A few days ago, in an attempt to regain the Krematorsk air base in the "separatist" eastern region, as part of the "counter-terrorist" offensive launched against the pro-Russians, Kiev also started what according to reports was an airborne press by Ukraine Mig fight jets. The condemnation by Russia to such an escalation against the country's own people was swift, and curiously, so was that by Ukraine's own troops which deserted the country's army to join eastern forces, taking with them an unknown number of tanks and APCs. So in what perhaps is a follow on attempt to preempt further escalation, Ukraine's air force has adopted a maneuver taken straight out of Top Gun's "Buzzing the Tower" approach, only this one involves "Buzzing the Tress." Watch as a Ukraine pilot does a fly by and narrowly misses hitting a tree.
Read Seymour Hersh’s devastating account of Obama’s Red Lines and Rat Lines and weep for the Republic. It is no more.
With everyone focusing on the stock market and debating whether the second tech bubble has finally popped as it tends to do every so many years, another bubble also appears to have burst, and this time it is literally a bubble - that in carbonated diet coke. The WSJ reported that "for 13 years running, Americans have been drinking less Coke. Now Diet Coke sales are falling off a cliff. Globally, sales growth of soda is slowing amid concerns about sugar intake and obesity."
Spot what is missing in the just blasted headline from Bloomberg:
IRAN, RUSSIA SAID TO SEAL $20B OIL-FOR-GOODS DEAL: REUTERS
If you said the complete absence of US Dollars anywhere in the funds flow you are correct. Which is precisely what we have been warning would happen the more the West and/or JPMorgan pushed Russia into a USD-free corner.
It didn't take long for Russia to launch the first retaliatory salvo against the unexpected JPMorgan "act of aggression." Moments ago Bloomberg just reported that Sberbank, the largest bank in Russia and all of Eastern Europe, just halted the issuance of consumer loans in foreign currency. Bloomberg adds that "Sberbank, Russia’s biggest lender, holds 43.3% of nation’s consumer deposits, 32.7% of consumer loans and 32.1% of corporate loans."
While everyone was gushing over the spectacle on TV of a pro-HFT guy and anti-HFT guy go at it, yesterday afternoon we reported what was by far the most important news of the day, one which was lost on virtually everyone if only until this morning, when we reported that "Monetary Blockade Of Russia Begins: JPMorgan Blocks Russian Money Transfer "Under Pretext" Of Sanctions." This morning the story has finally blown up to front page status, which it deserves, where it currently graces the FT with "Russian threat to retaliate over JPMorgan block." And unlike previous responses to Russian sanctions by the West, which were largely taken as a joke by the Russian establishment, this time Russia is furious: according to Bloomberg, the Russian foreign ministry described the JPM decision as "illegal and absurd." And as Ukraine found out last month, you don't want Russia angry.
Monetary Blockade Of Russia Begins: JPMorgan Blocks Russian Money Transfer "Under Pretext" Of SanctionsSubmitted by Tyler Durden on 04/01/2014 14:56 -0400
JP Morgan blocked money transfer from #Russia diplomatic mission in Kazakhstan "under pretext" of sanctions, says Foreign Ministry
— Thomas Grove (@tggrove) April 1, 2014
There’s nothing like a nice cup of reality 'tea' first thing on Monday morning. Periodically, we like to scan headlines for phrases like “record high” or “all time high”... in today's case, the results can often given an interesting big picture perspective of what’s happening in the world.
It is supremely ironic that those who wish to withdraw or minimize their interactions with the Ponzi might actually feed it on the way out. This alone speaks volumes towards how dysfunctional and truly unsustainable it is.
Just a few short weeks ago we reported on the unusual suicide, due to self-inflicted nail-gun wounds, of Richard Talley, CEO of Denver-based American Title Services. The death of the 57-year-old banker was accompanied by the fact that his firm was under investigation by the insurance regulators, and now, as The Denver Post reports, state prosecutors launched a criminal investigation and a grand jury over more than $2 million missing from escrow accounts. As part of that inquiry, investigators have seized about 100 boxes of documents and about 60 computers as records suggest the seemingly successful title business had serious financial problems. Talley's wife, Cheryl, who owns the other 60% of the firm has not commented.
The more the West attempts to "isolate" Russia and pushes it away from its "core values" and of course the US Dollar, the more Russia will seek the safety of a non-dollar based system. We have previously described how Putin has been scrambling to enmesh Russia in tight bilateral commodity-based trade with both China and India, and now it is Russia's turn to announce it would seek its own "national payment settlement system" following last week's surprising and unmandated service halts by both Visa and MasterCard, which as Vladimir Putin said earlier today, will be a "bid to reduce economic dependence on the West."
The situation with Russia should give investors and traders a reason to brush up on their history, as current events take root in things that happened 50, 100, and 200 years ago. To understand this, can provide perspective, during an information war, where it's not easy for some to separate facts from beliefs and propoganda (on both sides). The relationship between US and Russia has always been interesting, as we shall explore.
The cultural divide
After warning of the potential for "dangerous risks of escalation" President Obama, absent his Congress, has signed an Executive Order authorizing further penalties on more Russian individuals and also a bank. "We’re imposing sanctions on more senior officials of the Russian government,” Obama said. “In addition, we are today sanctioning a number of other individuals with substantial resources and influence who provide material support to the Russian leadership, as well as a bank that provides material support to these individuals.” The list includes Bank Rossiya (Russia's 5th largest bank), and 20 more individuals including Billionaire Gennady Timchenko, and Duma Deputy Speaker Evgeny Bushmin.
With Chinese authorities clamping down on the shadow-banking system, taking action of their bubble-bursting reforms, and now increasing the trading bands on the Yuan (to increase volatility and hopefully unwind, in a controlled manner, the biggest and most one-sided carry trade in the world's markets), we thought it perhaps surprising that growing numbers of Chinese are using UnionPay - a state-backed bank card - to illegally funnell billion of dollars out of the country. As Reuters reports, its unclear why the PBOC has not clamped down on this as documents show they are well aware of it... and as one clerk noted "don't worry... everyone's doing it."
If anyone ever said John Kerry - arguably the worst Secretariat of State in recent US history - didn't know how to look regal in photo ops of failure after epic failure, they obviously have never this picture. Such majesty, such posture, such a shiny coat. Just don't look him in the mouth.