TODAY: Khodorkovsky vows to set Russia straight; political elite rumoured to be at war; investors avoid Russian stocks due to falling ruble; China and Russia flexing military air power, planning new energy deals; Latvian pro-Russia party wins most votes in parliamentary elections; Statoil teams up with Naftogaz; Putin pardons former FSB member; theatre legend dies.

In an in-depth interview and profile, Mikhail Khodorkovsky said that Russia is going back in time to ‘1985 – the eve of glasnost and perestroika’, and vowed to do everything in his power to ‘reverse the trend’.  Bloomberg argues that Russia’s political elites are at war, as pro-Putin rivals fight over ‘a shrinking pool of assets’, fearful of the economy’s downward trajectory, and at odds over Putin’s plans to isolate the country from the global financial system.  Investors are continuing to avoid Russian stocks as the falling ruble risks rendering investments worthless.  This piece identifies two key drains on the budget that should be cut in order to rescue the economy: public sector salaries, and military spending.  Regarding the latter, Russia has overtaken the U.S. in nuclear warhead deployment – by one.  Both China and Russia are flexing their military power against the U.S. with ‘increasingly assertive strategies’ in the air.  On his trip to Europe later this week, Chinese Prime Minister Li Keqiang will sign energy and infrastructure deals with Russia.  VTB Capital investment bank says it is switching its focus to Asian markets in response to Western sanctions.