It doesn't take any special insight into the situation in Ukraine to conclude that no one narrative illuminates all the dynamics. Various contesting Grand Narratives have emerged in the media--neofascist coup, rampant corruption, east versus west, to name a few--but these only describe a few of the regional fault lines and complexities... I describe the U.S. Deep State as the National Security State which enables a vast Imperial structure that incorporates hard and soft power--military, diplomatic, intelligence, finance, commercial, energy, media, higher education--in a system of global domination and influence. One key feature of the Deep State everywhere is that it makes decisions behind closed doors and the surface government simply ratifies and implements the decisions. I have covered various aspects of geopolitics and the Deep State for years, for example:
With European peripheral bond yields collapsing every single day to new all time lows (primarily driven by Europe's near-certainty that a US-style QE is imminent as we first showed here in November, despite Mario Draghi's own words from November 2011 that a QE intervention is virtually impossible), increasingly more of Europe is trading just as safe, if not more, as the United States. And in keeping with the analogies, considering a major US metropolitan center, Detroit, recently went bankrupt, it is only fair that Europe should sacrifice one of its own historic cities to the gods of negative cash flows. The city in question, Rome, which as the WSJ reports, is "teetering on the brink of a Detroit-style bankruptcy."
Three unlucky attempts in a row to retake the S&P 500 all time high may have been all we get, at least for now, because the fourth one is shaping up to be rather problematic following events out of the Crimean in the past three hours where the Ukraine situation has gone from bad to worse, and have dragged the all important risk indicator, the USDJPY, below 102.000 once again. As a result, global stock futures have fallen from the European open this morning, with the DAX future well below 9600 to mark levels not seen since last Thursday. Escalated tensions in the Ukraine have raised concerns of the spillover effects to Western Europe and Russia, as a Russian flag is lifted by occupying gunmen in the Crimean (Southern Ukrainian peninsula) parliament, prompting an emergency session of Crimean lawmakers to discuss the fate of the region. This, allied with reports of the mobilisation of Russian jets on the Western border has weighed on risk sentiment, sending the German 10yr yield to July 2013 lows.
When civilians launched a suicidal attack on an armed force in Kyiv on February 20, their sense of representing “the nation” far outweighed their concern with their individual mortality. The result was to swing a deeply divided society from the verge of civil war to an unprecedented sense of unity. Whether that unity endures will depend on how Europe responds. We hope and trust that Europe under German leadership will rise to the occasion. We must, however, end with a word of caution. A replay of the Cold War would cause immense damage to both Russia and Europe, and most of all to Ukraine, which is situated between them.
Kevin Lau, the 49-year-old former editor of the respected Ming Pao newspaper (who was unexpectedly replaced last month by journalist with no experience) following his reporting on human rights abuses in China is in critical condition after being attacked with a meat-cleaver. As The Daily Mail reports, slashed three times by a man in a crash helmet in a residential neighbourhood who then fled on a motorbike, police said. His sudden dismissal sparked protests across the city over freedom of the press as the move raised fears among journalists that the newspaper's owners were moving to curb aggressive reporting on human rights and corruption in China. It appears, given this attack, they were right.
Having threatened Russia that "any military move would be a grave mistake" and sounding awefully like a "line" to be crossed, US Secretary of State John Kerry told reporters that the US is ready to bail out Ukraine...
- *KERRY: RUSSIA MILITARY MOVE ON UKRAINE WOULD BE GRAVE MISTAKE
- *KERRY SAYS U.S. PLANNING $1 BLN LOAN GUARANTEE FOR UKRAINE
- *KERRY SAYS U.S. WORKING WITH IMF, OTHERS ON AID TO UKRAINE
One has to wonder how many US jobs this will create (or save)? Or will Ukraine offer unlimited vodka to citizens of Detroit (or Puerto Rico for that matter)?
Just in case you thought for a second that the sorry discipline we call economics couldn’t stoop any further into the gutter of academic idiocy and irrelevance, think again. It’s now being reported that ex-Goldman Sachs trader Fabrice “Fabulous Fab” Tourre (recently convicted on six counts of securities fraud) will be teaching an honors economics class at the “prestigious” University of Chicago. There’s nothing like an esteemed University setting the already culturally accepted example that ethics are for suckers. Stealing, cheating and corruption are the values most exalted in today’s world. It doesn’t matter how you achieve your wealth, as long as you attain it.
Update as things just got worse: TURKISH POLICE CLOSE DOWN GEZI PARK IN ISTANBUL, CNN-TURK SAYS
As we reported previously, on Monday new revelations in the graft scandal surrounding Turkish PM Erdogan in the form of a leaked phone conversation between him and his son, Bilal, detailing plans how to hide huge sums of cash, by some estimates up to $1 billion, brought back the political crisis that has gripped the nation front and center, and led to renewed demands by the opposition party that the PM resign. It also sent the USDTRY surging to levels not seen in weeks. We said: "Somehow we doubt that Erdogan will resign, however, this latest confirmation that the graft scandal that is and will continue to dodge the Turkish Prime Minister is not going away, may just be the catalyst that pushes the TRY, and with it some of the other recently pacified EMs, back into volatile mode." Today the crisis is fully back and so is the predicted volatility, with the Lira blowing out by another 400 pip to a level of 2.240, not seen since the first week of February when the Turkish central bank was scrambling to restore confidence in the imploding currency.
As CNY unwinds, Russia-Ukraine safe-haven bids, and Turkish Lira (erdogan corruption) concerns flood back into the USD as a safe-haven, precious metals have come under pressure this morning. Gold has been sold but remains relatively stable but Silver is suffering its biggest down day in almost 2 months ad the gold-to-silver ratio surges back up to ts 4-month average.
"The conscious and intelligent manipulation of the organized habits and opinions of the masses is an important element in democratic society. Those who manipulate this unseen mechanism of society constitute an invisible government which is the true ruling power of our country. We are governed, our minds are molded, our tastes formed, our ideas suggested, largely by men we have never heard of..." - 1928
As a society we have fallen asleep at the wheel. We’ve allowed ourselves to be lulled into complacency, distracted by minutia, mesmerized by technology, turned into consumers by corporations, pacified by financial gurus and Ivy League economists, and fearful of our own shadows. Surveillance, censorship and propaganda are the tools of the oppressive state. Free speech and truthful revelations about the Deep State are a danger in the eyes of our oppressors.
In a desperate attempt to distance itself from the widening corruption scandal linking the Vatican's bank accounts to fund (and allegedly bribe) a 2007 acquisition by Monte dei Paschi of Antonventa, the Pope has taken an unprecedented step in open the Vatican's finances to public view. As Reuters reports, Pope Francis on Monday revolutionized the Vatican's scandal-plagued finances by appointing an auditor-general with wide oversight powers "to conduct audits of any agency of the Holy See and Vatican City State at any time," a statement said. Francis decreed that the changes have "immediate, full and stable effect," abrogating any existing rules not compatible with them.
Turkish Lira Sinks After New Alleged Recording Reveals More Erdogan Corruption; Opposition Calls For ResignationSubmitted by Tyler Durden on 02/24/2014 18:14 -0400
It is almost remarkable that it was a few short weeks ago when the Turkish Lira was crashing to new daily record lows against all reserve currencies, and when Erdogan, embroiled in a bitter political corruption scandal, was firing judges and police officers left and right. Since then, things have quieted down, on the back of the return to surface calm across the broader Emerging Markets (even if nothing has actually been resolved fundamentally in the post-Taper era), however the Turkish graft scandal refuses to go away. As a result, today the Turkish Lira soared by over 200 pips following the release of a new recording which is allegedly a leaked telephone conversation in which the premier discusses plans how to hide at least $1 billion in cash (an amount which would buy about 20 Yanukovich-style presidential palaces) in the period when the Police was raiding various affiliated venues as part of a corruption investigation.
The Russians had dangled their multi-billion euro carrot - then swiftly removed it pending further details of who is really running the show (demanding a crackdown on the extremists who are trying to establish power). The Europeans have promised an even bigger carrot - predicated on, we presume, total abdication of sovereignty. But now the Americans are jumping in - Treasury Secretary Jack Lew "urged" Ukraine's interim leader Yatsenyuk to start talks with the IMF as he and Lagarde agreed the fund would be the best foundation for advice and financing (if sought by a fully established Ukrainian government). And the winner is...
- *UKRAINE'S KUBIV PLANS TO INVITE IMF MISSION, UNIAN SAYS
Which means only thing - Russia is locked out and gas prices are about to take off.
Listening to the media gleefully hype the numerous construction flaws and rumors of corruption at the Sochi Olympics, we couldn't help thinking that Americans in general have no clue about Russia. Here are some of the similarities and differences... "Russia is rising. Maybe we can give her a high five on our way down. Instead of criticizing others, look in the mirror America."