Baltic Dry Index. 1518 +37
LIR Gold Target in 2019: $30,000. Revised due to QE programs.
The secret of politics? Make a good
treaty with Russia.
Count Otto von Bismarck.
In our new
lawless 21st century age, we stand on the edge of war in the steppes
of the Ukraine. Buy more is the indifferent view of Wall Street. Who cares
about war in the Ukraine or the Ukrainians? Isn’t the Yellen put still in
place? Isn’t it still QE Forever and ZIRP? Won’t the Fed’s talking Chair say as
much later today?
Does history
repeat? Will 2014 reprise 1914? Officially President Putin doesn’t want any
more of the Ukraine.
“Never believe
anything in politics until it has been officially denied.”
Count Otto von Bismarck.
Crimea crisis shifts to 'military stage' after soldier killed
Ukraine warns the showdown has entered a 'military stage' after deaths on both sides
The crisis in Crimea has shifted
“to a military stage” as the Ukrainian government responded to the killing of
one its soldiers by authorising its troops to open fire to defend themselves
from Russian forces.
Hours after Vladimir Putin
formally announced the annexation of the occupied Crimea region into Russia, a
Ukrainian soldier was apparently shot dead as pro-Kremlin forces stormed an
army base.
As tensions rapidly escalated on
the ground, the US warned Mr Putin he was on “the wrong side of history” and
Britain announced the suspension of all military cooperation with Moscow.
Joe Biden, the US vice-president,
said America was considering sending additional troops to the Baltics to
reassure its Eastern European allies in the face of Russian aggression.
The Ukrainian
soldier’s death, the first fatality since Russian forces moved into Crimea last
month, was immediately denounced as “a war crime” by the government in Kiev.
“The blood of Ukrainian soldiers
is on the leadership of the Russian Federation and specifically President
Putin,” said Oleksandr Turchynov, the country’s interim president.
A member of a pro-Russian militia
was later reported to have been killed during the same gun battle.
There was confusion over how the
militia man had died and it appeared he may have been accidentally shot by his
own side rather than killed by resisting Ukrainian forces.
The Ukrainian military had
previously forbidden its troops from opening fire in an effort to prevent the
outbreak of violence. Last night that order was withdrawn and Ukrainian
soldiers in Crimea were authorised “to use weapons to defend and protect the
lives of Ukrainian servicemen”.
Arseniy Yatsenyuk, the Ukrainian
prime minister, addressed the nation in a live television broadcast, warning
his countrymen: “The conflict is shifting from a political to a military
stage.”
“Russian soldiers have started
shooting at Ukrainian military servicemen, and that is a war crime,” he added.
----The first shooting death came hours after Mr Putin delivered a victorious speech in the Kremlin’s St George’s Hall, interrupted by applause at least 30 times in 47 minutes.
“Crimea has always been an
integral part of Russia in the hearts and minds of people,” he said as he
signed a treaty to make Crimea part of Russia.
Sneering at the decision by the
Soviet leadership to transfer Crimea in 1954, Mr Putin said it had been handed
over like a “pack of potatoes” and that his actions were correcting a historic
mistake.
Often rebuking the West for
following Cold War logic in its relations with Russia, Mr Putin suggested that
the push to reclaim Crimea was rooted in a fear that post-revolutionary Ukraine
would join Nato.
“Kiev has already announced its
intention to join Nato. What would that mean for Crimea and Sevastopol? That in
the city of Russia’s military glory would appear a Nato fleet, threatening to
Russia’s south regions,” he said.
----With Islamist websites announcing the death of Doku Umarov, the leader of Chechen rebels and the Kremlin’s most hated foe, the Russian leader rounded off a banner day by addressing a rally of supporters in Red Square.
Many in the crowd were happy but
urged their leader to keep on pulling in more former Soviet territories. “I am
so proud of my president and my country,” said Anastasia Garashchenko, 30,
holding a large Russian flag. “I would like other territories, such as
Transnistria, to join to Russia as well.”
----During a visit
to Warsaw, Mr Biden raised the prospect of further US ground and naval forces
being sent to the Baltic in a show of strength to reassure Eastern Europe.
More
Ticking Timebomb: Moscow Moves to Destabilize Eastern Ukraine
By Uwe Klussmann and Matthias Schepp March 18, 2014 – 06:02
PM
It's
not only in Crimea where Russian President Vladimir Putin is playing
with fire, but also in eastern Ukraine. The majority of the people in the
economically powerful region speak Russian and reject the new government in
Kiev.
The pensioner Oxana Kremenyuk limps as she passes by the House of Culture in a small village in eastern Ukraine. As a young woman, she used to dance here. Today the stucco is crumbling and the windows are broken. "The people in Kiev are driving our country into civil war," she says. "These good-for-nothings should be slaving away the way we do here." Kremenyuk receives a pension of about €90 ($125) a month.
In order to ensure there is food on the table, she keeps 10 chickens and a pig.
Kremenyuk's
village of Maidan, with its three dozen homes, is a peaceful place in a gentle,
hilly landscape. The village is 378 kilometers (235 miles) -- but also worlds
apart -- from the Maidan in the capital city of Kiev, the Independence Square
that has become known around the world since the start of the revolution.
Most
of the village's homes have fallen into a state of disrepair and young families
moved away long ago. The people living here don't think much of the revolution
taking place in the western part of the country.
In the eastern part of Ukraine, with several large cities including Donetsk, Kharkiv and Dnepropetrovsk, polls show three-quarters of those surveyed rejecting the popular revolt in Kiev. Between 70 and as many as 90 percent of the residents in this region say that Russian, and not Ukrainian, is their primary language. In Kharkiv, locals threw eggs at Vitali Klitchko, one of the protest leaders.
After the Crimean peninsula, eastern Ukraine has become the second powder keg in the conflict with Russia -- only it is a much larger one than the former. At the end of last week, the government in Moscow put the fuse on display.
After at least one person died and dozens were injured in clashes between friends and opponents of Russia in Donetsk, the foreign minister in Moscow warned: "Russia is aware of its responsibility for the life of compatriots and citizens in Ukraine and reserves the right to take these people under protection."
---- In Kiev, politicians seemed to react helplessly. On Thursday, the Ukrainian parliament voted to establish a 60,000-strong National Guard. On Facebook, Interior Minister Arsen Avakov wrote: "We will mobilize the guard in a very short time. It will protect the border and maintain order in the country. This is our answer to the foreign destabilization happening in the country."
But given that Maidan fighters
associated with the radical "Right Sector" are also expected to join
the guard, Moscow state television promptly scoffed, "They shouldn't call
the troops the national guard, but rather the nationalist guard. These are the
same people who shot at police in Kiev. They will follow any order to strike
down pro-Russian protests in Kharkiv or Donetsk."
More
GE, Boeing Among Firms Tracking Russia Sanction Fall-Out
Mar 19,
2014 2:39 AM GMT
Companies with investments in Russia -- such as General Electric Co. (GE) and Boeing
Co. (BA) -- are growing concerned as the U.S. prepares to impose tougher
sanctions over the crisis in Crimea that may spur retribution against corporate
interests. Almost 100 chief executive officers with the Business Roundtable are set to meet in Washington today with Defense Secretary Chuck Hagel, said John Engler, the group’s president and former governor of Michigan. He said there’s “no doubt” that the sanctions will be on the agenda.
“The CEOs are obviously very concerned about what is happening in Russia,” Engler said in an interview.
“For some companies, it’s a substantial bit of their business. They are watching it very intently, trying to understand what will happen and what the next steps will be.”
U.S.-based companies are the largest source of foreign investment in Russia, primarily in technology and financial services, according to a 2013 report by Ernst & Young. Business interests in the country have been growing after the nation joined the World Trade Organization in 2012, the analysts said in their report.
More
In other
news, it was still almost business as usual in Asia, despite yet another large
red flag. Who needs China or Japan?
There can be few
fields of human endeavour in which history counts for so little as in the world
of finance. Past experience, to the extent that it is part of memory at all, is
dismissed as the primitive refuge of those who do not have the insight to
appreciate the incredible wonders of the present.
J. K. Galbraith
Short Sellers Target Chinese Developers as Rout Deepens
Mar 19, 2014 2:01 AM GMT
Stock traders have doubled bearish bets against some of the biggest Chinese
developers amid growing concern that a weaker real-estate market will curb
property sales just as borrowing costs surge. Short interest in Evergrande Real Estate Group Ltd. (3333), the nation’s fourth-largest developer by market value, was at 8.4 percent of shares outstanding on March 17, up from 3.2 percent a year ago, according to data compiled by Bloomberg and Markit Group Ltd. It touched a record 8.6 percent on March 4. Wagers against Guangzhou R&F Properties Co. (2777) and Agile Property Holdings Ltd. (3383) have both reached the highest since December 2012.
Investors are bracing for losses as lenders pull back from the industry and local governments take steps to rein in home values in the second-largest economy. Yields on the dollar debt of Evergrande and Agile surged this week as a closely-held developer with 3.5 billion yuan ($566 million) of debt collapsed, while data showed property prices in some of China’s largest cities rose last month at the slowest pace since 2012.
“I see more downside in the share
prices,” said Peter Elston, the Singapore-based head of Asia-Pacific strategy at
Aberdeen Asset Management Plc, which oversees about $321 billion. “When
property companies get into trouble, generally the weak companies start to get
into trouble first. If property price weakness starts to become more
pronounced, that’s going to impact the broader market.”
More
China Stocks, Yuan Fall on Property Concern as Money Rates Jump
Mar 19, 2014 6:50 AM GMT
China’s
stocks fell and the yuan weakened near an 11-month low after the collapse of a
private developer spurred concern the industry may face defaults as economic
growth slows. Money-market rates jumped. China Vanke Co. and Poly Real Estate Group Co., the nation’s biggest developers, slumped at least 1.7 percent. Country Garden Holdings Co. plunged as much as 6.2 percent in Hong Kong after its chief financial officer quit. China Construction Bank Corp. (939), a creditor of Zhejiang Xingrun Real Estate Co., which collapsed with 3.5 billion yuan ($565 million) of debt, dropped 0.8 percent.
More
Japan Trade Deficit Exceeds Forecasts as Tax Rise Looms: Economy
Mar 19,
2014 2:51 AM GMT
Japan’s trade deficit
exceeded analysts’ estimates in February, underscoring drags on the nation’s
recovery ahead of a sales-tax increase in April that will weigh on domestic
demand. The 800 billion yen ($7.9 billion) shortfall reported by the finance ministry in Tokyo today was more than the 600 billion yen median estimate in a Bloomberg News survey of 31 economists. Imports (JNTBIMPY) expanded 9 percent from a year earlier, and exports rose 9.8 percent.
Sustained trade deficits and limited gains in exports after the yen’s decline make it harder for Prime Minister Shinzo Abe to steer the nation through the economic turbulence that’s likely after the tax increase. Gross domestic product will contract in the coming quarter and the Bank of Japan may be forced to add to stimulus this year, according to Bloomberg News surveys of analysts.
“The trend of a moderate expansion in trade deficits remains intact,” said Long Hanhua Wang, an economist at Royal Bank of Scotland Group Plc in Tokyo. “In the near-term the rise in imports will moderate as the temporary effect fades of imports being pushed higher by demand ahead of the sales-tax increase.”
Imports have exceeded exports for 20 straight months. The yen’s 18 percent slide against the dollar over the past two years has driven up energy import costs as nuclear reactors remain shuttered, while exports have seen limited gains.
More
We end for
the day wondering what does he know below that we don’t? My guess here is that
high risk speculators should be long fully paid up, deep out of the money stock
index option puts, plus a few stock index strangles. Non high risk gamblers,
formerly known as investors, should just sit out current conditions in cash and
fully paid up physical gold and silver, held outside of the LBMA and the USA MF
Global’s.
VIX Trader Pays $8 Million on Bet Gauge to Rally 60% by May
Mar 18,
2014 8:38 PM GMT
An investor paid about $7.95 million for a trade that will pay off if the
Chicago Board Options Exchange Volatility Index rallies at least 60 percent by
May. The trader bought 150,000 bullish contracts on the VIX expiring in May with a strike price of 22, while selling the same number of May 30 calls in a strategy known as a call spread, according to New York-based Miller Tabak & Co. The trade cost 53 cents to put on for each contract and it will profit if the volatility gauge rises above 22.53 from the current level around 14, data compiled by Bloomberg show. It has a maximum payoff if the VIX more than doubles to 30.
“It was one of the largest VIX trades we’ve seen in a while and an interesting way to put on a tail-risk hedge,” Lillian Seidman, an options strategist at Miller Tabak, said in an interview. “This is a play on the VIX shooting through its high not seen for the last couple of years.”
The VIX, an options-based measure of the price to protect against losses in the Standard & Poor’s 500 Index (SPX), soared 26 percent to 17.82 last week, while the benchmark equity gauge fell 2 percent for the biggest drop in seven weeks on concern that the standoff in the Crimea region between Ukraine and Russia could worsen. Almost $1.7 trillion was erased from global equities between March 6 and the end of last week, data compiled by Bloomberg show.
More
In central banking as in diplomacy,
style, conservative tailoring, and an easy association with the affluent count
greatly and results far much less.
J. K. Galbraith
At the Comex
silver depositories Tuesday
final figures were: Registered 52.94 Moz, Eligible 130.33 Moz, Total 183.27 Moz.
Crooks and Scoundrels Corner
The bent, the seriously bent, and the totally
doubled over.
Today, the world view as seen from Moscow. Stay
long physical precious metals.
All treaties between great states cease
to be binding when they come in conflict with the struggle for existence.
Count Otto von Bismarck.
Russia Must Stop U.S. Expansion in Ukraine
- By Sergei Markov Mar. 16 2014 00:00 Last edited 20:54
Today, as a result
of the Ukrainian crisis, U.S.-Russian relations have hit their lowest
point since the invasion of Afghanistan in 1979 or
of Czechoslovakia in 1969 — or perhaps even since they bottomed
out during the Cuban Missile Crisis. The Crimean crisis, which began
as a power struggle between the ruling authorities in Kiev
and opposition forces, transformed in to an attempt
to overthrow Ukrainian President Viktor Yanukovych by pro-Western
and nationalist opposition forces with the support of the U.S.
and European Union.
The crisis escalated
into a conflict between the U.S. and Russia after the West
supported a coup, then lied by violating the Feb. 21 agreement
when it recognized the formation of a new and illegitimate
government of extremists.
This conflict has
the potential of sparking a new Cold War — something I
never thought could happen in modern times since I believed it would have
to be rooted in ideological differences. Instead, Moscow
and Washington have billions of dollars of economic interests
at stake, making this a geopolitical rather than an ideological
Cold War.
Moscow does not see
the revolution in Ukraine as an attempt to create
a more democratic or law-based society. Instead, it sees the events
in Kiev as an attempt to make Ukraine as anti-Russian as
possible.
The new government represents a minority of the
Ukrainian population. It wants to suppress the Russian-speaking
majority and violate their right to representation by holding
unfair elections on May 25.
Moreover, U.S. President Barack
Obama and German Chancellor Angela Merkel deceived President Vladimir
Putin when they pursuaded him to convince Yanukovych to refrain
from using force to quell the Maidan, and then to sign
the Feb. 21 agreement — which they refused to uphold. Instead,
they told Russia to accept the new reality in Ukraine. But why
should Moscow accept that reality when it is directed against Russia, democracy
and human rights?
What did Russia do to become
the focus of so much animosity? Is it because it prevented
the West from bombing Syria? Because it persuaded Yanukovych not
to sign the Association Agreement — a treaty of little
real importance to the EU? Those are trivial reasons for starting
a new Cold War.
It seems that the West
simply does not like Putin. He is a huge obstacle who prevents them
from achieving global hegemony. For this reason alone he must be broken.
Nobody in Moscow has any doubt that what happened in Ukraine will be
repeated in Moscow in two or three years. Without Putin, there will
be few world leaders left who have the power or courage to stand up
to Washington. When this happens, the entire world will have
to quickly accept the new reality.
Russia is not in Crimea
to expand its territory but to oppose the immense power
of West and its financial institutions in New York
and London. Washington wants to characterize this as a conflict
between Moscow and Kiev, thereby forcing Russia to negotiate with
an illegitimate regime determined to destroy everything Russian
in Ukraine.
However, everyone understands
that this is a conflict between Moscow and Washington and that
these countries should negotiate a solution. The question here is not
Crimea but which reality the two sides are prepared to accept.
Should Moscow allow Washington
to force it into humiliating submission and accept
the possibility of a violent overthrow of the Putin regime? Or
should Washington acknowledge that it can no longer impose its will
on others? Both sides are unwilling to admit their weakness, thus
making a geopolitical Cold War likely.
The West will hit Russia
with economic sanctions to pressure Russian oligarchs into forming
a fifth column, just as it did in Ukraine. To avoid this, Moscow
will have to force oligarchs to bring their overseas assets back
to Russia.
If Washington wins this
geopolitical Cold War, it will install a pro-Western government
in Moscow which could lead to the breakup of Russia. Siberia,
the Caucasus and the Far East will demand autonomy, and the
country's oil and gas resources will be transferred from the
government to multinational corporations.
However, it is possible that
Russia can resist, thereby fulfilling its historical mission of foiling
the designs of those who long for world domination. Just as
Russia stopped Hitler in the 20th century, Napoleon in the 19th
century and Frederick the Great in the 18th century, it will
stop Washington in the 21st century. This is nothing personal, just
business. Russia has its historical mission to fulfil
If
a geopolitical Cold War erupts, it very well may morph into an
ideological one since a Western attack would force Putin to rely
heavily on conservative forces in the country's so-called "moral
majority" in order to bolster his support. Additionally, Moscow
will attempt to relieve pressure and find support abroad
by stepping up its information campaign among the hundreds
of millions of EU residents who sympathize not only with Putin's
stance against Washington, but also his support of the traditional values
that have been rejected by the EU elite.
More
Treaties are like roses and young girls.
They last while they last.
Charles de Gaulle.
The monthly Coppock Indicators finished February.
DJIA: +203 Up. NASDAQ: +353 Up. SP500: +255 Up.
The new Fed bubble continues, what could possibly go wrong?
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