Archive - Mar 2014

In a stunning 24 hours, it now appears that Russia and the Ukraine are one formal announcement away from a state of war. From moments ago, as reported by Bloomberg:

• UKRAINE ACTING PRESIDENT PUTS ALL FORCES ON FULL COMBAT ALERT

And this, as reported by the NYT, virtually assures the escalation to a hot war, as some provocation, somewhere will certainly take place: "a Ukrainian military official in Crimea said Ukrainian soldiers had been told to “open fire” if they came under attack by Russia troops or others."

A few days ago, we reported that, seemingly out of the blue, the city of Rome was on the verge of a "Detroit-style bankruptcy." " And just as expected, yesterday Rome was bailed out. What is certain is that this year will not be the last one Rome is bailed out either. In fact, it will continue getting rescued for years to come because contrary to the propaganda, the Italian economy continues to get worse with every passing month, yields on Italian bonds notwithstanding. Ansa reports that in January the Italian unemployment rate rose to a record 12.9%, and that "reducing Italy's "shocking" rate of unemployment must be the government's highest priority, Premier Matteo Renzi said Friday." How, by pretending everything is ok, kicking the Roman can and hoping things improve by bailing out anyone that is insolvent? Putting 2013 in perspective, this is the year when according to national statistical agency Istat, some 478,000 jobs were lost in Italy in 2013, the worst year since the global financial crisis of 2008-2009, with an average annual jobless rate of 12.2% last year.

Russian Ambassador has been summoned to the Foreign Office over #Ukraine

— William Hague (@WilliamJHague) March 1, 2014

Even as Russia has officially deployed its military to the Ukraine, its unofficial involvement in The Crimean was well known for days. A much more notable development would be if protesters in the pro-Russian eastern part of the country were to seize control of the second largest city in the Ukraine, Kharkiv, located just miles from the Russian border as this would quickly give Russia a foothold into the east of the nation with the tactical escalation abilities such a takeover would entail. Which is why the following clip of pro-Russian protesters storming the city administration in Kharkiv is of importance: should Ukraine lose control of the city, or is forced to use troops against the people, it would be just the pretext Russia needs to "defend" citizens in this part of the country, the same argument it used for military intervention in the Crimean.

All the dominoes are tumbling now. Moments after the Russian upper house of parliament approved the decision to use Russian troops in the Ukraine as expected, Ukraine's acting president called an emergency meeting of security chiefs according to his spokeswoman. Oleksander Turchinov summoned his Security Council after Russian President Vladimir Putin sought parliamentary approval to deploy Russian forces in the Ukrainian region of Crimea. At this point the biggest and perhaps final wildcard is whether NATO does or does not get involved. If it does, and if Russia does not back off - which it has clearly telegraphed it won't - futures may be looking at a limit down open on Sunday.

For those who follow folksy Uncle Warren, here is the breakdown of Berkshire's Q4 and full year results, as well as his latest letter to investors.

Current US foreign policy in a nutshell: Barack Obama tells Vladimir Putin "there will be costs" if Russia invades Ukraine. What does Putin do? He invades Ukraine. Only this time it's official: AP reports that the Kremlin says Russian President Vladimir Putin has asked parliament for permission to use the country's military in Ukraine. Putin says the move is needed to protect ethnic Russians and the personnel of a Russian military base in Ukraine's strategic region of Crimea. RIA further adds, the military use is virtually assured as it was leaders of Russia’s upper and lower houses of parliament who first called Saturday on President Vladimir Putin to stabilize the situation in Crimea and protect Russian citizens.  The leader of Federation Council, Russia’s upper house, said the use of military force in the former Soviet nation could be justified after the opposition swept into power in Kiev last weekend.

A weekly technical outlook for the major currencies.