THIS COLD, HOT WORLD

Azerbaijanis and those who visited our country this year know that this winter has been unusually cold in our region. In Baku and the Abseron peninsula alone, the level of snow in the first half of January exceeded the three-month norm. Residents of the Land of Fire were not too happy with 7-9 degrees of frost. The weather forecast for February does not look like consoling our southern people either. Meanwhile, distant Moscow, which is far to the north of Azerbaijan, has not seen the usual snow or frost these past few days. It seems that the poles are swapping places. But this is nature and, as we know, nature does not have bad weather.

The political weather of the world is still influenced by the same cyclones, and this world is divided not into North and the South, but into West and the East. They are not planning to swap places to all appearances. Every country strives to be a strong power in the world and it is no surprise that relationships are generally wintry - and quite severe at times.

The disputes over Kosovo are assuming greater importance these days. The United States and Europe are threatening to recognize the independence of the region, while Russia believes that Serbia's territorial integrity cannot be violated. This is why their relations are still so cold, and no-one is predicting a thaw in this situation.

All the tensions of January were supplemented by Russia's diplomatic scandals - first, with Britain and then with a new member of the European family, Latvia. We will not go into detail. We will only say that in the first case, Moscow thought that the work of branches of the British Council was illegal and began closing them; London saw this as a consequence of previous grievances. Although the British media warned that 34 Russian diplomats would be expelled, this did not happen. In the second case, Latvia suspected a Russian diplomat of spying and declared him persona non grata, to which the Kremlin responded with a similar move. And at this point, as Latvian President Valdas Adamkus stated, "the incident ended".

Instead, there are numerous issues that have not yet ended. Compared to them, global climate change may seem more predictable. This time it is not a question of confrontation between West and East. The second half of January was quite "hot" for all the stock exchanges of the world. One of the main subjects, or perhaps the main subject, was the global financial crisis, with the United States in its epicentre. The beginning of the year is the time to report. And these reports caused panic at stock exchanges, leading to depressing results. The losses sustained by companies following the mortgage crisis in the USA surpassed economists' expectations, provoking a wave of share selling around the world. The shares of major companies fell over seven days due to a panic that the weakening economic prospects of the Unites States would cause a fall in demand for metal and energy resources. Oil prices in New York fell to 87 dollars per barrel on fears that economic growth in the USA - the leading energy consumer - might slow down.

However, under pressure from international organizations, the USA was forced to reduce its federal interest rate by 75 basic points. After that, the market showed signs of recovery. In any case, analysts predict that it is unlikely to be the last weakening jab to monetary policy: the rate is likely to be reduced by another 50 basic points.

This may be what the International Monetary Fund, the World Bank and many analysts meant when they urged the USA to take more drastic measures. One thing is clear - unfortunately, those who were criticized for their pessimistic predictions in Davos last year proved to be right. Who knows, perhaps this year they will be wrong. But conjecture is not good business, even if it is the weather you are trying to forecast.