Archive - Mar 21, 2014 - Story

Earlier in the week the hypocrisy of the big tech firms was exposed when the NSA's senior lawyers "busted" their lies by explaining they knew full-well that they were engaged in the surveillance-state. Today comes yet more 'elite' hypocrisy as AP reports, Microsoft, which has skewered rival Google for going through customer emails to deliver ads, acknowledged Thursday it had searched emails in a blogger's Hotmail account to track down who was leaking company secrets. Scroogled, indeed.

Rumors of a new "preferred shares" program which could implicitly mean easier access to desperately needed liquidity for Chinese banks and real estate developers prompted what one analyst called "a short-covering-led recovery after shares had fallen a lot." The banks of the Shanghai Stock Exchanged rallied notably as chatter was they would be be first to be blessed with the ability to issue new stock and this boosting their capital. The 2.7% rally in the composite was the best day in 4 months (even as China CDS surged by their most in 9 months) but, as one trader noted, "we may see one or two more days of upside but China's fundamentals are still weak. We weren't falling for nothing."

Sanctions against billionaires - that's one (very much meaningless) thing. But halting sales of Russian vodka, now that could really cripple someone, just not clear who. And in an attempt to answer that question, the premier of Canada's Saskatchewan province, Brad Wall, says he is considering banning Russian booze in government-run liquor stores because of Russia’s actions in Ukraine. Wall says it’s a small measure, but sends a strong statement.

When we reported early yesterday that Turkey's Prime Minister Erdogan threateningly warned that since Twitter had ignored court orders to remove content related to a government corruption scandal., that he would "destroy Twitter" and that "we'll dig up Twitter - all of them - from the roots," he raged, "they'll see the power of the Republic of Turkey" it may not have been quite clear what he meant. A few hours later it was revealed, when virtually all Twitter access was blocked in Turkey ten days ahead of the general election in a move that has already enraged the nation and resulted in a powerful public outcry.

• Australia says nothing spotted in search for plane (AP)
• Putin looks to Asia as West threatens to isolate Russia (Reuters)
• China Billionaire Builds Metals With Dreyfus, Glencore Hires (BBG)
• China Beige Book Says Economy Slowing (BBG)
• Caterpillar Said to Be Focus of Senate Overseas Tax Probe (BBG)
• US Cancels Summit With Divided Group of Gulf Nations (WSJ)
• Cyprus defense minister suffers aneurysm (AP)
• Abe to zero in on economy as tax hike looms (Nikkei)
• Europe strikes deal to complete banking union (Reuters)

Moments ago the "absorption" of Crimea into the Russian Federation was completed after Putin signed the final previously passed by parliament. And with that, in less than a month, the Crimean "question" has been answered. The only question is whether Putin will stop here or will the ease with which he just expanded the Russian political map leave him hungry for more. In other news, as part of the Western escalations against Russia, Bank of Rossia, the one bank exclusively identified in the sanctions list, announced that Visa and MasterCard have stopped, without notification, providing services for payment transactions for clients. These moves in turn promptly led to Putin announcing that he wants to open an account with the Bank Rossia. 

Once again there has been little fundamental news or economic data this morning in Europe with price action largely driven by expiring option contracts. In terms of key events, Putin says Russia should refrain from retaliating against US sanctions for now even as Bank Rossiya discovered Visa and MasterCard have stopped servicing its cards, and as Putin further added he would have his salary sent to the sanctioned bank - the farce will go on. Continuing the amusing "rating agency" news following yesterday's policy warning by S&P and Fitch on Russian debt (was that a phone call from Geithner... or directly from Obama), Fitch affirmed United States at AAA; outlook revised to stable from negative, adding that the US has greater debt tolerance than AAA peers. Perhaps thje most notable move was in Chinese stocks which rallied overnight after major domestic banks said to have stopped selling trust products which were blamed for encouraging reckless borrowing and diluted credit standards. Speculation of further stimulus and the potential introduction of single stock futures also helped the Shanghai Comp mark its biggest gain of 2014 closing up 2.7%.