The Czechoslovakia crisis of 1938 marked a pivotal shift in the balance of power in Central Europe, putting the major world superpowers in a collision course. The policies of one superpower in particular made inevitable what was to come less than a year later - World War II. This episode provides important historical insights on geopolitics, appeasement strategies, buffer zones, ethnic tensions – and unintended consequences.
Austrian "Freedom" Party Demands Bailout For Swiss Franc Speculators (From "Monstrous Monetary Policy")Submitted by Tyler Durden on 01/26/2015 22:10 -0500
The phrases "it's just not fair" and "waa waa waa" were not seen in Austria's Freedom Party's statement demanding a bailout for Swiss-Franc-denominated borrowers (i.e. people who were willing to speculate on FX rates with their house as collateral in order to get a lower interest rate in order to afford a bigger home that they really couldn't afford in real risk-adjusted terms). What Austria needs, general secretary Franz Kickl exclaimed is "a general regulation and an offer to all Franc borrowers," adding that "it cannot be that Austrian borrowers are the only ones who keep their losses even they are indemnified in Hungary, Croatia and perhaps even in Poland, the Czech Republic and Slovakia." Which does sound oddly like 'waa waa waa'?
- U.S. agency gives quiet nod to light oil exports (Reuters)
- China’s Stocks Fall to Pare Biggest Monthly Advance Since 2007 (BBG)
- The Cartel: How BP Used a Secret Chat Room for Insider Tips (BBG)
- BRICs Busted as Stocks Diverge Most on Record on Outlook (BBG)
- Petrobras deadline prompts some bondholders to push for default (Reuters)
- AirAsia Captain at His Happiest When Flying, Family Says (BBG)
- UK housing crisis: brick stocks hit record low (Telegraph)
The topic of ‘currency war’ has been bantered about in financial circles since at least the term was first used by Brazilian Finance Minister Guido Mantega in September 2010. Recently, the currency war has escalated, and a ‘sanctions war’ against Russia has broken out. History suggests that financial assets are highly unlikely to preserve investors’ real purchasing power in this inhospitable international environment, due in part to the associated currency crises, which will catalyse at least a partial international remonetisation of gold. Vladimir Putin, under pressure from economic sanctions, may calculate that now is the time to play his ‘gold card’.
George Soros Slams Putin, Warns Of "Existential Threat" From Russia, Demands $20 Billion From IMF In "Russia War Effort"Submitted by Tyler Durden on 10/23/2014 11:35 -0500
If even George Soros is getting concerned and writing Op-Eds, then Putin must be truly winning.
Did The Winter War Just Begin? Russian Gas Supplies To Europe Plunge 15%, Ukraine Transit Slashed 54%Submitted by Tyler Durden on 09/30/2014 09:39 -0500
Just a week ago, the Russian energy minister made the first public 'threat' of gas supply "throttling" disruptions to Europe but judging by the data that has just been released, it appears the 'throttling' has begun. Bloomberg reports that Russian gas supplies to Europe fell 15% year-over-year in Q3 - the most in over two years - as natural gas transit through Ukraine plunged 54% year-over-year. In 2013, Gazprom sent 60% of its supply via Ukraine pipelines, in August that dropped to 39%, and in September only 34%. Of course, Europe remains confident its storage efforts will buffer any "Winter War" disruptions, as we noted here, but as Citi warned previously, "if colder weather arrives, storage levels will be drained," and then there is the Spring (and German industry needs).
The cold war is on, literally, because it will determine who will survive Europe's upcoming cold winter - a Europe with decreasing Russian gas supplies, or Russia now officially starved of Western sources of funding. The "Plan Bs" - Europe has record gas inventories in storage giving it hope it can last out an entire winter without any incremental Russian gas, while Russia is increasingly reliant and hoping on China-based sources of funding. While it remains to be seen just how Russian corporations will react to the recently imposed credit starvation, the chart below shows the steps Russia is now taking ahead of the European winter. Clearly, the trend in Russian gas supplies into Europe's core distribution hub, Slovakia, is not Europe's friend.
No one disputes that the amount of Russian gas being piped through Ukraine has been cut by at least 20 percent. But who’s responsible?
As reported ealier this morning, here, courtesy of Bloomberg, are the nominees for the next European Commission under the presidency of Jean-Claude "If Serioues Then lie" Juncker, with one from each of the European Union’s 28 countries. Job assignments were announced today by the incoming president, Jean-Claude Juncker of Luxembourg. What do these appointments mean for the European Union? The attached flash analysis from Open Europe should answer most initial questions.
Europe's leaders, we assume under pressure from Washington, appear to be making a big weather-related bet with their taxpayers' lives this winter. As they unleash funding sanctions on Russia's big energy producers, Europe has pumped a record volume of natural gas into underground inventories in an effort to 'outlast' Russia and mitigate any Napoleonic "Winter War" scenario. The plan appears to be to starve Russian energy firms of cashflow - as flows to Europe are already plunging - and remove their funding ability, potentially forcing severe hardship on Russia's key economic drivers. There appears to be 3 potential problems with this plan...
As 'rumors' of European sanctions against Russia's major oil energy firms are leaked strawman-like to the market and expected to be enacted as soon as tomorrow, it appears there is a 'glitch' in the union. The FT's Peter Spiegel reports that one country is holding out on EU sanctions and that is the reason for an emergency unscheduled meeting of EU diplomats this evening. While it is unclear which country it is, something tells us its name begins with an 'A' and ends in 'ustria'... or starts with 'S' and ends in 'lovakia'...
Having promised "whatever it takes" and now doing what many thought was un-possible, Mario Draghi has managed to smash EURUSD back to 14-month lows below 1.30 (without actually buying one bond - just promising) and has sent yields on most European bonds negative to 2Y (and Germany near negative in 4Y).
More Sanctions: Europe Will Ban Purchase Of Russian Bonds; However Russian Gas Exports Remain UntouchedSubmitted by Tyler Durden on 09/01/2014 08:18 -0500
Over the weekend, insolvent, debt-dependent Europe thought long and hard how to best punish Russia and moments ago reached yet another milestone in deep projective thought: as Reuters reports, Europeans could be barred from buying new Russian government bonds "under a package of extra sanctions over Moscow's military role in Ukraine that European Union ambassadors were to start discussing on Monday, three EU sources said." This will be in addition to the ban on the debt funding of most Russian corporations. So as Europe's 7-day ultimatum for the Kremlin to "de-escalate" counts down, Putin has a choice: continue operating under a budget surplus and ignore Europe's latest and most amusing hollow threat which is merely a projection of Europe's biggest fears, or spend himself into oblivion as Europe has done over the past decade and become a vassal state of the Frankfurt central bank.. Somehow we doubt Putin will lose too much sleep over this latest "escalation"...
The last time Poland 'spoke' it was to accuse Russia of invasion (and the time before that it was to accuse the government of giving the USA blow jobs), but this time actions speak louder than words:
*POLAND BLOCKS FLIGHT OF RUSSIAN DEFENSE MINISTER'S PLANE: RIA
Defense Minister Soigu's plane was forced to U-turn and land back in Bratislava.
"Anti-Putin" Alliance Fraying: Germany, Slovakia, Greece, Czech Republic Urge End To Russian SanctionsSubmitted by Tyler Durden on 08/16/2014 10:04 -0500
Greece, Slovakia, Czech Republic, Germany... the chorus of voices demanding an end to Russian sanctions is starting to drown out the neocon warmongering efforts of the west...