While we thought Venezuelan President Maduro was doing well in the verbal combat sparring match of global diplomacy, and of course Russian President Vladimir Putin holds the lead in proclaimed "despotism", it is the corruption-probe bedraggled Prime Minister of Turkey that is head-and-shoulders above the rest of the world's leaders in his insults. As Zaman reports, not a day goes by when Erdogan does not spew forth some insult-infused speech to rally his cheering supporters and here are his Top 15...
As we explained in great detail recently, the abundance of so-called cash-on-the-sidelines is a fallacy, but even more critically the we showed the belief that these 'IOUs of past economic activity' would immediately translate into efforts to deploy them into future economic activity is also entirely false. Simply put, there is no relationship between corporate cash and subsequent capital expenditure, nor is the level of capital expenditure even well-correlated with the level of real interest rates. At this point, as John Hussman explains, it should be clear that the mere existence of a mountain of IOUs related to past economic activity is not enough to provoke future economic activity. What matters instead is the same thing that always matters: Are the resources of the economy being directed toward productive uses that satisfy the needs of others?
With US manufacturing jobs down almost 40% from their 1980s peak, proclaiming the last few years marginal increase a "manufacturing renaissance" is more statistical noise, smoke, and mirrors than fact. That is a problem for an administration (and entire genre of Keynesian dreamers) that rely on this sector to prove how effective they have been with stimulus (and not just pulling demand so colossally forward that the future is bleak). How to fix this apparent dilemma between policy talking points and factual data? Easy - as WSJ reports, change the definition of "manufacturing."
Markets are showing increased signs of investor anxiety, warns BofA's Macneil Curry. The Friday breakout in the VIX Index says that this anxiety will likely persist into next week. Indeed, Curry adds, the VIX has based from its highest levels in over a year suggesting that investors are more susceptible to bad news and defensive behavior than at any time in the past 12 months. Several markets look particularly susceptible to this change in sentiment.
Crimea Will Formally Apply To Join Russia Tomorrow After 95.5% Support Referendum; US, UK, EU Reject ResultsSubmitted by Tyler Durden on 03/16/2014 - 14:12
UPDATE: While earlier exit polls indicated strong support, the preliminary results are now being announced:
*CRIMEA TO JOIN RUSSIA BACKED BY 95.5%: PRELIMINARY RESULTS
*CRIMEA TO REMAIN IN UKRAINE BACKED BY 3.5%: PRELIMINARY RESULTS
With a voter turnout (79.09%) that exceeded every US Presidential election since 1900, the people of Crimea have spoken. Ukraine's leaders have called up 20,000 men for a newly-created National Guard as despite the so-called "truce" Russian APCs and Tanks are rolling. The White House is already out rejecting the vote (before the final results are released) as are the EU, UK, and France.
"The Supreme Soviet of Crimea will make an official application for the republic to join the Russian Federation at a meeting on March 17," Sergiy Aksyonov said in a tweet.
*PUTIN TOLD OBAMA CRIMEA VOTE FULLY MET INTERNATIONAL NORMS
Crimean Deputy Prime Minister Rustam Temirgaliev has told RIANovosti that the region will abandon Ukraine's Hyrvnia:
*CRIMEA TO SWITCH TO RUSSIAN RUBLE APRIL 1: RIA NOVOSTI
This is not a total surprise as Reuters reported the Crimean Deputy PM stating "we are ready to introduce a ruble zone," a week ago.
From a strictly empirical perspective, the Keynesian theory is a disaster. Positivism wise, it’s a smoldering train wreck. You would be hard-pressed to comb through historical data and find great instances where government intervention succeeded in lowering employment without creating the conditions for another downturn further down the line. No matter how you spin it, Keynesianism is nothing but snake oil sold to susceptible political figures. Its practitioners feign using the scientific method. But they are driven just as much by logical theory as those haughty Austrian school economists who deduce truth from self-evident axioms. The only difference is that one theory is correct. And if the Keynesians want to keep pulling up data to make their case, they are standing on awfully flimsy ground.
Crimea Referendum Voter Turnout At 73%; EU Rejects "Illegal, Illegitimate" Vote, Seeks "Additional Measures"Submitted by Tyler Durden on 03/16/2014 - 12:44
"No provocations have been reported. The situation is quiet and under control," notes Crimea's Prime Minister Sergei Aksynov (despite plenty of chatter of pro-Ukraine buildings being attacked by pro-Russian supporters in Donetsk and Kharkiv). However, what is perhaps more important is that Interfax reports, voter turnout at Sunday's referendum on Crimea' future status had reached 73% by 6 p.m. (8 p.m. Moscow time), according to a posting on the referendum's website. That is higher than every US presidential election since 1900. European leaders remain dissatisfied with this "illegal and illegitimate" vote, demand Russian forces drop back to pre-crisis levels, and are preparing new EU sanctions for Monday.
Russia-Ukraine Agree "Truce" Until March 21st; White House Warns Putin Stop Playing "Russian Roulette"Submitted by Tyler Durden on 03/16/2014 - 12:05
"President Putin has started a game of Russian roulette and I think the United States and the West have to be very clear in their response," states Sen. Foreign Relations Committed Chair Robert Menendez among a slew of Sunday morning talk-show rhetoric from US politicians with the White House's Dan Pfeiffer adding "President Putin has a choice about what he's going to do here. Is he going to continue to further isolate himself, further hurt his economy, further diminish Russian influence in the world, or is he going to do the right thing?" As the "sham referendum" continues, Reuters, however, reports that Ukraine's acting defense minister believes Russia and Ukraine have agree a truce until March 21st.
With Malaysian authorities frustrated (and seemingly confused), and US and Chinese government offering "help" to solve this increasingly mysterious disappearance of the Boeing 777-200ER over a week ago, we thought a quick summation of all that we know would be useful. The possibilities remain numerous but it appears the latest line of investigation is the pane vanished through "deliberate action" with the airline pilots coming under increasing scrutiny.
More of the same. Via the Kremlin:
PUTIN TELLS MERKEL RUSSIA WILL RESPECT CHOICE MADE BY CRIMEANS
PUTIN TELLS MERKEL CRIMEA REFERENDUM ON JOINING RUSSIA IS LEGAL
Even as the West (and NATO) continues to reject any legitimacy of the referendum.
The much anticipated, if largely moot, Crimean referendum vote whether to break away from Ukraine and join Russia, began early on Sunday, even as Kiev is accusing Moscow of rapidly building up its armed forces on the peninsula in "crude violation" of an international treaty.
It has been over a week since Malaysia Airlines Flight MH370 disappeared without a trace, and the world is nowhere closer to finding either where the airplane and its 239 passengers and crew are to be found, nor what actually happened. Instead, what initially was speculation about a midair disintegration, and subsequently suggested a potential case of airplane terrorism gone wrong, has now transformed into a theory that the pilot and/or crew may have been engaged in "foul play", especially since it appears that based on tracking data, that the plane flew for nearly seven hours after someone "skilled" purposefully shut down its communications and tracking beacon: possibly indicative of a stealthy midair hijacking. However, the same satellite data gave no precise location, and the plane's altered course could have taken it anywhere from central Asia to the southern Indian Ocean.
A series of crises, the latest being the ominous developments in the Ukraine and further evidence of disappointing growth in China, have rattled financial markets. Of course, with all major central banks at amazingly easy policy stances, the bet continues to be that the latest uncertainties will also pass. That may be true once again. But, as Abe Gulkowitz lays out in the inimitable style of his The Punch Line letter, one must recognize that many of the serious flaws uncovered in each of the predicaments will linger for years to come and that the policy remedies have at best covered up the fundamental issues without completely resolving them.