• Pivotfarm
    04/18/2014 - 12:44
    Peering in from the outside or through the looking glass at what’s going down on the other side is always a distortion of reality. We sit here in the west looking at the development, the changes and...

Estonia

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More "De-escalation" - NATO Sends Five Warships To Baltic Sea





The latest development out of NATO, which was already largely expected, must be part of the just announced elaborate de-escalation scheme.  From VOA: "NATO members are sending navy ships to the Baltic Sea to increase the security of the alliance's eastern European allies in response to the Ukraine crisis. NATO's Maritime Command said Thursday it is sending four minesweepers and a support vessel to the Baltic Sea. The ships are from Norway, the Netherlands, Belgium and Estonia."

 


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Spot The "Recovering" European Periphery





With Italian and Spanish bond yields at record lows (and spreads - risk premia - near record lows) one can only ascertain that Europe is fixed, Draghi has no need to do QE, and everything in the world is fine again. Except it's not... Draghi is cornered from QE by a lack of uncommitted collateral and a banking system glued at the hip to the sovereign bond markets. But perhaps, for those who are buying Italian and Spanish bonds, it is not enough to see record high unemployment, record loan delinquencies, and record low credit creation... In order to help further with the BTFD, we offer the following chart - showing Spanish and Italian home prices continue to slump (along with Cyprus).

 


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More Americans Go Hungry Than All But 2 European Nations





Since 2007, when the financial crisis touched down across the world, the proportion of people going hungry in Europe has soared, according to the OECD. As Bloomberg's Niraj Shah notes, the number has doubled in Greece alone from 8.9% in 2007 to almost 18% currently unable to afford food. Across the European Union, the proportion of people going hungry ranges from 4.6% in Germany to over 30% in (ironically) Hungary. However, before one gloats at the weakness in Europe and the cleanest dirty shirt the US pretends to be, at 21.1% of Americans unable to afford food, only Hungary and Estonia are in worst shape... USA USA USA...

 


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China General Says "War With Japan Increasingly Likely" As Russia Conducts New Army Drill Near Latvia, Estonia





Just in case escalating tensions along Russia's western border - and one can be certain Estonia and Latvia will scream bloody murder any second - here is a retired Chinese general who just told SCMP that a "war with Japan over territorial disputes is becoming increasingly likely" and that China is more than capable of defending itself.

 


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Ukraine Official Warns "Chance Of War With Russia Growing" As Mike Rogers Calls For Sending Weapons To Ukraine





Concurrently with out post on what the odds are of a war between the US and Russia over Ukraine, the House Intelligence Committee Chairman Mike Rogers, and war hawk, appeared on TV this morning saying that the United States ought to provide weapons to the Ukrainian army "so it could defend the country from a Russian invasion." This is the same Mike Rogers who last August did everything in his power to perpetuate the lie that Syrians had used chemical weapons against "rebels" (who subsequently turned out to be mostly Qatari-funded Al Qaeda mercenaries and other Islamic extremists) “There are things that we can do that I think we’re not doing. I don’t think the rhetoric (from Obama administration officials) matches the reality on the ground,” he said. And while US neocons are warmongering, Ukraine is all too happy to raise the tension level just a bit more, hoping that NATO will finally intervene and present Putin with at least some hurdle to overrunning all of East Ukraine, using exactly the same template as already show in Crimea: Ukraine’s top diplomat warned Sunday that the chances of war with Russia “are growing” due to the buildup of Moscow’s forces along his country’s eastern border. In an interview with ABC’s “This Week,” acting Ukrainian Foreign Minister Andrii Deshchytsia said Kiev “is ready to respond” should Russia–which has already seized the Crimea–move further in Ukrainian territory.

 

 


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Guest Post: Would America Go To War With Russia?





Vice President Biden was in Warsaw last week to reassure our eastern NATO allies that they have the support of a “steadfast ally.” But if Russia moved against Poland or the Baltic States, would the United States really go to war? Or would we do nothing and effectively destroy the NATO alliance? President Obama has ruled out a “military excursion” in Ukraine. America is not obligated legally to take action against Russia for annexing Crimea. We would not go to war if Russia mounted a large-scale invasion of Ukraine to restore the ousted, pro-Moscow government of Viktor Yanukovych, currently under U.S. sanctions. And we would not even send troops if Ukraine was partitioned, or absorbed by Russia. Americans have no interest in such a conflict, and no stomach for it.

 


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The Russia “Sanction Spiral” Elegantly Spirals Out of Control





White House attacks Russian financial markets and oil, Merkel suffers from “moral cowardice,” Russia develops “Putin Doctrine,” in crescendo of sanctions and counter-sanctions

 


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Estonia Next? Russia "Signals Concern" For Its Citizens In The Baltic Republic





Amid the growing Crimea crisis, Estonia, Latvia and Lithuania - which like Ukraine were all parts of the old Soviet Union and have very significant concentrations of ethnic Russian-speaking citizens - have expressed growing apprehension over Moscow's intentions. As Reuters reports, Russia signaled concern on Wednesday at Estonia's treatment of its large ethnic Russian minority, comparing language policy in the Baltic state with what it said was a call in Ukraine to prevent the use of Russian. "Language should not be used to segregate and isolate groups," the envoy noted, referencing the same 'linguistic tensions' that supported its annexation of Crimea.

 


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An End To Austerity?





President Barack Obama has recently released his budget in which he calls for an “end of austerity.” This is an amazing statement from a president whose government has spent the highest percentage of GDP in history and added more to the national debt than all past presidents combined. What must he mean by austerity? The president’s rejection of austerity represents the Keynesian view which completely rejects austerity in favor of the “borrow and spend” — increase aggregate demand — approach to recession. What he really is rejecting is the infinitesimal cutbacks in the rate of spending increases and the political roadblocks to new spending programs. President Obama and Congress should get busy doing what is best for the economy and the American public instead of enriching themselves and those who feed at the public trough.

 


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"Behind The Kiev Snipers It Was Somebody From The New Coalition" - A Stunning New Leak Released





The last time a leaked phone call out of Ukraine was released about a month ago ostensibly by the Russian NSA equivalent, one between US assistant sec state Victoria Nuland and the US envoy to the Ukraine, Geoffrey Pyatt, it was revealed that the real puppet masters behind the Maidan movement, and the true instigators of the Ukraine "revolution" were none other than the "developed" world superpowers, lead by the US. Also revealed were tensions between the US and EU strategies on how to overthrow the current government, culminating with the infamous "Fuck the EU." Needless to say the US, which implicitly confirmed the recording, was angry at Russia and accused it of using dirty tricks. That's ironic, because when it comes to "dirty tricks" what is about to be presented, blows the top off anything Russia may or has done to date.

 


Tyler Durden's picture

Ukraine's NATO Member Neighbors To Boost Air Force Presence





As the big questions surrounding the future of the Ukraine crisis persist, the countries neighboring the former communist nation, and especially the Baltic states which are members of NATO, are asking for safeguards should Russian ambitions end up just a little too big to be contained solely by the Ukraine. As a result, the WSJ reports, they are considering calling for a greater North Atlantic Treaty Organization presence in their countries “if the situation gets worse” in the Ukraine, Ojars Kalnins, the chairman of the foreign-affairs committee of the Latvian parliament, said Monday. Mr. Kalnins said that a worsening of the Ukraine crisis “such as an outright invasion” of areas outside Crimea would present a threat to all of Russia’s neighbors, including the Baltic states–which are members of NATO. Such an expanded conflict should be reason for NATO to “bring extra military support to the Baltic region as a safeguard.”

 


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The Good, Bad, & Ugly Market Implications Of A "Crimean" War





At this stage we see very little from the Ukraine priced into the market as a best-case (encroachment into Eastern Ukraine that is quickly and peacefully resolved) scenario appearing to be the blissful hope. However, as some of the other scenarios (described below) potentially come into play, whether in reality or perception, the risk to further downside in the market is significant. Since we are already recommending being short based on the economy and the misperception of the Fed’s next steps, you effectively pick up the conflict for free. With VIX being so low, picking up some downside protection makes a lot of sense here.

 


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Risk Off: Yen Soars, Equity Futures Tumble As EM Revulsion Escalates





It's Risk Off time.

Things got really out of control, and the USDJPY plunged by some 150 pips in the matter of hours, plunging as low as 102, when EM revulsion once again hit participants, in particular TRY and ARS which also supported bid tone in USTs. This also saw spot TRY rate print fresh record high, while 5y Turkish CDS rate advanced to its highest level since June 2012, while at the same time Argentina announced it would life currency controls and dollar purchases in the aftermath of the ARS devaluation by 13%.  And since everything tracks the JPY carry pair as we have been showing for the past year, futures once again plunged overnight, for now held by 1810 support, Treasurys are bid throughout, with the same treasury yields that have "no where to go but up" sliding to 2.71% from 2.87% at the beginning of the week, while gold is finally spiking as the realization that absolutely nothing has been fixed, that apparently nobody got the taper is priced in memo, and that soon the Fed will have to untaper, begins to spread. Are the central planners finally starting to lose control?

 


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Guest Post: Violence In The Face Of Tyranny Is Often Necessary





The word “violence” comes with numerous negative connotations. We believe this is due to the fact that in most cases violence is used by the worst of men to get what they want from the weak. Meeting violence with violence, though, is often the only way to stop such abuses from continuing. We tend to discuss measures of non-participation (not non-aggression) because all resistance requires self-sustainability. Americans cannot fight the criminal establishment if they rely on the criminal establishment. Independence is more about providing one's own necessities than it is about pulling a trigger.

 


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Frontrunning: December 17





  • Fed’s $4 Trillion Assets Draw Lawmaker Ire Amid Bubble Concern (BBG)
  • Ex-Goldmanite Fab Tourre fined more than $1 million (WSJ)
  • EU Banks Shrink Assets by $1.1 Trillion as Capital Ratios Rise (BBG)
  • Japan to bolster military, boost Asia ties to counter China (Reuters)
  • China condemns Abe for criticizing air defense zone (Reuters)
  • Insider-Trading Case May Hinge on Phone Call (WSJ)
  • Republicans Gird for Debt-Ceiling Fight (WSJ)
  • Mario Draghi pushes bank union deal (FT)
  • German Coalition Plans More Pension Money (WSJ)
  • Oil Supply Surge Brings Calls to Ease U.S. Export Ban (BBG)
 


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