Archive - Mar 2, 2014

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Memo to Obama: This Was Their Red Line!





Ethnolingusitic_map_of_ukraine[1]In the era before we got our Pacific port in 1848 and in the 166-year interval since then, the security and safety of the American people have depended not one wit on the status of the Russian-speaking Crimea. Should the local population now choose fealty to the Grand Thief in Moscow over the ruffians and rabble who have seized Kiev, what’s to matter!  Worse still, how long can America survive the screeching sanctimony and mindless meddling of Susan Rice and Samantha Power? Mr. President, send them back to geography class; don’t draw any new Red Lines. This one has been morphing for centuries among the quarreling tribes, peoples, potentates, Patriarchs and pretenders of a small region that is none of our damn business.

 

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Horrific Knife Attack In China Leaves 33 Dead (130 Injured)





In one of the deadliest acts of terror in China in recent memory, a group of ten knife-wielding assailants attacked passersby at the Kunming Railway Station in the southwest of the country on Saturday night, killing at least 29 and wounding another 130. Local Kunming government officials say that evidence at the scene point to separatists from China’s restive Xinjiang region, in what is being called “an organized, premeditated violent terrorist attack.” China’s state media outlet Xinhua quotes domestic senior Chinese security official Meng Jianzhu as vowing to “severely punish” the attackers. Saturday’s attack comes ahead of the annual meeting of China’s parliament on Wednesday, a time when security is usually tightened.

 

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The Phone Call





The phone-calls are flying. On the heels of yesterday's Obama-Putin "discussion", today has seen Merkel drop him a line (with the resultant claim that Putin has accepted a "fact-finding mission" despite all evidence to the contrary); and then Merkel, Obama, and Cameron got on a party-line to discuss "sanctions". In the face of this seriousness, we suspect, however, any of the calls to Putin all had a similar dialogue...

 

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Guest Post: Why Keynesian Political Economy Is Theft





The plague of our time is Keynesian economics. It has destroyed the economics profession and enabled the political class to obtain powers never intended. Keynesian economics provided the intellectual cover for the criminal class we politely call “government” to plunder its citizenry.

 

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US Official Claims 6,000 Russian Troops In Complete Control Of Crimea - Crisis Map Update





While the images and local news have been suggesting that Russia is in control on the Crimean peninsula, US officials (according to Bloomberg) have confirmed this:

*RUSSIAN FORCES IN COMPLETE CONTROL OF CRIMEA: U.S. OFFICIAL
*RUSSIA HAS 6,000 TROOPS IN CRIMEA, U.S. OFFICIAL SAYS
*KERRY TO REAFFIRM SUPPORT FOR UKRANIAN SOVEREIGNITY, PSAKI SAYS

Obama, Merkel, and Cameron are now on a conference call to discuss this "fact" and officials have just reported that US Secretary of State John Kerry will visit Kiev tomorrow (though we suspect not Sevastopol).

 

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Chinese Manufacturing PMI Slumps To 8-Month Low, Services PMI To 3-Month High; Goldman Admits Growth Decelerating





UPDATE:*CHINA HSBC MANUFACTURING PMI AT 48.5 FOR FEB. (as expected and marginally above the Flash print)

Chinese manufacturing PMI fell to an 8-month low holding barely above the crucial 50 level yesterday forcing Goldman to admit that "this signals further deceleration" in Chinese growth. All sub-indices showed signs of cyclical slowdown from January to February with perhaps the two most-critical ones - production and new orders - showing considerably larger falls than the headline index itself as we await this evening's HSBC print to confirm an average 'contraction'. China's Services PMI just printed at 55, up from 53.4, to a 3-month high led by a surge in the "expectations" sub-index.

 

 

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G-7 Countries Put Sochi June Vacation Plans On Hold





By now it was only a formality, as the likelihood of the G-8 meeting taking place in Sochi in June, months after the Russian invasion of the Ukraine, was zero at best. So the fact that G-8, pardon, G-7 countries announced the halting of their preparation for a June vacation on the Black Sea should not surprise anyone.

 

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Schlichter: "Bitcoin Is Cryptographic Gold"





The Bitcoin phenomenon has now reached the mainstream media where it met with a reception that ranged from sceptical to outright hostile. The recent volatility in the price of bitcoins and the issues surrounding Bitcoin-exchange Mt. Gox have led to additional negative publicity. It is clear that on a conceptual level, Bitcoin has much more in common with a gold and silver as monetary assets than with state fiat money. The supply of gold, silver and Bitcoin, is not under the control of any issuing authority. It is money of no authority – and this is precisely why such assets were chosen as money for thousands of years. Gold, silver and Bitcoin do not require trust and faith in a powerful and privileged institution, such as a central bank bureaucracy. Under a gold standard you have to trust Mother Nature and the spontaneous market order that employs gold as money. Under Bitcoin you have to trust the algorithm and the spontaneous market order that employs bitcoins as money (if the public so chooses). Under the fiat money system you have to trust Ben Bernanke, Janet Yellen, and their hordes of economics PhDs and statisticians.

 

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The Oscar Winners (If Twitter Had Its Way)





With all eyes dismally fixed on Eastern Europe and the esclating tensions between the world's most powerful nations, we thought perhaps a little levity was appropriate. "Way To Blue" trawls the social media stratosphere of intellect and calculates a "desire to win" index that summarizes who we, the lowly members of the public, would most like to win the celebrated Academy Awards. It appears, in an odd coincidence to real-life, the debt-serfs of the world would most like to see "12 Years A Slave" win for Best Film.

 

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US Equity Futures Open Down 1% - Erase Friday's Melt-Up Close





Surprise! The pump on Friday afternoon has given way to the 5th 'dump' in 5 days as US equity futures have crumbled back top Friday's lows and are catching down to USDJPY's early weakness. Gold is up $10 at $1,338. It seems once again that stocks, despite all those talking heads on Friday afternoon so confidently explaining how Ukraine was priced-in, knew nothing... US Treasury futures are well bid implying 10Y -5bps at 2.60% and 5Y -4bps at 1.46%.

 

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Explosions Heard In Semferopol; Belbek (Sevastopol) Air Force Base Seized By Russian Forces, BBC & Pravda Report





Several unconfirmed reports of two explosions being heard in Crimea's capital, Semferopol were on the wires and now The BBC has confirmed,

A loud bang was heard about 23:10 local time (21:10 GMT), following by a smaller blast, BBC reporters in Simferopol say.

Reports vary from "didn't hear any explosions" in Semferopol to Belbek Air Force base (In Sevastopol) is under Russian attack. Ukrainian Pravda confirms:

"Russian military, using 'stun' grenades, seized nearly all the buildings of the Ukrainian military in Belbek."

 

Tyler Durden's picture

The Good, Bad, & Ugly Market Implications Of A "Crimean" War





At this stage we see very little from the Ukraine priced into the market as a best-case (encroachment into Eastern Ukraine that is quickly and peacefully resolved) scenario appearing to be the blissful hope. However, as some of the other scenarios (described below) potentially come into play, whether in reality or perception, the risk to further downside in the market is significant. Since we are already recommending being short based on the economy and the misperception of the Fed’s next steps, you effectively pick up the conflict for free. With VIX being so low, picking up some downside protection makes a lot of sense here.

 

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From Kiev To Crimea: Visualizing The Last 2 Weeks In Ukraine





The last two weeks have seen events escalating at a rapid pace in Ukraine with the center of attention quickly shifting from Kiev's deadly protests to Crimea's "invasion." With Russia's Prime Minister Dmitry Medvedev warning that Ukraine's new leaders seized power illegally and predicting their rule would end with "a new revolution" and more bloodshed, we thought the following infographic would provide some context for how Ukraine got here so fast.

 

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Is Chinese Centrally Planned FX Policy "Just A Silly Game"?





A picture explains things best, and The South China Morning Post's Jake van der Kamp's chart on China's net capital flows certainly says all you need to know about why Beijing is "playing silly games with the yuan again".

 
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