There was some trepidation yesterday when after the first day of Putin's visit to China the two countries did not announce the completion of the long-awaited "holy grail" gas dead, and fears that it may get scuttled over price negotiations. It wasn't: moments ago Russia's Gazprom and China's CNPC announced, that after a decade of negotiations, the two nations signed a 30 year gas contract amounting to around $400 billion. And with the west doing all it can to alienate Russia and to force it into China's embrace, this is merely the beginning of what will be a far closer commercial (and political) relationship between China and Russia.
Western companies have buybacks that only reward shareholders here and now; the East actually spends capex to invest into the future. Case in point: today's "holy grail" gas deal announcement, which in addition to generation hundreds of billions in externalities for both countries over the next three decades will result in an immediate and accretive boost to GDP, to the tune of $55 billion for Russia and $20 billion for Beijing.
- Eric Holder proves he is no US banker puppet by smashing another foreign bank: BNP Falls as U.S. Probe Said to Cost More Than $5 Billion (BBG)
- Fuld Was Top CEO When Fed Last Raised as New Neutral Era Beckons (BBG)
- Tymoshenko loses her magic in Ukraine presidential race (Reuters)
- GOP Sees Primaries Taming the Tea Party (WSJ)
- Heard that one before: Russian troops preparing to leave Ukraine border area (Reuters)
- Vietnam riots land another blow on the global supply chain (FT)
- Heard that one before too: Bank of England minutes show some members closer to voting for rate rise (Reuters)
- BOJ Refrains From Easing With Signs Japan Weathering Tax Rise (BBG)
- Miner Freeport Pressured by Water Costs as Copper Prices Slide (WSJ)
- Talks to end Thai crisis inconclusive, new round called (Reuters)
- Japan Court Blocks Reactor Restarts (WSJ)
Another right of perfectly round number supports: while the Shanghai Composite once again dipped below 2000 overnight to as low as 1991 only to close modestly higher, and the Nikkei followed suit, also sliding below the psychological support level of 14,000 to an intraday low of 13,964 only to close just above 14,000 if in the red, it was the USDJPY that has suffered the most technical pain when shortly after 2:30 am eastern time, the USDJPY dropped by nearly 40 pips, hours after the BOJ indicated that not only is it happy with where in the QE process it stands, but hinted there may well be no more QE, and certainly nothing imminent . In the process, the USDJPY fully smashed the 200 DMA, with the next key parallel support being the 200DMA in the EURJPY at 138.08 (which was at 138.34 last). When that too gives way, it is a straight line to double digits in the USDJPY, and the countdown to the end of the Abe regime begins in earnest.
Socialist-Motion Trainwreck: France Mistakenly Orders 2,000 Trains Which Are Too Wide For Its PlatformsSubmitted by Tyler Durden on 05/20/2014 19:13 -0500
In a time before the New Normal "fairness doctrine" where socialized companies such as GM have 60% more recalls in 5 months than they had sales in the prior year, a story such as the following would belong at best to a surreal "Polak" joke. Unfortunately, in this centrally-planned day and age, it is all too real. Reuters reports that in order to boost GDP and to cement that even under hard-core socialism France is still a manufacturing powerhouse, the French national rail company SNCF had ordered some 2000 trains for an expanded regional network from the national rail operator RFF. There was just one problem: the trains were too wide.
Another important caveat to the figures is the ‘elephant in the room’ that is demand from the People’s Bank of China (PBOC). The PBOC does not declare their monetary gold purchases to the IMF or release the data. However, most market participants accept that they have and are quietly buying significant amounts of gold as part of their foreign exchange diversification programme and as part of their strategic goal to position the yuan as a rival global reserve currency ...
Last week, for the first time ever, in "From Rothschild To Koch Industries: Meet The People Who "Fix" The Price Of Gold" Zero Hedge shone a spotlight on the mysterious, and "without any permanent employees" company known as The London Gold Market Fixing Limited which for 117 years has served as the corporate face of the London bankers who "fix" the price of gold twice daily. Since then, more than one of the LinkedIn pages we profiled of the bankers among the 5 gold fixing banks has quietly been taken down. However, the biggest surprise took place moments ago when none other than the head of spot gold trading at Barclays, Marc Booker, did what so many heads of spot FX trading in the past few months have done over fears of being caught in the ongoing manipulation probe: he exited stage left from Barclays HQ at One Chruchill Place.
- "May?" New Cold War May Emerge in Ukraine Crisis, Medvedev Says (BBG)
- Wristslaps will be fast and furious: EU Commission charges HSBC, JPMorgan, Credit Agricole with rigging (Reuters)
- Credit Suisse Rises as U.S. Guilty Plea Ends 3-Year Probe (BBG)
- After Martial Law Declaration, Thailand Waits for General's Next Move (WSJ)
- China property slowdown spells trouble for Asia bonds (FT)
- Russia Close to $400 Billion Gas Pipeline Deal in Pivot to China (BBG)
- Dimon-by-the-Sea Shows London Banking’s Engine of Growth (BBG)
- Modi Faces Greece-Sized Snag to Economic Revival (FT)
- U.K. Inflation Accelerates on Airfare Surge (BBG)
Considering the epic production and sales flop that Windows 8 has been, one probably does not need an actual sales ban from preventing anyone sane from using it let alone buying it, however in yet another symbolic step, banning its government employees from using the latest Windows operating system is precisely what China did in retaliation to yesterday's DOJ announcement it was charging five PLA members with hacking offenses against the US. According to Reuters, this latest blow to Microsoft came when the Central Government Procurement Center issued the ban as part of a notice on the use of energy-saving products. So Windows 8 lead to global warming? Who knew...
With Russia massing troops on the border with Ukraine, China doing the same with Vietnam, the already volatile situation in Libya and Syria imploding with every passing day, the only geopolitical variable that was missing was a martial law and/or national coup. Moments ago Thailand just declares the former and while the latter is still absent it too is likely just a moment of time. AP reports that "Thailand's army has declared martial law after six months of anti-government protests and political crisis, Associated Press said on Tuesday, citing an army statement issued in Bangkok." In other words, after not sternly not taking sides in the near civil war situation in Thailand for the longest time, the army finally picked a side: its own.
Two Former Government Officials Tell Us What It's All About ...
As expected and discussed earlier in the day, Credit Suisse appears has become the first major bank to admit to doing anything wrong (though obviously unrelated directly to the financial crisis):
- U.S. FILES CRIMINAL CASE AGAINST CREDIT SUISSE IN FEDERAL COURT
- CREDIT SUISSE AGREES TO PLEAD GUILTY IN TAX CASE SAYS U.S
- CREDIT SUISSE PLEA WOULD END THREE YEAR U.S. INVESTIGATION
- U.S. ALLEGES CREDIT SUISSE AIDED U.S. CITIZENS IN TAX EVASION
Expectations are for a $2.6 billion settlement ($1.9bn to DoJ & $0.7bn to NY) - notably more than the ~$475 million CS has reserved for the settlement - but Eric Holder's due to speak at a press conference at 6pmET to cover the details (but will anyone go to jail?)
The New York Times' ousted top editor Jill Abramson will have a chance on Monday to address the unusually scathing criticisms of her management style leveled by publisher Arthur Sulzberger Jr. when she makes her first public remarks since she was fired. But, as Reuters notes, it is unclear whether Abramson, who was the first woman to lead the Times newsroom, will mention the controversy over her firing when she delivers a commencement speech to students graduating from Wake Forest University in North Carolina.
The ECB, the Swiss National Bank (SNB) and the Riksbank of Sweden announced a new gold agreement this morning. They announced they have no plans to sell significant quantities of gold and reaffirmed the importance of gold bullion as a monetary reserve asset.
- Qatar Bank: Deutsche Bank to raise $11 bln with help from Qatar (Reuters)
- AstraZeneca rejects Pfizer's take-it-or-leave-it offer (Reuters)
- China Home-Price Growth Slowdown Spreads as Sellers Discount (BBG)
- The new face of NSA: Mike Rogers (Reuters)
- Putin orders troops near Ukraine to return home (AP)
- Wall of Worry Rebuilt as Nasdaq Rout Sends Cash to High (Nasdaq)
- Bank of England's Mark Carney highlights housing market's risk to UK economy (Guardian)
- Greek Selloff Shows Rush for Exit Recalling Crisis (BBG)
- Anti-austerity Greek radicals ahead in Athens local election (AFP)