FORTUNE -- It's the economies, stupid.
Russian President Vladimir Putin signed legislation officially annexing Crimea on Tuesday, in blatant disregard of threats of economic sanctions that President Barack Obama announced over the weekend. And while some have considered the events in Ukraine the result of geopolitical posturing (Arizona Senator John McCain, for instance, has blamed Russia's actions on the Obama administration's "disturbing lack of realism" on foreign policy.), economics and trade offer a much clearer view of the situation.
Put simply, Russia and the U.S. are free to antagonize each other because they have very little to lose economically from deteriorated relations. According to analysis from Carl Weinberg of High Frequency Economics, trade ties between the U.S. and Russia are minuscule:
U.S. goods exports to Russia totaled just $11 billion in 2013, equivalent to less than 0.1% of U.S. GDP. U.S. goods imports from Russia totaled $27 billion, just under 0.2% of U.S. GDP.
The direct financial linkages between the United States and Russia are also small. According to [the Treasury Department] Russians hold $139 billion in U.S. Treasury securities and virtually no U.S. corporate bonds or equities -- at least directly. Russian direct investment in the United States also appears minimal. In the other direction, U.S. residents hold $70 billion in long-term securities and $14 billion in direct investment in Russia.
Meanwhile, the European Union is far more reliant on Russia for its economic health, as much of the E.U.'s supply of natural gas comes from Russian gas fields. This may explain why the E.U. has been less forceful than the U.S. in its sanctions announced this weekend.
By contrast, take a look at the United States' economic relationship with China. Unlike Russia, China is a very lucrative source for U.S. exports -- it constitutes a $300 billion market for U.S. firms if you combine both exports and sales in China by firms with U.S. investment, according to the Congressional Research Service. Total trade between China and the U.S. reached more than half a trillion dollars in 2013, a significant chunk of both countries' total economic output.
These statistics also help explain why China -- which often sides with Russia on questions brought to the United Nations Security Council -- abstained from a vote to condemn Russia's actions in Eastern Europe.
Since Dodd-Frank, small banks have grown more profitable.
FORTUNE -- In Wednesday's presidential debate, Mitt Romney said President Obama was both the banking industry's make out partner and grim reaper. Neither were meant as a compliment.
In a response to a question about regulation, Romney said Dodd-Frank, the set of banking reforms that Obama pushed for and Congress passed in the wake of financial crisis, was an example of a law that's MOREStephen Gandel, senior editor - Oct 4, 2012 4:16 PM ET
President Obama has two choices to avoid a major fiscal debt crisis for the U.S.: Fix it or ignore it. Unfortunately, he has so far chosen the latter.
Now it's official. The budget President Obama released today does virtually nothing to address the growth of entitlement spending that's by far the biggest factor driving our gargantuan deficits and debt. As for the administration's claims that it's making big cuts in areas MOREShawn Tully, senior editor-at-large - Feb 14, 2011 10:39 AM ET
Just in time for tonight's big speech comes a reminder of the limits of austerity.
The U.K. economy posted a 0.4% fourth-quarter output decline, stunning economists who had expected to see gross domestic product rise 0.5%. Perhaps half the shortfall came from bad weather, but the news in any case was "shockingly bad," economists at Capital Economics in London said.
The shortfall is noteworthy because Great Britain, unlike the United States, has MOREColin Barr - Jan 25, 2011 1:00 PM ET
Paul Volcker is riding into the sunset, but it's just as well. Any hope the Obama administration might clean up the financial Wild West faded long ago.
It was around this time last year that Volcker, the former Federal Reserve chief who was a major figure in Obama's 2008 presidential run, reemerged after a year in the policy wilderness. He stood with Obama at a White House lectern and announced a MOREColin Barr - Jan 6, 2011 3:47 PM ET
The money crowd just can't stop gushing about William Daley – but not, they stress, because he's a banker.
Daley is best known as son of the late Chicago mayor Richard Daley, brother of the current Chicago mayor of the same name and as a high-ranking Clinton administration trade official in the late 1990s. He is now a top associate of the nation's most powerful finance executive, JPMorgan Chase (JPM) chief MOREColin Barr - Jan 6, 2011 10:01 AM ET
Lots of media chatter about how President Obama is meeting today with a large group of CEOs, in order to put a more business-friendly face on his administration (apparently big business bailouts, major R&D funding increases and top-earner tax cuts weren't enough capitulation).
What's particularly interesting, however, is the two private-sector attendees who aren't actual CEOs: Mark Gallogly, the onetime Blackstone Group pro who now helps manage Centerbridge Partners, and venture capitalist John Doerr.
I'm not saying MOREDan Primack - Dec 15, 2010 10:07 AM ET
This week's tax-cut compromise will trim everyone's taxes. But surprise, surprise, it's an especially rich deal for the rich.
The Obama administration says the deal will help working families by cutting workers' payroll tax contributions by almost a third.
That's a victory for the White House because it postpones an effective tax hike that would have kicked in next year with the expiration of Obama's Making Work Pay credit, and delivers fiscal MOREColin Barr - Dec 7, 2010 11:57 AM ET
The Obama administration has been criticized for failing to create many new jobs with its $862 billion stimulus package. So why are economists calling for another round of stimulus dollars?
To spend or not to spend? That's the question.
And similar to William Shakespeare's opening line of an act in Hamlet, there is no easy answer.
In the same week the British government unveiled its biggest spending cuts in 60 years, some of MORENin-Hai Tseng, Writer - Oct 21, 2010 3:29 PM ET
Farrell, one of Larry Summers' deputies at the NEC and a potential contender for his replacement, spoke to Fortune about what qualifications his successor should have.
by Tory Newmyer, writer
The news that Larry Summers, the strong-willed and frequently controversial captain of President Obama's economic team, will quit the administration after the mid-term elections did not come as a major shock on Tuesday. Summers, the director of the National Economic Council, MORESep 22, 2010 5:05 PM ET
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