Department of the Treasury
Moments ago, as was widely preannounced, the US Treasury unveiled its latest round of Russian sanctions. While the bigger picture was well-known, here are some of the highlights:
- U.S. SANCTIONS FOCUS ON FINANCIAL, ENERGY, DEFENSE SECTORS
- U.S. TREASURY ADDS SBERBANK TO SANCTIONS LIST,
- U.S. TREASURY SANCTIONS AFFECTS GAZPROM, GAZPROM NEFT, LUKOIL, ROSNEFT, AND SURGUTNEFTGAZ
- U.S. TIGHTENS DEBT FINANCING RESTRICTIONS TO 30 DAYS
And instantly: PUTIN: GOVT DRAFTING PROPOSALS TO RETALIATE AGAINST SANCTIONS
- Hillary and Me: The 2008 campaign was a nightmare. Will 2016 be as bad? (Politico)
- What Timothy Geithner Really Thinks (NYT)
- Rebels declare victory in east Ukraine self-rule vote (Reuters)
- Race for AIG's Top Job Has Two Favorites (WSJ)
- America on the Move Becomes Stay-at-Home Nation for Millennials (BBG)
- Old, Fired at IBM: Trendsetter Offers Workers Arbitration (BBG)
- Bad luck Jonathan: Pressure Mounts on Nigerian President (WSJ)
- Iran leader slams West's 'stupid' missile stance before talks (Reuters)
- Conchita Wurst of Austria Wins Eurovision Song Contest (WSJ)
- Greek Finance Ministry expects Q1 GDP contraction of less than 1.5 pct (Kathimerini)
- Omnicom, Publicis call off proposed $35 billion merger (Reuters)
- Apple in talks for $3.2bn Beats deal (FT)
- Alibaba IPO Grew Out of ’80s Chaos and Guy From Goldman (BBG)
- Nigeria's president at WEF pledges to free kidnapped girls (Reuters)
- JPMorgan Joins Wells Fargo in Rolling Out Jumbo Offerings (BBG)
- It's 1999 all over again: Young Bankers Fed Up With 90-Hour Weeks Move to Startups (BBG)
- ECB stimulus talk knocks euro, peripheral yields (Reuters)
- Deutsche Bank Currency Crown Lost to Citigroup on Volatility (BBG)
- London Taxis Plan 10,000-Car Protest Against Uber App Use (BBG)
- Pfizer Holders Could Face Tax Hit in a Deal for AstraZeneca (WSJ)
U.S. sanctions, to be announced today, will target Russian individuals and companies involved in financial, energy, infrastructure sectors, congressional official familiar with White House plan tells Bloomberg’s Jonathan Allen.
- *U.S. SAID TO SANCTION 7 RUSSIANS, 17 COMPANIES IN NEW ACTIONS
- *PERSON ON CAPITOL HILL DISCUSSES NEW U.S. SANCTIONS ON RUSSIA
As we already noted it appears Rosneft and Gazprom (and Gazprombank) will be among the companies but the one to watch is for a direct sanction against Vladimir Putin himself. Full list to follow... and then the blowback.
Moments ago, the Senate Banking Committee started a hearing on the topic of "Financial Stability And Data Security." We assume the topic discussed will be financial stability, the highly diluted final version of the Volcker Rule, Dodd Drank, the London Whale, and other things legislators have no understanding of. As such it will be a complete waste of time, and the only thing that can possibly force anyone to fix the broken system is the next systemic crash, one which the central banks, already all in with their bailout efforts, will be unable to resolve.
The spin does not get any better than this... As they reported they would,
- *LEW SAYS U.S. SOLD ALL REMAINING SHARES OF GENERAL MOTORS RECOUPING $39 BLN OF ORIGINAL GM INVESTMENT
That is a $10.5 Billion loss! But, The Center for Automotive Research, a Michigan nonprofit organization that analyzes auto industry issues, those funds “saved or avoided the loss of $105.3 billion in transfer payments and the loss of personal and social insurance tax collections -- or 768% of the net investment.” We can't wait to hear how much Bill Ackman made or saved on his Herbalife investment...
"A money-financed tax cut is essentially equivalent to Milton Friedman's famous "helicopter drop" of money."
"Beyond Silk Road: Potential Risks, Threats, and Promises of Virtual Currencies" is the title of today's Senate hearing (from Homeland Security) on th eperils of Bitcoin. We are sure the exaggeration and exasperation will run high as Government offers up its Financial Crimes (and missing and exploited children) directors, and the de-centralized unregulated crypto-currency faces them down...
Everyone knows that one of the immediate catalysts of the near systemic collapse in the aftermath of the Lehman bankruptcy, one which set in motion the sequence of events that led to Bernanke increasing the Fed's balance sheet fourfold, was when the Reserve Primary Money Market Fund announced on September 16 that the value of its shares had dropped to 97, sparking an epic run on money market funds, and requiring an immediate bailout first from its sponsor, and then the Federal Reserve and US government. What is far less known is that the Reserve Primary Fund was just one of many money market funds that got locked out and was in danger of collapse following the decision to let Dick Fuld hang. How many? According to a research note released by the NY Fed itself, at least 28 more!
Here's a new and very bizarre entry for the annals of "the dog ate it" excuses. According to Reuters, Montana man Wayne Klinkel, who last year pieced together the remnants of five $100 bills eaten by his one-eyed golden retriever, Sundance, is sporting a $500 check he says he received this week from the U.S. Department of the Treasury to replace the digested funds. Sundance sniffed the wad of bills out of a car cubby space while waiting for Klinkel and his wife to return from lunch, and the canine made the currency his lunch.
Outside the fetid terrarium where US economists live, like skinks kept as pets by bankers, other forces are in motion. For instance, there’s the non-theoretical, non-financial economy, which is now apparently based on the trade in tattoos, and the journey by automobile from the nearly foreclosed home to the tattoo studio, and to the hamburgers, pizzas, and fried chicken thighs consumed on each end of the journey. It seems, based on the latest odds, that Larry Summers will be entering the scene the way Vincent Price used to enter a Hammer Studio horror film - reliably delivering some deadly unpleasantness. We don’t think a more perfect figure might be found for piloting the garbage barge of American finance over a Niagara Falls of consequence.
If there was any doubt that the Fed would proceed with tapering its monthly deficit monetization (i.e., $85 billion in POMO/S&P500 flow injection) over the next few months, those were just laid to rest courtesy of the Treasury's quarterly refunding statement which was filed moments ago, and specifically its Marketable Borrowing Estimates.
Or why we must delay it, to find what's in it...
Not so long ago, the Congressional Budget Office (CBO) said it expected the U.S. government to register a budget deficit in the current fiscal year of $642 billion. But hold on a minute... The budget deficit so far (as of May 31, 2013) has already hit $626.3 billion, and we still have four more months to go in the government’s current fiscal year! The U.S. has been the family that spends more than it earns for many years now. In the short term, spending more than one takes in can work (especially if the Fed just prints new money and gives it to the government to pay its bills). But in the long term, if fundamental changes are not made to the government’s spending habits, financial chaos just starts all over again. Posting a budget deficit year after year is not sustainable. The debt-infested eurozone nations did very much the same; they borrowed to spend. Look where they are now.
Yesterday we opined on the deteriorating situation surrounding the much anticipated government scramble to collect perfectly legal offshored capital, initially focusing on Apple (which having now entered the focus of the US government will be nothing but an "negative externality" free utility going forward or as long as Uncle Sam wishes it to be) but soon to turn to virtually every other multinational corporation with a hugh cash hoard and a low effective US tax rate. Today, it is Tim Cook's turn to explain why the firm is merely following clearly laid out rules and tax regulations as encoded by none other than the same people who are bringing you today's particular episode of "distract them with witchhunts."