Europe and Russia

Russia: It says something about the self-confidence of the US now, a self-confidence based partly on a sense that the economy has indeed reached escape velocity but also on the boom in oil and gas production. Thanks to fracking, the US has this year passed Russia to become the world largest producer of oil and gas combined. This gives it a very different perspective from Europe: Europe needs Russian gas, America doesn't, according to The Independent. So what does preoccupy the US right now? The starting point is that, given what is happening elsewhere, it is a pretty good place to be. So what matters more than anything else is the health of corporate America. Good revenue figures from Google were more important than events in Ukraine or the Middle East. A lot of cheer was also taken from the evidence that US companies are investing again and Of course there is a sniff of fear, as you might expect whenever markets have had a long rally, but it is fear about something going wrong at home, not abroad. What seems to matter from the perspective of American finance is what Janet Yellen, chair of the Federal Reserve Board, thinks about the valuation of technology stocks, or whether the company reporting season, which is just starting, will show that US Inc is still thumping out the profits. If the Russian economy tanks in the months ahead, well, that is the effect that the sanctions approved by the US and Europe last week are supposed to have. It also does not need Russia as a market. Russia takes a bit more than 2 per cent of Germany exports, small but helpful, but it buys hardly anything from the US. For all its swagger as a member of the Bric club, which has just approved the founding of a rival to the World Bank, to be headquartered in Shanghai, the longer-term prospects for the Russian economy are pretty poor. It is the only large country in the world where life expectancy is falling, and its workforce is already in decline. (news.financializer.com). As reported in the news.