en Could Armenia Be The Next Ukraine? <p><a href=""><em>Submitted by Martin Vladimirov via</em></a>,</p> <p>When Konstantin Kosachyov, the head of the Russian Federation Council&#39;s International Relations Committee, said the protests in Armenia against a 16.7 percent power price hike follow a color revolution scenario sponsored by Western powers, <strong>many commentators rushed to compare the crisis in Yerevan with the 2014 protests in Kyiv that toppled the pro-Russian president, Victor Yanukovych</strong>.</p> <p><strong>However, the street protests in Armenia have more to do with the overall economic situation in the country than with proxy clashes between foreign countries. </strong>Although the main power supplier, the Electric Networks of Armenia (ENA) company, 100 percent-controlled by the Russian state-owned energy giant Inter RAO United Energy Systems, is behind the proposal for a steep power price hike, Armenian activists reject the notion that the protests are anti-Russian. What they have demanded is a halt of widespread corrupt practices in the power sector, which ultimately are the real reason why prices have to go up.</p> <p><strong>As in other former Soviet countries, the energy behemoth ENA remains a heavily mismanaged enterprise.</strong> This was confirmed by a recent probe, in which the energy regulator has found that suppliers and traders often use shady intermediaries to push energy managers to inflate procurement costs or steal electricity. This has led to more than EUR 70 million in losses for the company in just the last three years, <a href="">according to the energy ministry</a>.</p> <p>The company&rsquo;s overall debt has reached $250 million. Initially, ENA has suggested a 40 percent increase in electricity tariffs in order to cover its obligations. The government of the pro-Russian president Serge Sargsyan and the quasi-independent energy regulator initially refused but ultimately had to accept a 16.7 percent rise after a series of high-level visits from Moscow. Although the government has confirmed the results of the regulator&rsquo;s investigation, it has decided to look the other way.</p> <p>Even after the hike, power tariffs would still be just EUR 0.11 cents/kWh, or about half of what average EU households pay. At purchasing power parity, though, their impact on household budgets is much greater. According to a World Bank study, <strong>Armenians spend around 8% of their income on energy use, while consuming three times less energy per capita than people in Central and Eastern Europe, also a region where energy poverty is a widespread phenomenon.</strong></p> <p>In addition, if accepted, <strong>this would be the third consecutive power price hike in two years at a time when the economy is facing slow growth and <a href="">high unemployment rate.</a> </strong>The Armenian economy, which is <a href="">heavily dependent on Russia</a>, has faced a major downturn since the start of economic troubles for its powerful neighbor to the north. Russia is the key destination for labor migrants, who contributed more than <a href="">20% of the national income in the form of remittances in 2013</a> and 11 percent in 2014. In the first five months of 2015, cash transfers have halved.</p> <p><strong>The economic link with Russia is most profound in the energy sector. </strong>Apart from ENA, the Russian state, through Gazprom, owns 100 percent of the country&rsquo;s wholesale gas supplying company. The bulk of FDI inflows also have Russian origin, and 40 percent of them are targeting the energy sector.</p> <p>In addition,<strong> Armenia imports almost all of its gas from Russia and natural gas imports comprise around 80 percent of all energy imports.</strong> Furthermore, 60 percent of the country&rsquo;s total primary energy supply is derived from natural gas, which is responsible for the majority of residential energy use, especially in big cities.</p> <p>However, the increase in gas import prices in 2010 and the subsequent 40 percent hike in household gas tariffs pushed some urban residents to <a href="">switch from natural gas to electricity</a> for heating, which became comparatively cheaper (about one-fifth of Armenia&rsquo;s electricity is generated from natural gas, with the rest supplied by a number of hydro power plants and a nuclear power plant, which is <a href="">currently being modernized</a>). Hence, when power prices began to increase, the outrage in the capital, Yerevan, was easy to understand.</p> <p><strong>According to the protest leaders, the rallies are not anti-Russian in nature and the main demand of the people is a reversal to the government&rsquo;s power price decision.</strong> President Sargsyan seemed have backed down after he told senior officials on 26 June that the government will cover the difference between the old and the new price with budget subsidies until the end of a comprehensive audit of the ENA&rsquo;s activities.</p> <p><u><strong>Protesters, however, seem determined to stay on the streets. Deep-seated mistrust in the government&rsquo;s ability to implement reforms could trigger an impulse for a regime change. </strong></u>This is the biggest fear in Moscow, which sees the current Armenian government as an important ally in its natural backyard. Russia has been able to preserve its influence in the small Caucasian state by expanding its control over key economic sectors. This was done by recruiting senior government officials, who used Russia&rsquo;s influence to <a href="">limit outside competition</a> and preserve <a href="">the dominant position</a> of Russian companies in <a href="">the energy sector.</a></p> <p><u><strong>If there is a change of guard in Yerevan, the established connections that have served Moscow so well, could crumble. </strong></u>Not surprisingly, similar to the aftermath of Ukraine&rsquo;s Maidan rally in early 2014, <a href="">Moscow&rsquo;s propaganda</a> has presented the street protests in Yerevan as a Western plot to <a href="">contain Russia&rsquo;s influence.</a></p> <p><strong>In a sign of full support, Moscow provided the government with <a href="">$200 million in military aid on 26 June</a>. </strong>Armenia relies for its security on the 3,000 Russian troops stationed in the country, which have so far deterred efforts by Azerbaijan to try to reclaim the separatist republic of Nagorno Karabakh, occupied by Armenia during a bloody five-year war in the early 1990s.</p> <p>Paradoxically, Russia&rsquo;s attempts to secure its influence and, more importantly, its energy interests in the neighborhood could backfire. While Armenian demonstrators have largely limited, domestic aims, the Russian insistence on turning the protests into an East-West clash could incite protesters to demand that the Armenian government take a sharp turn away from Moscow.</p> <p><strong>Faced with such a choice, president Sargsyan might have to abandon his close ties with Kremlin in an attempt to stay in power. </strong>This is likely to lead to economic retaliation from Russia such as gas supply cuts. <em><u><strong>The alternative, though, may be to follow the path of Ukraine&rsquo;s former president, Victor Yanukovych.</strong></u></em></p> <div class="field field-type-filefield field-field-image-teaser"> <div class="field-items"> <div class="field-item odd"> <img class="imagefield imagefield-field_image_teaser" width="289" height="180" alt="" src="" /> </div> </div> </div> Eastern Europe Natural Gas Nuclear Power Purchasing Power Ukraine Unemployment World Bank Tue, 30 Jun 2015 17:51:20 +0000 Tyler Durden 509021 at Obama Talks The Other "N" Word <p>"N"onsense...</p> <p>&nbsp;</p> <p><a href=""><img src="" width="600" height="397" /></a></p> <p>&nbsp;</p> <p><a href=""><em>Source:</em></a></p> <div class="field field-type-filefield field-field-image-teaser"> <div class="field-items"> <div class="field-item odd"> <img class="imagefield imagefield-field_image_teaser" width="874" height="578" alt="" src="" /> </div> </div> </div> Tue, 30 Jun 2015 17:30:13 +0000 Tyler Durden 508983 at Don't Blame Austerity: Five "Dastardly" Ways Italy Burned Through Taxpayer Money <p>It took years (after our <a href="">initial report in 2011</a>) but finally the Greeks realized that the main reason the Troika had been fleecing them all along, is that of the €227 billion in bailout funds disbursed to Greece, the amount that actually <a href="">reached the Greek population was... <strong>11%. </strong></a>The rest went back to repaying Greek creditors in some form. </p> <p><img src="" width="600" height="771" /></p> <p>&nbsp;</p> <p>This is another way of explaining why while the PIIGS countries raged against "evil austerity", their debt load as a percentage of GDP was <a href="">consistently rising year after year</a>, and has hid new all time highs as of the most recent reading.</p> <p><a href=""><img src="" width="600" height="398" /></a></p> <p>&nbsp;</p> <p>So what was really going in Europe over the past 5 years, if the debt load kept creeping higher, and yet little money was actually making its way to the broader population? </p> <p>The answer is simple: abuse of taxpayer funding, also known as fraud and corruption. And while it may come as a surprise, more European tax money has been lost to fraud in Italy than in any other European country, Greece included (perhaps because most of the free cash was already earmarked for creditor repayment). </p> <p>As Italy's <a href="">TheLocal reports</a>, the EU anti-fraud office, Italy currently has 61 open investigations into fraud involving EU funds. <strong>This means Italy has the second highest number of investigations in the EU, ranking just below Greece's neighbor to the north, Bulgaria.</strong> </p> <p>As the Local reports, fraud with EU money is commonplace in Italy, but is far from an Italian-only phenomenon. Here is a list of some of the most dastardly, or as the Italian outlet pegs it "<a href="">insane</a>" cons pulled by Italians with EU money.</p> <p><strong>1) Digitaleco's dodgy DVDs</strong></p> <p>From 1998 to 2005 a fake company known as Digitaleco received over €3 million in EU funding to produce DVDs. However, by 2005 the company plant was still missing a roof and was not connected to a waste system. Still, it had mysteriously been certified as completed by regional officials in Calabria.</p> <p>Strangely, regional authorities in Calabria made no attempts to recoup the money and subsequent raids across the country implicated a former public official in Calabria, the treasurer of the Catholic UDC party and a fundraiser for Silvio Berlusoni's Forza Italia party in the scandal...</p> <p><strong>2) A lift to nowhere</strong></p> <p>Over €2 million of EU taxpayers hard-earned cash was used to build a lift in the small Italian town of Sutera, Sicily. The lift was finished in 2012, but has never been used as the costs of running the lift were too expensive for the small town.</p> <p>Now it is feared that much of the budget may have ended up lining the pockets of local mafiosi...</p> <p><strong>3) Clean electricity? Clean money!</strong></p> <p>Italy's poorer south is a prime target for EU development funds: unfortunately it is also the nerve centre of the global mafia. Between 2007 and? 2013 the EU structural fund granted €350 million to Sicily - money local mafia were looking to get a slice of.</p> <p>Vito Nicastri used some of these funds to build up a huge empire of renewable energy on Sicily that was used as a front for the Mafia, which is suspected to have used green businesses to launder illegally earned money.</p> <p>Nicastri had over €1.2 billion euros worth of assets seized by anti-mafia police in April 2014.</p> <p><strong>4) Crime Doesn't Pay</strong></p> <p>It's not always the case that EU funds disappear in Italy - at least not forever. In 2012, Italy was ordered to repay the EU a whopping €420 million after anti-fraud investigators found evidence of foul play in the way EU funds had been used to rebuild the A3 Motorway between Salerno and Reggio Calabria.</p> <p>The A3 is symbolic of the challenges Italy faces in its war on corruption. The project has been dogged by repeated scandals. In May this year, Italian Premier Matteo Renzi declared that the motorway would be finished within a year. Construction began in 1966 - so watch this space!</p> <p><strong>5) Rocket Man goes to Napoli</strong><br />&nbsp;<br />But that's not the only time the EU has asked Italy for a refund. In 2009 the regional of Naples was forced to pony up the EU dough it had spent on an Elton John concert.<br />&nbsp;<br />Following a Brussels led investigation, Naples was ordered to repay the €720,000 of the regional development fund it had splashed out on the gig. </p> <p>EU officials stated that the money should have been used for longer term cultural projects.</p> <p>When It comes to Italy and EU money, sorry often seems to be the hardest word.</p> <p>* * *</p> <p>So, dear PIIGS citizens, while we understand you are angry that so little of the taxpayer funds meant for you reached the general public, please don't blame it on austerity - the truth is what is taking place in Europe has little to do with actual belt-tightening or spending cuts as the record (in both absolute and relative terms) debt load across Europe shows, and everything to do with your corrupt politicians and crony capitalists abusing what little funds were destined to improve your living standards.</p> <p>And if you do want to blame someone, <strong>blame your corrupt politicians:</strong> it is they who sold you all out, with or without Goldman's debt-masking FX swaps (which the ECB still refuses to probe as they will reveal Mario Draghi's direct responsibility for the imminent Greek default).</p> <p>&nbsp;</p> <div class="field field-type-filefield field-field-image-teaser"> <div class="field-items"> <div class="field-item odd"> <img class="imagefield imagefield-field_image_teaser" width="468" height="303" alt="" src="" /> </div> </div> </div> Bulgaria Corruption Creditors default Greece Italy Tue, 30 Jun 2015 17:04:38 +0000 Tyler Durden 509020 at Former Senator Slams Washington As Corrupt "Sewer", Calls For Outraged Young Americans To Revolt <p>Submitted by Mike Krieger via Liberty Blityzkrieg blog,</p> <blockquote><div class="quote_start"><div></div></div><div class="quote_end"><div></div></div><p><em><strong>On a more personal level, how can public service be promoted as an ideal to young people when this sewer corrupts our Republic? At this point in early twenty-first-century America, the greatest service our nation&rsquo;s young people could provide is to lead an army of outraged young Americans armed with brooms on a crusade to sweep out the rascals and rid our capital of the money changers, rent seekers, revolving door dancers, and special interest deal makers and power brokers and send them back home to make an honest living, that is, if they still remember how to do so.</strong></em></p> <p>&nbsp;</p> <p><em><strong>Our ancestors did not depart Europe and elsewhere to seek freedom and self-government alone. They came to these shores to escape social and political systems that were corrosive and corrupt. Two and a quarter centuries later, we are returning to those European practices. We are in danger of becoming a different kind of nation, one our founders would not recognize and would deplore.</strong></em></p> <p>&nbsp;</p> <p><strong><em>In addition to the rise of the national security state, and the concentration of wealth and power in America, no development in modern times sets us apart more from the nation originally bequeathed to us than the rise of the special interest state. There is a Gresham&rsquo;s law related to the republican ideal. Bad politics drives out good politics. Legalized corruption drives men and women of stature, honor, and dignity out of the halls of government. Self-respecting individuals cannot long tolerate a system of election and reelection so dependent on cultivating the favor of those known to expect access in return. Such a system is corrosive to the soul.</em></strong></p> <p>&nbsp;</p> <p>&ndash; From the Gary Hart article,&nbsp;<a href="">Gary Hart: America&rsquo;s Founding Principles Are in Danger of Corruption</a></p> </blockquote> <p>A former senator from Colorado, Gary Hart, has written an extremely powerful and accurate critique of the unfathomably corrupt and crony state of the U.S. government in 2015. It covers several&nbsp;very important angles, including how appalled and disgusted our founders would be at the current state of affairs. How a once great&nbsp;republic has devolved into a thieving oligarchy in&nbsp;which&nbsp;the pursuit of money at power at the expense of the public good has been elevated into something that&rsquo;s not just tolerated, but actually celebrated and encouraged amongst an&nbsp;ethics deprived status quo.</p> <p>Don&rsquo;t take it from me though, here are several of my favorite excerpts:</p> <blockquote><div class="quote_start"><div></div></div><div class="quote_end"><div></div></div><p><em>By that standard, can anyone seriously doubt that our republic, our government, is corrupt? There have been Teapot Domes and financial scandals of one kind or another throughout our nation&rsquo;s history. <strong>There has never been a time, however, when the government of the United States was so perversely and systematically dedicated to special interests, earmarks, side deals, log-rolling, vote-trading, and sweetheart deals of one kind or another.</strong></em></p> <p>&nbsp;</p> <p><em>What brought us to this? A sinister system combining staggering campaign costs, political contributions, political action committees, special interest payments for access, and, most of all, the rise of the lobbying class.</em></p> <p>&nbsp;</p> <p><em>Worst of all, the army of lobbyists that started relatively small in the mid-twentieth century has now grown to big battalions of law firms and lobbying firms of the right, left, and an amalgam of both. <strong>And that gargantuan, if not reptilian, industry now takes on board former members of the House and the Senate and their personal and committee staffs. And they are all getting fabulously rich.</strong></em></p> <p>&nbsp;</p> <p><em>Frustrated, irate discussions of this legalized corruption are met in the Washington media with a shrug. So what? Didn&rsquo;t we just have dinner with that lobbyist for the banking industry, or the teachers&rsquo; union, or the airline industry at that well-known journalist&rsquo;s house only two nights ago? Fine lady, and she used to be the chairman of one of those powerful committees. I gather she is using her Rolodex rather skillfully on behalf of her new clients. Illegal? Not at all. Just smart . . . and so charming.</em></p> <p>&nbsp;</p> <p><em>There is little wonder that Americans of the right and many in the middle are apoplectic at their government and absolutely, and rightly, convinced that the game of government is rigged in favor of the elite and the powerful. Occupiers see even more wealth rising to the top at the expense of the poor and the middle class. And Tea Partiers believe their tax dollars are going to well-organized welfare parasites and government bureaucrats.</em></p> </blockquote> <p>Never forget this Venn diagram:</p> <p><a href=""><img alt="Screen Shot 2015-06-29 at 6.50.36 PM" class="alignnone wp-image-25072" height="486" src="" width="573" /></a></p> <blockquote><div class="quote_start"><div></div></div><div class="quote_end"><div></div></div><p><em>The advent of legalized corruption launched by the Supreme Court empowers the superrich to fund their own presidential and congressional campaigns as pet projects, to foster pet policies, and to represent pet political enclaves. You have a billion, or even several hundred million, then purchase a candidate from the endless reserve bench of minor politicians and make him or her a star, a mouthpiece for any cause or purpose however questionable, and that candidate will mouth your script in endless political debates and through as many television spots as you are willing to pay for. All legal now.</em></p> <p>&nbsp;</p> <p><em>To compound the political felony, much, if not most, campaign financing is now carried out in secret, so that everyday citizens have a decreasing ability to determine to whom their elected officials are beholden and to whom they must now give special access. As recently as the 2014 election, the facts documented this government of influence by secrecy: &ldquo;More than half of the general election advertising aired by outside groups in the battle for control of Congress,&rdquo; according to the New York Times, &ldquo;has come from organizations that disclose little or nothing about their donors, a flood of secret money that is now at the center of a debate over the line between free speech and corruption.&rdquo;</em></p> <p>&nbsp;</p> <p><strong><em>Of this handful, the largest by far is WPP (originally called Wire and Plastic Products; is there a metaphor here?), which has its headquarters in London and more than 150,000 employees in 2,500 offices spread around 107 countries. It, together with one or two conglomerating competitors, represents a fourth branch of government, vacuuming up former senators and House members and their spouses and families, key committee staff, former senior administration officials of both parties and several administrations, and ambassadors, diplomats, and retired senior military officers.</em></strong></p> <p>&nbsp;</p> <p><em>WPP has swallowed giant public relations, advertising, and lobbying outfits such as Hill &amp; Knowlton and BursonMarsteller, along with dozens of smaller members of the highly lucrative special interest and influence-manipulation world. Close behind WPP is the Orwellian-named Omnicom Group and another converger vaguely called the Interpublic Group of Companies.<strong> According to Mr. Edsall, WPP had billings last year of $72.3 billion, larger than the budgets of quite a number of countries.</strong></em></p> </blockquote> <p>I&rsquo;m not sure exactly where this number came from, as I&rsquo;ve seen <a href="">numbers around $15 billion</a> thrown around, but not $72 billion.</p> <blockquote><div class="quote_start"><div></div></div><div class="quote_end"><div></div></div><p><em>With a budget so astronomical, think how much good WPP can do in the campaign finance arena, especially since the Citizens United decision. The possibilities are almost limitless. Why pay for a senator or congresswoman here or there when you can buy an entire committee? Think of the banks that can be bailed out, the range of elaborate weapons systems that can be sold to the government, the protection from congressional scrutiny that can be paid for, the economic policies that can be manipulated.</em></p> <p>&nbsp;</p> <p><em>The lobbying business is no longer about votes up or down on particular measures that may emerge in Congress or policies made in the White House. It is about setting agendas, deciding what should and should not be brought up for hearings and legislation. <strong>We have gone way beyond mere vote buying now. The converging Influence World represents nothing less than an unofficial but enormously powerful fourth branch of government.</strong></em></p> <p><em>America&rsquo;s founders knew one thing: The republics of history all died when narrow interests overwhelmed the common good and the interests of the commonwealth.</em></p> <p>&nbsp;</p> <p><em>What would our founders make of this nightmare of corruption? We only know, in Thomas Jefferson&rsquo;s case, for example, that his distrust of central government had to do with the well-founded and prescient suspicion that its largesse would go to powerful and influential interests, especially financiers, who knew how to manipulate both the government and the financial markets. In particular, Jefferson envisioned sophisticated bankers speculating in public-debt issues with some if not all the interest incurred going into their pockets.</em></p> <p>&nbsp;</p> <p><em>The scope and scale of this genuine scandal (as distinguished from vastly more mundane behavior that passes for scandal in the media) is the single greatest threat to our form of government. It is absolutely incompatible with the principles and ideals upon which America was founded. At the very least, we Americans cannot hold ourselves up to the world as the beacon of democracy so long as we permit, as long as we acquiesce in, corruption so far beyond the standards of the true republic that our government cannot be proclaimed an ideal for other aspiring nations.</em></p> <p>&nbsp;</p> <p><em>On a more personal level, how can public service be promoted as an ideal to young people when this sewer corrupts our Republic?<strong> At this point in early twenty-first-century America, the greatest service our nation&rsquo;s young people could provide is to lead an army of outraged young Americans armed with brooms on a crusade to sweep out the rascals and rid our capital of the money changers, rent seekers, revolving door dancers, and special interest deal makers and power brokers and send them back home to make an honest living, that is, if they still remember how to do so.</strong></em></p> </blockquote> <p>When a former senator accurately notes that the best thing young Americans can&nbsp;do is instigate&nbsp;a successful rebellion against the incredibly corrupt and powerful monied interests running the county into the ground, you know things are very bleak.</p> <blockquote><div class="quote_start"><div></div></div><div class="quote_end"><div></div></div><p><em>A harsh judgment? Indeed. But it is impossible to claim to love one&rsquo;s country and not be outraged at how corrupt it has become. For former senators and representatives to trade a title given them by the voters of their respective states and districts for cash is beyond shameful. It is outrageous.</em></p> <p>&nbsp;</p> <p><strong><em>&ldquo;I tremble for my country when I contemplate that God is just.&rdquo; Those words of Thomas Jefferson, enshrined on the walls of his memorial, referred to the institution of slavery. Today he might readily render the same judgment about corruption in and of the American Republic.</em></strong></p> <p>&nbsp;</p> <p><em>It is an error of serious proportion to dismiss corruption in twenty-first-century American democracy on the grounds that this has all been going on from the beginning, that boys will be boys, that politicians are always on the take. Past incidents of the violation of public ethics provide no argument fozr accepting the systemic and cancerous commercialization of modern American politics.</em></p> <p>&nbsp;</p> <p><em><strong>Our ancestors did not depart Europe and elsewhere to seek freedom and self-government alone. They came to these shores to escape social and political systems that were corrosive and corrupt. Two and a quarter centuries later, we are returning to those European practices. We are in danger of becoming a different kind of nation, one our founders would not recognize and would deplore.</strong></em></p> <p>&nbsp;</p> <p><em>Even as politicians and pundits alike pummel the fiscal deficit, we are developing an integrity deficit of mounting proportions. And one is not disconnected from the other. Because of the erosion of the integrity of our governing system, and the principles and ideals underlying it, the fiscal deficit increases. The government spending so many conservatives claim to abhor includes not only the social safety net of Roosevelt and Johnson, but also the war-making excursions of Ronald Reagan and George W. Bush. It is all government spending. And it includes favorite pork-barrel projects of every member of both houses of Congress of both political parties, and every one of those most loudly condemning &ldquo;wasteful government spending.&rdquo; Those projects are produced by the lobbying interests that raise money for those members of Congress in direct proportion to their effectiveness at bringing government-financed projects to their states and districts. By definition, if it is a project in my state or district, it is not wasteful.</em></p> <p>&nbsp;</p> <p><em>We were not created to be like other nations. We were created as an alternative to monarchy, aristocracy, oligarchy, and corrupt political systems. The more we follow the easy path, the one paved for the benefit of the wealthy and powerful, the more we stray from our originally intended purpose and the more we lose our unique purpose for existence.</em></p> <p>&nbsp;</p> <p><em>In addition to the rise of the national security state, and the concentration of wealth and power in America, no development in modern times sets us apart more from the nation originally bequeathed to us than the rise of the special interest state. There is a Gresham&rsquo;s law related to the republican ideal. Bad politics drives out good politics. Legalized corruption drives men and women of stature, honor, and dignity out of the halls of government. Self-respecting individuals cannot long tolerate a system of election and reelection so dependent on cultivating the favor of those known to expect access in return. Such a system is corrosive to the soul.</em></p> </blockquote> <p><em><span style="text-decoration: underline;"><strong>As bad as things are, the fact a former senator is not only aware of the problem, but is willing to publicly write a scathing article condemning it, is ultimately a very good&nbsp;thing.</strong></span></em></p> <div class="field field-type-filefield field-field-image-teaser"> <div class="field-items"> <div class="field-item odd"> <img class="imagefield imagefield-field_image_teaser" width="213" height="194" alt="" src="" /> </div> </div> </div> Corruption national security New York Times Omnicom White House Tue, 30 Jun 2015 16:42:45 +0000 Tyler Durden 509019 at Dow, S&P Give Up Last-Minute-Greek-Deal Dead-Cat-Bounce Gains <p>Shocked...</p> <p>&nbsp;</p> <p><a href=""><img src="" width="600" height="555" /></a></p> <p>&nbsp;</p> <p><em>Charts: Bloomberg</em></p> <div class="field field-type-filefield field-field-image-teaser"> <div class="field-items"> <div class="field-item odd"> <img class="imagefield imagefield-field_image_teaser" width="828" height="766" alt="" src="" /> </div> </div> </div> Tue, 30 Jun 2015 16:33:56 +0000 Tyler Durden 509018 at Chart Of The Day: Is China Sending A Warning? <p><a href=""><em>Submitted by Lance Roberts via STA Wealth Management</em></a>,</p> <p>In <a href="">yesterday&#39;s discussion</a> on the technical underpinnings of the market, I pondered the question of whether Greece was really the primary issue of concern for investors.</p> <blockquote><div class="quote_start"><div></div></div><div class="quote_end"><div></div></div><p>&quot;Whether, or not, a Greek exit from the Eurozone or a potential debt default is<em> &quot;the thing</em>&quot; that sparks the next major correction in the markets is unknown. Historically, such a widely <em>&quot;known&quot;</em> event is generally already factored into the markets and has much less of an impact when that event eventually comes to fruition. As<a href=""> Art Cashin suggested</a> this morning:</p> <p>&nbsp;</p> <p>&#39;I think China may be more important than Greece. Stick with the drill &ndash; <strong>stay wary, alert and very, very nimble.&#39;</strong>&quot;</p> </blockquote> <p>I think that Art may be onto something. While Greece is indeed an issue, and <a href="">did confirm</a> that they would default on their debt payment to the IMF, this is something that has been long in the making. China, on the other hand, is very a different story.</p> <p>Today&#39;s chart(s) of the day is a look at the history of <em>&quot;bubbles and busts&quot;</em> of the Chinese Shanghai index.</p> <p><a class="highslide ageent-ru" href="" target="_blank" title="China-Index-063015"><img alt="China-Index-063015" class="i_want_img5" src="" style="width: 600px; height: 362px;" /></a></p> <p>Emerging markets have a long history of speculative investment bubbles and bursts. Whether it has been South American debt or emerging market stocks, they speculative push to garner higher yields or returns has always ended up badly.</p> <p>As shown in the chart above, the first bubble and burst occurred in 2001. It took almost 4.5 years before that particular investment bubble was unwound.</p> <p>The second bubble began in early 2006 and after a blistering run popped in mid-2007. Almost 7-years later that bear market ended as the fuse was lit for a new surge to record highs over the last several months.</p> <h2><u><strong>STOP</strong></u></h2> <p>Take a very close look at the chart above as there is something eerily familiar about it.</p> <p>As I stated, throughout history emerging markets have gone through a continuous series of booms and busts driven primarily by speculative greed. Whether it was chasing higher yielding debt instruments or just hopes of more lucrative stock market returns, these chases occurred very late in the market cycle when returns became lean in more mature markets.</p> <p>The chart below shows why the chart above is so familiar.</p> <p><a class="highslide ageent-ru" href="" target="_blank" title="China-SP500-Index-063015"><img alt="China-SP500-Index-063015" class="i_want_img5" src="" style="width: 601px; height: 358px;" /></a></p> <p>The boom/bust cycle of the Chinese Shanghai index has a relationship to the S&amp;P 500 index. The first bubble in China occurred as the <em>&quot;</em>&quot; bubble in the U.S. moved into a full speculative frenzy.</p> <p>After the bursting of that bubble, money primarily stayed domestically oriented until late in the <em>&quot;real estate/credit&quot;</em> bubble. At that late stage, speculation had once again reached the<em> &quot;irrational exuberance</em>&quot; phase as beliefs of ongoing stable economic growth, and the rise of emerging market dominance filled the airwaves. In just a few short months, those dreams were rapidly shattered as economic, and market realities, came to the fore.</p> <p>Following the <em>&quot;financial crisis,&quot;</em> money once again stayed focused primarily in domestic indices as the Federal Reserve flooded the system with liquidity to boost asset prices in hopes of stabilizing a weak economic backdrop. However, as the Federal Reserve ended its last liquidity program, money flooded into China once again chasing liquidity and hopes of higher returns.</p> <p>The recent plunge in the Chinese market may, or may not be, the sound of the latest bubble popping as I write this missive. However, there are two very important warnings be given here:</p> <blockquote><div class="quote_start"><div></div></div><div class="quote_end"><div></div></div><p>1) The current bubble will eventually end, just as the last two have, in a rather disastrous plunge for those chasing returns.</p> <p>2) The plunge will also likely be coincident with an unwinding of excesses in the S&amp;P 500.</p> </blockquote> <p>The current belief is that the economic environment is stable, and growing enough, to support and foster continued expansion in domestic markets for the foreseeable future. Of course, that was also the belief at the peak of the previous two bubbles as well.</p> <p>I think that Art Cashin could very well be right. Greece may not be <em>&quot;the thing.&quot; </em>We need to keep a close eye on China as it may well be the leading indicator for what happens next in the U.S.</p> <p>*&nbsp; *&nbsp; *</p> <p>But then again there&#39;s this from Goldman Sachs this morning:</p> <blockquote><div class="quote_start"><div></div></div><div class="quote_end"><div></div></div><p><em><u>Although Chinese equities have taken quite a hit, <strong>the manner in which they have fallen seems bullish in nature</strong>.</u></em></p> </blockquote> <p>WTF!?</p> Art Cashin Bear Market China default Eurozone Federal Reserve Goldman Sachs goldman sachs Greece Irrational Exuberance Real estate Tue, 30 Jun 2015 16:15:26 +0000 Tyler Durden 509017 at Fiat Faith Faltering? Bitcoin Surges 12% Post-Greferendum Announcement <p>Like it or not, Bitcoin is an alternative to the fiat fraud money that is the backbone of the status quo. <strong>Since Tsipras announced&nbsp; the Greferendum, Bitcoin has surged 12%</strong> as perhaps - <a href=""><em>away from the cornered and manipulated precious metals markets</em></a> - faith in fiat is faltering...</p> <p>&nbsp;</p> <p><a href=""><img src="" width="600" height="782" /></a></p> <p>&nbsp;</p> <p><a href=""><em>Source:</em></a></p> <div class="field field-type-filefield field-field-image-teaser"> <div class="field-items"> <div class="field-item odd"> <img class="imagefield imagefield-field_image_teaser" width="1114" height="1452" alt="" src="" /> </div> </div> </div> Bitcoin Precious Metals Tue, 30 Jun 2015 15:59:07 +0000 Tyler Durden 509016 at NATO Member Turkey Breaks Ranks: Slams EU Austerity, Offers Greek Aid <p>While perhaps not on the scale of China or Russia assistance, Turkey has thrown its hat into the Troika-Greece farce by offering financial assistance to its embattled neighbor. <a href="">As ekthimerini reports, </a><em>"<strong>We are ready to help Greece survive its economic crisis</strong> with cooperation in tourism, energy, trade,"</em> Turkish Prime Minister Ahmet Davutoglu said and Turkey's left-wing parties showed solidarity by adding, <strong><em>"we believe that apart from imposing austerity policies on peoples of Europe, there can be more reasonable agreements."</em></strong> While no aid has been asked fro Turkey says it is ready to evaluate options.</p> <p><a href=""><em>As ekathimerini reports,</em></a></p> <blockquote><div class="quote_start"> <div></div> </div> <div class="quote_end"> <div></div> </div> <p><strong>Turkey on Tuesday said it was "ready to help" Greece out of its escalating financial crisis as its embattled neighbor edged closer to default.</strong></p> <p>&nbsp;</p> <p>"We are ready to help Greece survive its economic crisis with cooperation in tourism, energy, trade," Turkish Prime Minister Ahmet Davutoglu said in the capital, Ankara.</p> <p>&nbsp;</p> <p><strong>"We want Greece to be strong...</strong> Therefore Turkey will be positive toward any proposal for cooperation," he said in televised comments.</p> <p>&nbsp;</p> <p>Davutoglu added that <strong>a Turkish delegation would travel to Greece for a high-level cooperation meeting</strong> as soon as possible to consider joint steps on the financial crisis.</p> <p>&nbsp;</p> <p>...</p> <p>&nbsp;</p> <p>Turkish Economy Minister Nihat Zeybekci said on Monday <strong>if an official proposal for financial aid is made by Greece, "we will evaluate it."</strong></p> <p>&nbsp;</p> <p>Turkey's left-wing and Pro-Kurdish Peoples' Democratic Party (HDP) also issued a message of solidarity with Greece, saying: "We are together with the Greek people and their government in their struggle for justice, equality and democracy and against austerity."</p> <p>&nbsp;</p> <p><strong>"We believe that apart from imposing austerity policies on peoples of Europe, there can be more reasonable agreements, which will be acceptable,"</strong> said the co-chairs of HDP, considered the Turkish equivalent of Greece's ruling SYRIZA party.</p> </blockquote> <p>It seems Greece has friends after all, and as we 'joked' previously:</p> <blockquote class="twitter-tweet" lang="en"><p dir="ltr" lang="en">Greece really just needs a DIP not bigger than $10 billion to last it 6 months. Should be easily 5-6x oversubscribed in 24 hours</p> <p>— zerohedge (@zerohedge) <a href="">June 28, 2015</a></p></blockquote> <script src="//"></script><p>Perhaps Turkey will provide the DIP?</p> <p>Meanwhile, work goes on with other options... <span style="text-decoration: underline;"><strong>Greece hasn’t sought aid from Russia, support wouldn’t hurt, </strong></span>Energy Minister Panagiotis Lafazanis tells in intw with Russia’s state TV channel Rossiya 24.</p> <ul> <li><strong>Lack of money from EU isn’t end of world</strong></li> <li>Greece expects EU to be reasonable, sees too much pressure from Brussels now</li> <li>Lafazanis reiterates that accord with Russia on gas link isn’t aimed at Europe</li> <li><strong>Greece might get “hundreds of millions of euros” from Russian gas transit after link starts in 2019</strong></li> </ul> <div class="field field-type-filefield field-field-image-teaser"> <div class="field-items"> <div class="field-item odd"> <img class="imagefield imagefield-field_image_teaser" width="329" height="266" alt="" src="" /> </div> </div> </div> China default Greece Turkey Tue, 30 Jun 2015 15:36:25 +0000 Tyler Durden 509015 at Malvinas 2.0? Argentina Plans Asset Seizure Of Falkland Oil Companies <p><a href=""><em>Submitted by Andy Tully via</em></a>,</p> <p>Is it just election fever, <strong><em>or is Argentina serious about reclaiming the Falklands Islands?</em></strong></p> <p><strong>Presidential elections loom</strong> in the country in October, so perhaps it&rsquo;s not surprising that a Lilian Herraez, a federal judge in Tierra del Fuego, Argentina&rsquo;s southernmost region, <a href="">ordered the seizure of $156 million in property and bank holdings</a> of oil drilling companies, including Noble Energy of the United States.</p> <p><u><strong>The government in Buenos Aires said on June 27 that the other targets of asset seizures were Edison International of Italy and three British-based companies, Falkland Oil and Gas Ltd., Premier Oil Plc and Rockhopper Exploration Plc.</strong></u></p> <p>Reuters <a href="">quoted a source</a> which it said was knowledgeable of the situation as saying none of these four companies tends to have financial holdings in Argentina or to work in Argentine waters. But a statement by prosecutors said Noble Energy &ldquo;has a local office registered in Argentina,&rdquo; and that its assets there would be frozen.</p> <p><em><strong>&ldquo;The [Argentine] foreign ministry will be notified of the court order so that by diplomatic means and in compliance with international treaties it can be carried out,&rdquo;</strong></em> the statement said.</p> <p>The Falklands, an archipelago within 450 miles of the Argentine mainland, have been under British rule continuously since 1833. Buenos Aires still claims the islands, which they call the Malvinas, as its territory, although a majority of the islands&rsquo; approximately 3,000 residents say they prefer to remain under British rule.</p> <p><span style="font-size: 1em; line-height: 1.6em;"><strong>In 1982, Argentina&rsquo;s military dictatorship tried to seize the Falklands from Britain, but were beaten back during a brief war. </strong>The matter was considered settled for nearly 30 years when oil deposits were discovered in the vicinity of the archipelago, due east of Tierra del Fuego. <a href="">Drilling in the waters around the islands began in 2010</a> over the objections of the Argentine government.</span></p> <p>The prosecutors had asked Herraez on June 1 to <strong>fine the energy companies and to order the seizure of five ships, a drilling platform and what is known as a floating dam</strong>. They argued that all these assets had been used to conduct illegal exploration and exploitation of Argentine waters.</p> <p>In her order, Herraez granted a request by prosecutors that she order the energy companies to end exploration of Argentine waters for <strong>fear of a negative environmental impact on them</strong>.</p> <p>The Buenos Aires Herald quoted government sources as saying they <strong>doubted Herraez&rsquo;s order could be enforced because the judge&rsquo;s jurisdiction doesn&rsquo;t include the Falklands and because that jurisdiction doesn&rsquo;t extend to the countries in which the companies are based.</strong></p> <p>Government prosecutors, however, say they believe the judge&rsquo;s ruling will carry weight. &ldquo;I strongly believe the judge&rsquo;s resolution is going to have a practical effect,&rdquo; said one, Carlos Gonella, the head of the Attorney General&rsquo;s Economic Crime and Money Laundering Unit. He didn&rsquo;t elaborate.</p> <p><u><strong>But will oil drilling off the Falklands remain a political issue in Argentina once the October election are past?</strong></u></p> <div class="field field-type-filefield field-field-image-teaser"> <div class="field-items"> <div class="field-item odd"> <img class="imagefield imagefield-field_image_teaser" width="276" height="185" alt="" src="" /> </div> </div> </div> Archipelago Italy None Reuters Tue, 30 Jun 2015 15:10:33 +0000 Tyler Durden 509014 at Europe Will Soon Impose Border Controls <p>Europe is imposing capital controls&hellip;&nbsp; next up will be border controls.</p> <p>&nbsp;</p> <p>How do we know? Because they already suggested this before.</p> <p>&nbsp;</p> <p>Back in March of 2012, when the EU Crisis first began to spin out of control, then Prime Minister of France Nicolas Sarkozy openly called for the renegotiation of the Schengen Treaty: the treaty that established the 26-nation EU as a &ldquo;borderless&rdquo; entity in which individuals could move from one country to another with little difficulty and which also made trade among EU members easier.</p> <p>&nbsp;</p> <p>France was not alone either. A few months later, both France and Germany proposed imposing border controls in June of that same year.</p> <p>&nbsp;</p> <p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <strong>A Vote of No Confidence in Europe</strong></p> <p>&nbsp;</p> <p style="margin-left:.5in;"><strong>Germany and France&#39;s joint proposal to allow Schengen-zone countries to temporarily reintroduce border controls</strong> as a means of last resort might sound harmless. But doing so would damage one of the strongest symbols of European unity and perhaps even contribute to the EU&#39;s demise.</p> <p style="margin-left:.5in;">&nbsp;</p> <p style="margin-left:.5in;">Germany and France are serious this time. During next week&#39;s meeting of European Union interior ministers, the two countries plan to start a discussion about reintroducing national border controls within the Schengen zone. <strong>According to the German daily Süddeutsche Zeitung, German Interior Minister Hans-Peter Friedrich and his French counterpart, Claude Guéant, have formulated a letter to their colleagues in which they call for governments to once again be allowed to control their borders as &quot;an ultima ratio&quot; -- that is, measure of last resort -- &quot;and for a limited period of time.&quot; They reportedly go on to recommend 30-days for the period</strong>.</p> <p style="margin-left:.5in;">&nbsp;</p> <p style="margin-left:.5in;"><a href=""></a></p> <p>&nbsp;</p> <p>Why border controls? Well in truth, it was all about the money&hellip; specifically, <strong><u>physical cash.</u></strong> As we&rsquo;ve noted before&hellip; with the vast majority of the global financial system based on <em>digital</em> money&hellip; the minute a significant number of depositors try to move their money OUT of a bank and INTO physical cash, <strong><u>the whole system can collapse.</u></strong></p> <p>&nbsp;</p> <p>Again, Europe was ahead of the US in terms of proposing these terms. The below article dated from 2012 outlines the plan to limit cash withdrawals, shut down ATMs, and impose border controls to stop people from fleeing with their capital.</p> <p>&nbsp;</p> <p>&nbsp;</p> <p><strong>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Exclusive: EU floats worst-case plans for Greek euro exit: sources</strong></p> <p>&nbsp;</p> <p style="margin-left:.5in;"><strong>European finance officials have discussed as a worst-case scenario limiting the size of withdrawals from ATM machines, imposing border checks and introducing capital controls in at least Greece should Athens decide to leave the euro&hellip;</strong></p> <p style="margin-left:.5in;">&nbsp;</p> <p style="margin-left:.5in;"><strong>As well as limiting cash withdrawals and imposing capital controls, they have discussed the possibility of suspending the Schengen agreement, which allows for visa-free travel among 26 countries, including most of the European Union.</strong></p> <p style="margin-left:.5in;">&nbsp;</p> <p style="margin-left:.5in;"><a href=";date=20120611&amp;id=15208663">;date=20120611&amp;id=15208663</a></p> <p>&nbsp;</p> <p>What are the key takeaways from this?</p> <p>&nbsp;</p> <p>1)&nbsp;&nbsp; When the next crisis hits, the Powers That Be are only too happy to let the rule of law will go out the window.</p> <p>&nbsp;</p> <p>2)&nbsp;&nbsp; The biggest problem they face is STOPPING people from moving their money into physical cash.</p> <p>&nbsp;</p> <p>3)&nbsp;&nbsp; To stop #2, capital controls, border controls, and even a CARRY taxes (<a href="mailto:">read here for more on this</a>) will be imposed.</p> <p>&nbsp;</p> <p>The next round of the great crisis is approaching. 2008 was A Crisis&hellip; what&rsquo;s begun is THE Crisis.</p> <p>&nbsp;</p> <p>If you&#39;ve yet to take action to prepare for this, we offer a <strong>FREE</strong> investment report called the <strong><em>Financial Crisis &quot;Round Two&quot; Survival Guide </em></strong>that outlines simple, easy to follow strategies you can use to not only protect your portfolio from it, but actually produce profits.</p> <p>&nbsp;</p> <p>We made <u>1,000 copies</u> available for FREE the general public.</p> <p>&nbsp;</p> <p>As we write this, <strong><u>there are less than 50 left.</u></strong></p> <p>&nbsp;</p> <p>To pick up yours, swing by&hellip;.</p> <p><a href=""></a></p> <p>&nbsp;</p> <p>Best Regards</p> <p>&nbsp;</p> <p>Phoenix Capital Research</p> <p>&nbsp;</p> <p>&nbsp;</p> European Union France Germany Greece Nicolas Sarkozy Tue, 30 Jun 2015 14:55:48 +0000 Phoenix Capital Research 509013 at