk made a sharp contrast with the rest of the country. Most polling stations failed to open for the vote because of intimidation and attacks by separatist gangs who pledged they would not allow a national election in that part of the country, where two independent republics were proclaimed earlier this month.

In the town of Novoaidar in Luhansk region at least one man was killed in a shootout outside of a polling station which opened in the morning, and then was stormed by the separatists.

By 3 p.m. turnout in Luhansk region was 17 percent by 3 p.m., while in Donetsk it was 10 percent, according to the Central Election Commission. There was no vote in Crimea, which was annexed by Russia in March.

In eastern Ukraine, many feared to go to the polls even in towns where the central government managed to organize the election. Those who braved it, said they were voting for peace.“I’m sure this will help to establish peace and stability here,” said Maria Andriyivna, 60, after casting her ballot in Svatovo, the stronghold of Ukrainian army in Luhansk region. She was afraid to give her last name.

Head of the Central Election Commission Mykhailo Okhendovskiy said that his commission received many letters from east of Ukraine, in which people requested to count their vote in for a candidate of their choice. “We would be pleased to do it if the law allowed,” he said at a briefing on May 25.

Poroshenko, who voted in Kyiv along with his family, pledged to address the problems of Donetsk region as soon as he comes to power.

“The first thing we will do is the direct dialog with residents of Donbass,” Poroshenko said after casting his ballot. He also pledged to fight corruption regardless of ranks and affiliations, “whether it covers opponents or allies.”

Greece: A message from the ballot box

By Alexis Papachela             Here we are, facing the ballot box again, torn between anger and a deep sense of national self-preservation. On the one hand we want to shake our leaders by the collars and demand that they change; on the other we want to support them because we know what early general elections could mean to stability right now.

We are scared that positive financial results in the past few months may lead some in the government to believe that they can go back to their old ways. We are mad about the succession of taxes we have been hit with and wonder how rational people from the world of business can enter politics and almost instantly seem to lose their sense of proportion. On the other hand, we don’t want Greece to live through a leftist experiment based on a nebulous plan and conducted by inexperienced politicians and members of PASOK’s old guard.

We are disgusted by the level of vulgarity to which political rhetoric has sunk, by politicians throwing their weight around and striking fear into voters’ hearts, bullying them. We look on in fear as fascist rhetoric becomes acceptable, not just from the far right but from the far left as well.

We are enraged at the inability of the center-right to behave like a modern European party, or shake off their old-fashioned perceptions and the instinct to guard their interests. And of course we are disheartened by the fragmentation of the center-left, which seems to be either talking to itself or expending its energies on exhausting personal games and vendettas.

Ultimately, we keep rediscovering that the country is being governed by an elite that cannot agree on the fundamentals and that cannot cast aside the no-goodniks that litter its ranks and put their own interests above those of the country.

We want something new – really new – and not just something that looks cool on a superficial level. Are we asking too much? Maybe. But we are weary and our institutions are so badly broken that they can no longer turn out anything better than what we have today. For four years we have been edging along the edge of the cliff but have kept from falling thanks to the Greek people’s maturity, patience and fortitude. Once again at the polls, the onus falls on the regular folk and hopefully the governing powers will listen to their message. If all goes well, they will acknowledge why people are mad and change things. If not, any return to the past will lead to an even greater catastrophe than the one we have been fearing this whole time.

Source: Ekathimerini

67 Festival de Cannes: Palma d’Oro alla Turchia. Alice Rohrwacher vince il Grand Prix

Un nuovo successo internazionale del cinema italiano, il Gran Prix di Cannes 67 che Alice Rohrwacher, 33 anni, si porta a casa con il suo «Le meraviglie», interpretato dalla sorella Alba e da Monica Bellucci. Il secondo alloro per importanza dopo la Palma d’Oro, che è andata al cecoviano «Winter Sleep», del regista turco Nuri Bilge Ceylan (che lo dedica «ai giovani turchi che sono morti in questi anni»). «Grazie a Thierry Fremaux che mi ha fatto arrivare qui, grazie alla giuria che mi ha fatto tornare» ha detto la Rohrwacher. Operazione non semplicissimo. Era già a casa, nel viterbese. Nel primo pomeriggio di sabato, mentre era in treno per Roma, è stata avvertita della vittoria (ma non sapeva per quale premio). Cambio di destinazione: aereoporto. Emozionatissima sul palco si è rivolta alla giuria presieduta da Jane Campion. «Grazie a voi, il vostro lavoro mi ha fatto innamorare del cinema e m ha portato fin qui». Confusa e felice, conferma che è stata una sorpresa. «Questo premio mi dà coraggio, è come aver messo la testa nel pozzo della storia d’Italia, dove mi affaccio e vedo Sophia e Marcello». Mastroianni che occhieggia sornione alle sue spalle dal manifesto ufficiale di Cannes 67, e che sembra una specie di angelo custode. È già stata a Cannes con il suo primo film, Corpo celeste, alla Quinzaine. Erano solo tre anni fa ma sembra un secolo. «Ora è tutto diverso. Dedico il premio alla mia famiglia allargata, ringrazio un po’ tutti ma soprattutto la produzione». Ovvero la bolognese tempesta di Carlo Cresto-Dina con Raicinema (Le meraviglie è già nelle sale da giovedì).

La parola ai giurati

L’estate di Gelsomina e della sua famiglia di apicoltori con una padre che difende ostinato dalle influenze esterne il regno popolato dalla moglie (Alba Rohrwacher, per la prima volta al lavoro con la sorella) e le quattro figlie ha colpito la giuria. «Un film spirituale, mi ha portato in un altro mondo. Ho pianto», spiega Nicolas Winding Refn. «Un’opera poetica»gli fa eco Sofia Coppola. «Abbiamo amato Gelsomina, così reale: Film modernissimo, mi sono sentita di farne parte», aggiunge Jane Campion. La presidente della giuria (che resta l’unica donna ad aver vinto la Palma d’oro in 67 anni) assicura che nella scelta non hanno contato valutati di genere. «Non abbiamo mai valutato un film pensando se fosse opera di un uomo o una donna».

Miele e politica

La giornata delle Meraviglie è finita con cena e festa con dolcetti al miele. E ancora, per Alice, la voglia di spiegare la sua creatura che, sottolinea da giorni, «è personale non autobiografico. Non la storia della mia famiglia, ma popolato di personaggi che ci sono familiari. Anche se api e miele è il lavoro di nostro padre».Un film collettivo, sottolinea, «che avevamo voglia di fare. Non abbiamo pensato a una storia che funzionasse rispetto al presente. Nasce come un processo prezioso che non va abbandonato». Le sta molto a cuore che si colga il legame con il territorio: «è una fiaba fatta di materia e di lavoro agricolo dove non c’è separazione tra tempo del lavoro e il resto». La storia di una famiglia alle prese con la realtà che irrompe sotto le trecce candide di Milly Catena (Bellucci) la conduttrice di un non troppo improbabile reality show sulla vita bucolica. Una parabola su «fallimento e perdono», l’ha definita. Che attraverso lo sguardo di Gelsomina dice cose sull’Italia. «Non parliamo di politica, ma facciamola. Se fossi una persona che è capace di creare consenso, farei politica, ma come vedete il mio film non ha solo creato consensi. Il cinema, comunque, non parla di politica ma fa politica».

Palma d’oro

A consegnare la Palma d’oro sale sul palco, accompagnato dalla sua musa Uma Thurman, il vincitore morale del festival, Quentin Tarantino,tornato a Cannes a 20 anni dalla vittoria del riconoscimento più importante con Pulp Fiction. Vent’anni fa ci fu chi gridò allo scandalo. Oggi è accolto come venerato maestro . Prima di presentare l’omaggio a Sergio Leone, Per un pugno di dollari, consegna la palma al regista turco Nuri Bilge Ceylan perWinter sleep. Ambientato in un villaggio in Cappadocia, nell’hotel Othello gestito da un attore, Aydin, che ci vive con la giovane moglie e la sorella divorziata. Ispirato a Cecov, ma con echi bergmaniani, una durata ormai insolita anche ai festival, oltre tre ore. «Un capolavoro intelligente e sofisticato» ha detto Campion. «Un ritmo incredibile che piano piano ti porta dentro. Mi sono riconosciuta nei personaggi». Erano in molti a scommettereche la regista avrebbe puntato per la Palma su Mommy del 25enne Xavier Dolan («un vero genio», l’ha definito) a cui è andato il Premio della giuria ex aequo con Jean-Luc Godard (Adieu au language). Il più giovane e il più vecchio uniti in un verdetto da cui escono sconfitti i fratelli Dardenne e la loro protagonista Marion Cotillard e la regista giapponese Nomei Kawase. Di certo ha vinto Gilles Jacob, accolto da una affettuosa standing ovation. Il presidente a 83 anni, passa la mano a Pierre Lescure. Ricorda cosa ha voluto fare al festival: «Aiutare, scoprire, celebrare il cinema e preparare il suo futuro».

CorrieredellaSera

TheGuardian: Putin rounds on Charles: 'It's not what monarchs do' Row over nazi remarks,by Prince Charles.

The row over the Prince of Wales's alleged comparison of Vladimir Putinwith Adolf Hitler deepened when the Russian president responded with his own withering assessment of the heir to the throne.

Asked about the prince's alleged remarks, Putin said they were unacceptable and wrong and "not what monarchs do".

The fallout from the comments, supposedly made during a private conversation during a royal tour of Canada, now look likely to cast a shadow over an event next month in Normandy to mark the 70th anniversary of the D-Day landings, which both Prince Charles and Putin are due to attend.

At a press conference in St Petersburg, Putin said of the incident: "It reminds me of a good proverb: 'You are angry. That means you are wrong'."

The prince is understood to have made his comments to museum volunteer Marianne Ferguson, 78, after she told him her Jewish family fled the Nazi occupation of Danzig during the second world war. Drawing a parallel with Russia's annexation of the Ukrainian peninsula of Crimea in March, he reportedly said: "Putin is doing just about the same as Hitler."

In his response, Putin said: "Give my words to Prince Charles. He has been to our country more than once, if he made such a comparison, it is unacceptable and I am sure he understands that as a man of manners." He added: "I met him personally, as well as other members of the royal family. This is not what monarchs do.

"But over the past few years we have seen so much, nothing surprises me any longer."

The prince's remarks have sparked anger in Russia, whose contribution to the defeat of Nazism cost the lives of an estimated 26 million Russians, including members of Putin's family.

"During the second world war, we were allies and we were fighting together against Nazism," the president said, discussing the D-Day commemoration. "As you know very well, the peoples of the Soviet Union and the people of Russia sacrificed a lot to win the war and achieve our joint victory over Nazism.

"That is why it is quite natural that we are going to have a meeting in Normandy and we are going to pay tribute to our coalition partners, to the British, the Americans and the French."

The meeting between the prince and Putin in Normandy is expected to take place at Sword Beach, where British troops stormed ashore to attack Nazi positions. World leaders including Barack Obama and François Hollande will attend alongside 2,000 Allied veterans. The Queen is also due to be present.

Putin said he would not allow the disapproval of prominent figures such as the prince to influence his actions in Ukraine. "I will be guided not by what they say about me anywhere," he said.

"I will only be guided by the interests of the Russian people, and I hope our colleagues in Great Britain will keep that in mind and will always remember that when finding solutions to any issues, we are always guided by international law and its norms."

Britain has led international calls for sanctions against Russia after its actions in Crimea. David Cameron has warned the UK may face "a very different long-term relationship with Russia" if Moscow does not de-escalate the crisis.

SINA Reports First Quarter 2014 Financial Results

First Quarter 2014 Highlights

• Net revenues increased 36% year over year to $171.5 million.  Non-GAAP net revenues increased 38% year over year to $167.3 million, exceeding the Company's guidance between $162.0 million and $167.0 million.
• Advertising revenue grew 44% year over year to $135.7 million, reaching the high-end of the Company's guidance between $133.0 million and $136.0 million.
• Non-advertising revenue increased 13% year over year to $35.8 million.  Non-GAAP non-advertising increased 17% year over year to $31.6 million, exceeding the Company's guidance between $29.0 million and $31.0 million.
• Net loss attributable to SINA was $33.2 million, or $0.52 diluted net loss per share attributable to SINA. Non-GAAP net income attributable to SINA grew 617% year over year to $11.1 million, or$0.15 non-GAAP diluted net income per share attributable to SINA.

"We are delighted to report strong revenue growth in the first quarter of 2014 driven by our continuing success in Weibo monetization," said Charles Chao, Chairman and CEO of SINA. "The successful separate listing of Weibo on the NASDAQ Global Select Market in April opened a new chapter for SINA. The more independent structure will help Weibo to better realize its long-term growth potential and create greater value for our shareholders. Looking forward, we hope to repeat our past successes of leveraging SINA's brand equity and market influence to build new businesses. We believe there is significant value creation potential by leveraging SINA's portal assets to build leading verticals and smartly deploying SINA's own cash pile of over $1.8 billion."

Loss from operations for the first quarter of 2014 was $8.7 million, compared to $9.9 million for the same period last year. Non-GAAP loss from operations for the first quarter of 2014 was $4.8 million, compared to $9.3 million for the same period last year. 

Non-operating loss for the first quarter of 2014 was $29.9 million, compared to $4.5 million for the same period last year. Non-operating loss for the first quarter of 2014 included a $40.2 million loss from the change in fair value of investor option liability in connection with Alibaba's investment in Weibo. Non-operating loss for the first quarter of 2014 also included $8.7 million, or $10.7 million on a non-GAAP basis, in earnings from equity method investments, which were accounted for under the equity-method and reported on a one-quarter lagging basis. Non-operating loss in the first quarter of 2013 included$1.5 million, or $4.8 million on a non-GAAP basis, in earnings from equity method investments. Non-operating loss in the first quarter of 2013 also included a non-cash $10.2 million loss on the dilution of equity interest in E-House, as a result of E-House issuing new shares to its management.

Net loss attributable to SINA for the first quarter of 2014 was $33.2 million, compared to $13.2 millionfor the same period last year. Diluted net loss per share attributable to SINA for the first quarter of 2014 was $0.52, compared to $0.20 for the same period last year. Non-GAAP net income attributable to SINA for the first quarter of 2014 was $11.1 million, compared to $1.5 million for the same period last year. Non-GAAP diluted net income per share attributable to SINA for the first quarter of 2014 was$0.15, compared to $0.02 for the same period last year.

As of March 31, 2014, SINA's cash, cash equivalents and short-term investments totaled $1,805.9 million, compared to $1,868.2 million as of December 31, 2013. For the first quarter of 2014, cash provided by operating activities was $4.9 million, capital expenditures totaled $23.8 million, and depreciation and amortization expenses amounted to $11.6 million

SINA Corp. Deutsche Bank cuts target price to US$ 60 from US$ 87 Rating BUY

SINA Corp. Deutsche Bank cuts target price to US$ 60 from US$ 87 Rating BUY

Source: Acquire Media Corporation

Tipping Points to Asia’s Future by Yuriko Koike

"A military coup, imposed following the Thai constitutional court’s ouster of an elected government on spurious legal grounds, can lead only to an artificial peace. Unless Thailand’s military is prepared to serve as a truly honest broker between deposed Prime Minister Yingluck Shinawatra (and her supporters) and the anti-democratic Bangkok elite, which has sought a right to permanent minority rule, today’s calm may give way to a new and more dangerous storm.

To Thailand’s east, Vietnam is the latest Asian country to feel pinched by China’s policy of creating facts on the ground, or in this case at sea, to enhance its sovereignty claims on disputed territory. Vietnam’s government reacted vigorously to China’s placement of a huge, exploratory oilrig near the disputed Paracel Islands in the South China Sea. Ordinary Vietnamese, taking matters into their own hands, reacted even more vigorously, by rioting and targeting Chinese industrial investments for attack.

China’s unilateral behavior has exposed a strain of virulent anti-Chinese sentiment bubbling beneath the surface in many Asian countries. Renewed protests over China’s mining investments in Myanmar this week confirmed this trend, one that China’s leaders seem either to dismiss as trivial, or to regard as somehow unrelated to their bullying. Indeed, like Russian President Vladimir Putin, who faces widespread public antipathy in Ukraine, China’s leaders appear to believe that popular protests against them can only be the product of an American plot.

Yet, despite their shared contempt for expressions of the popular will, China’s President Xi Jinping and Putin struggled, during Putin’s two-day visit to Shanghai, to agree on a new gas deal that the Kremlin desperately needs. Putin had viewed China as his backup option should the West seek to isolate Russia following its annexation of Crimea. Putin’s idea was that he could pivot Russia’s economy into a partnership with China.

But Xi balked, signing the gas agreement only after Putin offered a steep, long-term discount. Xi’s self-confidence reflected not only the Chinese leadership’s contempt for Putin’s mismanagement of the Russian economy, but also the fact that China’s energy worries have lessened considerably of late. Successful deployment of hydraulic fracturing (“fracking”) technology in Xinjiang suggests that China, like America, will soon be able to draw on its own reserves of shale energy. Moreover, plentiful gas supplies from Myanmar and Central Asia will provide China with sufficient supplies of energy for at least a decade.

China’s hard bargaining with Russia has exposed the limits of the two countries’ bilateral cooperation, which has important geo-strategic consequences for Asia and the world. China, it now seems, is happy to see Putin poke his finger in the West’s eye and challenge America’s global leadership. But it is not willing to underwrite with hard cash Russian pretensions to world power status. Instead, China appears interested in turning Russia into the sort of vassal state that Putin is seeking to create in Ukraine.

But the most epochal events of the last week took place in two of Asia’s great democracies: India and Japan. Narendra Modi’s landslide victory in India’s general election was not only a huge personal triumph for the son of a tea seller, but may well mark a decisive break with India’s traditional inward-looking policies. Modi is determined to reform India’s economy and lead the country into the front rank of world powers.

Here, Modi will find no stauncher ally than Japanese Prime Minister Shinzo Abe, who was among the first Asian leaders to embrace him in his bid to lead India. Given that both countries have almost perfectly aligned regional security interests, there should be plenty of scope for the two to act in tandem to improve regional security and mutual prosperity. Thailand’s crisis might well mark a good early test of their ability to work together, because both countries have strong interests in Thailand’s rapid return to democracy and the credibility needed to act as an honest broker in ending the country’s crisis.

In the past week, Abe created for himself considerably more political space to act as a strategic partner, not only to India, but also to Japan’s other allies, particularly the United States. Quietly, a panel appointed by Abe’s government this week offered a reinterpretation of a key element of Article 9 of Japan’s constitution. For the first time since the Pacific War’s end in 1945, Japan’s Self-Defense Forces would be able to participate in “collective self-defense” – meaning that Japan could come to the aid of its allies should they come under attack.

Of course, China and others in Asia have tried to muddy this change with the alarmist charge of a return to Japanese militarism. But the new interpretation of Article 9 augurs just the opposite: it embeds Japan’s military within an alliance system that has been, and will remain, the backbone of Asia’s prevailing structure of peace. Abe will make this clear when he delivers the keynote address in Singapore at this year’s Shangri La Dialogue, the annual meeting of Asian military and civilian military leaders.

Modi’s victory and Abe’s increased ability to stand by Japan’s allies can help to forge deeper bilateral ties and, if properly understood by China, foster a greater strategic equilibrium in the region. It is now possible for Asia’s greatest powers – China, India, Japan, and the US – to form something akin to the concert system that gave Europe a century of almost complete peace in the nineteenth century.

Of course, such a system would require China to set aside its goal of regional hegemony. Clear-sighted Chinese must already see that, short of a victorious war, such dominance is impossible. Now is the moment for China to anchor its rise within a stable and mutually acceptable Asian regional order. Indeed, for China, this may be the ultimate tipping point in its modernization."

Project-Syndicate

WSJ: Water Battle Entangles Augusta Resource Copper Mine in Arizona

     The WSJ reports,"Augusta Resource Corp., a Vancouver based junior mining company traded in Toronto and New York, wants to build a quarter-billion-pound-per-year copper mine here, next to a beautiful valley favored by retirees seeking golf courses, young couples who need yards and one very big pecan farm. Augusta, which recently rejected an unsolicited takeover offer from Hudbay Minerals Inc., paid $20.9 million for 2,000 acres here in 2005 for its Rosemont project, and says it seeks to start construction later this year and production of copper around the end of 2017.

But delays in receiving permits have been triggered by concerns over water use and quality. This bush country of bear grass, mesquite, oak and prickly pear cactuses gets a mere eight inches of rain a year.

Opponents to Augusta’s project argue the mine will take away water needed by local residents, driving up prices, and poses a danger of pollution. “Our concern is that we are taking groundwater that’s drinking quality water that took millions of years to create geologically, and using it for something that’s potentially polluting,” says Nan Walden, vice president of Green Valley Pecan Co., which farms pecans on an 8,000-acre strip, a 14-mile stretch of hefty trees harvested with a machine that shakes the nuts lose with a giant claw. “We’re saying it’s inappropriate to license a new mining operation that brings in a new requirement for water.” Green Valley is a leading opponent to the proposed mine.

Augusta counters that it will employ the world’s most advanced water conservation techniques in its mine. “Everything we’re doing is designed to minimize water impact,” says Augusta senior geologist Jeff Cornoyer. “From showers to truck washes to the tailings, we’ll save at least 50% more water than any other mine.”

The tailings waste pile, where excess rock is dumped, will contain a thicker than usual slurry—16% water instead of 50%. Additionally, Augusta will save water by planting grass and letting ranchers graze 300 head of cattle there. “Cattle compacts soil and slows erosion,” which preserves water, says Mr. Cornoyer.

Augusta is also building a $22 million pipeline into the mine from 9 miles away. “We want zero net impact on the aquifer,” says spokesman Dan Ryan. He argues that a copper mine is environmentally beneficial: “Copper pipes provide society with clean drinking water.”

All in all, Augusta plans to use 5,500 acre-feet of water per year. “It takes eight gallons of water to produce a pound of copper here, compared to 15 or 20 at other mines, and 800 gallons to make a pound of pecans,” says Mr. Ryan. “We hope to get all our permits by August.”

Green Valley, established in 1948, uses 26,000 acre-feet of water per year, almost five times what the proposed mine will consume.

But Green Valley says it poses much less of a threat to water supplies and the environment. A quarter of the water it uses goes back, cleanly, into the groundwater table, it says, and unlike a mine, the farm can go on producing pecans forever. “And there’s a difference between farming and creating a toxic pit that seeps into groundwater that is polluted forever,” says Mrs. Walden. “Why not go into an area that’s already been disturbed? People don’t want these huge trucks coming down the highway.” In addition, Green Valley says it has also launched conservation efforts of its own, such as installing water-efficient sprinklers to replace irrigation ditches

SPECIAL REPORT-How Putin's associates botched state hospital project

 At the foot of the Ural Mountains stands a symbol of how even the best intentions in Russia can enable well-connected individuals to bleed money from the state. It’s a modern hospital built in this industrial city of a million people, and intended to be a flagship of a grand project to improve the country’s healthcare.

The hospital’s chain-smoking director, Sergei Sukhanov, loves his new facility, the Federal Centre for Cardiovascular Surgery, which has beds for 167 patients. He also admires Russian President Vladimir Putin, who championed the hospital and whose letter of thanks to the surgeon adorns his office.

“It’s a huge gift to the Perm region,” said Sukhanov in his new white office. “It’s like we’ve moved from a one-bedroom apartment to a five-bedroom apartment.”

But a Reuters investigation shows the hospital, and a $1 billion construction project of which it was part, were also business opportunities for Putin’s allies. While it isn’t clear whether they managed to turn a profit, their involvement cost Russian taxpayers dearly.

A previous article detailed how two associates of Putin profited from selling high-tech medical equipment to the Russian state and sent money to Swiss bank accounts linked to the building of a lavish estate near the Black Sea.

Those two men, Nikolai Shamalov and Dmitry Gorelov, also had stakes in two companies that received contracts to build a series of hospitals around Russia. The undertaking later led to accusations of “unjust enrichment” against one of the companies. That company ended up going bust, owing around 860 million roubles ($26 million) to the state. Hundreds of people lost their jobs.

Corporate records show there was another major investor in the two building companies: Rosinvest, a Russian investment firm owned by offshore entities.

In 2010 Sergei Kolesnikov, a businessman who used to work with the two Putin associates, went public with a claim that Rosinvest was ultimately controlled by the Russian leader himself. The role of Rosinvest in Putin's $1 billion health project, however, hasn't been previously reported.

Kolesnikov says that Putin owned an offshore entity called Lirus Investment Holding, which had ultimate control of Rosinvest. He told Reuters that he knew this because he

“participated in the creation” of Lirus. Lirus was a Liechtenstein company that, he said, was owned through bearer shares - securities that don’t record the name of the owner.

Putin owned 94 percent of the company, Kolesnikov said, while he, Shamalov and Gorelov owned 2 percent each. Kolesnikov said he was informed by both Gorelov and Shamalov that they had given Putin his bearer shares and that Putin had placed these in a safe. “The situation was specially done in such a way that nowhere would be anyone’s signatures,” Kolesnikov said.

Kolesnikov said he helped to manage a portfolio of investments through Rosinvest on behalf of Shamalov, Gorelov and himself. But the prime beneficiary, he said, was Putin. Kolesnikov said he delivered reports about the investments to Shamalov, and that Shamalov presented them to Putin.

Putin’s ownership role in the project couldn’t be confirmed. The Kremlin did not respond to Reuters questions about Rosinvest, which was liquidated in 2012. In the past, Putin’s spokesman, Dmitry Peskov, has firmly denied any connection between Putin and Rosinvest.

Shamalov and Gorelov did not respond to requests for comment on Kolesnikov’s account.

This series examines Russian capitalism in the Putin era. A complex system of reward and obligation has operated among the elite since Putin gained power in 2000, with associates of the president tapping into the flow of funds from state coffers. In addition to breeding corruption, this system carries another cost: bungling and waste.

The project to create the string of hospitals wound up costing about $700 million more than Putin called for and delivered two fewer hospitals than planned. A state agency involved in steering the project went under, leaving behind debts of $300 million.

The hospital money would have been better spent on simple outpatient healthcare than on high-tech facilities, some Russian healthcare specialists said. Despite a large number of state-run hospitals and an army of doctors, many Russians only get access to the healthcare they need by paying private clinics or bribing state doctors.

Overall, Russians have seen only limited advances in the nation's medical care. Public-sector health spending in Russia remains low compared with the United Kingdom and other countries with government-financed healthcare: It equalled 3.7 percent of economic output in 2011, according to the World Bank. UK public spending on health was 7.7 percent of economic output that year.

In the case of Putin’s hospital scheme, say some specialists, Russian taxpayers overpaid for trophy structures that don’t address the underlying causes of the nation’s health crisis.


“These projects are just about PR,” said Kirill Danishevsky, a doctor and professor at Moscow’s Higher School of Economics specialising in healthcare. “Russia didn’t need new hospitals, and we certainly didn’t need the number of scanners they bought. What Russia needs is primary healthcare.” 

Source:  Reuters

Russia says to complete troop pullback from Ukraine border 'within days'

 Russia will pull back all forces deployed to regions near its border with Ukraine "within a few days," a deputy defence minister said on Friday, a move that if carried out could ease tensions around Ukraine's presidential election on Sunday.

Moscow has concentrated tens of thousands of troops across the border from eastern Ukraine, where pro-Russian separatists have declared two independent states. The United States said a

"very large and very capable" Russian force remained on Friday.

Kiev and its Western allies see the Russian troops as a potential invasion force should Moscow choose to back the rebels openly, fuelling pre-election tensions. The United States and European Union hope the vote will strengthen the embattled central government.

Asked whether Russia would comply with Western calls for a withdrawal of its troops near the Ukraine frontier, Deputy Defence Minister Anatoly Antonov told Reuters: "They will see it

- 100 percent ... We will leave less than nothing behind."

The United States said it was not yet convinced.

The Pentagon said it had seen Russian military units withdrawing from the border on a small scale, but it was too early to tell whether that movement represented the broader withdrawal ordered by the Russian President Vladimir Putin.

"We have actually seen the movement of some units away from the border region, apparently back to what we would consider garrison, their home base. But it's not in great number right now," said Rear Admiral John Kirby, a Pentagon spokesman.

He could not say how long it should take the Russian troops to withdraw, but added: "I can tell you they got there in a hurry so it's certainly our expectation that this order to withdraw will be followed with some sense of alacrity. That's what we would like to see."

Source: Reuters
U.S. State Department spokeswoman Marie Harf said it was

"too early to know where or how many of these forces are actually moving out for good."

"And regardless ... the force that remains on the border is very large and very capable and remains in a very coercive position and posture," Harf said.

The Kremlin said on Monday that President Putin had ordered his defence chief to return troops that had taken part in military exercises in the Rostov, Belgorod and Bryansk provinces, which share a border with Ukraine, to their permanent bases.

On Friday, Antonov said Russia had so far moved 20 transport planes and 20 trains carrying personnel and military equipment out of the three provinces, and that a full withdrawal of the forces could be completed "within a few days."

A Defence Ministry source later echoed that statement, saying troops and equipment would be fully moved out of the border area in the course of a few days, but added it would take about 20 days to return the forces to their permanent bases.

Russia has not said how many troops it is withdrawing from areas near the Ukrainian border. The United States and NATO have said Russia amassed some 40,000 troops near the frontier.

WSJ: Dealpolitik: The Paradox of Alibaba’s Novel Governance Structure

            The WSJ reports, "Alibaba Group Holding Ltd. seems proud of its novel governance structure. As described in its preliminary prospectus filed Tuesday, Alibaba is effectively controlled by a partnership which the filing said currently consists of 28 partners, all of whom who are members of management of Alibaba and related entities. But is it a good structure for the long term?

The governing documents of Alibaba, the prospectus says, will provide that the partnership is entitled to nominate a majority of the board of the company, subject to the approval of those nominees by the Alibaba shareholders. If shareholders don’t approve a partnership nominee, then the partnership has the right to appoint a different person to serve as a director until the next annual meeting, when the process starts all over again".

"But the filing shows that the chances of shareholders not approving a partnership nominee are slim. That’s thanks to a contractual commitment by SoftBank Corp., which currently owns over 34% of Alibaba, and Yahoo Inc., which currently owns over 22% of Alibaba, to vote their shares in favor of all of the partnership nominees. (This contract expires when Softbank’s ownership dips below 15% of Alibaba.) Considered together with the approximately 9% owned by Jack Ma, Alibaba’s founder and Executive Chairman, until those three major holders sell down or are diluted (we don’t know how many shares they are planning to sell in the IPO, though Yahoo will definitely sell some), any fight to defeat a partnership nominee would be at least an uphill battle. Besides, why bother to try when the partnership will just put on the board a replacement?

Still, investors in the IPO aren’t likely to be too troubled by this governance structure. Investors in technology and other companies are accustomed to investing in companies with dual classes of stock which permit founders continued control for substantial periods by giving them extra voting power. (Newscorp, the owner of The Wall Street Journal, has dual classes of stock.) While not the same as Alibaba’s structure, it also offers a way of maintaining control, although the prospectus indicates that Alibaba thinks the partnership system is a better one".

"An investor in Alibaba, with its impressive track record of growth, is unlikely to be buying stock in the company with the thought that it wants to be able to throw out management. And if things don’t turn out well, an investor in the IPO could just sell the stock.

But here is the paradox of this situation. If the governance is extensively repeated at other new companies, eventually we will have some companies that are poorly managed and in which the shareholders have little or no say".

Markets’ Federal Reserve Love Story

After many decades of Disney movies, we have been conditioned to expect princesses to fall in love quickly with their charming princes and “live happily ever after.” And when there are challenges or obstacles (mostly in the more recent movies), these are quickly overcome (and with humor).

Similarly, for many years market participants have been richly rewarded for falling in love – quickly and decisively – with the new policy measures adopted by America’s Federal Reserve. Indeed, the romance has overwhelmingly followed the Disney script. Yes, there may have been some bumps along the way, but they have been overcome quickly. And the romance has resulted in both parties living happily: the Fed feels better positioned to pursue its dual mandate of high employment and stable inflation, while investors feel that they have the opportunity for sizeable financial rewards.

This relationship has been so comfortable that market participants have adopted the mantra “Never fight the Fed” – and for good reason. The Fed is the world’s most powerful central bank. It owns the printing press that produces the world’s main reserve currency. It enjoys a significant amount of political independence. And it has not been shy about using its considerable operational autonomy.

Market participants also know that the Fed needs them to leverage its policy influence and deliver on its mandate, which, in recent years, has rightly been broadened in practice to incorporate the goal of financial stability. To this end, the Fed has become much more “transparent” with markets in the last few years, sharing more readily the minutes and transcripts of its policy discussions. The Chair of the Federal Reserve Board has even taken to holding periodic press conferences that are closely watched on trading floors around the world.

"Since the 2008 global financial crisis, the romance has become particularly intense, especially as the Fed has been compelled to use a range of unconventional measures to overcome the capital-market disruptions that almost tipped the world economy into a deep depression. In doing so, the Fed has become more involved in how markets function, the valuation of assets, and fluctuations in their prices. And the markets have come to depend much more on the Fed, expecting more frequent attention and support from it (and throwing a short tantrum when they feel disappointed, as was the case a year ago).

Initially, central bankers were keen to cultivate this romance as a means of meeting their broader policy objectives of growth, employment, stable inflation, and financial stability. More recently, however, some have become less comfortable, warning that the codependence is encouraging excessive risk-taking and, in some cases, bubbly valuations. Some worry that it may even undermine the Fed’s political independence. And, only two weeks ago, an outgoing Fed governor, Jeremy Stein, declared that the Fed is in the middle of a policy transition that renders its guidance to markets “more qualitative,” “less deterministic” and, therefore, less precise.

....it will take time for markets to recognize that their relationship with the Fed is changing (and should change); and, ......, some sort of shock may be involved in socializing the new understanding. Having said that, the outcome will certainly not be as dramatic as in the movie – if only because, ....., the Fed is not out to take over the markets.

So the romance will survive, but it is unlikely to be as intense, and it is unlikely to be unconditional. The hope is that, by that time, a more vibrant real economy will perform.

The best and most sustainable love story for markets is one based on a healthy and dynamic real economy that creates jobs and opportunities for many more people. Unfortunately, on that count, it is too soon to predict whether we will live happily ever after".

Project-Syndicate by:  Mohamed A. El-Erian

WSJ: Favor Triple-B Corporate Bonds, Barclays Says

   The WSJ reports,"bonds rated in the triple-B-category, the low end of investment grade, are poised to do better than some higher-rated bonds in the coming months, analysts from Barclays said in a research note Friday.

In the note, they suggested that investors consider selling bonds from the higher-rated companies and pick up debt issued by companies just north of the junk-rating threshold. They said some triple-B companies offer yields that are high for the rating, like Boardwalk Pipeline Partners LP, which yields 4.600% for a 2023 bond, and Transocean Inc., which yields 5.967% on a 2038 bond. In contrast, a 2023 bond from BP PLC, rated single-A, yields 3.395%.

“We expect BBB credits to benefit from investors seeking additional yield,” the Barclays analysts wrote.

Bond markets overall have rallied this year as U.S. economic growth remains uneven and the stock market turns in a lukewarm performance. Benchmark U.S. Treasury yields remain relatively low, so investors looking for higher yields are buying corporate bonds.

The Barclays analysts argued that triple-B bonds are offering more yield compared to Treasurys than they did before the financial crisis. Right now, triple-B bonds are yielding 1.30 percentage points more than Treasurys. Before the crisis, that figure was 1.27 percentage points. Higher yields indicate lower prices".

S&P closed today at record high

       The WSJ reports,"U.S. stocks rose Friday, with the S&P 500 drifting to a record high to cap a sleepy week for trading activity.

The S&P 500 added 8.04 points, or 0.4%, to 1900.53. The index rose 1.2% on the week to top its May 13 record close of 1897.45.

It was a quiet week on Wall Street, with little in the way of economic data or companies’ earnings reports. Friday saw 4.5 billion shares change hands, the lowest volume of any day this year. The Chicago Board Options Exchange Volatility Index, a measure of traders’ expectation for future stock-market swings, fell to a multimonth low.

Some of the activity traders did see reflected the fallout of this spring’s rout in fast-growing technology and biotechnology companies’ stocks. To some degree, participants who had fled to the exits amid that selloff have been playing catch-up on this week’s move higher, said Doug Crofton, head of U.S. cash equity trading at Bank of America Merrill Lynch.

“From a positioning standpoint, clients are underinvested and are not prepared for a move higher in the market,” Mr. Crofton said. “There’s a chase to increase exposure” to stocks.

The Dow Jones Industrial Average tacked on 63.19 points, or 0.4%, to 16606.27 on Friday. The Nasdaq Composite Index rose 31.47 points, or 0.8%, to 4185.81.

Stock-market bulls have stayed the course amid continued evidence of slow but steady improvement in corporate profits and the U.S. economic backdrop. Meanwhile, some say stocks look attractive in comparison to bonds paying historically low interest rates.

Skeptics point to the fact a long-awaited acceleration in economic activity has yet to emerge, and last year’s rally has left stocks less attractively valued.

With earnings reports in for 490 of the 500 companies in the S&P 500, 74% have posted profits that topped Wall Street’s forecasts, according to FactSet. But analysts expect that earnings rose just 2.1% from the year-earlier period, including actual results for companies that have reported".

theguardian: Russia will recognise outcome of Ukraine poll, says Vladimir Putin

    TheGuardian reports,"Vladimir Putin has given the strongest indication yet that Russia is defusing its policy towards Ukraine, saying that Moscow will "respect the choice of the Ukrainian people" and work with the country's government after a new president is elected on Sunday.

Previously, the Kremlin had not made it clear whether it would recognise the vote amid the continuing violence in the east of the country, where pro-Moscow separatists have declared two independent statelets after questionable referendums held earlier this month.

The separatist authorities have said they will do everything possible to disrupt the elections, stating they do not plan to hold "the presidential elections of a neighbouring state" on their territory, and there has been a campaign of terror and intimidation against polling stations and election officials.

Putin blamed the west for provoking the Ukraine crisis and said the country was now experiencing "full-blown civil war". However, he suggested on Friday that the Kremlin would recognise the vote. Since former president Viktor Yanukovych fled Ukraine in February, Moscow has referred to the interim government as a "junta" with no legitimacy. Russia has annexed the Crimea peninsula, and Kiev has accused it of stirring up an armed revolt in the east of the country as well.

As Sunday's election approaches, violence in the east has continued, with Ukraine's defense ministry saying up to 500 insurgents attacked government troops in one clash in eastern Ukraine that left 20 insurgents dead. The ministry said in a statement the clash took place on Thursday as a convoy of Ukrainian troops was attacked outside the eastern village of Rubizhne. Up to 16 Ukrainian soldiers also died on Thursday in an assault on a checkpoint by separatists.

On Friday, the Donbass paramilitary group, which operates with the tacit backing of Kiev, said it had been ambushed by separatist forces, with at least one dead, and many injured or taken hostage.

Voting in the east will be severely limited on Sunday, with pro-Kiev forces not fully in control of the region and a fear that violence could spike as the separatists attempt to disrupt the vote. Kiev has said it will halt its "anti-terrorism operation" against separatist forces on voting day.

Frontrunner Petro Poroshenko needs more than 50% to win the election in the first round, otherwise there will be a run-off three weeks later. Pro-Kiev authorities in the east are hoping for a first-round victory to avoid another period of political uncertainty. Poroshenko has said he would negotiate with political forces from the east of the country, but not with armed separatists responsible for attacks on official buildings and soldiers".

UK sceptics surge, Dutch right-wing stumbles as EU votes

- Britain's Eurosceptic UK Independence Party made strong gains but their Dutch counterparts stumbled in elections to the European Parliament that are expected to produce a widespread anti-EU vote thanks in part to a low turnout.

Nigel Farage's UKIP, which wants to pull Britain out of the European Union and severely restrict immigration, grabbed seats from both the governing Conservatives and the opposition Labour Party in local elections held at the same time as the EU vote on Thursday, partial results showed.

If those scores are confirmed or amplified in the European ballot, from which results will only be released late on Sunday, it could increase pressure on Conservative Prime Minister David Cameron to take a harder line on reducing the EU's powers.

"Looking at the average vote shares across the country, and without wishing to count any chickens before they're hatched, it looks pretty good," an ebullient Farage said as evidence of his anti-establishment party's surge trickled in.

By contrast, far right Dutch populist Geert Wilders, whose anti-EU, anti-Islam Freedom Party had been forecast to top the poll in the Netherlands, was beaten into fourth place by pro-European parties in a surprise reverse, according to exit polls.

His PVV was projected to get just 12.2 percent, behind the centrist Democrats 66, the centre-right Christian Democrats and Prime Minister Mark Rutte's right-wing liberals.

Wilders blamed the disappointing score on a low turnout of around 35 percent, saying that "by staying home (voters) showed their loathing for and disinterest in the European Union. The Netherlands has not become more pro-European."

Political analysts said the poor showing by the PVV may not be mirrored by UKIP or the National Front in France, but said it could still alter interpretations of the elections as a whole.

"The results will have a large effect on the media and political frame of the European elections, which was supposed to be 'far-right wins big' and will now look more critically at the actual results," said Cas Mudde, a political scientist at the University of Georgia in the United States.

Voters in Ireland and the Czech Republic began casting their ballots on Friday but most of the EU's 28 nations hold the election on Sunday. Some 388 million Europeans are eligible to vote for 751 members of the parliament, which is an equal co-legislator with member governments on most EU laws.

MARKETS TWITCH

Opinion polls suggest anti-EU parties of the far right and hard left, which blame Brussels for austerity, recession and unemployment in the wake of the euro zone crisis, may win about 25 percent of seats, roughly double their current share.

But the parliament will remain dominated by pro-European centre-right, centre-left, liberal and Greens parties which often vote together in support of EU legislation.

Financial markets have so far been largely unconcerned by the prospect of a strong protest vote, partly because it has not prevented EU countries pursuing orthodox budget policies.

While the euro slipped against the dollar on Friday, interest rates on peripheral euro zone government bonds fell marginally, indicating little concern of political fallout.

In France, final polls put Marine Le Pen's far right National Front, which wants to leave the euro and restore national border controls and trade barriers, neck-and-neck with the conservative UMP party ahead of Sunday's vote, with President Francois Hollande's Socialists a distant third.

Other countries where Eurosceptics are expected to do well include Italy, where Beppe Grillo's anti-establishment 5-Star Movement is the main threat to Prime Minister Matteo Renzi's centre-left Democratic Party, as well as Austria and Denmark.

In Greece, the score of Alex Tsipras' leftist anti-austerity Syriza party may determine whether conservative Prime Minister Antonis Samaras' coalition can cling to power and implement the rest of a deeply unpopular EU/IMF bailout programme.


IMPACT ON BRITAIN'S CAMERON

In a possible first sign of UKIP's impact, sources familiar with Cameron's thinking said the British leader would lobby fellow EU leaders against nominating either of the two leading candidates of the mainstream EU parties as president of the executive European Commission.

Europe's main political families have agreed in principle that the candidate of whichever party tops the poll - either centre-right Jean-Claude Juncker or Socialist Martin Schulz - should be the nominee to succeed Jose Manuel Barroso.

The EU treaty says the European Council of EU leaders must propose a candidate "taking into account" the parliamentary election and after appropriate consultations.

The British sources said Cameron, who has promised Britons an in/out referendum on EU membership in 2017 if he is re-elected next year, regarded both the veteran former Luxembourg prime minister and the German president of the outgoing European Parliament as too federalist.

"It's really important the next commission president is reform-minded. He (Cameron) will be talking to EU leaders about other candidates," one of the sources said.

Juncker and Schulz have both said EU leaders would be betraying the electorate if they pulled another candidate out of a hat in a backroom deal, although that is still very possible.

As so often in the EU, much will hinge on German Chancellor Angela Merkel, the bloc's most influential leader, who has backed Juncker in principle but also said it will take weeks of negotiation before a candidate emerges.

Merkel was due to take part in a joint election rally later on Friday with Juncker and David McAllister, the leading candidate of her Christian Democrats, on the market square at Saarlouis, a small town close to the French border.

German officials decline to discuss names but say they expect a package deal with several other EU jobs including the presidents of the European Council and the European Parliament, as well as the EU's foreign policy chief.

Although Britain has no veto over the Commission president, if neither main party has a big lead and turnout falls again despite efforts to personalise the election, seasoned Brussels diplomats say EU leaders are unlikely to force the matter to a vote and humiliate Cameron.