It will be difficult for Western companies to come back to Russian markets as their refusal to cooperate with Russia under sanctions would seriously damage their reputation, Russian President Vladimir Putin said.

"It is obvious that the decline in mutual confidence is bound to have a negative impact on both the international business climate in general and on the operation of European and American companies in Russia, bearing in mind that such companies will find it difficult to recover from reputational damage," Putin said in an interview with Serbian newspaper Politika ahead of his visit to Belgrade, scheduled for October 16.

The president also said US sanctions against Russia's financial sector would blemish the reputation of the US banking system as a reliable investment partner.

Belgian law enforcement officials opened an investigation Friday into an alleged jihadist training camp in the Ardennes region of northeastern Belgium, according to local media reports.

Photos of so-called combatants at the site were recently posted on Facebook.

Sporting combat fatigues, balaclavas and bullet proof vests, the men stomp around the sylvan Belgian countryside, wielding what appears to be dummy guns and looking incongruously menacing in the Western European forest.

But in a tiny European nation that has seen a disproportionate percentage of its population joining jihadist groups in Syria and Iraq, the photographs sparked alarm, prompting a police investigation into the possibility that Belgium's Ardennes region was being used to train would-be jihadists, Belgian media reported on Friday.

Western countries must acknowledge their policy faults and stop their mechanical repetition to improve relations with Russia and the security situation in general, Russia's representative to NATO has said.

"One of the main levers that could really shift the European security situation for the better could be work on mistakes," Aleksandr Grushko said at a public discussion in Moscow on Monday.

"We and our Western partners, first of all Europe, must recognize that their policies of the past few years are only deepening the dividing lines between Russia and Europe, and this is extremely dangerous," the Russian diplomat added.

"The West must eventually acknowledge the fact that the mechanical implementation of its recent policies is leading itself into a dead end."

Grushko also said that the continuing crisis in Ukraine was proof that a single security structure based on the non-division principle was impossible in Europe. "Regretfully, today we can state that the political project that sought to unite Europe, Eurasia or the Europe-Atlantic region has failed."

In addition, the Russian envoy said that Russia's input in the European security structure was the greatest among all the countries, and it was because of Russia's efforts that Europeans can feel safe spending only between 1.6 and 1.8 percent of its GDP on defense and security.

Grushko also blamed the United States for undermining regional security in Europe by pressing for the new missile defense system. In particular, the diplomat promised that Russia would take measures in reply to the transfer of a new military base in Romania to US command.

"The United States is gradually implementing its Euro Missile Defense program. They either do not consider the regional security interests or plainly ignore them," the Interfax news agency quoted Grushko as saying.

President Putin's average approval marks from the Russian public have approached the record level of early 2008, independent research has shown.

The poll conducted in late September by the Levada sociology center shows that the average mark given by Russians to their leader is now 7.33 out of 10. This figure has been higher only once before - a mark of 7.49 reached in January 2008 at the very end of Putin's first two terms as president.

17 percent of all respondents think Putin deserved the top mark - 10 out of 10 - for his work.

In the same poll, 38 percent of Russians said the head of state was worthy of their trust because his current performance was strong and successful.

At the same time, the overwhelming majority of respondents denied that the president's popularity was turning into a personality cult. Only 19 percent said they had noticed features resembling a cult, compared to 27 percent a year ago.

The poll results are consistent with a recent tendency for record-breaking ratings for President Putin and other top Russian officials. Researchers explain this by 'mobilization' and solidarity of society in the face of foreign hostility, and also by events like the accession of the Crimean Republic into the Russian Federation.

In mid-August, 52 percent of Russians told Levada Center that they were ready to vote for Putin if presidential elections were held on the nearest weekend. January 2014, the share of such people was about 29 percent and that means that Vladimir Putin's presidential rating has doubled in almost seven months.

Another influential sociological think-tank, the Public Opinion Foundation, conducted similar research in early August. It found that 68 percent of all potential voters were ready to support Putin at presidential elections, compared to 58 percent in March and 46 percent in January.

The Russian PM has suggested that Obama's charges against Russia were caused by a "brain aberration" and added that such rhetoric saddened him.

"I am very upset by the fact that President Obama, while speaking from the United Nations' podium and listing the threats and challenges humanity is currently facing, put Ebola in first place, the Russian Federation second and the Islamic State organization was only in the third place. I don't even want to comment on this, this is some sort of aberration in the brain," Dmitry Medvedev said in an interview with CNBC television.

The top Russian official stressed that his country was not isolating itself from the rest of the world, but sought mutually beneficial cooperation with foreign nations. "We want to communicate with all civilized peoples on friendly grounds. Of course, this includes our partners from the United States of America, but for this the situation must be leveled," Medvedev said.

However, the Russian PM also noted that the Western sanctions have inflicted considerable damage to Russia's cooperation with the US, and without cancellation of this policy there can be no return to partnership.

Media analyst and professor emeritus of finance at the Wharton School, Edward S. Herman, co-author with Noam Chomsky of Manufacturing Consent, discusses the propaganda embedded in US mainstream media coverage of the Ukraine crisis.

Dan Falcone: What is missing in the US mainstream news coverage of Ukraine? What major elements are being suppressed?

Edward Herman: What is missing, first of all, is a minimum of objectivity. The media are functioning more than ever as a propaganda machine for the State Department. One thing missing - and being suppressed - is the important role of neo-Nazi elements both in the Kiev government and in the forces they have fielded in their war against East Ukraine. The media are eager to find Russians in Ukraine, but will not even recognize neo-fascists staring them in the face, but working on our side. They had earlier virtually suppressed the very important role of these right-wing elements in the Maidan protests and the accompanying violence and overthrow of the elected government in Kiev. The media regularly called those forces "protesters," whereas they called the East Ukraine rebels "pro-Russian militants" and "separatists" rather than "protesters" and "federalists." The double standards here are dramatic and the sign of a propaganda system at work.

"While continually stressing Russian alleged interventions, the media essentially suppress the US role in the 'coup' of February 2014 and its aid to the coup government."

So also is the different treatment of casualties. In the Maidan street protests and fighting before the coup, the media were very sensitive to violence against the protesters, although less attentive to violence by the protesters; whereas the thousands of civilian casualties in the Kiev war against the East have been of little interest to the media, again following the party line and paralleling the attention of [US Secretary of State John] Kerry and [US Ambassador to the UN Samantha] Power. They buried the story of the Odessa massacre, which was surely of greater scope than the Racak massacre in Kosovo, which so aroused US officials and the ever-so-amenable media.

While continually stressing Russian alleged interventions, the media essentially suppress the US role in the "coup" of February 2014 and its aid to the coup government (advice, trainers, military supplies, diplomatic backing and encouragement of the IMF to aid the government). They failed to give any deeper context to Russian behavior, most notably the NATO advance toward the Russian borders and virtual encirclement of Russia and the threat this embodies to Russian national security. These suppressions are the work of a very efficient and aggressive propaganda system.


Falcone: Who is Victoria Nuland, what is the significance of her leaked phone call and how does she exemplify our actual motives in European and Eurasian affairs?

Herman: She is a neo-con brought into the State Department by Hillary Clinton and put in charge of the desk dealing with the Ukraine. Her leaked phone call made it clear that she was actively working for regime change, resented the EU [European Union] attempts to arrange a negotiated settlement and helped to scuttle it. She succeeded in her task of "f***[ing] the EU" by helping the ouster of the elected government by violence and getting her preferred choice ("Yats") as prime minister in the coup government. The call was one important piece of evidence of US intervention with a highly political purpose - and one that seriously threatened Russian national interests and national security. But the US media ignore this evidence and take the coup-installed Kiev government as completely legitimate and completely independent. The New York Times has barely mentioned this phone call, which is a strong piece of evidence of the paper's bias and propaganda service.

Falcone: Andrew Kramer and Andrew Roth just recently wrote in The New York Times that, "On the sidewalk of a busy street beside a checkpoint, a bearded gunman wrapped a woman in a Ukrainian flag and forced her to stand, sobbing in terror, holding a sign identifying her as a spotter for Ukrainian artillery. 'She kills our children,' it read. Because the woman was a spy, said the gunman, a pro-Russian militant, everything that would happen to her would be well-deserved." What do you think of a news story contextualized in this fashion?

Herman: The factual claims may be true, although The New York Times reporters are hugely biased, and I wouldn't be surprised if there was some falsification here, but the main bias here is selecting this set of facts for emphasis. One feature of The New York Times coverage is the almost complete failure to provide stories, interviews and pictures of the thousands of civilians who have been killed, wounded or terrorized by Kiev bombs and artillery fire. Omitting that context makes this terrible action by anti-Kiev rebels look like inexplicable cruelty rather than monstrous behavior in reaction to monstrous Kiev behavior (supported by US policy, hence decontextualized in The New York Times).

Arming insurgencies around the world has rarely worked for the CIA without direct support from Americans on the ground, according to a still-classified agency review of the practice conducted during debate over arming rebels in Syria.

The review, according to The New York Times, was one of many Central Intelligence Agency studies commissioned in 2012 and 2013 as the Obama administration considered how to counter Syrian President Bashar Assad's forces amid the nation's civil war.


From aiding contra rebels against Nicaragua's Sandinista government to the Bay of Pigs invasion in Cuba that ended in disaster, the study concluded that many attempts the spy agency has made in its 67-year history to covertly arm foreign fighters have had little success in effectively turning the outcome of a conflict, especially when there is no American ground support involved.

The study was eventually presented to the White House, where it fueled skepticism among President Barack Obama and top advisers regarding whether to arm scattered rebel groups in Syria.

"One of the things that Obama wanted to know was: Did this ever work?" a former senior Obama administration official involved in the debate told the New York Times. The report, he said, "was pretty dour in its conclusions."

American soldiers discovered more than 4,990 chemical munitions in Iraq, according to Iraqi and US officials and previously classified intelligence documents, which may now be in the hands of Islamic State militants.

For much of the duration of the Iraq War, which saw US soldiers open a military invasion against the Ba'athist country in March 2003 amid tremendous international outcry, US forces "repeatedly encountered, and on six occasions were wounded by, chemical weapons" leftover from the Iraq-Iran War, reported the New York Times.

The hefty eight-part report, largely based on interviews and highly redacted intelligence documents, said "17 American service members and seven Iraqi police officers...were exposed to nerve or mustard agents" between 2004 and 2011.

The article detailed the harrowing chemical encounters of several servicemen, including Sergeant Duling, who in August 2008 unwittingly led his unit into a munitions pit outside Baghdad.

"This is mustard agent," he said, after carrying out an examination of the contents of the rusting artillery. "We've all been exposed."

Investors' 2014 stock gains have evaporated under a broad-based Wednesday selloff as fears over the slowing global economy, corporate earnings and the spreading Ebola virus rattles already skittish investors.

The Dow Jones Industrial average plunged 407 points (2.5%) to 15,907 in afternoon trading. The Standard & Poors 500 was down 2.6% to 1,827, while the Nasdaq was off 2.2% to 4,130.

Wednesday's carnage - which marked the fifth straight drop in the Dow - began in Europe, where Britain's FTSE fell 1.9% and Germany's DAX and France's CAC 40 sank nearly 3% after Germany lowered its growth projections. But investors were also unnerved by fresh Ebola fears and weaker-than-expected U.S. economic data, including a Commerce Department report that September retail sales fell 0.3%.

Selling pressure hit a broad array of stocks. Banking and financial stocks, including Bank of America, down 4.5%, Citigroup, off 5%, and JP Morgan, down 3.7%, were particularly hard hit.

Airline stocks were roiled by the prospects of curtailed travel due to the spreading Ebola virus. United Continental fell 6%, American Airlines was off 4.3% and Delta tumbled 4.7%. Among tech stocks, Intel fell 3% and Microsoft slipped 2%.

Desk chatter confirms liquidations are occurring ahead of expected margin calls later in the day. This is evident in widely held stocks like AAPL which just plunged on very heavy volume and has dragged the "off the lows" bounced US equity indices back to their lows of the day...

AAPL in trouble...

Dow back under 16,000

Brief USDJPY-driven v-shaped recovery sent S&P back to VWAP (to enable some institutional selling) but that has given way now that pre-emptive liquidations have begun...