As tensions between all parties in Eastern Europe boil over, Chris Martenson provides a brief tour through just some of the antics surrounding the US' involvement in bringing about change (you can believe in!) in Ukraine. We raise these items to counter the usual clutter and complete lack of context being provided in the US press and to illustrate that the US is already in pretty deep and therefore unlikely to back down now. Before we move on, do you not find it at all strange that the US media, usually extremely sensitive to anti-semitism, has given the McCain and Nuland support of the Svoboda party a complete pass? I find it to be like the case of "the dog that did not bark", meaning the silence reveals a very fickle moral compass at the heart of the western press. The demonization of Putin as the bad guy here is near complete in western media. But there’s plenty of mischief all around and, as usual, the US finds itself with some pretty strange bedfellows as it seeks an outcome it likes.
This is an impressive, comprehensive analysis of the February 2014 Ukraine coup from the perspective of a senior Russian academic. It details the interests and affiliations of the main Ukrainian domestic players - oligarchical clans many of whose leaders have dual nationality - with some shocking and little known detail. It exposes the glaring hypocrisies and double standards of the western sponsors of the coup and their Russian/Ukrainian '5th Column traitors'. It sees the coup and Russia's successful incorporation of Crimea as major game-changing events in the on-going, US-lead post-WWII machinations of the West to subdue Russia to its own agenda and outlines how Russia should now respond. All-in-all a must-read for westerners needing to understand what is really happening in both the Ukraine and the wider Anglo-US-NATO globalisation drive which it brings into sharp focus
The coming week will be busy in terms of data releases in the US; highlights include an improvement in consumer confidence, anemic 1Q GDP growth, and solid non-farm payrolls (consensus expects 215K). Wednesday brings advanced 1Q GDP - consensus expected a pathetic 1.1% qoq, on the back of what Goldman scapegoats as "weather distortions and an inventory investment drag", personal consumption (consensus 1.9%), and FOMC (the meeting is not associated with economic projections or a press conference). Thursday brings PCE Core (consensus 0.20%). Friday brings non-farm payrolls (consensus of 215K) and unemployment (6.6%). Other indicators for the week include pending home sales, S&P/Case Shiller home price index, Chicago PMI, ADP employment, personal income/spending, and hourly earnings.
Putin Tells Merkel "Ukraine On The Verge Of A Civil War" As Germany Agrees To Re-Sell Russian Gas To UkraineSubmitted by Tyler Durden on 04/15/2014 18:36 -0500
A day after Putin called Obama to warn him that only the US president can prevent bloodshed in Ukraine - something which Obama failed at based on this morning's reports out of east Ukraine - German Chancellor Angela Merkel had a follow up phone call with the Kremlin a few hours ago, in which Putin told her that "The sharp escalation of the conflict puts the country, in essence, on the verge of a civil war".
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...
- Russia's Gazprom says Ukraine did not pay for gas on time (Reuters)
- Ukraine Moves to Keep Control in East (BBG)
- Banks Set to Report Lower Earnings as Debt Trading Slumps (BBG)
- More DeGeners and Obama selfies needed: Samsung's lower first-quarter estimate highlights smartphone challenges (Reuters)
- Citi Is Bracing to Miss a Profit Target (WSJ)
- Another slam from GM? Safety group calls for U.S. probe of Chevy Impala air bags (Reuters)
- Japan drugmaker Takeda to fight $6 billion damages imposed by U.S. jury (Reuters)
- EU court rules against requirement to keep data of telecom users (Reuters)
- White House may ban selfies with president after Ortiz-Obama photo promotes Samsung (Syracuse)
There is a reasonably quiet start to the week before we head into the highlights of the week including the start of US reporting season tomorrow, FOMC minutes on Wednesday and IMF meetings in Washington on Friday. On the schedule for today central bank officials from the ECB including Mersch, Weidmann and Constancio will be speaking. The Fed’s Bullard speaks today, and no doubt there will be interest in his comments from last week suggesting that the Fed will hike rates in early 2015.
With another session in which US futures levitate into the open, despite a modest drop in the Nikkei225 (to be expected after the president of Japan’s Government Pension Investment Fund, the world’s largest pension fund, said that a review of asset allocations into stocks is not aimed at supporting domestic share prices) and an unchanged Shanghai Composite while the currency pair du jour, the USDCNY, closes higher despite tumbling in early trade (which also was to be expected after a former adviser to the People’s Bank of China said China is headed for a “mini crisis” in its local- government debt market as economic reforms lead to the first defaults) everyone is asking: will it be deja vu all over again, and after a solid ramp into 9:30 am, facilitated without doubt by the traditional Yen carry trade, will stocks roll over as first biotech and then all other bubble stocks are whacked? We will find out in just over two hours.
While Naftogaz (Ukraine's gas pipeline operator) states that all gas transportation from Russia to Europe is running normally, Bloomberg reports that Russian natgas exports to Europe are declining. Shipments are down over 4% from the prior week and also lower to Ukraine. This 'adjustment' follows increased sanctions by the West as Medvedev's notable statement this morning that Ukraine owes Russia $16bn. Furthermore, Gazprom has cut its Diesel output by the most in 7 months... and just to rub some Black Sea salt into the wound, NY Times reports that Russia's asking price for natgas to Europe is soaring.
Russian Politician Suggests Dividing Ukraine Along Lines Of Nazi-Soviet Pact, Proposes West Ukraine ReferendumSubmitted by Tyler Durden on 03/24/2014 11:23 -0500
It has been a while since well-known Russian nationalist and spotlight-grabbing politician, Vladimir Zhirinovsky, made headlines. The recent flame up of Cold War 2.0 is precisely the cover the flamboyant individual needed to reemerge once more, scandalous as ever. Because while the west scrambles to find a way to punish Russia for openly flaunting its relentless hollow threats by annexing Crimea, Zhirinovsky is back and has a "modest proposal" for Ukraine, and the countries neighboring the troubled former USSR territory: namely dividing the country along the lines of an infamous Nazi-Soviet pact, suggesting that regions in Western Ukraine hold referendums on breaking away from Kiev. In a letter sent to the governments of Poland, Romania and Hungary, Vladimir Zhirinovsky also suggested those countries hold referendums on incorporating the regions into their territory. The question is whether Zhirinovsky, who traditionally has been just a bit of a loose cannon yet whose nationalist Liberal Democratic party largely backs President Vladimir Putin in the Russian parliament,speaks only for himself, or whether Putin is using him the way the Fed uses Hilsenrath.
If there was one thing that the market was demanding after last night's disappointing March HSBC manufacturing PMI, which has now fallen so low, local market participants are convinced a stimulus is imminent (despite China's own warnings not to expect this), and sent both the SHCOMP and the CNY surging, it would have been further weak data out of Europe, where the other possible, if not probable, "QE-stimulus" bank is located now that the Fed is in full taper mode. It didn't get precisely that however there was a step in the right direction when overnight the Euro area Composite Flash PMI eased marginally from 53.3 to 53.2 in March, largely as expected. The country breakdown showed a narrowing of the Germany/France Composite PMI gap owing to a notable (3.7pt) increase in the French PMI while the German PMI eased somewhat (1.4pt). On the basis of past correlations, a Euro area Composite PMI of 53.2 is consistent with GDP growth of around +0.4%qoq, slightly stronger than our Current Activity Indicator (+0.35%qoq).
A dispassionate look at the main considerations for investors in the week ahead.
In an overnight session that had little in terms of macro and news flow, the most notable event was that the Dollar-Renminbi finally crossed above 6.20 which as a reminder is the suggested "max vega" point beyond which even more max pain lies for levered accounts long the Yuan. However, in a world in which nothing is discounted and in which no news matters, the "market" broadly ignored this significant development (which as we explained further yesterday means an accelerated unwind of Chinese Commodity Funding Deals, and a potential drop in global commodity prices), and eagerly awaited today's non-event of an FOMC conference, where nothing new will be announced save for the novelty of it being Yellen's first appearance before the press as the head of the Fed. And of course the Fed will almost certainly scrap the 6.5% employment threshold, as the FOMC scrambles to make the economy appear worse than it is reported to be, in a stark reminder that the biggest optically manipulated tool meant to boost confidence in the recovery was nothing but a number meant to serve political purposes.
Russia's military action in Crimea was out of weakness. He was afraid having a potentially hostile power on his border and losing his naval base in Crimea. He is at risk of repeating mistakes of the Soviet Union in not taking market forces seriously enough.
While central bankers and politicians alike celebrate the great recorvery in the UK, the nation is increasingly divided between the haves and have-nots (or Londoners and non-Londoners). In no way is that more clearly evident that a dreadful new trend that, as The Sunday Post reports, desperate Brits are turning to Facebook to advertise their organs for sale at up to $50,000 despite the medical and legal risks involved.