http://www.zerohedge.com/fullrss2.xml/wp-login.php en Futures Soar 40 Points In Hours On Hopes Of Futher Economic Weakness http://www.zerohedge.com/news/2014-04-16/futures-soar-40-points-hours-hopes-futher-economic-weakness <p>We summarized yesterday's both better and worse than expected <a href="http://www.zerohedge.com/news/2014-04-15/baffle-fake-bs-chinese-q1-gdp-beats-and-misses-same-time">Chinese GDP data</a> as follows: "a substantial deterioration of the economy, one which was to be expected yet one which can be spun as either bullish thanks to the GDP "beat", and negatively if the purpose is to make a case for more PBOC stimulus." Sure enough here are the headlines that "explain" the latest overnight futures surge which has once again brought the S&amp;P into the green on the year - <em><strong>a 40 point Spoo move in hours</strong> <strong>since yesterday's bottom when the Nikkei "leaked" Japan's economy is on the ropes </strong></em>: </p> <ul> <li><strong>Stocks Rise on China Stimulus Speculation</strong></li> </ul> <p>Here one should of course add the <a href="http://www.zerohedge.com/news/2014-04-15/headline-broke-todays-downward-momentum">comment that launched yesterday's rebound</a>, namely the Japanese warning that its economy is about to contract, adding to calls for more BOJ stimulus, and finally this other Bloomberg headline:</p> <ul> <li><strong>The Strengthening Case for ECB Easing</strong></li> </ul> <p>And there you have it - goodbye <em>"fundamental"</em> case; welcome back "<em>central banks will once again bail everyone out</em>" case. Hopefully today's news are absolutely abysmal to add "US economic contraction fear renew calls for untapering" to the list of headlines that should send the S&amp;P to all time highs by the end of today.</p> <p>What else is going on: stocks in Europe partially shrugged off mounting concerns over Ukraine and remained in the green, benefiting from a positive close over on Wall Street which consequently filtered over into the Asian session (Nikkei 225 +3.0%).</p> <p>GBP rallied across the board and Short-Sterling curve bear-steepened after UK unemployment rate fell to 6.9%, below the 7% threshold as advocated by the BoE. Britain’s unemployment rate dropped to a five-year low in February, underscoring the strength of the economic recovery and raising the prospect of a debate among Bank of England officials about whether to raise interest rates</p> <p>Looking at the day ahead, though we may run into some pre-Easter pockets of illiquidity, there’s still plenty of data and Fed speak ahead today for the markets to mull. Ahead of the four-party EU/US/Russia/Ukraine summit in Geneva on Thursday, it will be worth watching what political leaders have to say today on the prospect of sanctions. European data will be centred on the final Euroarea CPI for March, UK unemployment and Spanish trade. Across the Atlantic, Yellen’s speech to the Economic Club of NY is scheduled for around 5:25pm London time, but the text of her speech may be made available shortly before that. The Fed’s Stein and Lockhart will be speaking at the Atlanta Fed’s financial market conference while the Dallas Fed’s Fisher speaks in Texas shortly after Yellen. In terms of US data, housing starts, building permits and industrial production are the key releases. The Fed Beige Book may provide more anecdotal commentary on how activity is recovering post-winter. BofA and Google report earnings today.</p> <p><strong>Bulletin headline summary from Bloomberg and RanSquawk</strong></p> <ul> <li>Treasuries decline within ranges seen since Friday as stocks in Asia and Europe and commodities rebound from recent losses; trading may slow before Yellen’s speech in New York, long holiday weekend.</li> <li>China’s GDP rose 7.4% in 1Q, weakest pace in six quarters; industrial production and fixed-asset investment trailed &nbsp;&nbsp;&nbsp; projections while property construction plunged</li> <li>Offshore yuan traded near a 14-month low after the PBOC weakened the currency’s reference rate for a third day </li> <li>The euro area’s core inflation rate fell more than initially estimated in March, keeping pressure on the ECB to take action to boost prices </li> <li>Ukraine accused Russia of fueling “terrorism” in its eastern provinces as government troops pressed on with an offensive to rein in separatist unrest</li> <li>Japan’s government may downgrade its economic assessment for the first time since November 2012 amid a drop in consumption after this month’s sales-tax increase, the Nikkei newspaper reported, without citing anyone </li> <li>Chinese investors demanding their money back from a troubled 973 million-yuan ($156 million) high-yield product in Shanxi province were confronted by police in front of a China Construction Bank Corp. branch</li> <li>Sovereign yields mostly higher. Asian stocks gain, Nikkei +3%, Shanghai +0.2%. European equity markets, U.S. stock futures gain. WTI crude and copper higher, gold lower</li> </ul> <p><strong>US Event Calendar</strong></p> <ul> <li>7:00am: MBA Mortgage Applications, April 11 (prior -1.6%)</li> <li>8:30am: Housing Starts, March, est. 970k (prior 907k)</li> <li>Housing Starts m/m, March, est. 7% (prior -0.2%)<br />Building Permits, March., est. 1.010m (prior 1.018m, revised&nbsp; 1.014m)</li> <li>Building Permits m/m, March, est. -0.4% (prior 7.7%, revised 7.3%)</li> <li>9:15pm: Industrial Production m/m, March, est. 0.5% (prior 0.6%)</li> <li>Capacity Utilization, March, 78.7% (prior 78.8%, revised 78.4%)</li> </ul> <p><strong>Fed action</strong></p> <ul> <li>8:30am: Fed’s Stein speaks on QE at Atlanta Fed conference at Stone Mountain, Ga.</li> <li>12:00pm: Fed’s Lockhart speaks at Stone Mountain</li> <li>12:25pm: Fed’s Yellen speaks to Economic Club of New York</li> <li>1:25pm: Fed’s Fisher speaks in Austin, Texas</li> <li>2:00pm: Federal Reserve releases Beige Book</li> <li>8:30pm: Bank of Japan’s Kuroda speaks at branch managers meeting</li> <li><strong>11:00am POMO: Fed to purchase $900m-$1.15b in 2036-2044 sector</strong></li> </ul> <p><strong>Asian Headlines</strong></p> <p>Asia-Pacific focus was on the Chinese GDP: (Q1) Y/Y 7.4% vs. Exp. 7.3% (Prev. 7.7%), which supported gains in equity markets overnight. However, Chinese equities slightly underperformed as quarterly figures showed the slowest growth since late 2012. Other data releases included softer industrial production (8.8% vs. Exp. 9.0%) and weaker quarterly growth (1.4% vs. Exp. 1.5%).</p> <p><strong>EU &amp; UK Headlines</strong></p> <p>Concerns over the instability in Ukraine failed to support safe-have assets, with both Gilts and Bunds trading sharply lower after the release of the latest UK jobs report, which revealed that the unemployment rate is now below the BoE's 7% threshold and stands at its lowest since 3 months to February 2009. This in turn prompted aggressive bear-steepening of the Short-Sterling curve as market participants contemplated of an earlier tightening move by the BoE.</p> <p>However analysts at UBS suggested that inflation matters more than UK jobs and believe that GBP is stretched, adding that the BoE will try to emphasize soft inflation in context of policy and spare capacity, and may disappoint those looking for early tightening.</p> <p>The release of the latest EU CPI data which Y/Y core at 0.7% vs. Exp. 0.8% and Y/Y at 0.5% vs. Exp. 0.5% acted as a reminder of potential emergence of deflation in the joint-currency bloc. On that note, analysts at Bank of America believe that the ECB needs EUR 1trl in QE for measures to be effective, adding that the ECB will have to purchase government bonds as well as private sector assets in event of QE and that at least EUR 75bln (EUR 40bln in govt bonds) per month would be necessary.</p> <p><strong>US Headlines</strong></p> <p>Intel Corp and Yahoo! shares traded sharply higher after the closing bell on Wall Street yesterday after reporting consensus beating earnings. In terms of earnings, focus will be on Google, IBM, Bank of America and also American Express.</p> <p><strong>Equities</strong></p> <p>Equities in Europe, initially buoyed by a positive close over on Wall Street and the consequent risk on sentiment over in Asia, failed to hold onto the best levels of the session as concerns over the growing instability in Ukraine weighed on sentiment. Nevertheless, heading into the North American open, stocks are seen higher across the board, with consumer services as the outperforming sector as Tesco shares surged over 5% following earnings pre-market.</p> <p><strong>FX</strong></p> <p>The release of better than expected UK jobs report saw GBP rally across the board, with GBP/USD advancing to its highest level since Feb, while EUR/GBP tested April lows. At the same time, the USD failed to benefit from the risk averse sentiment amid the uncertainty surrounding direct implications of further sanctions on Russia and its appetite for the global reserve currency. As a result, in spite of lower EUR/GBP, EUR/USD remained better bid.</p> <p><strong>Commodities</strong></p> <p>WTI and Brent crude futures remain higher, with Brent at early March highs and above USD 110/bbl as markets remain nervy over Ukrainian tensions. The energy complex has been on the front foot following the original headlines of APCs defecting from the Ukrainian army to fly the Russian flag and move into Slavyansk ahead of potential anti-terror operations directed by President Turchynov. The continued mobilisation of military units has heightened market expectations of further conflict in the area after fatalities were reported yesterday.</p> <p>Yesterday's API inventory data is as follows:<br />- US API Crude Oil Inventories (Apr 12) W/W 7640k vs. Prev. 7080k<br />- Cushing Crude Inventories (Apr 12) W/W -640k vs. Prev. 204k<br />- Gasoline Inventories (Apr 12) W/W -499k vs. Prev. -3650k<br />- Distillate Inventories (Apr 12) W/W -1110k vs. Prev. 293k</p> <p>* * * </p> <p><strong>Jim Reid's overnight recap concludes this summary</strong></p> <p>China’s Q1 statistical update was released earlier this morning and it was met with a mixture of relief and pessimism which will only heighten the market's confusion as to the state of the domestic economy. Starting with GDP, growth in Q1 was measured at 7.4% y/y which marginally beat median market expectations of 7.3% but was consistent with DB’s estimates. There is some relief that growth beat consensus but Q1’s growth rate was still below 4Q13’s growth of 7.7%. The other negatives are that Q1’s y/y growth is a cyclical low and the annualised Q/Q GDP number works out to be just 5.7%. Retail sales grew 12.2% YoY in Q1 which again was just ahead of estimates of 12.1% but substantially below 4Q13’s 13.6%. Industrial production missed estimates at 8.8% (vs 9.0% consensus and 9.7% recorded in Q4). Finally, fixed asset investment grew 17.6% YTD YoY which was below expectations of 18.0%. So all in all, evidence of slowing growth and activity which is consistent with recent PMIs, but perhaps not as bad as the market had feared from an overall GDP growth point of view. <strong>To add to the confusion there’s also a sense that the numbers were not bad enough to prompt a sudden easing of policy from the&nbsp; Chinese authorities. Something for both the bears and the bulls here this morning.</strong></p> <p>Unsurprisingly the reaction to the data has been mixed. The Nikkei and S&amp;P 500 futures rallied into the data releases, and though some of the gains have been pared since, both are still sitting on healthy gains this morning. <strong>There are some heightened expectations that the BoJ will ease further in the coming months as the Nikkei reported that the Japanese cabinet may downgrade its economic outlook when it issues its monthly assessment tomorrow. This would be the first downgrade since late 2012</strong>. The reaction to the data from Chinese equities was more negative and we saw the Shanghai Composite shed 0.9% in the minutes after – however it too is now trading in positive territory. Shanghai copper is up 0.2% and the AUDUSD is steady at 0.935. Despite the negative headlines emanating from Ukraine yesterday, Asian EM is having a decent run today helped by firmer US treasuries. Asian EM equity bourses are generally firmer today and Asian credit is flat to a couple of basis points tighter on the day.</p> <p>The story of yesterday was the large intra-day swings in markets with the S&amp;P 500 (+0.68%) covering more than 27 points from it’s early peak, down to its<br />the intraday low and retracement up to the closing highs. All day it appeared that markets were playing out a tug of war between the headwinds of geopolitical headlines versus the tailwinds of strong US corporate results. On the geopolitical side, events in the Ukraine took a turn for the worse as Putin described Ukraine as being on the brink of a civil war as clashes were recorded in a number of eastern Ukraine flashpoint cities. The Ukrainian government claimed that Russia’s 45th airborne division had crossed the border into its territory. It seems that Thursday’s four-party EU/Russia/US/Ukraine summit in Geneva will be a pivotal event heading into the long weekend. The probability of further sanctions against Russia appears to be growing and the yield on Russian government bonds gapped out by 16bp, slightly less than spreads on Russian banks which gapped out more than 20bp. Sberbank of Russia’s US ADR’s were down 3.6% in US trading. </p> <p>Risk recovered as US participants started their day, spurred by some solid premarket results from Johnson &amp; Johnson and Coca-cola. Coke’s management was relatively upbeat on its outlook and it said that Coke was enjoying revenue growth in EM including China (+12%), Brazil (+4%) and Russia (+6%). After&nbsp; the closing bell, Intel reported EPS above consensus on the back of better gross margins (Q1 59.7% vs 59.1% expected) and was also positive on the outlook of Q2 margins. Intel was relatively upbeat in its forecast for Q2 saying that business PC upgrades are set to pick up. However the broader macro implications of this might be limited given that upgrades are occurring based on Microsoft ceasing support for its Windows XP operating system. Intel’s stock was up 3.5% in aftermarket trading. Yahoo! Inc also reported strong results and the stock surged 9% in afterhours trading.</p> <p>US treasuries started the overnight session firmer on Ukraine fears but gave up most of those gains after the release of a stronger than consensus US CPI report. 10yr yields closed 2bp firmer (2.63%) but the shorter end of the curve underperformed with 5yr yields up nearly 1bp. Both headline and core US CPI printed at +0.2% in March (vs expectations of +0.1% for both). This had the effect of lifting the YoY rate in the headline to +1.5% from +1.1% previously (1.4% exp); and the core moved up to +1.7% from +1.6% previously. In other data, the NY Empire state manufacturing index for April fell to +1.3 (vs.&nbsp; +5.6), the lowest level since November 2013 (+0.8). However the six month outlook on capital expenditures (+23.5 vs. +16.5) rose to one of its strongest&nbsp; levels in many months. DB’s economists have maintained their forecast for this Thursday’s Philly Fed survey (+10.0 forecast vs. +9.0 previously). Elsewhere the US Homebuilders’ sentiment index rose 1 point to 47 (vs 49 expected) due entirely to a 4 point increase in the six-month outlook (57 vs. 53). </p> <p>Yellen’s brief remarks at the Atlanta Fed’s financial markets conference were mostly related to the issue of financial stability. In a short speech, Yellen urged further action to strengthen liquidity regulations for banks and she spoke in firm support of the Basel Committee’s Liquidity Coverage Ratio (LCR) and the Net Stable Funding Ratio (NSFR) measures. In addition to that she said that the Fed is considering additional measures to strengthen liquidity requirements&nbsp; in the financial markets via minimum margin requirements for repos and other security financing transactions which could apply on a market-wide basis. Though she steered clear of talking about monetary policy, we’re likely going to hear more on this topic when the Fed Chair speaks at the Economic Club of NY today.</p> <p>With many in the market talking about next steps for the Bank of Japan, there are a couple of interesting economic headlines this morning. The country’s finance minister made some vague comments in parliament that the Government Pension Investment Fund “will make a move” in the stock market in June, perhaps hinting at imminent asset allocation changes. In terms of the impact of the country’s recent 3% sales tax hike, the Nikkei says that anecdotal evidence suggests that the effect hasn’t been all bad, which were echoed by the Japanese PM earlier this morning. According to the Nikkei, supermarkets and electronics stores, which saw sales dip right after the tax increase, are now saying the slump is tapering off. Aeon Retail, which runs large general merchandise stores, reported that over the second weekend of April, same-store sales recovered to about the same level seen the previous year. Department stores, on the other hand, are having a lot of trouble moving luxury products with little recovery one the second weekend of April. The Nikkei says that two Isetan Mitsukoshi stores, sales of such products are down 50% on the year. The article suggests that perhaps the demand for larger ticket items was disproportionately pulled forward ahead of the tax hike. </p> <p>Looking at the day ahead, though we may run into some pre-Easter pockets of illiquidity, there’s still plenty of data and Fed speak ahead today for the markets to mull. Ahead of the four-party EU/US/Russia/Ukraine summit in Geneva on Thursday, it will be worth watching what political leaders have to say today on the prospect of sanctions. European data will be centred on the final Euroarea CPI for March, UK unemployment and Spanish trade. Across the Atlantic, Yellen’s speech to the Economic Club of NY is scheduled for around 5:25pm London time, but the text of her speech may be made available shortly before that. The Fed’s Stein and Lockhart will be speaking at the Atlanta Fed’s financial market conference while the Dallas Fed’s Fisher speaks in Texas shortly after Yellen. In terms of US data, housing starts, building permits and industrial production are the key releases. The Fed Beige Book may provide more anecdotal commentary on how activity is recovering post-winter. BofA and Google report earnings today.</p> http://www.zerohedge.com/news/2014-04-16/futures-soar-40-points-hours-hopes-futher-economic-weakness#comments American Express Bank of America Bank of America Bank of England Bank of Japan Beige Book BOE Brazil British Pound Capital Expenditures Central Banks China Copper CPI Crude Crude Oil Empire State Manufacturing Equity Markets European Central Bank Fed Speak Federal Reserve Fisher fixed Gilts Google Gross Domestic Product headlines Housing Starts Japan Monetary Policy Newspaper Nikkei Philly Fed POMO POMO recovery Reserve Currency Ukraine Unemployment United Kingdom Yuan Wed, 16 Apr 2014 11:00:15 +0000 Tyler Durden 487371 at http://www.zerohedge.com Guest Post: The Slow Death Of The Old Global Order http://www.zerohedge.com/news/2014-04-15/guest-post-slow-death-old-global-order <p><em>Submitted by Robert Merry via<a href="http://nationalinterest.org/commentary/the-slow-death-the-old-global-order-10247"> The National Interest</a>,</em></p> <p>In the spring of 2012, <i>The National Interest</i> produced a special issue under the rubric of &ldquo;<a href="http://nationalinterest.org/issue/may-june-2012">The Crisis of the Old Order: The Crumbling Status Quo at Home and Abroad</a>.&rdquo; The thesis was that the old era of relative global stability, forged through the crucibles of the Great Depression and World War II, was coming unglued. In introducing the broad topic to readers, <i>TNI</i> editors wrote, &ldquo;Only through a historical perspective can we fully understand the profound developments of our time and glean, perhaps only dimly, where they are taking us. <strong>One thing is clear: they are taking us into a new era. The only question is how much disruption, chaos and bloodshed will attend the transition from the Old Order to whatever emerges to replace it.&rdquo;</strong></p> <p>Since publication of that special issue of the magazine, events have seemed to bolster the thesis that the current global situation and the American domestic political situation are inherently unstable, and stability will return only with the emergence of some kind of new order. Leaving aside the U.S. domestic scene for purposes of this digression, the gathering global crisis got a penetrating survey the other day from William Pfaff, the longtime geopolitical analyst for the <i>International Herald Tribune</i> (recently renamed the <i>International New York Times</i>).</p> <p>Pfaff said the world faces an &ldquo;<a href="http://www.williampfaff.com/modules/news/article.php?storyid=673">international disorder unmatched since the interwar 1930s</a>,&rdquo; fostered by the ongoing Ukraine crisis, the &ldquo;self-destructive forces&rdquo; of the Israeli-Palestinian conflict, growing instability within the world of Islam, and the &ldquo;serious risk of collapse&rdquo; of the European Union. Pfaff notes with a small measure of relief that the world isn&rsquo;t beset these days by ideological dictatorships on the march or any new waves of totalitarianism. Today&rsquo;s problems, he says, are merely &ldquo;confusion, incompetence, and intellectual and moral disorder.&rdquo; He adds: &ldquo;But these are bad enough, in an over-armed world.&rdquo;</p> <p><u><strong>What&rsquo;s most troubling about all this is that today&rsquo;s national leaders seem utterly lacking in any serious consciousness of just how dangerous the global situation is.</strong></u> <a href="http://nationalinterest.org/commentary/russia-cant-afford-lose-10236">The current Ukraine crisis</a> , for example, is the product of a long-term Western tendency (the word &ldquo;strategy&quot; hardly qualifies here, given the lack of any coherent logic involved) to push eastward through what once were the buffer territories of Eastern Europe and press right up to the Russian border.</p> <p>Though highly provocative, this didn&rsquo;t generate any serious crisis when Russia remained weak after the Soviet collapse and the eastward push didn&rsquo;t extend into territories that for centuries had been part of Russia&rsquo;s traditional sphere of influence. But the United States, European Union and NATO remained blithely unmindful of the consequences when they kept pushing as Russia gained sufficient power to resist incursions into its areas of crucial national interest. What were the leaders of these Western entities thinking?</p> <p>Pfaff puts that question a little differently: &ldquo;Why Should Slavic and Orthodox-Uniate Ukraine, its history painfully intertwined with Russia&rsquo;s, be made a member of what was and still essentially is Charlemagne&rsquo;s post&ndash;Roman Europe?&rdquo; With one sentence he places today&rsquo;s sordid events surrounding Ukraine into a broad historical perspective of more than a millennium.</p> <p><strong>For that matter, adds Pfaff, &ldquo;Why does Turkey belong in Christian Europe?&quot; He wonders if President Obama, should he be asked such questions, could give a considered and historically grounded answer. &ldquo;Or does the machinery of foreign-policy making grind relentlessly along behind Mr. Obama&rsquo;s back, or beyond his attention?&rdquo;</strong></p> <p>Good question. And it&rsquo;s particularly intriguing given the machinations of that meddling bureaucrat, <a href="http://www.bbc.com/news/world-europe-26079957">Victoria Nuland, Assistant Secretary of State for European and Eurasian Affairs, who worked behind the scenes</a>&nbsp; to foment the uprising that eventually ousted the duly-elected Ukrainian president, Viktor Yanukovych. She even identified the man who should replace Yanukovych after his ouster and&mdash;presto!&mdash;he did indeed emerge as Ukraine&rsquo;s interim leader. It turns out that the United States has spent some $5 billion in fostering &ldquo;democratic institutions&rdquo; in Ukraine designed to nudge the country away from Russian sway.</p> <p><strong>Saner heads would have understood just how dangerous this kind of activity can be. </strong>And so some questions intrude: Did anyone in the State Department inform President Obama that this was going on? If anyone had, would the president or his informant have understood the potentially incendiary nature of such diplomatic intrusiveness? Or was the president simply left in the dark, as Pfaff has suggested, while his minions engaged in activity destined to create an unnecessary crisis in U.S.-Russian relations and possibly unleash destabilizing ethnic tensions in a crucial corner of the world?</p> <p>For historical perspective, it&rsquo;s worth noting that we look back now with a certain disdain upon the heads of state grappling with events leading to World War I. Those events ended a century of relative stability and peace in Europe, and the men who let that grand epoch pass are seen in history as hapless, out of touch, even stupid. In fact, they weren&rsquo;t stupid, but they were out of touch and that rendered them hapless in the face of events they didn&rsquo;t understand.</p> <p>President Obama and those around him aren&rsquo;t stupid either, but they don&rsquo;t seem to understand the nature of our time and the challenges posed by a fading era. They seem incapable of grappling with the kinds of broad historical questions posed by William Pfaff.</p> <p>But the problem doesn&rsquo;t reside only with the current administration. There seems to be a zeitgeist in play that retards the ability of our leaders and intellectuals to grasp the transformative nature of our time and hence the havoc besetting the globe. Pfaff is equally hard on George W. Bush and his father, George H. W. Bush, particularly regarding what he calls &ldquo;the Muslim conflagration.&rdquo; He writes: &ldquo;Iraq, Syria, Egypt, Libya, Yemen, Lebanon, Afghanistan, Pakistan&mdash;in all of them, a President Bush, or President Obama, together with his accomplices, has passed their way, sowing annihilation.&quot;</p> <p>He&rsquo;s right, of course, and equally correct in dismissing the ongoing efforts by U.S. officials to find a solution to the Israeli-Palestinian conflict &ldquo;in the face of the manifest unwillingness of Israel to allow the conflict to be solved on any terms that do not expel all the Palestinians from the Palestinian Occupied Territories, and award these to Israel (God&rsquo;s lands, therefore Zionist Israel&rsquo;s: Sheldon Adelson, sales agent).&quot;</p> <p>One could argue that it isn&rsquo;t in America&rsquo;s interest to push Israel on this matter, though that is eminently debatable. More to the point, though, is the haplessness of a nation continually going back to the well with high expectations of finding water, when in fact the well has been dry for decades. That kind of behavior by any nation denotes a clear lack of seriousness.</p> <p><u><strong>Seriousness is what the times call for.</strong></u> We are living through a crisis of the old order, and it demands new thinking, new cautions, new understandings of the profound challenges of this pregnant historical interregnum.<u><strong> If Western leaders continue along the course they&rsquo;ve been on in the post-Cold War period, they are likely to go down in history in much the same light as those sadly obtuse leaders who presided over the onset of World War I.</strong></u></p> http://www.zerohedge.com/news/2014-04-15/guest-post-slow-death-old-global-order#comments Afghanistan Eastern Europe European Union Great Depression Guest Post Iraq Israel New York Times President Obama Sheldon Adelson Totalitarianism Tribune Turkey Ukraine Wed, 16 Apr 2014 02:41:45 +0000 Tyler Durden 487370 at http://www.zerohedge.com Baffle With Fake BS: Chinese Q1 GDP Beats And Misses At The Same Time http://www.zerohedge.com/news/2014-04-15/baffle-fake-bs-chinese-q1-gdp-beats-and-misses-same-time <p>In keeping with the tradition of Chinese data being fully Schrodingerized, not to <a href="http://www.zerohedge.com/news/2014-04-11/and-fake-headline-day-award-goes">mention completely goalseeked and fake</a>, moments ago China reported that its GDP for the quarter which ended 15 days ago has not only been compiled and analyzed, but somehow once again it both beat and missed at the same time. It beat on a Year over Year basis rising 7.4%, if far below the 7.7% expected&nbsp; just fractionally above the 7.3% expected, while at the same time it missed on a sequential basis with Q1 GDP growing 1.4% Q/Q, just below the 1.5% expected, suggesting the annualized Q/Q has slowed to a meager 5.7% - a number <a href="http://www.chinajob.gov.cn/EmploymentServices/content/2014-04/11/content_913712.htm">far below China's 7.0% minimum threshold target. </a></p> <p><a href="http://www.zerohedge.com/sites/default/files/images/user5/imageroot/2014/04/China%20Q1%20GDP.jpg"><img src="http://www.zerohedge.com/sites/default/files/images/user5/imageroot/2014/04/China%20Q1%20GDP_0.jpg" width="600" height="206" /></a></p> <p>Some other Schrodingerian, and just as fake, data:</p> <ul> <li>Retail Sales beat at 12.2%, above the expected 12.1%, but sharply below the 13.6% in Q4</li> <li>Industrial Output missed at 8.8%, below the expected 9.0%, and also well below the 9.7% previously</li> <li>Fixed Asset Investment also slide from 19.6% at Q4 to just 17.6%, also missing the 18% estimate, as the capex boom from building ghost cities is slowly grinding to a halt, and finally</li> <li>Real Estate development dipped from 19.8% to only 16.8%</li> </ul> <p>&nbsp;</p> <p><a href="http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/2014/04/20140415_china.png"><img src="http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/2014/04/20140415_china_0.png" width="600" height="319" /></a></p> <p>&nbsp;</p> <p>In short: a substantial deterioration of the economy, one which was to be expected yet one which can be spun as either bullish thanks to the GDP "beat", and negatively if the purpose is to make a case for more PBOC stimulus. </p> <p>And now we look forward to seeing if the difference between the consolidated GDP and that provided by China's provinces is and summed up is more than the CNY1 trillion we have been used to as of late, since apparently nobody in China is familiar with simple addition.</p> http://www.zerohedge.com/news/2014-04-15/baffle-fake-bs-chinese-q1-gdp-beats-and-misses-same-time#comments China Gross Domestic Product Wed, 16 Apr 2014 02:12:51 +0000 Tyler Durden 487369 at http://www.zerohedge.com HFT Firm CEO Seeks Taxpayer Dollars To Save His Hockey Team http://www.zerohedge.com/news/2014-04-15/hft-firm-ceo-seeks-taxpayer-dollars-save-his-hockey-team <p><em>The Florida Panthers finished this season with the 2nd lowest points total in the NHL and drew the 2nd lowest average attendance of 14,200 fans per home game. The team is losing $25 million annually.</em> All of this is the exact opposite situation of the team's owner - Vincent Viola of HFT firm Virtu Financial infamy. As Bloomberg reports, <strong>Viola, whose high-frequency trading firm plans to raise millions in an initial public offering next month, is seeking tax dollars to help cover the bills for the hockey team he bought six months ago</strong>. Viola asked lawmakers in South Florida’s Broward County to use <strong>$64 million in taxpayer funds</strong> for arena bond payments owed by the team. In addition to taking over bond payments, which would be made over the next 14 years, the team wants concessions that would cost county taxpayers <strong>another $14 million</strong> in the same period.</p> <p>&nbsp;</p> <p><em>As Bloomberg reports</em>, <strong>officials in Broward, which encompasses Fort Lauderdale on the Atlantic Coast, disagree on how to proceed</strong>, with some saying that if they don’t pick up the tab, the team may move and leave taxpayers with $225 million in debt and an empty arena.</p> <blockquote><div class="quote_start"> <div></div> </div> <div class="quote_end"> <div></div> </div> <p><strong>"If we lose the Panthers and the arena operators, we would devalue our asset,"</strong> said Broward Mayor Barbara Sharief, referring to the $220 million BB&amp;T Center arena near Fort Lauderdale. "The building could stay vacant for six months out of the year. <strong>That’s a significant loss.</strong>"</p> <p>&nbsp;</p> <p>The value of the 20,000-seat arena would drop 70 percent if the Panthers fold or relocate, Sharief said. The arena would probably lose its concert promoter, Live Nation Entertainment Inc., and forfeit a $2 million annual state subsidy.</p> </blockquote> <p>iola has been owner since September...</p> <blockquote><div class="quote_start"> <div></div> </div> <div class="quote_end"> <div></div> </div> <p>The team, in its current location since the 1998-99 season, <strong>was sold to Viola and Douglas Cifu, Virtu’s CEO, in September for $250 million</strong>, according to the South Florida Sun-Sentinel. Team CEO Rory Babich declined to comment.</p> <p>&nbsp;</p> <p><strong>The team is losing $25 million annually, according to a county review.</strong></p> </blockquote> <p>But everyone involves expects the taxpayer handout...</p> <blockquote><div class="quote_start"> <div></div> </div> <div class="quote_end"> <div></div> </div> <p>With more tax money, the Panthers could recruit better players, said Babich, the team CEO. The county could share the profits, he said.</p> <p>&nbsp;</p> <p>In addition to taking over bond payments, which would be made over the next 14 years,<strong> the team wants concessions that would cost county taxpayers another $14 million in the same period</strong>. </p> <p>&nbsp;</p> <p>Babich wouldn’t say whether the team would move if it doesn’t get a bigger subsidy. <strong>He said the team expects to reach a “satisfactory’’ resolution with Broward.</strong></p> </blockquote> <p>So the big question is - why does Viola need US taxpayer help when his firm (and his pocketbook) is exploding with holy grail cash? Or is that, in a nutshell, how one gets rich in this new normal... take the profits and let government take the downside.</p> http://www.zerohedge.com/news/2014-04-15/hft-firm-ceo-seeks-taxpayer-dollars-save-his-hockey-team#comments Bond Florida HFT New Normal Wed, 16 Apr 2014 01:12:53 +0000 Tyler Durden 487368 at http://www.zerohedge.com Tuesday Humor: Biggest Fed Dove Concerned About "Real Erosion Of People's Purchasing Power" http://www.zerohedge.com/news/2014-04-15/tuesday-humor-biggest-fed-dove-concerned-about-real-erosion-peoples-purchasing-power <p>In all honesty, we were a little confused whether to call this <em>Tuesday Humor </em>or <em>Tuesday Schizophrenia, </em>because moments ago the biggest dove at the Fed, Minneapolis Fed's one-time converted uberhawk Kocherlakota (who recall <a href="http://www.zerohedge.com/news/2013-11-21/how-fed-dove-crushes-any-hawkish-opposition-feds-true-religion">fired his two biggest hawkish opponents </a>at his regional Fed) just came up with the most idiotic, and hence hilarious, thing a president of the one institution <strong>whose only job is to devalue the fiat currency of the host nation can say:</strong></p> <ul> <li><strong>KOCHERLAKOTA SEES ‘REAL EROSION’ OF PEOPLE’S PURCHASING POWER</strong></li> </ul> <p>Yep - the biggest dove in the Fed - the only person who disagreed with the Fed's decision to continue tapering - <strong>is suddenly worried about the erosion in your purchasing power dear people. </strong>What nobility. What humanism. </p> <p>But wait, there's more. </p> <p>Because within moments of uttering this epic phrase, Kocherlakota said this:</p> <blockquote class="twitter-tweet"><p>Kocherlakota: You see an asset price or land price growing at 10% per year. That can’t continue. <a href="https://twitter.com/search?q=%23MFedQandA&amp;src=hash">#MFedQandA</a></p> <p>— Minneapolis Fed (@MinneapolisFed) <a href="https://twitter.com/MinneapolisFed/statuses/456230426386776064">April 16, 2014</a></p></blockquote> <script src="//platform.twitter.com/widgets.js"></script><p>So according to the head of the Minneapolis Fed, the S&amp;P, which rose at 30% last year, is in a bubble and due to pop? Thanks for the warning, chief, even though it is ironic considering it comes on the heels of this:</p> <blockquote class="twitter-tweet"><p>Kocherlakota: The ways in which low interest rates provide stimulus are greater than the impact on savings accounts. <a href="https://twitter.com/search?q=%23MFedQandA&amp;src=hash">#MFedQandA</a></p> <p>— Minneapolis Fed (@MinneapolisFed) <a href="https://twitter.com/MinneapolisFed/statuses/456232480664600576">April 16, 2014</a></p></blockquote> <p>Greater than the impact on savings accounts... and precisely equal to the impact on their E-trade accounts.</p> <p>And we close with this rhetorical question posed by the Fed economist:</p> <blockquote class="twitter-tweet"><p>Question: What could the Fed be doing to help spur the economy? <a href="https://twitter.com/search?q=%23MFedQandA&amp;src=hash">#MFedQandA</a></p> <p>— Minneapolis Fed (@MinneapolisFed) <a href="https://twitter.com/MinneapolisFed/statuses/456224890123583488">April 16, 2014</a></p></blockquote> <script src="//platform.twitter.com/widgets.js"></script><p>Why shut itself down of course.</p> http://www.zerohedge.com/news/2014-04-15/tuesday-humor-biggest-fed-dove-concerned-about-real-erosion-peoples-purchasing-power#comments E-Trade Purchasing Power Wed, 16 Apr 2014 00:59:21 +0000 Tyler Durden 487367 at http://www.zerohedge.com The "Shocking" Buying Spree Of America's Mysterious Third Largest Treasury Holder Ramps Higher http://www.zerohedge.com/news/2014-04-15/shocking-buying-spree-americas-mysterious-third-largest-treasury-holder-ramps-higher <p>When we reported <a href="http://www.zerohedge.com/news/2014-03-18/meet-brand-new-and-shocking-third-largest-holder-us-treasurys">last month </a>that in a shocking twist, "Belgium" holdings of Treasurys had soared by a massive amount in the past three months, making the tiny country the third largest holder of US paper, our Belgian readers took offsense alleging it is impossible that Belgium itself could be buying all this paper, explaining it was all Euroclear. Well, yes: we know <strong><em>and noted </em></strong>that, which is why those same readers probably should have actually read the <a href="http://www.zerohedge.com/news/2014-03-18/meet-brand-new-and-shocking-third-largest-holder-us-treasurys">part in the post which said</a>: "<strong>our question is: just who is Belgium being used as a front for?</strong></p> <p>Recall that for years, the "UK" line item on TIC data was simply offshore accounts transaction on behalf of China. Of course, since China hasn't added any net US paper holdings in the past year, the UK, and China, are both irrelevant in the grand scheme of things. "</p> <p>So yes, to clarify for our trigger-happy Belgian (non) readers: it is quite clear that Belgium itself is not the buyer. What is <strong>not </strong>clear is who the mysterious buyer using Belgium as a front is. Because that same "buyer", who to further explain is not China, just bought another whopping $31 billion in Treasurys in February, bringing the "Belgian" total to a record $341.2 billion, cementing "it", or rather whoever the mysterious name behind the Euroclear buying rampage is, as the third largest holder of US Treasurys, well above the hedge fund buying community, also known as Caribbean Banking Centers, which held $300 billion in March.</p> <p>In summary: someone, <em>unclear who</em>, operating through Belgium and most likely the Euroclear service (possible but unconfirmed), <strong>has added a record $141 billion in Treasurys since December, or the month in which Bernanke announced the start of the Taper, bringing the host's total to an unprecedented $341 billion! </strong></p> <p><a href="http://www.zerohedge.com/sites/default/files/images/user5/imageroot/2014/04/Belgium%20TSY%20Holdings%20February.jpg"><img src="http://www.zerohedge.com/sites/default/files/images/user5/imageroot/2014/04/Belgium%20TSY%20Holdings%20February_0.jpg" width="600" height="422" /></a></p> <p>Also of note: Chinese holdings of US Paper dropped by $2.7 billion to $1273 billion, offset by Japan's $9 billlion increase in holdings to $1210 billion, as the convergence between the two countries resumes.</p> <p>One thing that is certain: the mystery buyer is not Russia, which in February, or just as the Ukraine conflict was starting, sold another $6 billion, bringing the Russian total to $126 billion, the lowest since 2011, and the biggest annual drop, -24%, in holdings in history.</p> <p><a href="http://www.zerohedge.com/sites/default/files/images/user5/imageroot/2014/04/Russian%20Holdings%20March.jpg"><img src="http://www.zerohedge.com/sites/default/files/images/user5/imageroot/2014/04/Russian%20Holdings%20March_0.jpg" width="600" height="468" /></a></p> http://www.zerohedge.com/news/2014-04-15/shocking-buying-spree-americas-mysterious-third-largest-treasury-holder-ramps-higher#comments Belgium Ben Bernanke China Ukraine United Kingdom Wed, 16 Apr 2014 00:55:40 +0000 Tyler Durden 487326 at http://www.zerohedge.com Equity Rallies Are Corrective, Downside Risks Remain, BofAML Says http://www.zerohedge.com/news/2014-04-15/equity-rallies-are-corrective-downside-risks-remain-bofaml-says <p>As the second algo-crazy spike in stocks in 2 days draws to a close, it is perhaps worth considering BofAML's Macneil Curry's perspective on the S&amp;P 500 - despite the potential for further near-term strength, <strong>equity gains are corrective and downside risk remain</strong>... or put a different way "sell the f##king rips." Just as<em> growthless-ly,</em> Curry advises 5s30s flatteners in Treasuries as the slowing trend is set to continue.</p> <p>&nbsp;</p> <p><strong>US5s30s resumes its flattening trend.</strong> </p> <p><a href="http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/2014/04/20140415_curry2.png"><img src="http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/2014/04/20140415_curry2_0.png" width="600" height="639" /></a></p> <p>US5s30s is resuming its flattening trend. The test and reversal from old channel support, now resistance at 196bps and coincident momentum unwind from oversold extremes says the flattening trend is resuming and that it has room to run. </p> <p>REMEMBER, WE ARE IN A CYCLICAL (multi-year) flattening trend. Steepening is temporary and corrective. Our initial downside targets are seen to retracement support at 146bps, but eventually we look for a move to long term channel support at 57bps and eventually below. </p> <p>Initiate UST 5s30s Flatteners at mkt (185.3bps) risk 197bps, target 143bps </p> <p><strong>ESM4 gains remain corrective.</strong></p> <p><strong><a href="http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/2014/04/20140415_curry1.png"><img src="http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/2014/04/20140415_curry1_0.png" width="600" height="319" /></a><br /></strong></p> <p><strong>Turning to equities,</strong> despite the potential for further near term strength, against a break above 1867.50/1872.53 (ESM4 and CASH) downside risks remain for the confluence of CASH SUPPORT between 1794/1763 (10m trendline and 200d avg).</p> <p>&nbsp;</p> <p><em>Source: BofAML</em></p> http://www.zerohedge.com/news/2014-04-15/equity-rallies-are-corrective-downside-risks-remain-bofaml-says#comments Wed, 16 Apr 2014 00:38:50 +0000 Tyler Durden 487366 at http://www.zerohedge.com Bomb Squad Arrives At Boston Marathon Finish Line To Investigate Unattended Bags http://www.zerohedge.com/news/2014-04-15/bomb-squad-arrives-boston-marathon-finish-line-investigate-unattended-bags <p>On the one year anniversary of the Boston Marathon Bombing (which oddly enough the NSA did not prevent, even before its expansive anti-terrorist exploits were revealed by Edward Snowden) it was practically unavoidable that there would be some echos of that tragic day. Sure enough as <a href="http://boston.cbslocal.com/2014/04/15/boylston-street-evacuated-after-backpack-left-near-finish-line/">CBS reports</a>, "the area near the finish line of the Boston Marathon was evacuated Tuesday night after two unattended backpacks were left at the finish line. Police tape has been put up around the photo bridge on Boylston Street. WBZ-TV photographers on scene say they saw a person with the backpack screaming “Boston Strong” before police cleared everyone from the area."</p> <blockquote><div class="quote_start"> <div></div> </div> <div class="quote_end"> <div></div> </div> <p>Witnesses say the person was barefoot, wearing a long black veil and was acting strange. It is unclear whether or not the person was taken into custody.</p> <p>&nbsp;</p> <p>Copley Station on the Green Line is closed while police investigate the bags.</p> <p>&nbsp;</p> <p>One year ago, three people died, and more than 260 people were injured when two bombs exploded near the finish line of the marathon. Earlier in the day, Vice President Joe Biden joined survivors, and victim’s families for a moment of silence at 2:49 p.m., the same time the bombs exploded a year ago.</p> </blockquote> <p>Below is a video of the suspicious person:</p> <p> <iframe src="//instagram.com/p/m1BqjLslsS/embed/" width="612" height="710" frameborder="0" scrolling="no"></iframe></p> <p>Moments later the bomb squad arrived.</p> <blockquote class="twitter-tweet"><p>Boston Police: 2 suspicious, unattended bags being investigated near the Boston Marathon finish line: <a href="http://t.co/I5ikKuq4nF">pic.twitter.com/I5ikKuq4nF</a></p> <p>— ABC News (@ABC) <a href="https://twitter.com/ABC/statuses/456216834908651520">April 15, 2014</a></p></blockquote> <script src="//platform.twitter.com/widgets.js"></script><blockquote class="twitter-tweet" lang="en"><p>Bomb squad gearing up in Copley Square. <a href="https://twitter.com/search?q=%23Boston&amp;src=hash">#Boston</a> <a href="https://twitter.com/search?q=%23BostonStrong&amp;src=hash">#BostonStrong</a> <a href="https://twitter.com/search?q=%23BostonMarathon&amp;src=hash">#BostonMarathon</a> <a href="http://t.co/Ai1umTuQm5">pic.twitter.com/Ai1umTuQm5</a></p> <p>— Jay Gray (@jaygraymatters) <a href="https://twitter.com/jaygraymatters/statuses/456215458409381888">April 15, 2014</a></p></blockquote> <script src="//platform.twitter.com/widgets.js"></script><blockquote class="twitter-tweet" lang="en"> <p>Officer returning from scene asked if all-clear - shook his head NO. <a href="https://twitter.com/search?q=%23Boston&amp;src=hash">#Boston</a> <a href="https://twitter.com/search?q=%23BostonMarathon&amp;src=hash">#BostonMarathon</a> <a href="http://t.co/cZBHl573ln">pic.twitter.com/cZBHl573ln</a></p> <p>&mdash; Jay Gray (@jaygraymatters) <a href="https://twitter.com/jaygraymatters/statuses/456218597652983808">April 15, 2014</a></p></blockquote> <script async src="//platform.twitter.com/widgets.js" charset="utf-8"></script><p>We suppose the "all clear" will be given promptly, but should the situation escalate, we will update.</p> http://www.zerohedge.com/news/2014-04-15/bomb-squad-arrives-boston-marathon-finish-line-investigate-unattended-bags#comments ABC News Joe Biden Twitter Twitter Tue, 15 Apr 2014 23:52:43 +0000 Tyler Durden 487365 at http://www.zerohedge.com Putin Tells Merkel "Ukraine On The Verge Of A Civil War" As Germany Agrees To Re-Sell Russian Gas To Ukraine http://www.zerohedge.com/news/2014-04-15/putin-tells-merkel-ukraine-verge-civil-war <p>A day after Putin called Obama to warn him that only the US president can prevent bloodshed in Ukraine - something which Obama failed at based on this morning's reports out of east Ukraine - German Chancellor Angela Merkel had a follow up phone call with the Kremlin a few hours ago, in which Putin told her that "<strong>The sharp escalation of the conflict puts the country, in essence, on the verge of a civil war".</strong></p> <p>From <a href="http://en.itar-tass.com/russia/728148">Itar-Tass:</a></p> <blockquote><div class="quote_start"> <div></div> </div> <div class="quote_end"> <div></div> </div> <p>President Vladimir Putin has had a telephone conversation with Chancellor Angela Merkel of the Federal Republic of Germany and discussed with her the situation in Ukraine, the Kremlin press service reports.</p> <p>&nbsp;</p> <p>Russia's Head of State pointed out , "<strong>The sharp escalation of the conflict puts the country, in essence, on the verge of a civil war</strong>".</p> <p>&nbsp;</p> <p>The leaders of the two countries accentuated the importance of talks in a quadripartite format (Russia, the European Union, the United States, and Ukraine), planned for April 17. "Hope has been expressed that the sides at the meeting in Geneva will manage to convey a clear message contributing to directing the situation into a peaceful channel," a Kremlin press service official added.</p> <p>&nbsp;</p> <p>The RF President also recalled the importance of stabilizing the economy of Ukraine and of ensuring deliveries and transit of Russian natural gas to Europe. This had been reiterated in his message, dated April 10, 2014, to the leaders of a number of European countries.</p> <p>&nbsp;</p> <p>The telephone conversation was held on the initiative of the German side.</p> </blockquote> <p>Considering the events from this morning which nearly resulted in the S&amp;P plunging below 1800 only to be "redeemed" by the "bad news" that the Japanese economy is about to stumble yet again, leading algos to believe that more BOJ QE is imminent and sending the S&amp;P surging by over 30 points in the span of a few hours, this is hardly surprising. </p> <p>What is more surprising, is that as we reported earlier, the very same Germany, through its RWE AG utility, announced it would supply Ukraine with nat gas in 2014 since Gazprom is adamant on no longer providing the troubled country with the precious commodity in the absence of payment (which Ukraine can't afford). <a href="http://online.wsj.com/news/articles/SB10001424052702303887804579502970256672130?mg=reno64-wsj">WSJ reports</a>:</p> <blockquote><div class="quote_start"> <div></div> </div> <div class="quote_end"> <div></div> </div> <p>German utility RWE AG said it agreed to supply Ukraine with natural gas this year, as the troubled country seeks to reduce its reliance on gas imported from Russia.</p> <p>&nbsp;</p> <p>RWE is the first European energy company to agree to supply gas to Ukraine since the political crisis there threatened the former Soviet republic's supplies from Russia. <strong>But the deal underscores the extent to which Europe, now scrambling to shore up Ukraine, also depends on Russian gas.</strong></p> </blockquote> <p>The paradox of course, is that Germany itself is reliant on Russian natgas exports for about a third of its needs, which means that the gas Germany "sells" to Ukraine will in fact originate in the Ukraine! "RWE declined to estimate how much of its gas deliveries to Ukraine's state-owned energy company Naftogaz will likely stem from Russia or to provide details to the agreement, such as volumes, price or the duration of the shipments."</p> <p>What the deal would do, is to allow Ukraine to purchase nat gas at lower prices than the 81% price surge Gazprom is demanding from Ukraine in the Kremlin's implicit halt of gas supplies to the intransigent ex-USSR republic. As a result, the deal "could at least partially buffer Ukraine from price increases imposed by Russia's OAO Gazprom—which currently supplies the vast majority of the country's gas imports—and the state-owned energy giant's recent threats to turn off the spigot. RWE said it would begin the gas deliveries via Poland immediately, adding only that the gas would be supplied at European market prices, including delivery costs."</p> <p>There are other complications: </p> <blockquote><div class="quote_start"> <div></div> </div> <div class="quote_end"> <div></div> </div> <p>It isn't clear how much gas the RWE deal will enable to flow to Ukraine. Under a 2012 deal between the German utility and Ukraine, the German company could ship up to 10 billion cubic meters of gas to Ukraine each year—the precise amount is agreed upon annually. However, RWE currently can't ship the maximum allowable amount because of capacity constraints, a company spokesman said. RWE shipped around one billion cubic meters of gas to Ukraine last year.</p> <p>&nbsp;</p> <p>Ukraine consumed around 50 billion cubic meters of gas in 2013, of which 60% came from Russia, according to its government. and most of the rest was produced domestically. Gazprom earlier this month raised gas prices for Ukraine by 81%, saying that Naftogaz owed it around $2.2 billion. Officials in Moscow later warned there could be gas-supply disruptions if Ukraine's unpaid gas bills weren't resolved.</p> <p>&nbsp;</p> <p><strong>Some analysts caution that European countries won't be able to supply Ukraine with significant quantities of gas until pipelines that carry gas into the country are upgraded.</strong></p> <p>&nbsp;</p> <p>Central and Eastern Europe's gas-pipeline system was built to ship large quantities of Russian gas westward. After a price dispute in 2009 prompted Gazprom to temporarily halt gas supplies to Ukraine, the European Union looked into upgrading pipelines to allow for reverse flows of gas back into Ukraine. The EU currently receives around 30% of its annual gas demand from Russia, of which around a half is delivered via pipelines that run through Ukraine.</p> <p>&nbsp;</p> <p><strong>But reverse-flow capacity into Ukraine is still limited. In 2013, around 2 billion cubic meters of gas were shipped to Ukraine via Poland and Hungary, according to the European Commission.</strong></p> </blockquote> <p>Finally, even this attempt to keep Ukraine plugged in, is likely merely for optical purposes:</p> <blockquote><div class="quote_start"> <div></div> </div> <div class="quote_end"> <div></div> </div> <p>Jonathan Stern, senior research fellow at the Oxford Institute for Energy Studies, said Russian gas supplies to Ukraine would likely remain indispensable near-term.</p> <p>&nbsp;</p> <p><strong>"I expect that raising reverse-flow capacities to around 5 bcm this year should be possible, but that would still leave a large gap to meet all of Ukraine's gas needs," Mr. Stern said.</strong></p> </blockquote> <p>Of course Putin knows this. He also knows that all this deal really means is that instead of Ukraine paying Gazprom it will now be up to Germany to foot the bill for Ukraine token nat gas supply, which in the grand scheme of things, will hardly be sufficient to move the needle.</p> http://www.zerohedge.com/news/2014-04-15/putin-tells-merkel-ukraine-verge-civil-war#comments European Union Germany Hungary Nat Gas Natural Gas Poland Ukraine Vladimir Putin Tue, 15 Apr 2014 23:36:02 +0000 Tyler Durden 487364 at http://www.zerohedge.com Fourth Anniversary of Gulf Oil Spill: Wildlife Is Still Suffering from Toxic Cover Up http://www.zerohedge.com/contributed/2014-04-15/fourth-anniversary-gulf-oil-spill-wildlife-still-suffering-toxic-cover <p>As we noted <a href="http://www.washingtonsblog.com/2010/05/dispersants-might-be-increasing-damage-from-gulf-oil-spill.html" title="at the time">at the time</a>, and on the <a href="http://www.washingtonsblog.com/2011/04/no-the-gulf-oil-spill-is-not-old-news.html" title="first">first</a> (and <a href="http://www.washingtonsblog.com/2011/04/one-year-anniversary-of-the-gulf-oil-spill.html" title="here">here</a>), <a href="http://www.washingtonsblog.com/2012/04/the-bp-cover-up-2-years-later.html" title="second">second</a> and <a href="http://www.washingtonsblog.com/2013/04/bp-oil-spill-clean-up-worker-video-evidence-of-massive-cover-up.html" title="third">third</a> anniversaries of BP&rsquo;s Gulf oil spill, BP and the government made the spill much worse by dumping toxic dispersant in the water in an attempt to to sink &ndash; and so <em>temporarily</em> hide &ndash; the oil.</p> <p>In addition, adding dispersant makes oil <a href="http://www.washingtonsblog.com/2012/12/dispersants-make-oil-52-times-more-toxic-than-oil-and-delay-cleanup-of-oil-spills-by-many-years.html" title="52 times more toxic">52 times more toxic</a> than it would normally be.</p> <p>EPA whistleblowers <a href="http://www.washingtonsblog.com/2010/11/senior-epa-analyst-government-doing-a-cover-up-regarding-dispersants-trying-to-reassure-the-public-instead-of-doing-honest-scientific-testing.html" title="tried to warn us">tried to warn us</a>&hellip;</p> <p>Gulf toxicologist Susan Shaw <a href="http://www.washingtonsblog.com/2013/09/bps-gulf-oil-spill-covering-up-the-oil-spill-with-corexit-was-a-deadly-action-what-happened-in-the-gulf-was-a-political-act-an-act-of-cowardice-and-greed.html" title="told us">told us</a> last year:</p> <blockquote><div class="quote_start"><div></div></div><div class="quote_end"><div></div></div><p>Covering up the [Gulf] oil spill with Corexit was a <strong>deadly action</strong> &hellip; what happened in the Gulf was <strong>a political act, an act of cowardice and greed</strong>.</p> </blockquote> <p>(60 Minutes did a <a href="http://www.washingtonsblog.com/2013/08/you-wont-believe-the-upshot-of-bps-gulf-oil-spill.html" title="fantastic exposé">fantastic exposé</a> on the whole shenanigan.)</p> <p>And the cover up went beyond adding toxic dispersant.&nbsp; BP and the government went so far as <a href="http://www.washingtonsblog.com/2010/07/in-trying-to-cover-its-own-behind-bp-has-lowballed-the-amount-of-oil-which-has-made-everything-worse.html" title="low-balling">low-balling</a> the <a href="http://phys.org/news205605198.html" target="_blank" title="amount of oil">amount of oil</a> spilled, <a href="http://www.washingtonsblog.com/2010/08/bp-is-hiding-dead-animals-to-avoid-fine-of-50000-per-dead-animal-and-the-bad-publicity.html" title="hiding dead animals">hiding dead animals</a> and <a href="http://www.washingtonsblog.com/2010/09/bp-and-government-representatives-still-keeping-scientists-and-reporters-away-from-areas-impacted-by-oil.html" title="keeping scientists and reporters away">keeping scientists and reporters away</a> from the spill so they couldn&rsquo;t document what was really happening.</p> <p>As the National Wildlife Federation (NWF) <a href="http://www.nwf.org/News-and-Magazines/Media-Center/Reports/Archive/2014/04-07-14-Gulf-Report-2014.aspx" target="_blank" title="notes">notes</a> in a new report, the wildlife is <em>still</em> suffering from this toxic cover up.</p> <p>NWF <a href="http://www.slideshare.net/NationalWildlife/deepwater-horizonfouryearslater-nationalwildlifefederation" target="_blank" title="reports">reports</a>:</p> <blockquote><div class="quote_start"><div></div></div><div class="quote_end"><div></div></div><p>Some 900 bottlenose dolphins of all ages&mdash;the vast majority of them dead&mdash;have been reported stranded in the northern Gulf between April 2010 and March 2014. In 2013, bottlenose dolphins were found dead or stranded at more than three times average rates before the spill. In 2011, dead infant or stillborn dolphins were found at nearly seven times the historical average and these strandings have remained higher than normal in subsequent years. NOAA has been investigating this ongoing wave of bottlenose dolphin strandings across the northern Gulf of Mexico since February 2010, before the Deepwater Horizon rig exploded. This is the longest period of above-average strandings in the past two decades and it includes the greatest number of stranded dolphins ever found in the Gulf of Mexico. In December 2013, NOAA published results of a study looking at the health of dolphins in a heavily-oiled section of the Louisiana coast. This researchers found strong evidence that the ill health of the dolphins in Louisiana&rsquo;s Barataria Bay was related to oil exposure.</p> <p>&nbsp;</p> <p>***</p> <p>&nbsp;</p> <p>Dolphins in Barataria Bay showed evidence of adrenal problems, as has been previously reported in mammals exposed to oil.4 Barataria Bay dolphins also were five times more likely than dolphins from unoiled areas to have moderate-to-severe lung disease. Nearly half the dolphins studied were very ill; 17% of the dolphins were not expected to survive. The study concludes that health effects seen in Barataria Bay dolphins are significant and likely will lead to reduced survival and ability to reproduce.</p> </blockquote> <p>NWF found many other species have also been harmed by the dispersant-oil mixture:</p> <blockquote><div class="quote_start"><div></div></div><div class="quote_end"><div></div></div><p>Roughly 500 stranded <strong>sea turtles</strong> have been found in the area affected by the spill every year from 2011 to 2013. This is a dramatic increase over the numbers found before the disaster. Other teams of scientists have reported negative impacts of oil on a number of species of fish, including tuna red snapper and mahi-mahi. As we have learned from previous spills far smaller than the 2010 event, it has taken years to understand the full effects on the environment. In some cases, recovery is not complete even decades later. Twenty-five years after the Exxon Valdez spill in Prince William Sound, clams, mussels, and killer whales are still considered &ldquo;recovering,&rdquo; and the Pacific herring population, commercially harvested before the spill, is showing few signs of recovery. [One of the main ingredients in Corexit - 2-butoxyethanol - was also <a href="http://www.nytimes.com/gwire/2010/06/09/09greenwire-ingredients-of-controversial-dispersants-used-42891.html" target="_blank" title="used in the Valdez spill">used in the Valdez spill</a>] &hellip; the full scope of the</p> <p>Deepwater Horizon disaster on the Gulf ecosystem will likely unfold for years or even decades to come.</p> <p>&nbsp;</p> <p>***</p> <p>&nbsp;</p> <p>The Atlantic <strong>bluefin tuna</strong> is one of the largest fish in the Gulf, reaching average lengths of 6.5 feet and weighing about 550 lbs. A single fish can sell for tens of thousands of dollars.&hellip; The Deepwater Horizon rig exploded while the April-May breeding season in the northern Gulf was underway. In 2011, NOAA researchers estimated that as many as 20% of larval fish could have been exposed to oil, with a potential reduction in future populations of about 4%.</p> <p>&nbsp;</p> <p>***</p> <p>&nbsp;</p> <p>A more recent study shows that a chemical in oil from the spill can cause irregular heartbeats in bluefin and yellowfin tuna that can <strong>lead to heart attacks</strong>, or even death. The effects are believed to be particularly problematic for fish embryos and larvae, as heartbeat changes could affect development of other organs. The researchers suggest that other vertebrate species in the Gulf of Mexico could have been similarly affected. Scientists found that four additional species of large predatory fish&mdash;<strong>blackfin tuna, blue marlin</strong>, <strong>mahi-mahi</strong> and <strong>sailfish</strong>&mdash;all had fewer larvae in the year of the oil spill than any of the three previous years.</p> <p>&nbsp;</p> <p>***</p> <p>&nbsp;</p> <p>The Deepwater Horizon spill occurred during the <strong>blue crab</strong> spawning season, when female crabs were migrating out of estuaries into deeper waters of the Gulf to release their eggs.</p> <p>&nbsp;</p> <p>***</p> <p>&nbsp;</p> <p>[Reports indicate problems with crabs.] Blue crabs provide evidence of oil tainting Gulf food web. 2. Alabama Local News. 2013. Blue crab stock declines are concern for Gulf Coast fishermen. 3. Houma Today. 2013. Locals say blue crab catches plummeting. 4. Louisiana Seafood News. 2013. Lack of Crabs in Pontchartrain Basin Leads to Unanswered Questions. 5. Tampa Bay Times. 2013. Gulf oil spill&rsquo;s effects still have seafood industry nervous. 6. Presentation at the 2014 Gulf of Mexico Oil Spill &amp; Ecosystem Science Conference. The Effects of the Deepwater Horizon Oil Spill on Blue Crab Megalopal Settlement: A Field Study.</p> <p>&nbsp;</p> <p>***</p> <p>&nbsp;</p> <p>Marine life associated with the <strong>deep sea corals</strong> also showed visible signs of impact from the oil. In a laboratory study, coral larvae that had been exposed to oil, a chemical dispersant, and an oil/ dispersant mixture all had lower survival rates than the control larvae in clean seawater.</p> <p>&nbsp;</p> <p>***</p> <p>&nbsp;</p> <p>According to a recently published federal report, <strong>oyster</strong> eggs, sperm and larvae were exposed to oil and dispersants during the 2010 oil spill. Oil compounds known as polycyclic aromatic hydrocarbons (PAHs) can be lethal to oyster</p> <p>&nbsp;</p> <p>***</p> <p>&nbsp;</p> <p>In the fall of 2010, even after the Macondo well was capped, oyster larvae were rare or absent in many of the water samples</p> <p>collected across the northern Gulf of Mexico.</p> <p>&nbsp;</p> <p>***</p> <p>&nbsp;</p> <p>There are nearly 1000 known species of <strong>foraminifera</strong> in the Gulf of Mexico. These small marine creatures form part of the base of the marine food web, serving as a food source for marine snails, sand dollars and fish. Previous research has shown that these sediment-dwelling microorganisms are sensitive to oil damage. Rapid accumulation of oiled sediment on parts of the Gulf floor between late 2010 and early 2011 contributed to a dramatic die-off of foraminifera. Researchers found a significant difference in community structure and abundance during and after the Deepwater Horizon event at sites located from 100-1200 meters deep in the Desoto Canyon, nearly 100 kilometers south-southwest of Pensacola, Florida. Deep sea foraminifera had not recovered in diversity a year and a half after the spill.</p> <p>&nbsp;</p> <p>***</p> <p>&nbsp;</p> <p><strong>Killifish</strong>, also known as bull minnows or cockahoe, are prized bait fish and play an important role in the Gulf food web..&hellip;This species has been extensively studied in the aftermath of the disaster because of its abundance and its sensitivity to pollution. Oil exposure can alter the killifish&rsquo;s cellular function in ways that are predictive of developmental abnormalities, decreased hatching success and decreased embryo and larval survival. In 2011, Louisiana State University researchers compared the gill tissue of killifish in an oiled marsh to those in an oil-free marsh. Killifish residing in oiled marshes showed evidence of effects even at low levels of oil exposure which could be significant enough to have an impact at a population level. Additional research has found that four common species of marsh fish, including the Gulf killifish, seem to be avoiding oiled areas. These behaviors, even at small scales, could be significant within marsh communities, leading to changes in food web dynamics.</p> <p>&nbsp;</p> <p>***</p> <p>&nbsp;</p> <p>In the aftermath of the spill, a number of fish, including <strong>red snapper</strong>, caught in Gulf waters between eastern Louisiana and western Florida had unusual lesions or rotting fins. University of South Florida researchers examined red snapper and other fish and determined that their livers contained oil compounds that had a strong &ldquo;pattern coherence&rdquo; to oil from the Deepwater Horizon spill.&hellip; An analysis of snapper populations in the Gulf that was done between 2011 and 2013 showed an unusual lack of younger snapper. Further research found a significant decline in snapper and other reef fish after the spill. Small plankton-eating fish, such as damselfishes and cardinalfishes, declined most dramatically but red snapper and other larger reef fish also declined.</p> <p>&nbsp;</p> <p>***</p> <p>&nbsp;</p> <p>Seaside <strong>sparrows</strong> live only in coastal marshes, where they are common year-round residents. Oil from the Deepwater Horizon spill remains in some marshes, putting seaside sparrows at continued risk from direct oiling, contaminated or reduced food supplies, and continued habitat loss. In 2012 and 2013, seaside sparrows in Louisiana salt marshes were found to have reductions in both overall abundance and likelihood to fledge from the nest. Because these birds are not aquatic, exposure to oil would likely come from incidental contact on the shore or from eating oil or bugs and other creatures that have oil in their systems. Other studies have shown a significant decrease in the insect population in oiled marshes, which could be reducing prey availability for seaside sparrows.</p> <p>&nbsp;</p> <p>***</p> <p>&nbsp;</p> <p>Roughly 700 <strong>sperm whales</strong> live year-round in the Gulf&rsquo;s deep waters off the continental shelf&hellip;. A researcher at the University of Southern Maine has found higher levels of DNA-damaging metals such as chromium and nickel in sperm whales in the Gulf of Mexico compared to sperm whales elsewhere in the world. These metals are present in oil from the spill. Whales closest to the well&rsquo;s blowout showed the highest levels.</p> </blockquote> <p>Nothing has changed &hellip; indeed, the U.S. has <a href="http://www.nytimes.com/2014/03/14/business/energy-environment/epa-to-lift-suspension-of-oil-leases-for-bp.html?_r=0" target="_blank" title="let BP back into the Gulf">let BP back into the Gulf</a>.&nbsp; And BP is going to drill <a href="http://www.upi.com/Business_News/Energy-Resources/2012/02/08/BP-plans-to-drill-deeper-than-ever/UPI-62971328705233/" target="_blank" title="even deeper">even deeper</a> &hellip; with an even <em>greater</em> potential for disaster (and see&nbsp;<a href="http://www.huffingtonpost.com/2011/04/14/experts-fear-another-oil-_n_849352.html" target="_blank" title="this">this</a>).</p> <p>It&rsquo;s not just BP &hellip; or the Gulf.&nbsp; Giant banking and energy companies and the government have a habit of covering up disasters &ndash; including not only oil spills, but everything from <a href="http://www.washingtonsblog.com/2011/04/japans-nuclear-melt-down-economic.html" title="nuclear accidents to&amp;nbsp; financial problems">nuclear accidents to&nbsp; financial problems</a> &ndash; <a href="http://www.washingtonsblog.com/2013/07/when-bad-government-policy-leads-to-bad-results-the-government-manipulates-the-data-instead-of-correcting-the-policy.html" title="instead of actually fixing the problems"><strong><em>instead</em></strong> of actually <strong><em>fixing</em></strong> the problems</a> so that they won&rsquo;t happen again.</p> http://www.zerohedge.com/contributed/2014-04-15/fourth-anniversary-gulf-oil-spill-wildlife-still-suffering-toxic-cover#comments Exxon Florida Mexico NOAA recovery Tue, 15 Apr 2014 23:23:24 +0000 George Washington 487363 at http://www.zerohedge.com