It’s like 34 drunken sailors holding each other up. That’s the best way I can think of to describe the latest product from the good idea factory that is the OECD. Over the weekend in yet another cushy five-star hotel, representatives from this unelected supranational bureaucracy announced plans for world governments to exchange all their citizens’ tax and financial data with one another. It’s a pathetic display of exactly the sort of tactics that governments embrace when they go broke. And most of these OECD countries ARE broke – Italy, Japan, the US, Spain, Greece, etc.
It would indeed be supremely ironic if the "strong" foreign law bond indenture would be tested, and breached, not by Greek bonds, as so many expected in late 2011 and early 2012, but by one of the last contries in Europe which is still AAA-rated. We would find it less ironic if the next leg of the global financial crisis was once again unleashed by an Austrian bank: after all history does rhyme...
The Russians had dangled their multi-billion euro carrot - then swiftly removed it pending further details of who is really running the show (demanding a crackdown on the extremists who are trying to establish power). The Europeans have promised an even bigger carrot - predicated on, we presume, total abdication of sovereignty. But now the Americans are jumping in - Treasury Secretary Jack Lew "urged" Ukraine's interim leader Yatsenyuk to start talks with the IMF as he and Lagarde agreed the fund would be the best foundation for advice and financing (if sought by a fully established Ukrainian government). And the winner is...
- *UKRAINE'S KUBIV PLANS TO INVITE IMF MISSION, UNIAN SAYS
Which means only thing - Russia is locked out and gas prices are about to take off.
For those who have been following the abysmal loan creation in Europe, which recently dropped to an all time low today's inflation, or rather make that deflation, data out of Europe should not come as much of a surprise. Then again, with January inflation posting the biggest drop in history, when it tumbled by a record 1.1% from December levels, even the skeptics may be stunned by how rapidly deflation is gripping the continent.
- Ukraine Seeks $35 Billion as Yanukovych Warrant Is Issued (BBG)
- Ukraine's fugitive president wanted for mass murder (Reuters)
- Polar Vortex to Bring More Snow on Return to U.S. This Week (BBG)
- China property prices continue to rise (FT)
- Microsoft Said to Cut Windows Price 70% to Counter Rivals (BBG)
- Pentagon to propose shrinking Army, scrapping some jets (Reuters)
- Hedge Funds Turn Bearish on S&P 500 as VIX Advances (BBG)
- Draghi’s Data Jigsaw Takes Shape as ECB Readies Showdown (BBG)
- China, eyeing Japan, seeks WW2 focus for Xi during Germany visit (Reuters)
Asian equities are trading lower across the board on the back of some negative credit stories from China. Shanghai Securities News noted that ICBC and some other banks have curbed loans to developers in sectors such as steel and cement. Slower gains in home property prices in China’s tier 1 cities are also not helping sentiment. Beijing and Shenzhen prices rose 0.4% in January, which looks to be the slowest monthly gain since October 2012 according to Bloomberg. Elsewhere there are reports that a property developer in Hangzhou (Tier 2 city in China) is reducing its unit prices by 19%. Our property analysts noted that given the strong gains seen in Tier-1 and some bigger Tier-2 cities in 2013, a slowdown or negative trends in price growth should not be a surprise. Nevertheless, it has been a very weak day for Chinese and HK markets with the Shanghai Composite and the Hang Seng indices down -2.0% and -1.2% lower as we type. Across the region, bourses in Japan and Korea are down -1.0% and -0.6%, respectively.
The bad feelings concerning Russia run deep in the Western parts of Ukraine (as they topple statues of Lenin in growing numbers) while in the East they see themselves much more as Russians. These feelings run very deep in the region and memories do not fade so easily as the mayor and police chief of Kerch vigorously defend the Ukrainian flag in the clip below - deep in the eastern Crimea region (that Russia has already suggested it is willing to go to war over). Russian President Vladimir Putin has now been placed in a very difficult position, as Martin Armstrong notes, the entire set of circumstances creates the image of events in Ukraine that have diminished the power of Russia, which is a matter of pride and the only stable resolution remains a split along the language faultline. The critical question then is - will Putin let it go?
Current events are frequently viewed through the prism of analogies. Words become shorthand for a particular type of situation. “Munich” equals the danger of appeasing bloodthirsty dictators, “Vietnam,” and now “Iraq/Afghanistan” means the folly of getting involved in (or, in the case of Iraq, starting) civil wars in countries whose societies the outsiders neither understand nor can effectively influence. In some cases, acting on these parallels turns out to be wise. The analogy that is currently in vogue in Asia is “1914.”
As Facebook's $19 Billion Whatsapp Purchase Crashes (And May Be Hacked), Its Competitor Is ExplodingSubmitted by Tyler Durden on 02/22/2014 17:43 -0500
sorry we currently experiencing server issues. we hope to be back up and recovered shortly.
— WhatsApp Status (@wa_status) February 22, 2014
Yulia Tymoshenko (Ukraine's "Iron Lady") Freed, Vows To "Run For President"; Addresses Protesters - Live FeedSubmitted by Tyler Durden on 02/22/2014 14:38 -0500
*TYMOSHENKO URGES PROTESTERS TO STAY IN INDEPENDENCE SQUARE "NOW UKRAINE IS A FREE UKRAINE:"
Yulia Tymoshenko was the heroine of the 2004 pro-Western Orange Revolution in Ukraine. But, as DPA notes, the two-time former prime minister was convicted in 2011 of abuse of power in connection with a gas deal with Russia (detailed below). This morning she was freed from prison in Kharkiv in eastern Ukraine Saturday after parliament voted for her release...
*TYMOSHENKO LEAVES HOSPITAL WHERE SHE WAS UNDER GUARD;: WEBSITE
*UKRAINE'S TYMOSHENKO SAYS SHE WILL RUN FOR PRESIDENT: ITAR TASS
and is set to address the protesters in Independence Square... (full chronology below) The US welcomed her freedom and is "closely monitoring"; Russia is displeased blaming opposition for violence. Meanwhile,
- *UKRAINE EX-INT MIN ZAKHARCHENKO CAUGHT TRYING TO FLEE BY BORDER SERVICE: IFX
With 328 (of the 450 seats) voting in favor, the Ukraine parliament has agreed to removed President Viktor Yanukovych:
*UKRAINIAN PARLIAMENT VOTES TO REMOVE PRESIDENT YANUKOVYCH
*UKRAINIAN PARLIAMENT VOTES TO HOLD EARLY ELECTIONS ON MAY 25
“Yanukovych, in an illegal manner, removed himself from his constitutional duties,” Turchynov says in chamber before vote. The Russians are not at all happy with Siluanov exclaiming these actions "pose a direct threat to Ukraine's sovereignty and constitutional order." As Martin Armstri0g warns, the nation will survive divided for there is far too much resentment to simply put this all behind and walk forward. Divide Ukraine along the historical language faultline and there is a chance to calm things down. Otherwise, this will flare up and take others with it.
Ukraine President Flees Kiev After "Coup D'Etat" As Protesters Storm Presidential Palace, Plunder Gold; Army On HoldSubmitted by Tyler Durden on 02/22/2014 10:02 -0500
1. Within 48 hours of the signing of this agreement, a special law will be adopted, signed and promulgated, which will restore the Constitution of 2004 including amendments passed until now. Signatories declare their intention to create a coalition and form a national unity government within 10 days thereafter.
2. Constitutional reform, balancing the powers of the President, the government and parliament, will start immediately and be completed in September 2014.
3. Presidential elections will be held as soon as the new Constitution is adopted but no later than December 2014. New electoral laws will be passed and a new Central Election Commission will be formed on the basis of proportionality and in accordance with the OSCE & Venice commission rules.
4. Investigation into recent acts of violence will be conducted under joint monitoring from the authorities, the opposition and the Council of Europe.
5. The authorities will not impose a state of emergency. The authorities and the opposition will refrain from the use of violence. The Parliament will adopt the 3rd amnesty, covering the same range of illegal actions as the 17th February 2014 law.
The Chinese Gold & Silver Exchange Society is prepared to spend at least HK$ 1 billion to set up a gold vaulting warehouse in mainland China that will be able to store a massive 1,500 tonnes of gold. Owning gold directly and in a fully allocated, fully segregated account and with an ability to take delivery remains vital.