Despite Pope Francis' recent attempts - mostly for media and public consumption, if not so much in actuality - to clear out decades of corruption at the Vatican including shady financial backroom dealings, involving countless global banks, some very odd things continue floating up to the surface. Like condoms filled with cocaine.
Having discussed the links between economic growth and energy resource constraints, and with the current geo-political fireworks as much about energy (costs, supply, and demand) as they are human rights, it would appear the following chart may well become the most-important indicator of future tensions...
"I'm here to fight for my children's future," exclaims one father as Spaniards rallied in Madrid against poverty and EU-imposed austerity. As Reuters reports, the largely peaceful protest later marred by violent clashes in which police fired rubber bullets. The so-called "Dignity Marches" brought hundreds of thousands to the capital with banners making it clear what their feelings about record 26% unemployment were - "Bread, jobs and housing for everyone" and "Corruption and robbery, Spain's trademark." One protester summed up the people's views of the government, "I'm sick of this system they call democracy... I want things to change."
As was reported earlier, the Turkish premier, embroiled in what increasingly appears a career terminating corruption and embezzlement scandal (it is not exactly clear yet just how involved the CIA is in this particular upcoming government overthrow), blocked Turkey's access to Twitter last night, hours after vowing to "destroy twitter." The idiocy of this escalation against dissemination of information in the internet age needs no comment. Well maybe one. This is what we said in our post from this morning: "since Turkey will certainly not stop at just Twitter, here is what is coming next: "Last week, Erdogan said the country could also block Facebook and YouTube." It now appears that at least half of this threat is about to materialize because moments ago Google just announced that it would not remove a previously uploaded video, one in which Erdogan tells his son to hide money from investigators (one which can be seen here), and which Erdogan demanded be pulled from Google (seemingly unaware that by doing so he simply made sure that everyone saw it). This means that within days, if not hours, Turkey will likely block Google-owned YouTube, if not Google itself.
In the hopes of maintainijng his status quo amidst a plethora of corruption probes and allegations, Turkey's Erdogan has blocked Twitter after pledging to "destroy" the social media platform after troubling leaks occurred appearing to confirm his corruption. As one can imagine, the Turkish people (among others) are not happy...
Yesterday we warned that the honeymoon is over as Ukraine expects gas prices to rise 40% as Russian discounts fade. Today it appears the situation is even worse:
- *NAFTOGAZ, GAZPROM TALKS FOR MARCH 20-21 CANCELLED: INTERFAX
- *UKRAINE POLICE DETAINS NAFTOGAZ CHAIRMAN BAKULIN: AVAKOV
- *UKRAINE NAFTOGAZ RAID PART OF CORRUPTION PROBE, AVAKOV SAYS
The issues up for debate, of course, are supply and pricing of gas from Russia and the payment for over $2bn of existing debt owed. While Interfax reports that this was because the Ukraine gas company executive was unable to leave the country, which now appears due to corruption allegations ("there's corruption going on here?") but merely exacerbates any Russian gas retaliation concerns.
For a variety of reasons, the Federal Reserve is viewed by many as the financial Master of the Universe. Given how the media hangs on every pronouncement and the visible power of the Fed's policies to move markets, this view is understandable. But suppose rather than being masters of all things financial, the Fed was actually little more than a collection of incompetents trapped in a broken system that is beyond repair. Rather than Masters of the Universe, the Fed's governors are increasingly looking more like deer caught in the headlights of a transformation they cannot understand, much less control.
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)
S&P, still deep in the mire of a legal battle with the US government, has decided now is an opportune time to cut the ratings outlook on Russia:
- *RUSSIAN FEDERATION OUTLOOK TO NEGATIVE FROM STABLE BY S&P
- *S&P SEES EU-U.S. IMPOSING FURTHER SANCTIONS
Russia remains a BBB credit (but with the outlook shift remains open to a downgrade with 24 months). S&P has cut 2014 GDP forecast to 1.2% and 2015 to 2.2%. Of course, we are sure, this would have nothing to do with currying favors with the US government (who threatened them when they downgraded the USA). Full report below.
It appears the madness is contagious. Turkish Prime Minister Recep Tayyip Erdogan, embroiled in an ongoing and huge corruption probe, lashed out at "international conspiracies" in a speech at a rally in Bursa. "We'll dig up Twitter - all of them - from the roots," he raged, "they'll see the power of the Republic of Turkey." With the looming elections - sure to fair and equitable to all - he warned he would "settle scores" after winning. Indeed...
- How Putin Parried Obama's Overtures on Crimea (WSJ)
- West Readies Tighter Sanctions After Russia Seals Crimea Claim (Bloomberg)
- Putin says U.S. guided by 'the rule of the gun' in foreign policy (Reuters)
- JPMorgan Said to Agree on Commodities Unit Sale to Mercuria (BBG)
- Short Sellers Target Chinese Developers as Rout Deepens (BBG)
- HFT finally under the spotlight: High-Speed Trading Firms Face New U.S. Scrutiny (WSJ)
- Chinese Dollar Bond Investors Demand Higher Yields After Default (BBG)
- According to Joe LaVorgna it's the snow's fault: Deutsche Bank Said to Plan Job Cuts at Investment Bank (BBG)
- Israeli airstrikes kill 1 Syrian soldier, wound 7 (AP)
Nearly 40% of China lives off of $2 a day. Your average college graduate in China makes just $2,500 per year. In an economy such as this, a rise in prices in costs of living can be devastating for the population.
If I feed at the trough, because that is what all cattle do, then I will be slaughtered in the killing house, because that is what all cattle do.
"All the Trumans – the economists, fund managers, traders, market pundits –know at some level that the environment in which they operate is not what it seems on the surface…. But the zeitgeist is so damn pleasant, the days so resplendent, the mood so euphoric, the returns so irresistible, that no one wants it to end."
Klarman is here referring to the waning days of this third and greatest financial bubble of this century. But David Stockman's take is that the crack-up boom now nearing its dénouement marks not merely the season finale of still another Fed-induced cycle of financial asset inflation, but, in fact, portends the demise of an entire era of bubble finance.