Putin Asks For, And Is Granted Permission By Parliament To Use Military In Ukraine

Current US foreign policy in a nutshell: Barack Obama tells Vladimir Putin “there will be costs” if Russia invades Ukraine. What does Putin do? He invades Ukraine. Only this time it’s official: AP reports that the Kremlin says Russian President Vladimir Putin has asked parliament for permission to use the country’s military in Ukraine. Putin says the move is needed to protect ethnic Russians and the personnel of a Russian military base in Ukraine’s strategic region of Crimea.

From the Kremlin website:

Vladimir Putin made an appeal to the Council of the Federal Assembly of the Russian Federation.

“Due to the extraordinary situation on Ukraine , threatened the lives of citizens of the Russian Federation , our compatriots , the personnel of the military contingent of the Armed Forces of the Russian Federation located in accordance with the international agreement on the territory of Ukraine ( Autonomous Republic of Crimea ) , on the basis of paragraph ” d ” part 1 of Article 102 of the Constitution of the Russian Federation am submitting to the Federation Council of the Federal Assembly of the Russian Federation appeal for use of the Armed Forces of the Russian Federation on the territory of Ukraine to the normalization of the political situation in this country.

RIA further adds, the military use is virtually assured as it was leaders of Russia’s upper and lower houses of parliament who first called Saturday on President Vladimir Putin to stabilize the situation in Crimea and protect Russian citizens.  The leader of Federation Council, Russia’s upper house, said the use of military force in the former Soviet nation could be justified after the opposition swept into power in Kiev last weekend.

More from the RT:

In this situation it would even be possible, on the request of the Crimean government, to bring in a limited contingent [of troops] to guarantee security,” Valentina Matviyenko said.


The partition of Ukraine has become increasingly likely in recent days as heavily armed men understood to be Russian soldiers have taken control of key facilities and blocked roads in Crimea.


About 60 percent of the residents of Ukraine’s southern peninsula are ethnic Russians with the remainder of the population made up of Ukrainians and Crimean Tatars, who largely support the incoming regime.


The State Duma, Russia’s lower house, released a similar statement Saturday that said must Putin bring the situation in Ukraine under control.


“All available means” should be deployed to protect Russian citizens, said Sergei Naryshkin, a former head of the presidential administration and the current parliamentery speaker in the Duma.


The Crimea has been visited by a series of Russian Duma deputies in recent days, including former boxing champion Nikolai Valuev, former figure skater Irina Rodnina, and the first woman in space Valentina Tereshkova.


Pro-Russian protests calling for secession have taken place sporadically across the southern and eastern Ukraine since President Viktor Yanukovuych was toppled from power a week ago.


Meanwhile, international media has reported widespread military movements, believed to be units from Russia’s Black Sea fleet headquartered in Crimea, including tanks and helicopters that began on Tuesday. Ukrainian officials have accused the Kremlin of provoking conflict and called on Russia to return all soldiers to their bases.

And then this:


Needless to say all of this is just for show: as we have been reporting for the past 4 days, Russian troops are long since in Ukraine.

More importantly, it appears Putin is not very concerned about the impact his actions will have on equity futures when they open for trading on Sunday evening: but… but… the artificial “on paper” wealth effect. On the other hand, he certainly has a lot of concern to keep geopolitical events of the type that keep the price of crude high, always at arms length.


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Georgia CBD Medical Marijuana Bill Wins in House Committee, Still Has Shortcomings

Earlier this week, the Georgia House Health and Human Services
Committee unanimously supported a bill allowing the use of CBD
cannabis oil for children suffering from debilitating health
conditions. The bill still has to pass the full House vote and then
be approved by the Senate, but Rep. Allen Peake (R-Macon) is
hopeful. From 
GPB News

[Peake] told lawmakers, “The heart and intent is to find the
best way for families in Georgia, in conjunction with their
physicians, to get access [to the treatment.]”

The bill would authorize the Georgia Composite Medical Board to
oversee the use of marijuana derivatives in a nonsmoking delivery
system, such as an oil or pill form, for treatment of patients
within an academic medical center research setting, under the
direction of a physician.

The only conditions approved for treatment would be seizure
disorders, glaucoma, and nausea associated with cancer chemotherapy
and radiation.

The Marijuana Policy Project says that the bill is
too restrictive
, and that they “already know from similar
programs in other states that this will be unworkable.”

Reason TV recently released a video detailing one mother’s
battle to provide CBD for her child. The video, “Docs Afraid to
Prescribe Life-Saving Medical Pot, Even Though It Won’t Get
Patients High,” originally aired on Feb 25, 2014 and
the original text is below:

Three-year-old Dahlia Barnhart was diagnosed with an
aggressive form of brain cancer last June. Her mother, Moriah
Barnhart, immersed herself in research and sought out any treatment
that could improve Dahlia’s condition.

“We were pretty much confronted early on with the fact that this
was the worst case scenario,” says Barnhart.

Barnhart’s research led her to CBD extract, a major component of
the cannabis plant. Unlike more commonly known THC, CBD doesn’t get
patients high. Barnhart says CBD has been extremely effective for

“The first night she took it, she slept through the night for the
first time in her entire almost three years of life. She very
quickly started to get her appetite back, she was thirsty,” says

Many patients swear by CBD as a treatment for a variety of cancers
and other serious conditions like epilepsy. Yet despite the fact
that it’s not psychoactive, doctors won’t prescribe it for their

“I was really shocked. To be completely honest, I discussed diets,
supplements, and the only thing that could not be discussed was
cannabis extract.”

The murky waters surrounding federal prohibition have had a
chilling effect on the medical community, and even though CBD may
be a viable option for many patients, doctors won’t prescribe it
for fear of losing their licenses. Prohibition has also made
researching and accessing CBD a difficult task. This is because CBD
has been “strained out” over the years as CBD counteracts the
psychoactive effects of THC.The Ludwig von Mises Institute’s Mark
 says that prohibition can help explain these
dimished levels of CBD.

“The war on drugs increases the risk and the penalties of being
caught and therefore suppliers have a tendency–a strong desire–to
bring in highly potent marijuana,” Thornton says. “All of their
efforts are given to driving up the potency of THC in marijuana and
as a consequence they’ve also reduced the potency of

With marijuana legalization picking up steam and advocates like
Moriah spreading the word, many are hopeful that access to strains
with higher CBD levels may follow suit.

About 4:30 minutes.

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Big Week Ahead for FX

Technical and fundamentals appear aligned against the dollar versus most of the major currencies in the week ahead.   Last week, we cautioned against playing for a break out, pending key data.  The the higher than expected preliminary CPI figure from the euro zone before the weekend, lifted the euro and Swiss franc to new highs.  Sterling is poised to push through its multi-year high set in mid-February near $1.6825. 


It is almost like the first law of thermodynamics:  an object remains at rest or in motion unless acted upon by another force.  No other force has emerged sufficiently strong to counter the recent trends.  The market accepts that, even though the chair of the Fed suggests that it is difficult to determine how much of the recent economic weakness is due to weather, the measured tapering will continue.  Yet, investors also recognize that tapering is not tightening and that the first rate hike is still well over a year away (H2 15).  


Even with the German Constitutional Court raising questions about the legitimacy of the ECB’s OMT, a new government in Italy, the political uncertainty in Cyprus, and the fissures in the Ukraine, the euro has remained well supported.  The preliminary CPI report reduces the perception of the pressure on the ECB to take bold action, such as QE or a negative deposit rate at the meeting on March 6 to address the threat of deflation.  


A small cut in the repo rate (25 bp) would have next to no impact on inflation or inflation expectations.  Nor would it help the ECB address its other two challenges: elevated and volatile EONIA, and the continued reduction in lending to businesses and households.  A cut in the lending rate, would address the former, while the latter may require a new program (which Draghi has hinted involving buying bank bonds that are backed by loans, as in asset-backed securities). 


Euro:   Technical indicators are constructive, but the two-day rally at the end of last week has brought the euro near the top of its Bollinger band. Consolidation or even a small pullback toward $1.3770 early in the week may be seen as a new buying opportunity ahead of the ECB meeting and US jobs data, where the early call is for an increase of about 155k.   The next immediate target for the euro is the $1.3900 area that was approached just after Xmas, but it is the $1.40 area that poses the next key hurdle.    The move to new highs for the year did not see the benchmark 3-month implied euro volatility increase.  It remains a low vol environment.  


Sterling:  Barring a significant downside surprise in the UK’s three PMIs due out in the first week in March, the market will continue to see the BOE as the first of the major central banks to lift rates.  Most expectations are for the first hike in Q1 2015, but strong data will keep the risk asymmetrically biased toward earlier rather than later.  The Dec 14 and March 15 short-sterling futures ended last week little changed, but are poised move lower (implying higher rates).  This is consistent with sterling challenging and surpassing the mid-February high (~$1.6825).   Over the slightly longer term, a test on $1.70 still seems reasonable.  


Yen:  The technical outlook for the yen is decidedly less clear than for the euro and sterling.  The uptrend off the early February lows was violated in the second half of last week.  The dollar recorded lower highs and lower lows every day last week, yet there is not much momentum.  Three-month implied volatility looks set to test last year’s lows set in October near  8.5%. after starting the February above 10%.  The RSI is flat and MACDs may cross lower, but from well below zero.  The 100-day moving average, which the dollar has closed below once since mid-Nov 2013 comes in near JPY101.85 now, and is still rising about 20 ticks a week.   The JPY102.45 marks nearby resistance, but the JPY102.70-80 capped efforts to rally in February remains the key hurdle to stronger dollar recovery. 


Canadian dollar:   The Bank of Canada is likely to retain a dovish tone at the March policy meeting, but barring some significant economic deterioration, a rate cut is not envisioned.  Although technical indicators are not generating a strong signal, we are inclined to look for the US dollar to correct lower.  This could bring the dollar toward CAD1.10.  A break then would could spur a move to CAD1.0920.   Resistance is see near CAD1.1150.  


Australian dollar:   The technical outlook is poor.  It is the only major currency to finish lower against the dollar last week, managing to hold just above the 50-day moving average near $0.8910.  The 5-day moving average will likely move below the 20-day at the start of the week for the first time in nearly a month.  MACDs are rolling over and the RSI is weakening after moving sideways in recent weeks.   The initial target is in the $0.8840-80 band.  In the bigger picture, though the month-long rally is likely over and the longer term down trend may be resuming.  Fundamentally, the market has taken on board the neutral RBA, but weak data and slowing of its largest trading partner may spur expectations of another cut in late Q2 or Q3.  A move back above $0.9000 would help improve the technical tone.  


Mexican peso:  The dollar spent last week within the previous week’s range against the Mexican peso, but posted the lowest weekly closes since the first full week of the year.  It is near the lower end of the trading range seen since mid-January.  A break of the MXN13.19-MXN13.20 area could spur a move toward MXN13.00, though technical indicators are not generating particularly strong signals.   The upper end of the range is seen near MXN13.40. 



Observations from the CFTC Commitment of Traders for the CME currency futures:


1.  Position adjustments in the reporting week ending February 25 were mostly minor.  There were not gross position adjustments of more than 10k contracts.  Indeed, only 2 of the 14 gross positions we track were in excess of 6k contracts.  Short sterling positions were reduced by 8.2k contracts to 45.8k.  The short Canadian dollar positions were cut by 9.3k contracts to 83.5k, which is the second largest gross short position after the yen’s 99.8k contracts.


2.   The 5.2k contract increase in the gross long Swiss franc position was sufficiently larger than the 2k increase in the gross short positions to swing the net franc position back to the long side, albeit barely with a 400 contracts.


3.  The increase in the net long sterling position was not a function of new longs being established, as the gross longs were actually reduced by 1.7k contracts to 74.6k.   Rather it reflected an 8.2k gross short contracts were covered.


4.  The net short Australian dollar position of 39k contracts is the smallest since late November.  The decline has been fueled by short-covering.  The gross short position most recently peaked in late-Jan/early Feb near 80k contracts.  During the latest reporting period, it fell 4.5k contracts to slip below 50k.  Despite the fact that the Aussie rallied 4 cents from the multi-year low in late-Jan through mid-Feb, the gross long positions are a lowly 10.3k, having risen by nearly 1k in the period.  This is the smallest of the gross positions we track.  There are even more gross long yen contracts (14.7k) than Australian dollars.


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Baylen Linnekin on a Tidal Wave of Threats to Food Freedom

Farm standFebruary
2014 may go down as the worst month for food freedom since the New
Deal era. The lowlights began with President Obama signing a new
trillion-dollar Farm Bill into law. While this Farm Bill eliminates
the pointless direct subsidies paid to farmers, the new law is rife
with crop insurance subsidies that will cost taxpayers untold
billions. Soon after, word came that tort lawyers were busy
pitching attorneys general in sixteen states on the idea of a broad
lawsuit to “make the food industry pay for soaring obesity-related
health care costs.” The same week that news broke of lawyers
itching to cash in on the food industry, California legislators
proposed adding a warning label to all sweetened drinks like soda
sold in the state. As the year began, Baylen Linnekin predicted
that supporters of food freedom would face considerable hurdles in
2014. But even he couldn’t have imagined that the year would bring
so many challenges.

View this article.

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