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Ukraine May Or May Not Have A Crisis Deal As S&P Warns Of Sovereign Default

Tyler Durden's picture




 

Several hours ago, and a day after the latest truce lasted about a few minutes before the the shooting returned and resulted in the bloodiest day of Ukraine's protests so far, there was hope that the situation in Ukraine may finally be getting resolved, when Ukraine's President Viktor Yanukovich announced plans for early elections in a series of concessions to his pro-European opponents. As Reuters reported earlier, Russian-backed Yanukovich, under pressure to quit from mass demonstrations in central Kiev, promised a national unity government and constitutional change to reduce his powers, as well as the presidential polls. He made the announcement in a statement on the presidential website without waiting for a signed agreement with opposition leaders after at least 77 people were killed in the worst violence since Ukraine became independent 22 years ago. This comes in the aftermath of S&P's announcement overnight that the Ukraine will default in absence of favorable changes.

So is this the favorable change that everyone has been expecting. Nope.

First, it was Russia's turn to remind everyone that it is Russia's decision whether or not it will allow the nations that has the bulk of its European gas pipelines crossing its territory to leave its sphere of influence. To wit, Russia announced that it plans to wait before issuing additional financial support to Ukraine’s govt under $15b package, FinMin Anton Siluanov says in interview in Hong Kong, adding that Ukraine’s central bank may be wasting intl reserves defending hryvnia. Almos as if Russia would like the Ukraine to become insolvent and thus even more dependent on its good graces.

And then it was Europe's turn. As WSJ reported, Polish Prime Minister Donald Tusk told reporters that "A lack of credibility will hang over all negotiations with Yanukovych’s participation. It seems the atmosphere in Kiev, especially after the death of so many people, may prompt the people in the Maidan to say: ‘We won’t discuss anything anymore with Yanukovych’.… The situation is changing so dramatically that this [deal] doesn’t necessarily need to be accepted by the Maidan, which considering thousands of people there make it the main reference point in Ukraine. … It’s too early for optimistic conclusions.”

He also said Poland’s efforts in Ukraine are an “investment in our security.” “It seems an increasing number of Poles understand that for a secure Poland an independent Ukraine is needed,” he said.

“It would be naive to assume Yanukovych has any good will—there’s nothing behind him but the wall. I don’t know anyone in the world who could say he trusts President Yanukovych. …

“I understand people in the Maidan who say ‘We don’t trust this man’ and that his departure is a condition for this deal. Those people need to be understood—bodies of people killed the other night are still there.

“But in order not to jeopardize this effort, in spite of myself I’m saying: ‘President Yanukovych should be at the table.’”

It was unclear as of this moment whether Yanukovich was at the table but what is clear is the following:

  • UKRAINE PACT SIGNING DELAYED, WSJ SAYS, CITING DIPLOMATS
  • GERMAN, POLISH MINISTERS RETURN TO MEETING W/UKRAINE PRESIDENT

Did they take him out?

And some more details from Dow Jones:

  • Signing of Anticrisis Pact in Ukraine Delayed — Diplomats and Officials
  • Ukraine Opposition Leaders, EU Diplomats in Talks With Protesters on Pact Terms
  • Polish PM Tusk: Some Protesters Seeking Immediate Yanukovych Resignation
  • Poland’s Tusk: “There’s Nothing Behind (Yanukovych) but the Wall”
  • Poland’s Tusk: “In Spite of Myself, I’m Saying Yanukovych Should Be at the Table”

In other words, no deal, as the confusion and escalation will go on, until either a CIA-installed, pro-Western puppet government is installed (with the aid of said West of course - see Victoria Nuland leaked phone conversation), or until the Ukraine taps out and demands unconditional help from Putin.

At this point there does not appear to be a middle ground.

Ukrainian lawmakers scuffle in the country's Parliament after the speaker
delayed debate on a resolution to reduce the powers of President Viktor
Yanukovych.
- Reuters

 

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Fri, 02/21/2014 - 09:06 | 4461358 RSloane
RSloane's picture

Oh dear, oh dear.......timing is everything.

Fri, 02/21/2014 - 09:12 | 4461365 fonzannoon
fonzannoon's picture

they should have stuck to the safe stuff like Puerto Rico. 

talk about reaching for yield.....

Fri, 02/21/2014 - 09:23 | 4461388 RSloane
RSloane's picture

They leaned a little too far off the horse trying to grab the brass ring. I read an article somewhere yesterday that claimed foreign capital into the Ukraine must be continued because without it, the Ukraine would completely descent into financial chaos and widespread starvation would ensue. So really, they were doing it for the 'little guy'. How noble of them.

Fri, 02/21/2014 - 09:27 | 4461400 fonzannoon
fonzannoon's picture

It's interesting that this time around high yield corporate debt is hanging in and it's the sovereigns that are blowing out. 

Fri, 02/21/2014 - 09:41 | 4461425 RSloane
RSloane's picture

Yup. At this point its too late for the corporate bow out. I guess if you keep repeating "this was a sound investment, this was a sound investment" you can convice yourself of anything. What can they do now? They have to wait this out or look incredibly stupid or grossly irresponsible.

Fri, 02/21/2014 - 09:44 | 4461434 fonzannoon
fonzannoon's picture

This can all be solved with a mandatory Myra that is split between TLT and SPY depending on risk tolerance. 

Then we can finally reach our true potential.

http://www.youtube.com/watch?v=h1BQPV-iCkU

Fri, 02/21/2014 - 11:29 | 4461864 Truthseeker2
Truthseeker2's picture

"ANSWER:  These US agencies and their European counterparts, when colluding to trigger a revolution for the purposes of regime change, have so finely tuned the implementation of the HEGELIAN DIALECTIC that they are still virtually unstoppable." 

UKRAINE: Another CIA-Coordinated Color Revolution In Progress

.

http://stateofthenation2012.com/?p=3733

Fri, 02/21/2014 - 12:10 | 4461987 LMAOLORI
LMAOLORI's picture

 

 

"they should have stuck to the safe stuff like Puerto Rico. "

 

Speaking of Puerto Rico lol 

 

Puerto Rico looks to be yielding to hedge-fund pressure

 


Puerto Rico looks ready to cave to hedge-fund demands that it waive sovereign immunity to get a new $3.5 billion financing done, officials indicated in a webcast Tuesday.

And right on cue...

Puerto Rico Statehood Proposed: Will US Flag Need A 51st Star?

We already bailed out foreign capitalists there but it's never enough!

The Obama Administration's Backdoor Bailout Of Puerto Rico

'Backdoor bailout' boosts Puerto Rico's revenues

Fri, 02/21/2014 - 09:02 | 4461347 NEOSERF
NEOSERF's picture

Once you've been batoned and shot at, it is a little hard to go back to your couch to eat Doritos waiting for the diplomatic game to get you nothing.  It is also hard for the opposition leaders to allow their advantage on the street to dissipate, thereby losing all their power which then allows those in power to put them in jail. 

Fri, 02/21/2014 - 09:17 | 4461371 BandGap
BandGap's picture

Ukraine reminds me of the cartoon where one mouse has it's head caught in the trap and the other mice are lining up to drill him in the ass.

Fri, 02/21/2014 - 09:59 | 4461475 smlbizman
smlbizman's picture

is that on adult swim?

Fri, 02/21/2014 - 09:18 | 4461372 Urban Redneck
Urban Redneck's picture

The "opposition" leaders are damaged goods, thanks to the ineptitude of the US State Dept. Who knows how much more legitimate dirt the intelligence services actually have, and how much more they have been able to manufacture through "enhanced interrogation" - either way it's enough to put them all before a firing squad or incarcerate them for life even with a "transparent and open" judicial system, much less what actually exists in Ukraine.

So how many "protester" lives are the leadership/(pawns of the real players) willing to sacrifice for a surrender that allows them to walk away relatively unscathed?

And what nutcase in the EUroAsylum though it would be wise to send a Polack into Ukraine when missile bases and the survival of the Ukrainian political elite are at stake?

Fri, 02/21/2014 - 09:03 | 4461351 MeMongo
MeMongo's picture

Seems like President Yankitbitch should keep his kevlar undies handy! Images of last days of Gadaffi come to mind.

Fri, 02/21/2014 - 09:03 | 4461352 jubber
jubber's picture

So what French and German Banks bought the Sovereign bonds? the usual suspects...BNp Soc Gen Cnca & Deutsche & Commerzbank and I guess Unibank....

Fri, 02/21/2014 - 09:05 | 4461353 magpie
magpie's picture

Great buy...like Tsarist bonds.

Fri, 02/21/2014 - 10:01 | 4461356 One And Only
One And Only's picture

The only entity that can secure their liberty is the citizens.

When you hear a politician wanting to restrict the right to bear arms, just remember the government doesn't protect the liberty of people they can only usurp it. It is the responsibility of the people to preserve their rights.

When the government reigns down sniper fire or marches you to concentration camps remember....it's the guns that kill, it's the free press that engenders radicalism, it's the right to privacy that endangers people....or so the government will tell you.

Just remember history. Governments are dangerous, not citizens.

Fri, 02/21/2014 - 10:03 | 4461491 muleskinner
muleskinner's picture

You can't write words like that.

Now cut it out right now.

Sheeple can't be free and you know it.

Fri, 02/21/2014 - 09:08 | 4461362 Johnny Cocknballs
Johnny Cocknballs's picture

I predict a riot...

IMF riot...

or, you know... more of them....

Fri, 02/21/2014 - 09:10 | 4461363 youngman
youngman's picture

I hope the Swiss banks that are hiding the President and his sons money..has the balls to give it back to the Ukraine people.....it was stolen by power and should be returned...but I doubt it ever wll..bankers will never do that...corrupt politicians should all lose it..and lose it all

Fri, 02/21/2014 - 09:23 | 4461390 Urban Redneck
Urban Redneck's picture

The Swiss banks are generally the first to seize funds (Egypt, Libya, etc). I would be more concerned about US institutions like JPM & GS who facilitate the overthrow of governments and oppression of peoples so that Customer/Muppet "deposits" can disappear into their off-balance sheet entities (see examples above).

Fri, 02/21/2014 - 09:28 | 4461401 negative rates
negative rates's picture

Move it or lose it I say.

Fri, 02/21/2014 - 09:19 | 4461379 Fíréan
Fíréan's picture

Favorable changes as requested  by the IMF and rebuked by the present goverrnent as being unacceptable, not being in the interests of the Ukraine people ( "the extremely harsh conditions" of an IMF loan , see link) was where things were back last year  on 20th november, 2013.

 

 

https://en.wikipedia.org/wiki/EuroMaidan#Initial_causes

 

http://www.nytimes.com/2013/11/23/world/europe/ukraine-blames-imf-for-collapse-of-accord-with-european-union.html?_r=0

Fri, 02/21/2014 - 09:20 | 4461380 Greshams Law
Greshams Law's picture

Good thing I have my money with Jum P Morgan. Trying to get my banker on the phone, but it just keeps ringing. I'll just be patient.

Fri, 02/21/2014 - 09:22 | 4461385 CuttingEdge
CuttingEdge's picture

Ukraine is strategically essential to Russia.

Now Putin has been taking lumps on the sidelines (probably because of the Olympics) while EU officials have been marching around the Ukraine like they already own the place...

Polonium Vlad is a nasty ruthless unforgiving bastard (gotta respect him though, unlike that sad sack of shit in the White House), and if I were Ashton and any other EU official dipping their mittens in this ogre's pie, I'd be carrying a geiger counter in future.

Putin always gets even...

Fri, 02/21/2014 - 09:35 | 4461414 El Tuco
El Tuco's picture

Fuck Putin, nothing a noose around his neck won't fix...besides everything you see from this guy is desperation. Russian population sinking, average life expectancy of a Russian male is 55 years of age. Alcoholism rampant. All they have is their oil, nothing else and once the House of Saud and Friends drive the price of crude to 50 USD a barrel Russia will be on its knees.

It will give the people a chance at regime change...

Fri, 02/21/2014 - 10:07 | 4461502 Son of Captain Nemo
Son of Captain Nemo's picture

All they have is their oil, nothing else and once the House of Saud and Friends drive the price of crude to 50 USD a barrel Russia will be on its knees.

Yeah Tucus.

They'll be buying it all in USD.  Keep telling yourself how well that's working out for the House of Saud these days!

Me I'd rather take my losses in the short term and go long in Yuan and Rubles.

Fri, 02/21/2014 - 09:39 | 4461422 rsnoble
rsnoble's picture

I don't think defaults are allowed are they?  I think they'd nuke a country out of existence before they'd allow a default.

Fri, 02/21/2014 - 09:45 | 4461435 disabledvet
disabledvet's picture

Ukraine demands unconditional help from Russia? Bwhahahahaha. "Demand"? With "Yanukovich as the country's Savior"? This reporting is delusional...a vestige of an Age that ceased to exist 200 years ago.

"Little Russia." That sums up this situation perfectly. How "quaint" I imagine...people fighting for their historical identity and everyone around "this" acting like it doesn't even exist...that indeed "this is to be the Great Battle fought between The Europe and the Rus yet again."

probably true...but we'll see.
Be interesting to see where the Austrians come down on this.

Fri, 02/21/2014 - 10:17 | 4461534 RaceToTheBottom
RaceToTheBottom's picture

What do the banksters say?

Isn't that what determines a countries course of action?

Fri, 02/21/2014 - 10:22 | 4461571 Dr. Bonzo
Dr. Bonzo's picture

Surely the globalists won't let that happen. Take popular violent demonstrations with national default and you basically have the formula for government collapse. No way Putin is going to allow a Western-friendly "democracy" right on Moskow's doorstep. No friggin way. Russian tanks will be in the streets of Kiev before that happens.

Fri, 02/21/2014 - 10:38 | 4461668 thestarl
thestarl's picture

I certainly don't like Putin{and think even less of Obama}but this is Putins moment of truth maybe even the Russians own Cuban missile crisis.

Come on Vlad show us you gotz some balls man.

Fri, 02/21/2014 - 10:23 | 4461590 RaceToTheBottom
RaceToTheBottom's picture

I would think that Slovakia is pretty happy they have become aligned with the EU and solidified their position as the low cost auto producer in Europe.  Slovakia is where the gas line from Ukraine flow into EU land.

This does put more pressure on Ukraine as mother Russia no longer has two countries separating herself from the hords of the EU.

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