Ukraine

With Western condemnations rife, bailouts ready to flow, US F-16s on the ground in Poland, Crimea voting to join Russia, and allies pulling back from sanctions, we anxiously await President Obama to explain his next steps and just what will trigger them...

Ukraine's Acting President Turchynov is not happy about what his 'fellow countrymen' in the east are doing:

• *UKRAINE PARLIAMENT TO DISSOLVE CRIMEA LEGISLATURE: TURCHYNOV
• *UKRAINE PRESIDENT SAYS ONLY NATIONAL CRIMEA VOTE IS LEGAL
• *UKRAINE'S TURCHYNOV SAYS MARCH 16 REFERENDUM WOULD BE 'FARCE'
• *TURCHYNOV CALLS MARCH 16 REFERENDUM 'CRIME AGAINST NATION'

So how will he enforce that decision? Perhaps this is the instigation that Putin has been waiting for? Bonds and precious metals are suddenly bid on this news.

While the biggest strategic news of the day is that the Crimean parliament voted to join Russia with a done deal referendum to be held in a few days, as well as collapse of the anti-Russian sanction lobby with Germany and others getting cold feet against boycotting Russian goods, the tactical developments continue. Of note: earlier today the leader of the most persistent pro-Moscow protest movement in eastern Ukraine was arrested at his home in the city of Donetsk on Thursday, a Reuters journalist who was with police on the raid said. Around 10 members of the SBU security service arrested Pavel Gubarev at his apartment in a five-story Soviet-era block in the eastern city, on charges of "infringing the territorial integrity and independence of the state". He did not resist.

The move towards "bail-ins" and away from government "bailouts" continues to evolve and yesterday credit rating agency, Standard and Poor's  (S&P) warned that this could lead to credit ratings for European banks being slashed by one or two notches. It is important that one owns physical coins and bars, legally in your name, outside the banking system. Paper or electronic forms of gold investment should be avoided as they could be subject to bail-ins.

Moments ago, Reuters blasted the following headline:

DECREE MAKING CRIMEA PART OF RUSSIA HAS COME INTO FORCE FROM MOMENT OF ADOPTION; RUSSIAN ARMED FORCES ARE ONLY LEGITIMATE FORCES IN REGION -DEPUTY PRIME MINISTER OF CRIMEA

On the surface, this would mean that the Russian annexation of the Crimea if complete (and East Ukraine is coming). Especially when one considers that earlier Crimea also said it could adopt the Russian rouble as its currency and "nationalise" state property as part of plans to join the Russian Federation, a regional official was quoted as saying on Thursday.

• Spot the inaccuracies: Stocks rise on Ukraine diplomacy, ECB easing speculation (Reuters)
• Bank of England Extends Record-Low Rates Into a Sixth Year (BBG)
• China's Chaori Solar poised for landmark bond default (Reuters), explained here previously
• EU leaders meet in Brussels to address Ukraine crisis (FT)
• Nine-month-old baby may have been cured of HIV, U.S. scientists say (Reuters)
• China Raises Defense Spending 12.2% for 2014 (WSJ)
• China Stock Index Rises as Developers Jump on Policy Speculation (BBG)
• VTB Cancels New York Forum as U.S. Relations Sour (BBG)
• IBM workers strike in China over terms of Lenovo takeover (FT)
• College Board Redesigns SAT Exam Making Essay Portion Optional (BBG)

While the world is convinced that Putin's Tuesday press conference was an admission of blinking to the west, the reality is anything but that, and hours ago Crimea's parliament voted to join Russia on Thursday and its Moscow-backed government set a referendum within 10 days on the decision in what Reuters said is a "a dramatic escalation of the crisis over the Ukrainian Black Sea peninsula." To be sure, the Crimea - which has an ethnic Russian majority - affiliation to Moscow as opposed to Kiev is well-known, yet still the sudden acceleration of moves to bring Crimea formally under Moscow's rule came as European Union leaders gathered for an emergency summit to seek ways to pressure Russia to back down and accept mediation. And now all Putin has to do is sit back and say the people have spoken and without spilling a drop of blood has effectively split the country in two parts, with the entire east of Ukraine, where pro-Russian sentiment also runs high - sure to follow Crimea. Just as we said from the very beginning.

Following yesterday's abysmal employment and service data which led to an unchanged close it quite clear that the market has returned to a mode where it ignores all newsflow - at least the bad, which is due to the weather, the good news is due to the recovery - and instead is simply driven by such "fundamental drivers" as the momentum and position of the Yen carry trade. And overnight the USDJPY positively exploded following news that the Japan advisory committee has decided the nation's pension fund, the GPIF, does' t need a domestic bond focus. Implicitly this means that the GPIF will soon be able to purchase stocks like Facebook and Tesla, which is a guaranteed way of generated short-term gains and longer-term total losses for the Japanese pensioners. Of course, when the latter happens, nobody will have been able to foresee it and some scapegoat somewhere will be summarily fired. As for what this means for futures, the drift higher has made SPOOs rise once more and at last check was just below if not at new all time highs on an ongoing barrage of increasingly negative macro news.

Palladium has gained 5.5% during the last five days of the crisis and is up 7.9% year to date. Ore deposits of palladium are rare and are mostly located in Russia and South Africa. Russian resource nationalism, as has been seen with natural gas, could lead to supply disruptions and to palladium going higher in the coming months. Some analysts believe palladium may be in deficit for most of the next decade as Russia depletes stockpiles and industrial uses and investment demand for the precious metal increase.

Below is the photo that reveals why US and EU bankers despise Russian President Putin so much

Presented with little comment, suffice to add former Washington DC RT correspondent Liz Wahl's comments that "personally she cannot be part of a network funded by the Russian government that whitewashes the action of Putin..."  At least RT was correct when it said yesterday that "Contrary to the popular opinion, RT doesn't beat its journalists into submission, and they are free to express their own opinions, not just in private but on the air."  One wonders if Ms. Wahl's next stop will be MSNBC, FOX or CNN, where the truly unbiased coverage can be found.

The last time a leaked phone call out of Ukraine was released about a month ago ostensibly by the Russian NSA equivalent, one between US assistant sec state Victoria Nuland and the US envoy to the Ukraine, Geoffrey Pyatt, it was revealed that the real puppet masters behind the Maidan movement, and the true instigators of the Ukraine "revolution" were none other than the "developed" world superpowers, lead by the US. Also revealed were tensions between the US and EU strategies on how to overthrow the current government, culminating with the infamous "Fuck the EU." Needless to say the US, which implicitly confirmed the recording, was angry at Russia and accused it of using dirty tricks. That's ironic, because when it comes to "dirty tricks" what is about to be presented, blows the top off anything Russia may or has done to date.

General Keith Alexander, who has furiously denounced the Snowden revelations, said at a Tuesday cybersecurity panel that unspecified “headway” on what he termed “media leaks” was forthcoming in the next several weeks, possibly to include “media leaks legislation.” Alexander genuinely thinks that intelligence officials know best, and should not be subject to any sort of accountability. You don’t need to be a card-carrying member of the ACLU to see how dangerous this perspective is. To endorse this notion that “journalists have no standing when it comes to national security issues,” is to effectively make illegal one of the most important free speech rights in any democracy. This sort of attitude represents the antithesis of American values.

When Hillary Clinton compared Russia's incursion into Ukraine to the early days of Nazi Germany's expansion, she joined an illustrious band who have compared Russian President Vladimir Putin to Adolf Hitler since the 2008 Georgia crisis.

Members of the Ukrainian parliament have had their mobile phones hacked by equipment installed in Russia-controlled Crimea, according to the nation's security services. Reuters reports that "an IP-telephonic attack is under way on mobile phones of members of Ukrainian parliament for the second day in row."