Mardi Gras weekend can only mean one thing… actually, I don’t even know what that means, but I’m gonna have a helluva weekend. Hope y’all do, too! As we say here in New Orleans, “Laissez Les Bon Temps Roulez!” (that’s “Let The Good Times Roll” for you not-so smart folk.)


Mardi Gras weekend can only mean one thing… actually, I don’t even know what that means, but I’m gonna have a helluva weekend. Hope y’all do, too! As we say here in New Orleans, "Laissez Les Bon Temps Roulez!" (that’s "Let The Good Times Roll" for you not-so smart folk.)



from @hooper_fit RSS | Webstagram

Russia vs Ukraine: The Infographic

Curious how Ukraine, which with its population of 44 million and size of 603,628 square km makes it the largest single country entirely in Europe, stacks up against Russia? The following infographic should answer some questions regarding the (im)balance of power.

And as a follow up, here is a map showing the location of the various sites of the Russian Navy in the Crimea. These will be the first sites to see a surge in Russian troop presence.

H/t @MrHalimi, @seanrussiablog


via Zero Hedge Tyler Durden

Britain Summons Russian Ambassador

While various organizations are scrambling to meet on short notice, or not so short if one is a European finance minister, the diplomatic fallout has begun with the summoning of the Russian Ambassador in Great Britain to the foreign office.

This was to be expected. More interest will be whether Russia will “summon” its ambassador to the US as the upper house of parliament has demanded of Putin:

Russia’s upper house of parliament will ask President Vladimir Putin to recall Moscow’s ambassador from the United States, the chamber’s speaker said on Saturday.


Valentina Matviyenko, the head of the Federation Council, asked the Council’s Committee on Foreign Affairs to draw up a proposal setting out the demands to Putin.

Now all eyes are focused on the White House. Or perhaps that should say on the nearby golf courses?


via Zero Hedge Tyler Durden

Thaddeus Russell on Labor Corporatism and the Volkswagen Union Vote

Leading up to the recent election conducted by
the National Labor Relations Board at the Volkswagen automobile
plant in Chattanooga, Tennessee, in which workers voted 712 to 626
against joining the United Automobile Workers (UAW), left-wing
supporters of the union drive demonstrated a curious lack of
understanding of the conservatism of their cause. Indeed, writes
Thaddeus Russell, the fact that Volkswagen tacitly supported the
UAW was a clear sign that unionization in this case would serve to
benefit something other than the interests of the workers.

View this article.

from Hit & Run

Pro-Russian Protesters Storm Kharkiv City Administration Building; Klitschko Calls For General Mobilization

Even as Russia has officially deployed its military to the Ukraine, its unofficial involvement in The Crimean was well known for days. A much more notable development would be if protesters in the pro-Russian eastern part of the country were to seize control of the second largest city in the Ukraine, Kharkiv, located just miles from the Russian border as this would quickly give Russia a foothold into the east of the nation with the tactical escalation abilities such a takeover would entail. Which is why the following clip of pro-Russian protesters storming the city administration in Kharkiv is of importance: should Ukraine lose control of the city, or is forced to use troops against the people, it would be just the pretext Russia needs to “defend” citizens in this part of the country, the same argument it used for military intervention in the Crimean.

And in other news, Ukrainian boxer, vocal leader of the EuroMeidan opposition movement and potential future president, Vitali Klitschko just called for a general mobilization. After all he has the most to lose if the countercoup quickly sweeps away from power those who organized the original coup in the first place. From Reuters:

Vitaly Klitschko, a senior Ukrainian politician and likely presidential candidate, called on Saturday for a “general mobilisation” following Russian parliament’s decision to approve deploying troops in Ukraine’s Crimea region.


“Klitschko calls for a declaration on a general mobilisation,” the retired boxing champion’s political party UDAR (Punch) said, making clear he favoured a military mobilisation.

Finally, the world’s most useless organizations, the UN and European finance ministers, are pretending to be relevant:


Time for another Obama appearance to explain just what the “costs” that he mentioned are in his opinion. Because Putin seems to have missed the message.


via Zero Hedge Tyler Durden

So this happened this morning. #NotForMe #FatFriendAtItAll #MyHouseSmellsLikeLove


So this happened this morning. #NotForMe #FatFriendAtItAll #MyHouseSmellsLikeLove




from @hooper_fit RSS | Webstagram

Ukraine Acting President Calls Emergncy Meeting Of Security Chiefs; Russia Threatens To Cut Off The Gas

All the dominoes are tumbling now. Moments after the Russian upper house of parliament approved the decision to use Russian troops in the Ukraine as expected, Ukraine’s acting president called an emergency meeting of security chiefs according to his spokeswoman. Oleksander Turchinov summoned his Security Council after Russian President Vladimir Putin sought parliamentary approval to deploy Russian forces in the Ukrainian region of Crimea. At this point the biggest and perhaps final wildcard is whether NATO does or does not get involved. If it does, and if Russia does not back off – which it has clearly telegraphed it won’t – futures may be looking at a limit down open on Sunday.

And while military escalation is now an official reality instead of merely YouTube clips of unidentified crap troops , Russia just sent another major warning shot across the bow when it issued several warnings on Saturday that Ukraine may lose a discount to the gas price it now pays to Gazprom due to Kiev’s outstanding gas debt. Russia’s state gas company Gazprom estimates Ukraine’s outstanding gas debt at $1.55 billion for 2013 and gas deliveries so far this year. This of course, was Russia’s trump card from the very beginning. Via Reuters:

“It seems that with such gas payments and fulfilment of its obligations Ukraine may not keep its current gas discount. The gas discount agreement assumed full and timely payment,” Gazprom spokesman Sergei Kupriyanov told Reuters.


A price increase would deepen Ukraine’s already dire cash situation and could lead to a new “gas war” between Kiev and Moscow as well as interrupt gas shipments to Europe, which gets around third of its gas from Russia.


In December, Russia agreed to reduce gas prices for Kiev by about a third, to $268.50 per 1,000 cubic metres from around $400 which Ukraine had paid since 2009, after ousted President Viktor Yanukovich spurned an EU trade deal in favour of closer ties to Moscow.


The deal allowed for the price to be revised quarterly between the 5th and 10th day of the first month every quarter.


The news agency Interfax cited a representative of the Russian energy ministry as saying on Saturday that Moscow sees no reason to extend the discount to Ukraine for the second quarter – because of the outstanding debt.


If this continues to happen, is there any point in continuing the existing agreement on gas supplies at discount prices? No,” the agency cited an unnamed ministry representative as saying.


“It is important that the proposal for a reduced gas price is confirmed quarterly. It would be stupid and wrong to extend it to the second quarter.”


Ukraine’s newly appointed Energy Minister Yuri Prodan told reporters on Saturday that the price for Russian gas would stay unchanged in March but it could jump to around $400 per 1,000 cubic metres in the second quarter if the two sides fail to sign an agreement.


Ukraine, which has seen its currency spiralling down and cash and gold reserves falling significantly as a result of the political protests that led to the ousting of President Viktor Yanukovich last weekend, is in dire need of cash.


It faces a further $6 billion in foreign debt payments this year and has asked the International Monetary Fund for financial assistance of at least $15 billion. Ukraine’s newly appointed leaders estimated Kiev’s needs at around $35 billion.


Prodan told journalists that the Ukrainian energy firm Naftogas is in “active talks” with Gazprom over pricing. Ukraine consumes about 55 billion cubic meters of gas each year, and more than half of this amount is imported from Russia.

But far more important than Ukraine, which is merely a sacrificial lamb in the latest proxy war between east and west, is the Russian hint that what is likely to happen to Ukraine’s gas may soon hit Europe too if it also gets involved.

Apart from through Ukraine, Russian gas flows to Europe via Belarus and two subsea pipelines – under the Black Sea and the Baltic Sea. Gazprom plans to build another subsea pipeline – the South Stream – to bypass Ukraine by 2016.

So check to you NATO: will you defend the territorial integrity of Ukraine even as NATO actively pushed for a split in Yugoslavia some 15 years ago, or will it do the “right” thing… in the dark?


via Zero Hedge Tyler Durden

Warren Buffett’s Latest Letter To Investors

For those who follow folksy Uncle Warren, here is the breakdown of Berkshire’s Q4 and full year results, as well as his latest letter to investors.

  • Book value at Dec. 31: $134,973/shr
  • Book value up by 18.2% since ’12 end
  • 4Q oper EPS $2,297, est. $2,204
  • 4Q derivative gains $334m
  • 4Q investment gains $880m
  • Insurance float ~$77b at Dec. 31
  • Cash & cash equivalents $48.19b at end of yr
  • Will be aggressive on shr purchases if stock price descends to 120% level

Berkshire Hathaway’s Warren Buffett says in holder letter he would like to buy larger stake in Heinz.

Though the Heinz acquisition has some similarities to a “private equity” transaction, there is a crucial difference: Berkshire never intends to sell a share of the company. What we would like, rather, is to buy more, and that could happen: Certain 3G investors may sell some or all of their shares in the future, and we might increase our ownership at such times. Berkshire and 3G could also decide at some point that it would be mutually beneficial if we were to exchange some of our preferred for common shares (at an equity valuation appropriate to the time).

As usual, Buffett preaches his irrational optimism in a country that over the past 237 years has piled up $17.4 trillion in debt and over $200 trillion in derivatives, which has made the concept of capitalism a mockery as even a modestly sized counterrparty failure would collapse the system. Of course, those like Buffett would be again bailed out. Others wouldn’t be so lucky but at least they can have their optimism. From the WSJ:

“Indeed, who has ever benefited during the past 237 years by betting against America?” Mr. Buffett wrote in his annual letter to shareholders, released Saturday along with Berkshire’s fourth-quarter and annual report. The “dynamism embedded in our market economy will continue to work its magic. America’s best days lie ahead.”

On the operational front, Berkshire did well to quite well in a year in which the Fed pumped well over a trillion in extra liquidity which went into the stock market if not the economy:

For the fourth quarter, Berkhire’s net income jumped 9.6% to nearly $5 billion, helped partly by gains at its insurance operations. Berkshire owns auto insurer Geico as well as large reinsurance businesses, both of which are core operations that have propelled the company’s growth from an ailing textile manufacturer in the 1960s to a diversified holding company with a market capitalization of $282 billion.


Mr. Buffett uses the insurance premiums it collects from customers upfront to invest for Berkshire’s benefit. Berkshire can use this money, which Mr. Buffett calls “float,” because insurance claims are typically paid much later. In 2013, Berkshire’s float grew to $77.2 billion. Last year, Berkshire insurance business also generated about $3.1 billion in underwriting profit, its 11th consecutive year of earning such a profit.


Revenue and net earnings at one of Berkshire’s biggest units, the freight railroad Burlington Northern Santa Fe Corp., rose to $22 billion and $3.8 billion, respectively.


Berkshire’s “Powerhouse Five”—a group of large non-insurance businesses—made $10.8 billion in pretax profit last year, up from $758 million in 2012, Mr. Buffett wrote in his letter. This group includes Burlington Northern, utility company MidAmerican, chemicals maker Lubrizol and industrial companies Marmon and Iscar. Earnings for these five companies could increase by $1 billion before taxes if the U.S. economy continues to improve, Mr. Buffett said.

It wasn’t all high fives this time. In this year’s letter Buffett does a mea culpa for his investment in the near bankrupt Energy Future Holdings, fka TXU:

Most of you have never heard of Energy Future Holdings. Consider yourselves lucky; I certainly wish I hadn’t. The company was formed in 2007 to effect a giant leveraged buyout of electric utility assets in Texas. The equity owners put up $8 billion and borrowed a massive amount in addition. About $2 billion of the debt was purchased by Berkshire, pursuant to a decision I made without consulting with Charlie. That was a big mistake.


Unless natural gas prices soar, EFH will almost certainly file for bankruptcy in 2014. Last year, we sold our holdings for $259 million. While owning the bonds, we received $837 million in cash interest. Overall, therefore, we suffered a pre-tax loss of $873 million. Next time I’ll call Charlie.

For all the other folksy witticisms (zero mentions of gold or fondling it this year), you can read them in the letter below (link) or the WSJ liveblog:

Source: BBG, WSJ


via Zero Hedge Tyler Durden

Southern Poverty Law Center Finds Fewer Far-Right Groups, Warns Us To Be Worried Anyway

America reacts to a new SPLC report.Every year the Southern Poverty Law Center lists
all the organizations it can assign to one “extremist” category or
another. I’m not a fan of the resulting report. (You can see some
of my past criticisms of its methodology and conclusions here,
and in my book The United States
of Paranoia
.) But I’m always interested to see the spin
that the group puts on its findings—particularly
this year
, when the center’s census shows substantial
declines in both of its major categories. According to the SPLC’s
new figures, the number of hate groups dropped in 2013 for the
second straight year, sliding from 1,007 to 939. And
anti-government “Patriot” groups plunged from 1,360 to 1,096, a
shrinkage that not only reversed 2012’s
heavily hyped growth
in the category but fell below the number
for 2011. How do you cry crisis about that?

The SPLC’s Mark Potok adopts a two-punch strategy. One reason
extremist groups are less popular, he claims,
is that “many issues championed by the radical right have been
adopted by purportedly mainstream politicians.” (His first example:
Some elected officials believe conspiracy theories about
. Of course, that was true when the list was longer,
too.) Meanwhile, as erstwhile extremists exit the movement, the
reduction in the hard core’s numbers “often has the effect of
fostering, rather than retarding, followers’ decisions to finally
act out violently.” The result, he says, is “a
leaner, meaner radical right

I especially enjoyed the second half of that argument. When the
Patriot count was going up last year, Potok
that “the movement and its violence will spurt ahead
yet again.” Now the count is going down, but it turns out that
also means violence is liable to rise. Apparently, Potok
is going to see a swelling threat no matter which way the numbers
that he’s touting are moving. For years I’ve been saying
that the size of the SPLC’s list is not a very good guide to the
size of the threat of domestic terrorism. Who knew that Mark Potok

from Hit & Run

Cathy Young Names Vladimir Putin as the Biggest Loser in Sochi and Ukraine

With the rapid developments in Ukraine, it is
difficult at this point to make any predictions. No one knows how
far Russia’s now-certain military intervention will go—or whether
the revolution that ousted pro-Russian president Viktor Yanukovych
will succeed in steering the country toward freedom and prosperity.
But one thing is already clear: the past week’s biggest loser is
Russian president Vladimir Putin. Cathy Young writes that Putin’s
rout in Ukraine has further soured the already dubious triumph of
the Sochi Olympics. It is almost a storybook tale of hubris,
humiliation, and poetic justice.

View this article.

from Hit & Run