Think of a rhino that puts its head down, and just charges through the bushes. Everything gets trampled in the process.
Today is the day all Robert Langdon fans have been feverishly waiting for: the 115 voting cardinals of the Catholic church begin today their secret conclave to choose the successor to Pope Benedict XVI. As Bloomberg puts it succinctly, "he who enters the conclave a pope exits as a cardinal" and it is notoriously tricky to try to handicap the papal vote. In processional next steps, the Cardinals will gather in the Sistine Chapel, hailing from as far as the Philippines, and may hold a single vote today with as many as four ballots on succeeding days. Politically, this conclave has been presented as a "struggle between cardinals looking to overhaul the Vatican bureaucracy known as the Curia, and those trying to maintain its influence, according to Vatican analysts. Electing a non-European, while a novelty, would not necessarily presage a change of course for the millennia-old institution shaken by the abdication of German-born Benedict." Realistically, it will be a free for all for the scandal-riven church, and it is very much an open question who the next pope will be. So while we await the puffs of white smoke, courtesy of Bloomberg here are brief biographies of some of the men who may be in the running, based on betting websites and consulting Vatican watchers.
What wasn’t said at the Senate hearings: too-big-to-jail is just part of the problem
It's an odd question, we know - especially ahead of today's Stress Tests, but given today's testimony on assessing the bank secrecy act, apparent trouble-maker Elizabeth Warren pokes and prods (correctly we would add) at the surreality that exists between the Department of Justice, The Treasury, and the financial system. David Cohen, Tom Curry, and Jerome Powell dodged bullets and blame, "does that mean essentially we have a prosecution-free zone for large banks in America?" But Warren wasn't going to be fobbed off with useless banter as she pointed out, "if you're caught with an ounce of cocaine, the chances are good you're going to go to jail... for the rest of your life. But evidently, if you launder nearly a billion dollars for drug cartels and violate our international sanctions, your company pays a fine and you go home and sleep in your own bed at night - I think that's fundamentally wrong." Indeed Ms. Warren.
The United States desperately needs to formulate a grand strategy that reinforces the domestic foundations of American power while providing strategic guidance and direction to the nation’s actions in foreign policy. America must adapt with new ideas, tools and innovations if it is going to meet the opportunities and challenges of a rapidly changing world. To be successful, this strategy must embrace several overarching themes: first, the United States must remain committed to playing a leadership role; second, American grand strategy must promote a positive, hopeful, and optimistic vision for the world that it seeks to build; third, a grand strategy will be effective only if it commands broad and unequivocal support from the American public and their policymakers; and finally, the nation is long past the age when American grand strategy can pursue “cookie-cutter” or “school solutions” to challenges. What we are proposing is the hardly radical but often overlooked principle that American grand strategy should be, above all else, agile and flexible as it responds to the demands of the American people and the challenges of a rapidly evolving world.
The most unsurprising news of the day has just hit, and while we have already had some 20+ rumors on this issue previously, this time it is official:
Venezuela's Hugo Chavez has died, says VP Maduro
Chavez who ruled Venezuela since 1999, died from cancer at the age of 58
Venezuela's army chiefs pledge to support President Nicolas Maduro after Hugo Chavez's death
Special deployment of armed forces announced in Venezuela after death of Hugo Chavez
Time to celebrate Hugo's memory with some more currency devaluation? It is unclear if Goldman's record profits on Venezuela exposure (see How The Glorious Socialist Revolution Generated A 681% Return For Goldman Sachs) are about to snap back with a vengeance.
As is now confirmed, at least one of many JPMorgan margin calls directed at Lehman in the days before the world's biggest bankruptcy became fact, were based on glaringly erroneous information and an error so profound one wonders if this was not a premeditated "hit" on one bank by another bank. Yet a purposeful "hit" orchestrated by one bank, even JPMorgan, would require the involvement of the highest echelons of the US government. So was the US government complicit and give its blessing in this historic liquidation? The Abu Dhabi Investment Council would like to know.
In light of today's enormous domestic and international challenges, the United States today needs, more than ever, an effective grand strategy. Without one, the nation is in a dangerous state of drift. In the aftermath of the recent U.S. presidential elections and in the midst of grueling battles over spending and deficit crises, American politics is highly polarized with the electorate and their policymakers deeply divided on domestic issues. Turning to foreign policy, the picture is equally troubling. The United States struggles without a coherent grand strategy, while the American people, its friends and allies, and competitors wonder what principles guide Washington's foreign policy. What, they must ask, does the United States want to achieve in its foreign policy, and what leadership role does it seek to play in this rapidly evolving world order. Simply put, grand strategy is a broad set of principles, beliefs, or ideas that govern the decisions and actions of a nation’s policymakers with public support on foreign policy.
It wasn’t exactly a propitious start for new US Secretary of State John Kerry on his first foreign trip when he referred to “Kyrzakhstan”, where US diplomats are ostensibly working to secure “democratic institutions”. Getting all those Central Asian “stans” right can be confusing - even more so when things get muddled in the “Great Game”. And it’s no easy thing following in the footsteps of Hillary Clinton. Later - after the State Department took the liberty of omitting the mention of “Kyrzakhstan” from the official transcript - it became clear that Kerry was actually referring to Kyrgyzstan (not Kazakhstan and indeed not Kyrzakhstan). So let’s look at these two countries that Kerry has inadvertently combined.
- US braced as cuts deadline passes (FT)
- U.S. stares down start of steep "automatic" budget cuts (Reuters)
- Yeltsin-Era Tycoons Sell Resources for Distance From Kremlin (BBG)
- Italy's center-left leader rules out coalition with Berlusconi (Reuters)
- Apple Required Executives to Hold Triple Their Salary in Stock (WSJ)
- BOJ Seen Spiking Punchbowl in April Under New Chief Kuroda (BBG)
- Diplomatic fallout from EU bonus cap (FT)
- Italy’s Stalemate Jeopardizes Resolution of Crisis, Finland Says (BBG)
- Chinese trader accused of busting Iran missile embargo (Reuters)
- JPMorgan No. 1 Investment Bank Amid a Flurry of New Deals (BBG)
- Eurotunnel’s Ferry Strategy at Risk as Rivals Cry Foul (BBG)
- Telepathic rats team up across continents (FT)
The discovery of oil in the Middle East around the 1930s has had a drastic effect on the lives of the people in the region. In most instances this black gold buried under the sands of Arabia has impacted the lives of the people in a rather positive manner. But not always. Syria today is burdened with the largest refugee crisis in the world - mostly displaced internally - a clear indication of population shifts. And as population shifts so too do demarcation lines, with the rebels claiming now to be in control of some of the oil producing sites. Will the opposition fare any better once they manage to get the oil facilities to operate once more? Or will they also contribute towards making the people who sell guns all that richer? How will they use the revenue if the manage to operate the facilities?
Gold is trading flat today near a one and a half week high hit yesterday as Federal Reserve Chairman Ben Bernanke defended the U.S. ultra loose monetary policy.
The selloff in gold ETFs in February underscores the weakness in gold sentiment among retail investors that has been prominent recently.
Last year was a record one for major new discoveries, and 2013 has so far demonstrated that the road to discovery still has plenty of mileage. The past two months alone have netted new finds in Egypt, a flurry of promising exploration results in East and West Africa, some important moves toward commercial viability in Kenya, more gas in the North Sea, an unexpected junior discovery in Brazil - and of course, more gains in Texas. Riding high on a year of brilliant discoveries, companies are drilling deeper and expanding exploration like never before. These are the top finds for January and February that should be on your radar and sure enough as we have been vociferously discussing, Africa is increasingly the focus of developed nations' resource hunting.
- Italy sold EUR 6.5bln in 5y and 10y BTPs this morning, solid b/c and competitive yields, especially when considering the uncertain political situation in Italy.
- Moody's also said that Italian election is indirectly credit negative for other pressured EU sovereigns.
- Fears rise that ECB plan has a weakness as the strings in the Eurozone bond buying programme may be its frailty.
Russia is back. President Vladimir Putin wants the world to acknowledge that Russia remains a global power. He is making his stand in Syria. The Russians are troubled by what they see as a growing trend among the Western Powers to remove disapproved administrations in other sovereign countries and a program to isolate Russia. Again, Russia is seeing Washington’s hand in Syria in the conflict with Iran. The Russians are backing their determination to block another regime change by positioning and manning an advanced air defense system in what is becoming the Middle East casino. Putin is betting that NATO will not risk in Syria the cost that an air operation similar to what was employed over Libya will impose. Just in case Russia’s determination is disregarded and Putin’s bluff is called, Surface to surface Iskander missiles have been positioned along the Jordanian and Turkish frontiers. Putin is certain that he is holding the winning hand in this very high stakes poker game. When the Turks and U.S see that there is little chance of removing Al-Assad, they will have no option other than to negotiate a settlement with him; and that would involve Russia as the protector and the mediator.