Vladimir Putin

• Obama Says Bernanke Fed Term Lasting ‘Longer Than He Wanted’ (Bloomberg)
• Merkel Critical Of Japan's Credit Policy In Meeting With Abe (Nikkei)
• China Wrestles With Banks' Pleas for Cash (WSJ)
• Biggest protests in 20 years sweep Brazil (Brazil)
• Pena Nieto Confident 75-Year Pemex Oil Monopoly to End This Year (Bloomberg)
• G8 leaders seek common ground on tax (FT)
• Putin faces isolation over Syria as G8 ratchets up pressure (Reuters)
• Former Trader Is Charged in U.K. Libor Probe (WSJ) - yup: it was all one 33 year old trader's fault
• Draghi Says ECB Has ‘Open Mind’ on Non-Standard Measures (BBG)
• Loeb Raises His Sony Stake, Drive for Entertainment IPO (WSJ)

• Obama prepares for chilly talks with Putin over Syria (Reuters)
• G8 opens amid dispute on Syria arms (FT)
• Economists Blame Fed for Higher Bond Yields (WSJ) - wait... what? Isn't the "stronger economy" to blame?
• What a novel concept - In the Czech Republic, a spying scandal has forced the PM to resign (BBG)
• Rigged-Benchmark Probes Proliferate From Singapore to UK (BBG)
• Economists Wary as Fed's Next Forecast Looms  (Hilsenleak)
• Banks Balk at New Rules for Small Loans (WSJ)
• Sporadic clashes in Turkey as Erdogan asserts authority (Reuters)

This week, the US Ministry of Propaganda presented a patently absurd gem of a news article in which it equated a growing percentage of US workers quitting their jobs in April as a sign that Americans’ confidence in the US economy is returning.

Through most of the 20th century, America led something of a charmed life, at least when compared with the disasters endured by almost every other major country. We became the richest and most powerful nation on earth, partly due to our own achievements and partly due to the mistakes of others. The public interpreted these decades of American power and prosperity as validation of our system of government and national leadership, and the technological effectiveness of our domestic propaganda machinery - our own American Pravda - has heightened this effect. Author James Bovard has described our society as an “attention deficit democracy,” and the speed with which important events are forgotten once the media loses interest might surprise George Orwell.

A 'second Economic Miracle' and other psychedelic feats, but inconvenient data gets in the way.

As Boston and U.S. security agencies congratulate themselves over the apparent neutralization of a pair of Chechens that bombed the Boston Marathon, troubling questions are beginning to arise. First and foremost is, why a pair of Chechens, born in the former Soviet republic of Kyrgyzstan, apparently committed the attack? For possible answers, one must looks beyond the present and delve into Russia’s and the USSR’s past policies towards Chechnya, and since 1991, U.S. policy in the Caucasus, which since the 1991 implosion of the USSR had a single focus – the exploitation of the Caspian’s massive energy reserves. It is a history that makes for deeply uncomfortable reading, but one that may eventually provide some answers to seemingly intractable questions. The history below, virtually unknown in the US, is deeply known to the Chechens; and while nothing excuses the terrible actions, the US is hardly blameless about the carnage visited on the Tsarnaev's ancestral homeland.

"This is the nationalization of the elite," is how one ex-Kremlin-ite described Putin's new policy. "For [years], the elite saw Russia as a hunting ground - they would keep their money and live somewhere else," but no more, as the FT reports, Putin has moved to inject some moral fibre into the country’s top-level bureaucrats and state employees by giving them a three-month deadline to close their foreign bank accounts and divest themselves of offshore assets – or face the sack. "There is a sort of algorithm [in Russia] for civil servants. You stash a lot of money abroad, send your family to live there, and then when you retire, you join them. This new legislation will put a question mark next to the career plan of a generation of top-level people." Putin's new decree makes it clear, "There are no untouchables and there cannot be any."

Bloomberg reported recently that Russia is now the world's biggest gold buyer, its central bank having added 570 tonnes (18.3 million troy ounces) over the past decade. At $1,650/ounce, that's $30.1 billion worth of gold. Russia isn't alone, of course. Central banks as a group have been net buyers for at least two years now. But the 2012 data trickling out shows that the amount of tonnage being added is breaking records. Based on current data, the net increase in central bank gold buying for 2012 was 14.8 million troy ounces – and that's before the final 2012 figures are in for all countries. This is a dramatic increase, one bigger than most investors probably realize. To put it in perspective, on a net basis, central banks added more to their reserves last year than since 1964. The net increase – so far – is 17% greater than what was added in 2011, which was itself a year of record buying. The message from central banks is clear: they expect the dollar to move inexorably lower. It doesn't matter that it's been holding up against other currencies or that the economy might be getting better. They're buying gold in record amounts because they see a significant shift coming with the status of the dollar, and they need to protect themselves against that risk. Embrace the messages central bankers are telling us – the ones they tell with their actions, not their words.

Just your ordinary run of the mill Russian billionaire oligarch in exile who had so much money he was terminally depressed... or just the opposite, and the first tragic casualty of the Cyprus capital controls which are about to eviscerate a whole lot of Russian wealth (and ultraluxury Manhattan real estate prices)? From RT: “Just got a call from London. Boris [Abramovich] Berezovsky committed suicide. He was a difficult man. A move of disparity? Impossible to live poor? A strike of blows? I am afraid no one will get to know now,” the lawyer said on his social network page."

So far the market has been largely oblivious of the shattered trust and changed dynamic in European banking dynamics for one simple reason: Cyprus banks have been closed, and likely will be closed indefinitely, preventing the mass media from broadcasting what happens when an entire population, and foreign depositors, decide to clear out the holdings of their bank accounts, either physically or electronically, and the public anger the will result when they find that courtesy of fractional reserve banking, only a tiny amount of said deposits is actually present. In the meantime, retail depositors have had their withdrawals limited through a form of capital controls, allowing them to pull only as much as the daily limit is on given ATMs. So far the banks have had enough cash to keep ATMs stocked up to the daily required minimum, but that may soon be ending. BBC's Mark Lowen, in Nicosia, reports that "Cyprus' banks are still giving out cash through machines - although with limits, and some are running low." Ironically, as physical cash becomes ever scarcer, merchants are now clamping down on electronic payments unsure if they will ever be able to convert electronic euros into actual ones: "Some businesses are now refusing credit card payments, our correspondent reports."

The Cyprus finance minister Michael Sarris may or may not have submitted his resignation after the president formally declined to accept it, but now that he is back on the saddle he is back to spreading hope, cheer and goodwill. Those wondering why both the EURUSD, and its derivative, US stock futures have surged overnight and retraced all of yesterday's losses and then some, it is not due to any anachronistic events such as "good economic news" (especially since the Spanish PM said Spain will have to cut its economic outlook once again, or rather, as usual), but due to the following phrase uttered by Sarris a few hours ago: "We are hoping for a good outcome, but we cannot really predict" regarding his views on talks with Russia. That's right - the entire overnight ramp is based on the hope of one man, who thinks Russia can be blackmailed through deposit haircuts, into bailing out the tiny island which has now said nein to Europe and bet the ranch on a well-meaning Vladimir Putin. What can possibly go wrong: according to the GETCO algos all alone in levitating stocks, absolutely nothing. What is clear is that Cyprus is fully intent on seeing Europe "blink" whether due to Russia's involvement or just because it thinks (correctly) it has all the leverage as the alternative is a breakdown of the Eurozone.

While the Cypriot Parliament may be dragging its feet on a proposed rescue plan for Cyprus' banks, the country ultimately faces a choice between Brussels' bitter pill... and bankruptcy. Cyprus' newly-elected President, Nicos Anastasiades, has quite accurately summed up the situation: "A disorderly bankruptcy would have forced us to leave the euro and forced a devaluation." Yes, Brussels and the IMF have finally decided to come to the aid of the tiny island, which accounts for just 0.2% of European output -- to the tune of roughly $13 Billion. But, this bailout is different. Still, the question lingers: Why now? The sorry state of Cyprus' banking system is certainly no secret. One reason can be found by taking a look at the composition of Cyprus' bank deposits...

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.

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.

In perhaps the oddest news of the day, workers in the Chelyabinsk region in the Russian Urals were greeted this morning with a spectacular show: an exploding meteor. Bloomberg reports "A meteor exploded in the skies above Russia’s Urals region and sent shock waves that shattered windows, hurting hundreds of people, hours before an asteroid half the size of a football field hurtles past the Earth. The meteor broke apart above the Chelyabinsk region at about 7:25 a.m. Moscow time, the Emergencies Ministry’s division in the Urals district said today on its website. “A serious meteor fell,” billionaire Sergey Galitskiy, chief executive officer of OAO Magnit, Russia’s biggest food retailer by value, said in a post on his Twitter Inc. account. “At our hypermarket in Emanzhelinsk, windows were blown out, the roof shook, there was a strong shock wave.”  More than 290 people reported injuries, according to the website of Chelyabinsk Region Governor Mikhail Yurevich. The number may be higher than 500, Interfax reported, citing an unidentified Interior Ministry official."