Ukraine

Ukraine is on the brink of civil war. In the country, there is chaos and anarchy.

The life, the security and the rights of people, particularly in the southeast part in Crimea are being threatened.

So under the influence of Western countries, there are open acts of terrorism and violence. People are being persecuted for language and political reasons.

So in this regard, I would call on the President of Russia, Mr. Putin, asking him to use the armed forces of the Russian Federation to establish legitimacy, peace, law and order, stability, and defending the people of Ukraine.

As the big questions surrounding the future of the Ukraine crisis persist, the countries neighboring the former communist nation, and especially the Baltic states which are members of NATO, are asking for safeguards should Russian ambitions end up just a little too big to be contained solely by the Ukraine. As a result, the WSJ reports, they are considering calling for a greater North Atlantic Treaty Organization presence in their countries “if the situation gets worse” in the Ukraine, Ojars Kalnins, the chairman of the foreign-affairs committee of the Latvian parliament, said Monday. Mr. Kalnins said that a worsening of the Ukraine crisis “such as an outright invasion” of areas outside Crimea would present a threat to all of Russia’s neighbors, including the Baltic states–which are members of NATO. Such an expanded conflict should be reason for NATO to “bring extra military support to the Baltic region as a safeguard.”

Welcome to the era of failed states. We’ve already seen plenty of action around the world and we’re going to see more as resource and capital scarcities drive down standards of living and lower the trust horizon. The world is not going in the direction that Tom Friedman and the globalists thought. Anything organized at the giant scale is now in trouble, nation-states in particular.  The USA is not immune to this trend, whatever we imagine about ourselves for now.

After once again clearly delineating that Russian "costs" are set to surge, and hopefully he means more than just the drop in the Micex and its artificial, paper wealth effect which Putin couldn't care less about as long as crude is soaring...

• OBAMA SAYS INCIDENT WITH UKRAINE WILL BE ‘COSTLY’ FOR RUSSIA

... the US president has laid out his latest tactic:

• OBAMA SAYS HE'S CONSIDERING ECONOMIC STEPS TO ISOLATE RUSSIA

And the punchline:

• OBAMA URGES CONGRESS TO PROVIDE PACKAGE OF ASSISTANCE QUICKLY TO UKRAINIAN PEOPLE; SAYS SHOULD NOT BE PARTISAN ISSUE ON CAPITOL HILL

Maybe time to send Obamacare to Kiev: so many young, strapping participants just waiting to sign up? Or maybe it just time to raise minimum wages in the Ukraine while giving the local population the safety of mind that comes with investing in the "no risk, guaranteed return" MyRA.

Minutes after Russia denied it had issued an ultimatum to the Ukraine navy, Ukraine's acting president has just denied the denial.

• UKRAINE'S TURCHYNOV SAYS SHIPS THREATENED IF ARMS NOT LAID DOWN
• UKRAINE'S TURCHYNOV SAYS SHIPS THREATENED WITH SEIZURE
• UKRAINE'S TURCHYNOV SAYS SITUATION AROUND FLEET IS DANGEROUS
• UKRAINE'S TURCHYNOV SAYS RUSSIA INCREASING CRIMEA FORCES
• UKRAINE'S TURCHYNOV SAYS RUSSIAN BLACK SEA FLEET HAS BLOCKED UKRAINIAN NAVY VESSELS IN SEVASTOPOL BAYS

What is curious here is that while it is clear why Russia would benefit from an escalation in hostilities in the Crimea, on which it did not "start" - i.e., allowing it a clear pretext to enter the "east" and "protect" its citizens - what is becoming clear is that it is Ukraine that is desperate to raise the level of hostilities. Why - if it is to force the hand of NATO, EU or the west in providing assistance, this is a wild gambit, which will backfire massively.

It’s Not Our Fight

The speculative excesses and political power of Wall Street pose a strategic threat to the Deep State, and as a result a showdown between the Deep State and the surface machinery of governance that has been captured by Wall Street is looming. Put another way: we've reached Peak Wall Street and it's all downhill from here. This crisis is simple to summarize: the paper claims on wealth so far exceed actual wealth that something's gotta give. Simply put, the vast majority of these claims will have to be zeroed out, i.e. these phantom-claim "assets" will be voided and declared worthless. This leads to the key question: who will the Deep State throw under the bus to preserve itself and the nation-state?

While the news actually broke earlier, once the headline that Russia denies an "ultimatum" threat to assault the Ukrainian fleet hit Reuters, the algos smashed USDJPY higher and that lifted stocks on a huge volume spike ($3.7bn notional in first minute) up to near VWAP.

Google translated for most impact: "today the agency " Interfax-Ukraine" reported, citing a source in the Defense Ministry of Ukraine , that the commander of the Black Sea Fleet of Russia Alexander Vitko an ultimatum Ukrainian soldiers in the Crimea . According to the source agency , if, prior to 5:00 am Tuesday Ukrainian soldiers " do not give up , start a real assault units and parts of the Ukrainian Armed Forces around the Crimea." The official representative of the Russian Defense Ministry called Message agency " utter nonsense " and said that any ultimatums Ukrainian military in the Crimea was not put."

Yields on Belarus government bonds have surged to near 10% this morning (up 130bps) and the "managed" Belarus Ruble has leaked further to new record lows against the US Dollar. One can't help but wonder what message the Russian actions are sending to other Eastern European nations but one thing is clear, capital is not comfortable there as bonds see the biggest price drop in almost 3 years.

The technicals break with the news!

Just out from Reuters:

• INTERFAX UKRAINIAN DEFENCE MINISTRY AS SAYING  RUSSIAN FLEET HAS GIVEN UKRAINIAN FORCES IN CRIMEA UNTIL 0300  GMT TOSURRENDER OR FACE STORM

It appears Putin is still unaware of the "costs" he is facing.

Having earlier blasted John Kerry for his "lack of analysis" of the Ukraine situation and noted that China "understands" the Russian perspective, the Russian foreign ministry has issued a further statement defending its actions in Crimea: "...through the fault of the Bandera-type groups and other ultra-nationalistic forces, the measures we are taking are adequate and absolutely lawful."

It appears the bank runs - or desparate dash for cash - in Ukraine have escalated. We noted that Russian banks had already limited access but now Unicredit has issued a statement "temporarily limiting operations on cash withdrawal in ATMs, in order to provide all the clients with an access to cash money." The decision, they stress, is a temporary one (like Cyprus capital controls?) and will be cancelled with the "normalization of the situation."

U.K. natural gas jumped the most in more than 16 months and was 2.3% higher to $4.72 on supply concerns. Wheat and corn surged 4.3% and 3.3% respectively, also on supply concerns. Should relations between Russia and Western nations deteriorate further, it will have consequences for already vulnerable economies and lead to increased safe haven demand.