International Monetary Fund
While the IMF is promising a massive bailout to the Ukraine, and NATO is using the harshest language it can possibly muster to halt Russia in its tracks, Putin is doing what he does best: employing brute force (as seen below), and using even harsher language, to wit: RUSSIA: WEST MUST STOP MAKING PROVOCATIVE STATEMENTS ON UKRAINE.
Pro-Russian Gunmen Seize Ukraine Crimean Parliament; Russia Puts Jets On High Alert; Hryvnia In Record PlungeSubmitted by Tyler Durden on 02/27/2014 10:01 -0400
All those clips we showed in the past few days of Russian forces amassing in the Crimean? Well, turns out they were all predictive of what has just happened in the Crimean region parliament at Simferopol, where around 120 pro-Russian Gunmen occupied the parliament building and raised the Russian flag. The scene was the site of Wednesday’s scuffles between Tatar groups and pro-Russian supporters. As Euronews reports, local Tatar leader Refat Chubarov posted that the buildings have been occupied by men in uniforms bearing “no recognisable insignia.” Kyiv says it would regard any movements by Russian military in Crimea outside Moscow’s Black Sea Base in Sevastopol as an act of aggression. Following the fall of President Viktor Yanukovych divisions in Ukraine have come to the fore. All this happens as Russian troops in the area are building up and at the same time as Russia put fighter jets on combat alert, according to Interfax.
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.
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)?
Russian bonds had rallied for 2 days on the heels of the ouster of Yanukovych and a hope-fueled strategy (supported by Goldman's buy-buy-buy recommendation) that Europe or the IMF would save the day and fund them back to solvency. However, Russian deputy finance minister Storchak has a different perspective...
*UKRAINE FACES HIGH PROBABILITY OF DEFAULT: RUSSIA'S STORCHAK
And that has sent 3-month Ukraine bond prices tumbling once again...
All eyes were on China overnight, where first the PBOC drained a quite substantial CNY 100 billion in liquidity via 14 day repos in the month following the biggest credit injection on record, pushing those worried about China's credit schizophrenia to the edge, and then things got even more bizarre when in an act of clear PBOC intervention, the CNY dropped to the lowest since August 2013 as concerns about the global carry trade's impact on China (as noted here previously) start to reverberate. We will have more to say about China's Yuan intervention, but what should be noted is that the Shanghai Composite has tumbled nearly 10% in the past week, and was down another 2% overnight and is once again just barely above 2000, a level it can't seem to get away from for years (which is fine: recall that the real bubble in China is not the stock but the housing market). Chinese property stocks dropped to 8-month lows as concern continues about bank's withdrawing some liquidity for the asset class.The USDJPY drifted along and after rising to a resistance level of about 102.600 has since slide just shy of its 102.20 support area which means US equity futures are now in the red, and concerns that the S&P 500 may not close at a new record high are start to worry the technicians.
It’s like 34 drunken sailors holding each other up. That’s the best way I can think of to describe the latest product from the good idea factory that is the OECD. Over the weekend in yet another cushy five-star hotel, representatives from this unelected supranational bureaucracy announced plans for world governments to exchange all their citizens’ tax and financial data with one another. It’s a pathetic display of exactly the sort of tactics that governments embrace when they go broke. And most of these OECD countries ARE broke – Italy, Japan, the US, Spain, Greece, etc.
Russia represents over 25% of Ukraine's exports and is the divided nation's largest trade partner. As Ukraine remains deep in its self-described "pre-default" state, the economy languishes vainly in the hopes of a trade deal with 'someone' and a bailout from 'someone' else. However, the IMF's first move to bail the nation out has now been met by a subtle punch to the country's kidneys as Interfax reports that Russia threatens to limit food imports on the basis of "veterinary and phytosanitary risks."
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.
Apparently all it takes to kick the world out of a secular recession and back into growth mode, is for several dozen finance ministers and central bankers to sit down and sign on the dotted line, agreeing it has to be done. That is the take home message from the just concluded latest G-20 meeting in Syndey, where said leaders agreed that it is time to finally grow the world economy by 2% over the next 5 years. "We are putting a number to it for the first time -- putting a real number to what we are trying to achieve," Hockey told a news conference. "We want to add over $2 trillion more in economic activity and tens of millions of new jobs." There is only one problem: the G-20 has absolutely no idea how to actually achieve its goal of boosting global output by more than the world's eighth largest economy Russia produces in a year. Nor does it have any measures to prod and punish any laggards from this most grand of central planning schemes.
Inflation is always somebody else’s fault. Ludwig von Mises called out finger pointing central bankers and politicians decades ago in his book, Economic Policy. “The most important thing to remember is that inflation is not an act of God, that inflation is not a catastrophe of the elements or a disease that comes like the plague. Inflation is a policy.” Don’t expect the printing to stop any time soon. Central bankers believe they are doing God’s work. “To ensure that my people survive, I had to print money,” Zimbabwe's Gideon Gono told Newsweek. “I found myself doing extraordinary things that aren’t in the textbooks. Then the IMF asked the U.S. to please print money. The whole world is now practicing what they have been saying I should not. I decided that God had been on my side and had come to vindicate me.”
Liberal Politicians Launched the Idea of “Free Trade Agreements” In the 1960s to Strip Nations of SovereigntySubmitted by George Washington on 02/21/2014 14:40 -0400
And Hand Over Power to Giant Multinational Corporations
The Chinese Gold & Silver Exchange Society is prepared to spend at least HK$ 1 billion to set up a gold vaulting warehouse in mainland China that will be able to store a massive 1,500 tonnes of gold. Owning gold directly and in a fully allocated, fully segregated account and with an ability to take delivery remains vital.
- RBS plans dramatic scaling back, to fire 30,000 of its 120,000 workers (FT)
- Zuckerberg’s Data Stance Faces Privacy Backlash in Europe (BBG)
- WhatsApp Shows How Phone Carriers Lost Out on $33 Billion (BBG)
- Markets flooded with cash, should Fed prep to stamp out risk? (Reuters)
- Venezuela threatens to expel CNN over protest coverage (BBC)
- Firm Stops Giving High-Speed Traders Direct Access to Releases (WSJ)
- Obama Budget to Delete Proposal to Limit Social Security (BBG)
- Energy Holdings Prepares for a Breakup (WSJ)
- EU Struggles to Streamline Bank-Failure Plan for Weekends (BBG)
- Madoff said JPMorgan executives knew of his fraud (Reuters), and JPM admitted as much when it settled with the DOJ