Deposed-Ukraine President Yanukovich Speaks At Press Conference – Live Webcast

The long awated press conference has begun. Here are the highlights:


Live webcast below:


via Zero Hedge Tyler Durden

Mt Gox Files For Bankruptcy After $473 Million In Bitcoins “Disappeared”

For a case study of a blistering rise and an absolutely epic fall of an exchange that i) was named after Magic: the Gathering and ii) transacted in a digital currency which many have speculated was conceived by the NSA nearly two decades ago and was used as a honeypot to trap the gullible, look no further than Mt.Gox which after halting withdrawals for the second (and final time) has finally done the honorable thing, and filed for bankruptcy. As the WSJ reports, “Bitcoin exchange Mt. Gox said Friday it was filing for bankruptcy protection after losing almost 750,000 of its customers’ bitcoins, marking the collapse of a marketplace that once dominated trading in the virtual currency. The company said it also lost around 100,000 of its own bitcoins. Together, the lost bitcoins would be worth approximately $473 million at market prices charted by the CoinDesk bitcoin index, although the price of Mt. Gox bitcoin had fallen well below that index after it stopped bitcoin withdrawals in early February.”

The punchline: speaking to reporters at Tokyo District Court Friday after the bankruptcy filing, Mt. Gox owner Mark Karpelès said technical issues had opened the way for fraudulent withdrawals, and he apologized to customers.  

“There was some weakness in the system, and the bitcoins have disappeared. I apologize for causing trouble”

So $473 million Bitcoins disappear just like that? But you heard the man – he is sorry. So all is well – and why not: it works for the TBTF banks every day.

What is amazing is that at the time of filing Mt. Gox had outstanding debt of about ¥6.5 billion ($63.6 million), and just as amazing is that it actually had assets worth ¥3.84 billion.

Elsewhere, prices on the CoinDesk index, which tracks the Bitstamp and BTC-e bitcoin exchanges, fell slightly after the announcement but appeared to stave off a larger drop.

Mr. Karpelès, wearing a gray suit and a blue tie, appeared calm while his lawyer did most of the talking, but he appeared to have difficulty finding words when reporters asked him to send a message to his investors, just repeating his apology.

Computer geeks who were hoping to ride the momentum train to riches, and apparently had never heard of gold, were unhappy:

“It is disappointing they hid so much for so long,” said Jonathan Waller, a 30-year-old game developer who said he had had 211 bitcoin in Mt. Gox. “I hope they manage to become a fully-functioning exchange again, but their reputation is so damaged it may not be possible,” he said.


Over the past month, customers from as far away as the U.K. and Australia had come to air their complaints outside the company’s Tokyo offices. One of them, Londoner Kolin Burges, figured in news photos around the world holding a sign saying, “MT GOX—WHERE IS OUR MONEY.”


William Banks, a website developer in Australia, said he lost about 100 bitcoins in Mt. Gox. He had been using the platform since the end of 2012, when he bought some bitcoins at $40 each. Recently, he bought more at about $800 a pop as he became more confident in the virtual currency. He said he has contacted a Japan-based lawyer to look into legal action.


About Mt. Gox’s loss of bitcoins, he said, “That seems impossible to me. It’s just such an astronomical amount of coins to lose.”

Only when redenominated in USD. Remember: BTC is its own currency so why fret? As for the collapse of this latest Ponzi scheme: if things appear too good to be true (wink wink S&P 500), they usually are.


via Zero Hedge Tyler Durden

Frontrunning: February 28

  • Yuan suffers biggest weekly loss as PBOC punishes speculators (Reuters)
  • Euro Gains as Bonds Decline With Stocks on Inflation Data (BBG)
  • Biggest Sovereign Fund Forced to Sell Stocks as Mandate Breached (BBG)
  • Because we don’t already have enough fried foods.. (Reuters)
  • Putin: Russia to Consider Aid to Ukraine (AP)
  • Wall Street Hates JPMorgan Fee for $1 Trillion Junk Loans (BBG)
  • Yellen Sticks to Plan Amid Weather Doubts (WSJ)
  • U.S. Retail Chains See First Profit Decline Since Recession (BBG)
  • Sotheby’s Pink Diamond Buyer Defaulted on Record Purchase (BBG)
  • Winter Storm Threatens New Yorkers on First Commute in March (BBG)
  • New York Plaza Owner Arrested Amid $3.9 Billion Refund Probe (BBG)


Overnight Media Digest


* Federal Reserve Chairwoman Janet Yellen said bad weather might explain the patch of soft economic data making headlines during the past few weeks, but she isn’t quite sure.

* Insurers are rushing to gather health information from the new customers they won on public marketplaces in a high-stakes outreach effort crucial to their hopes of profiting from the health-care law.

* Sandwich chain Quiznos is preparing to file for bankruptcy-court protection within weeks as it contends with unhappy franchisees and a $570 million debt load, according to people with direct knowledge of the matter.

* Wells Fargo said it is cutting another 700 mortgage jobs, as the U.S. home refinancing market continues to cool.

* Jos. A. Bank Clothiers Inc rejected Men’s Wearhouse Inc’s $1.8 billion takeover as “inadequate,” but in doing so left open the possibility of ultimately agreeing to a tie-up with its rival.

* Freddie Mac reported a record annual profit of $48.7 billion for 2013 on Thursday, powered by a strong rebound in U.S. home prices and a series of legal and accounting benefits that reversed earlier losses.

* SunTrust Banks Inc is the subject of an investigation into whether its actions may have resulted in unspecified losses to Fannie Mae the government-controlled mortgage-finance company, according to federal filings and people familiar with the matter.

* Venture capitalist Marc Andreessen defended the corporate-governance practices of the technology industry and said he recuses himself from boardroom discussions that could involve companies his firm is backing.

* Federal regulators plan to file a legal action against a unit of mortgage-servicing firm Walter Investment Management over alleged violations of consumer financial laws, the company said in a regulatory filing Thursday.

* Teens as young as 13 are sometimes shown Facebook ads inappropriate to their age, underscoring Facebook’s challenge in policing a social network with more than a billion users and a million advertisers.



British Prime Minister David Cameron announced an independent inquiry into letters of immunity sent to IRA suspects after an angry response to the freeing of an Irishman accused of 1982 bombing that killed four soldiers in London.

Spain’s government has started to sell some of its shares in nationalised lender Bankia with an initial offer to investors of a 7.5 percent stake in an attempt towards reprivatisation.

Europe’s largest insurer Allianz’s Chief Executive warned of interference in the operating decisions of Pimco amid pressure from investors to protect the bond fund manager brand.

Insurance and pensions heavyweight Standard Life became the first major company to warn it could move partly out of Scotland if Scots split from the United Kingdom, fuelling a political row over the financial impact of independence.

Italian fashion house Versace is selling a 20 percent stake to U.S. private equity firm Blackstone through the injection of 150 million euros of fresh capital and the purchase of 60 million euros worth of shares from the Versace family.



* Accounts based on documents supplied by Edward Snowden say images – many sexually explicit – were collected from Yahoo users, even those not suspected of illegal activity.

* The instant growth in the oil-by-rail business is increasing the oil supply, but also raising alarms.

* State and federal regulators are worried that Ocwen Financial Corp is mishandling some of the mortgages it services, citing examples of shoddy paperwork and faulty technology.

* SeaWorld Entertainment Inc has come under fire after a documentary criticized its practice of holding whales in captivity. Now, the company is firing back.

* Janet Yellen, the Federal Reserve chairwoman, said on Thursday that the Fed was looking closely at a recent run of disappointing economic data as it considers how quickly to retreat from its economic stimulus campaign.

* Scrambling to contain the expanding fallout from the recall of about 1.4 million small cars because of a faulty ignition switch, General Motors Co again apologized on Thursday and said that it hoped to start repairing the cars in early April.

* A British man has been charged with hacking into computer servers belonging to the United States Federal Reserve, and then widely disclosing personal information of people who use them.

* Jos. A. Bank Clothiers Inc said on Thursday that its board had rejected Men’s Wearhouse Inc’s latest takeover bid, worth nearly $1.8 billion, but said that it was willing to meet to try and agree on a higher price.




* Long-simmering tension between Toronto Mayor Rob Ford and the city’s police chief reached a new level of animosity with the mayor daring Chief Bill Blair on Thursday to “arrest me.”

* With its flagship project rejected once more, Taseko Mines Ltd is refusing to throw in the towel, saying it will not give up its bid for a federal judicial review of what the company calls a flawed environmental report.

Reports in the business section:

* Bruce Power is working to secure the commitment from its two leading shareholders – TransCanada Corp and the Ontario Municipal Employees Retirement System – for a 15-year, C$15 billion ($13.5 billion) project to refurbish six Candu reactors at its Lake Huron site.

* Amid signs of a cooling Canadian economy and slower personal borrowing, the country’s largest lenders are reporting stellar results, reviving memories of a recent earnings season when four of the Big Six banks reported record profits.


* At the just-concluded Liberal national policy convention, a motion called for Australian-style gun control in Canada. This would see a huge number of guns seized from their owners in exchange for monetary compensation, and then destroyed. The motion was defeated, but that didn’t stop some Tory members of parliament from warning lawful gun owners that the Liberals are out to get them.

* Quebec’s Premier Pauline Marois says she doesn’t believe Quebec’s anglophone and allophone communities are living in a climate of insecurity despite a recent poll suggesting the contrary. The EKOS poll, conducted for CBC-Radio-Canada, suggested that 51 percent of anglophones surveyed had considered leaving Quebec in the past year.


* WestJet Airlines Ltd could bring in wide-body aircraft for in-house flying as soon as next year, the company disclosed to its pilots in a private presentation on Thursday.

* British Columbia’s finance minister says the government is taking West Coast liquefied natural gas investment “very seriously,” even as companies such as Royal Dutch Shell push back on the province’s 7 percent additional income tax on proposed LNG projects on the West Coast.




– Ownership reform of state-owned enterprises (SOEs) in the southern Chinese province of Guangdong is expected to attract more than 100 billion yuan ($16.32 billion) of private capital, the region’s vice governor Xu Shaohua said. The reform should be completed by 2015, he added.

– China will adopt five key measures to deal with worsening air pollution problems, including promoting natural gas supply, building new electric transmission networks and developing new energy technology, the country’s energy authorities said.


– Asset-backed securitization is estimated to hit 200 billion yuan ($32.63 billion) this year, industry experts told the official paper.


– A police official in the southwestern province of Sichuan has been arrested for taking 31 million yuan ($5.06 million) in bribes. Authorities raided his home and office, finding close to $2 million in cash alone.


– Shenzhen’s Qianhai free trade zone (FTZ), a testing ground for many policies to attract overseas investments, will help promote trade liberalization in Hong Kong, Macau and Guangdong, the Qianhai authority said in a document.


– Chinese contractors earned $137 billion in revenues from operations abroad in 2013, according to the China International Contractors Association. This was up 17.6 percent from a year earlier, driven by growing demand in Europe and Latin America.


– China needs to remember its history in order to create a bright future, the paper which acts as a Party mouthpiece said in an editorial. This comes in the wake of the country setting two new national memorial days to mark its victory in the Sino-Japanese war and the massacre of its civilians in Nanjing.



The Telegraph


Bonuses for GlaxoSmithKline’s top executives were “lower than they otherwise might have been” last year due to a major bribery scandal in China that has dogged the company since June, the company said in its annual report.


British American Tobacco has threatened to take the UK government to court over proposals to enforce plain packaging on cigarette packages.

The Guardian


Standard Life, the Edinburgh-based financial services group, became the largest and most influential Scottish firm yet to warn about the possible impact of independence and said it was setting up English subsidiary companies in case it decided to relocate.


The Bank of England’s base rate would peak close to 3 percent to protect mortgage payers from a big increase in monthly interest payments, a senior Bank of England official said .

The Times


Shares in Royal Bank of Scotland slid more than 9 per cent today after the bank revealed a “sobering” £8.24 billion loss and its chief executive revealed a radical restructuring plan.


The Spanish-owned network maintained its position as Britain’s second-largest mobile operator after adding 222,000 customers in the fourth quarter, bringing its total customer base to 23.9 million.

Sky News


Ofgem will on Friday intensify the pressure on the big six energy companies by demanding that they hand back hundreds of millions of pounds in surplus customer funds.


Indebted people who try to get out of financial trouble by using the services of consolidation firms are seeing up to four fifths of the money they pay going on fees and charges rather than their debts, a Sky News investigation has found.



Fly On The Wall 7:00 AM Market Snapshot

Domestic economic reports scheduled for today include:
Q4 GDP, second read, at 8:30–consensus 2.5%
Chicago PMI for February at 9:45–consensus 56.4
U. of Michigan consumer confidence at 9:55–consensus 81.5
Pending home sales for January at 10:00–consensus up 2.3% for the month



American States Water (AWR) upgraded to Buy from Hold at Brean Capital
Crane (CR) upgraded to Buy from Neutral at Citigroup
Credit Suisse (CS) upgraded to Overweight from Equal Weight at Barclays
Eaton Vance (EV) upgraded to Buy from Neutral at Sterne Agee
Gap (GPS) upgraded to Neutral from Underweight at Atlantic Equities
Principal Financial (PFG) upgraded to Outperform from Market Perform at Keefe Bruyette
RadiSys (RSYS) upgraded to Buy from Hold at Needham
Taseko Mines (TGB) upgraded to Buy from Neutral at BofA/Merrill
TripAdvisor (TRIP) upgraded to Neutral from Negative at Susquehanna
WesBanco (WSBC) upgraded to Outperform from Market Perform at Keefe Bruyette
Westlake Chemical (WLK) upgraded to Overweight from Neutral at JPMorgan


Abaxis (ABAX) downgraded to Underperform from Neutral at BofA/Merrill
American Assets (AAT) downgraded to Market Perform at JMP Securities
American Public (APEI) downgraded to Market Perform from Outperform at BMO Capital
American States Water (AWR) downgraded to Neutral from Buy at Janney Capital
Catamaran (CTRX) downgraded to Neutral from Buy at ISI Group
Deckers Outdoor (DECK) downgraded to Hold from Buy at Jefferies
Eagle Rock Energy (EROC) downgraded to Market Perform from Outperform at Wells Fargo
Endologix (ELGX) downgraded to Perform from Outperform at Oppenheimer
Equity One (EQY) downgraded to Market Perform from Outperform at Raymond James
Hanesbrands (HBI) downgraded to Hold from Buy at Stifel
InterMune (ITMN) downgraded to Neutral from Outperform at Credit Suisse
Isle of Capri (ISLE) downgraded to Hold from Buy at Deutsche Bank
James Hardie NV (JHX) downgraded to Neutral from Buy at BofA/Merrill
KBR (KBR) downgraded to Hold from Buy at BB&T
MarkWest Energy (MWE) downgraded to Equal Weight from Overweight at Morgan Stanley
MarkWest Energy (MWE) downgraded to Market Perform from Outperform at Wells Fargo
Medivation (MDVN) downgraded to Hold from Buy at Jefferies
Medivation (MDVN) downgraded to Market Perform from Outperform at Cowen
Pan American Silver (PAAS) downgraded to Hold from Buy at Deutsche Bank
Performant Financial (PFMT) downgraded to Neutral from Outperform at Credit Suisse
ResMed (RMD) downgraded to Neutral from Overweight at JPMorgan
Silver Standard (SSRI) downgraded to Sell from Hold at Deutsche Bank
Solar Senior (SUNS) downgraded to Market Perform from Outperform at JMP Securities
The Fresh Market (TFM) downgraded to Outperform from Strong Buy at Raymond James
Vanguard Natural (VNR) downgraded to Market Perform from Outperform at Wells Fargo
Vantiv (VNTV) downgraded to Hold from Buy at Jefferies
Westar Energy (WR) downgraded to Equal Weight from Overweight at Barclays
YuMe (YUME) downgraded to Neutral from Buy at Citigroup
Zale (ZLC) downgraded to Neutral from Buy at Citigroup


Magellan Health (MGLN) initiated with a Market Perform at Leerink
Virtus Investment Partners (VRTS) initiated with a Neutral at BofA/Merrill


Jos. A. Bank (JOSB) rejected $63.50 tender offer, agreed to meet with Men’s Wearhouse (MW)
Pepsi (PEP) sent letter to Peltz, rejected proposal
Mattel (MAT) acquired MEGA Brands in transaction valued at about $460M
ParkerVision (PRKR) gained after Qualcomm (QCOM) dismissed counterclaims against the company in their patent infringement suit
Decker’s Outdoors (DECK) fell 14% after the UGG manufacturer reported Q4 earnings and sales that beat estimates, but forecast a Q1 loss of 16c against analysts’ expectations for a 10c profit
Nippon TV acquired Hulu service (CMCSA, DIS, FOXA) in Japan
Juniper (JNPR) entered $1.2B accelerated share repurchase agreements
Ashford Hospitality (AHT) to spin off asset management business
Aqua America (WTR) prepared to invest in strategic ventures
United Continental (UAL) forecast Q1 PRASM down 0.5%-2.5%


Companies that beat consensus earnings expectations last night and today include:
Buenaventura (BVN), Aqua America (WTR), New Gold (NGD), Howard Hughes (HHC), Universal Health (UHS), OmniVision (OVTI), Mentor Graphics (MENT), Esterline (ESL), Hyperion Therapeutics (HPTX), Deckers Outdoor (DECK), SandRidge Energy (SD), Air Lease (AL), ACADIA (ACAD), Tumi (TUMI), (CRM), Gap (GPS)

Companies that missed consensus earnings expectations include:
Tesco (TESO), Orient-Express (OEH), Atlas Resource Partners (ARP), Comfort Systems USA (FIX), Willbros Group (WG), Bio-Rad (BIO), Arena Pharmaceuticals (ARNA), Clovis (CLVS),  Merrimack (MACK), Einstein Noah (BAGL), Monster Beverage (MNST), Sotheby’s (BID)

Companies that matched consensus earnings expectations include:
Pactera (PACT), Sequenom (SQNM), Spectranetics (SPNC), Ross Stores (ROST)


Amazon (AMZN) negotiating Prime streaming music service, Re/code reports
U.S. judge: Gmail suit against Google (GOOG) faces significant hurdle, Reuters reports
IBM (IBM),in restructuring move, begins cutting U.S. jobs, Bloomberg reports
3M (MMM) working with Goldman (GS) to sell some electronics units, Bloomberg reports
Warner Bros. (TWX) planning Minecraft movie, CNET reports
German court dismisses patent suit against Apple (AAPL), Bloomberg reports
UBS (UBS) to trade Chinese stock futures, Bloomberg reports
GM (GM) looking to start repairing ignition switches in April, NY Times reports
Musk (TSLA) says battery swapping should be available in few months, Bloomberg reports
Nissan (NSANY) aims to rev up production in U.S., Detroit News reports


Ampio (AMPE) 8.5M share Secondary priced at $7.00
Bankrate (RATE) files to sell 14M shares of common stock for holders
Colony Financial (CLNY) files to sell 12M shares of common stock
Compugen (CGEN) files automatic ordinary share shelf
DCP Midstream (DPM) 12.5M share Secondary priced at $48.90
Enzymotec (ENZY) 4.8M share Secondary priced at $28.00
Neptune Technologies (NEPT) files to sell common stock
Prospect Global Resources (PGRX) files to sell 17M shares of common stock
Sunoco Logistics (SXL) files to sell $250M in common units
United Insurance (UIHC) 4M share Secondary priced at $12.50
Varonis (VRNS) 4.8M share IPO priced at $22.00


via Zero Hedge Tyler Durden

Futures Tread Record Territory Water Following Overnight China, Ukraine Fireworks

In addition to the already noted fireworks out of China, where the Yuan saw the biggest daily plunge since 2008 and the ongoing and very rapid newsflow out of the Ukraine, focus this morning was very much of the latest Eurozone CPI data, which despite matching previous low levels, came in above expectations and in turn resulted in an aggressive unwind of short-EUR bets as market participants were forced to re-asses the likelihood of more easing by the ECB. Still, even though the Euribor curve bear steepened and Bunds came under significant selling pressure, the EONIA forward curve remained inverted, signifying that there is still a degree of apprehension over what is unarguably very low inflation data.

Looking elsewhere, even though the PBOC engineered correction resulted in the Chinese CNY posting record loss this week, the Shanghai Comp settled the session in the green, as the initial volatility surrounding the exodus of carry trades gradually abates. In Europe this morning, stocks are seen lower across the board, with healthcare and financials underperforming.

Going forward, market participants will get to digest the release of the latest GDP data from Canada and the US, as well as Chicago PMI and Pending Home Sales data.

Bulletin headline summary from Bloomberg and RanSquawk

  • EUR strengthened across the board and the Euribor curve bear steepened following the release of higher than expected Eurozone CPI data.
  • Even though the PBOC engineered correction resulted in the Chinese CNY posting record loss this week, the Shanghai Comp settled the session in the green, as the initial volatility surrounding the exodus of carry trades gradually abates.
  • Crisis in Ukraine continues to escalate, after Ukraine’s interior minister accused Russian naval forces of occupying Sevastopol airport in the autonomous region of Crimea.
  • Treasury 10Y notes headed for best weekly gain in a month as ongoing unrest in Ukraine and poor U.S. economic data drove strong bidding at 2Y/5Y/7Y auctions.
  • USTs also benefited from rally in JPY and expectations that today’s month-end index extension (0.13yr est. for Barclays Treasury Index, biggest since Aug. 2011), will drive demand
  • The euro-area inflation rate exceeded economists’ forecasts in February, easing pressure on the ECB to take action next week to foster the fragile economic recovery
  • Ukraine’s new government on its first day in office invited the IMF to Kiev for talks about a bailout worth as much as $15b while deposed former President Viktor Yanukovych, who claims to be the country’s rightful leader, surfaced in Russia and will hold a news conference today
  • Armed troops wearing uniforms without insignia arrived at Crimea’s main airport in Simferopol while servicemen from Russia’s Black Sea Fleet blocked Sevastopol’s Belbek airport, acting Interior Minister Arsen Avakov said on his Facebook account; the fleet said it wasn’t involved in the incident
  • China’s yuan tumbled by the most on record on speculation the central bank will widen the currency’s trading band, allowing greater volatility at a time when growth is slowing in the world’s second-largest economy
  • Several thousand anti-government demonstrators marched in Caracas yesterday after Maduro tried to defuse two weeks of protests by granting Venezuelans an  unexpected six-day holiday
  • The London gold fix may have been manipulated for a decade by the banks setting it, researchers say
  • Goldman Sachs, which generated 46% of revenue from sales and trading last year, recorded losses from that business on 27 days in 2013, up from 16 the previous year
  • Sovereign yields mostly lower. EU peripheral spreads steady. Nikkei -0.6%; Shanghai Composite gains 0.4%. European stocks and U.S. stock-index futures decline. WTI crude, gold and copper little changed

US event calendar:

  • 8:30am: Revised GDP q/q, 4Q, est. 2.5% (prior 3.2%)
    • Personal Consumption, 4Q, est. 2.9% (prior 3.3%)
    • GDP Price Index, 4Q, est. 1.3% (prior 1.3%)
    • Core PCE q/q, 4Q, est. 1.1% (prior 1.1%)
  • 9:45am: Chicago Purchasing Managers, Feb., est. 56.4 (prior 59.6)
  • 9:55am: UofMich. Confidence, Feb. final, est. 81.2 (prior 81.2)
  • 10:00am: Pending Home Sales m/m, Jan., est. 1.8% (prior -8.7%)
  • Pending Home Sales y/y, Jan., est. -10.8% (prior -6.1%)
  • 11:00am: POMO- Fed to purchase $1b-$1.25b in 2036-2044 sector

Asian Headlines

Despite the fact that the Chinese CNY posted weekly record loss this week, with money market rates also edging higher, the initial volatility which was observed in equity markets has abated amid spec. that the PBOC is engineering a temporary correction. As a result, while the CNY carry trade squeeze continued to support flows into JPY, with consequent move lower by the Nikkei 225 index, the Shanghai Comp was able to settle session in minor positive territory.

Japan’s GPIF’s weighting in Japanese equities at 16.6% at end-Dec, nearing allocation ceiling of 18% and domestic bonds at 53.40%, nearing allocation floor of 52%. Japan’s GPIF public pension fund shows investment gain for record 6th consecutive quarter in Oct-Dec. (RTRS)

Japanese National CPI (Jan) Y/Y 1.4% vs. Exp. 1.3% (Prev. 1.6%)

Japanese Industrial Production (Jan P) M/M 4.0% vs. Exp. 2.8% (Prev. 0.9%) – The headline figure posted its fastest monthly gain since June 2011.

EU & UK Headlines

Eurozone CPI Estimate (Feb) Y/Y 0.8% vs. Exp. 0.7% (Prev. 0.8%) – Which immediately resulted in steepening of the Euribor curve and EUR supportive flows across the board as bets of further easing by the ECB were unwound.

Norway’s oil fund says sharply increased US, German, British government bond holdings in Q4 (the fund held 37.3% of bonds at end 2013 vs. 35.5% at end Q3). The fund also held 61.7% of portfolio in equities at end of 2013 vs.63.6% at end of Q3. 2013 return was second best in its history, highest since 2009. (RTRS)

Der Spiegel writes citing sources that publicly traded banks may not have to immediately disclose capital shortfalls identified by ECB in its Asset Quality Review (AQR).

Barclays preliminary pan-Euro agg month-end extensions: (+0.07y) (12m avg. +0.07y)

Barclays preliminary Sterling month-end extensions:(+0.05y) (12m avg. +0.06y)

US Headlines

Fed’s Fisher said that as soon as feasible, the Fed should stop asset purchases entirely. He also said that he was pleased with the decision to taper. (RTRS)

Barclays preliminary US Tsys month-end extensions:(+0.12y) (12m avg. +0.07y) – Large extension is a result of the refunding auctions earlier this month.


Financials underperformed in Europe this morning, with Erste Group Bank trading sharply lower after the bank posted less than impressive earnings and also noted that it has EUR 435mln exposure to Ukraine, despite also noting that it is not particularly concerned about it. At the same time, Spanish listed Bankia bank shares also came under selling pressure after the Spanish government started selling some of its stake in nationalised lender.


The release of higher than expected Eurozone CPI data, which in turn buoyed demand for the joint-bloc currency and pushed EUR/USD to its highest level since late December. At the same time, consequent USD weakness supported GBP/USD, which remained in the green despite the aggressive bid by EUR/GBP. Looking elsewhere, even though spot JPY rate recovered following the sell-off overnight amid yet another move higher by USD/CNY rate, implied vols remain better bid as the pain trade continues.

Crisis in Ukraine continues to escalate, after Ukraine’s interior minister accused Russian naval forces of occupying Sevastopol airport in the autonomous region of Crimea. The other main Crimean airport, Simferopol, has also been occupied by armed men. The men are thought to be pro-Russia militia. (BBC)


CME lowered initial margins for crude oil future NYMEX initial margins for specs by 8.8% to USD 3,410 per contract from USD 3,740 per contract. (BBG)

More winter storms are predicted for next week, with snow sleet and rain expected through out the US north east. (BBG)

China added 1.084bln tonnes to its oil reserves last year, with NatGas proven reserves increasing by 616.4bln cubic meters. (China News Service)

India gold imports may total 22 tons in February, according to India Gems & Jewellery Trade Federation. (BBG)

Freeport may be forced to declare force majeure at its Grasberg mine in Indonesia after the new concentrate ore rules in effect there. (BBG)

* * *

We conclude with the traditional Jim Reid overnight recap

We’ll review Yellen’s testimony in more detail below, but first we’ll take a quick look at overnight markets where the focus is again on China and the renminbi. As we type this morning, the CNH and CNY have declined by 0.4% and 0.6% respectively against the USD. At one stage the CNY was around 0.85% weaker on the day and pushing up against the top end of the PBOC’s daily trading band. Though the quantum of these falls doesn’t sound large, they are the largest oneday declines since 2008 according to Bloomberg data. Some are wondering whether the PBoC will step in to stabilise the yuan, but reports (Financial Times) have been suggesting that the central bank is indeed trying to shake out speculators who have put on the renminbi carry trade. Indeed, the USDCNH rate (6.13) is approaching the 6.20 mark, which is reportedly a key technical level for many SME and retail investors who have entered into leveraged CNH-appreciation option structures known as Target Redemption Forwards or TRFs (WSJ and Financial Times). All this follows a sharp devaluation in the CNH and CNY over the last fortnight, including a five-day window where it recorded its sharpest decline since the currency’s devaluation in 1994 (Financial Times). The moves come ahead of China’s National People’s Congress starting next week where economic and market reforms will again be discussed by China’s leaders (Reuters).

Asian equity markets are trading with a downbeat tone partly in reaction to the continued renminbi depreciation, with losses on the Hang Seng (-0.3%), Nikkei (-1.0%) and KOSPI (-0.2%). Chinese equities are underperforming headlined by the HSCEI (-0.8%) and Shanghai Composite (-0.95%). There have also been falls in the AUDUSD (-0.1%), copper futures (-0.4%), and in USDJPY (-0.5%) in sympathy with the move in the renminbi. Note that copper futures have declined for eight days straight, with Chinese import iron ore following a similar pattern. Elsewhere in Asia, the latest Japanese CPI numbers for February were broadly in line with market expectation. The headline reading of +1.4% YoY was marginally higher than the 1.3% expected, but slower than the 1.6% YoY recorded in January. Core CPI rose 0.7% YoY which was in line with consensus estimates and the prior month’s result.

Looking at Yellen’s speech in more detail, perhaps the key highlight was Yellen’s commentary relating to the recent run of disappointing US data. On this she mentioned that “part of that softness may reflect adverse weather conditions, but at this point it’s difficult to discern exactly how much. In the weeks and months ahead, my colleagues and I will be attentive to signals that indicate whether the recovery is progressing in line with our earlier expectations”. On rate thresholds, Yellen hinted that the Fed was moving away from quantitative guidance saying the Fed will look beyond the 6.5% unemployment threshold to decide more broadly whether the labor market was healthy enough for tightening. Consistent with other Fed speakers of late, Yellen said it would take a “significant change” in the outlook for the Fed to pull back from its gradual reduction in monthly asset purchases. There were also comments on assets bubbles and financial stability, but on these topics Yellen’s comments were fairly similar to those she made before the House Committee on February 11th. US 10yr yields were rangebound between 2.63% and 2.66% yesterday, closing at a three-week low of 2.63% (or -3bp).

Taking a closer look at yesterday’s market moves, there was firmer sentiment in EM in particular in LATAM where we saw solid gains in equities including in Brazil (+2.1%) and Mexico (+0.8%). The CDX EM credit index (+0.25pt in price) managed to recover most of the Ukraine/Turkey-inspired losses on Wednesday but there was still some nervousness about political and ethnic tensions in Ukraine. Indeed, before Yellen’s testimony markets were weighed by reports that an unnamed, armed group had taken control of the local Crimean parliament in the Ukraine. There are also unconfirmed reports this morning that dozens of armed men in military uniforms have seized an airport in the capital of Ukraine’s Crimea region (AP). The report said the men with “Russian Navy ensigns” first surrounded the Simferopol Airport’s domestic flights terminal. On a more positive note, Ukrainian Prime Minister Arseniy Yatsenyuk’s government on its first day in office invited the IMF to Kiev for talks about securing funds of up to $15 billion. Meanwhile former President Viktor Yanukovych, who claims to be the country’s rightful leader, surfaced in Russia and will hold a news conference today, according to Bloomberg.

In terms of data flow, the main highlight was the better than expected US durable goods report. US January durable goods orders declined 1.0% on the headline (-1.7% consensus) but rose in the core orders category by +1.7% (vs -0.2% expected). Initial jobless claims for the week ending February 22 (one week after the February employment survey period) rose 14k to 348k (335k expected). In terms of earnings, RBS stock fell 7.74% after the company reported FY13 earnings. The UK Telegraph noted that the bank’s cumulative losses since its bailout has now drawn level with the GBP46bn equity pumped into it by the government in 2008. Elsewhere in the European banking sector, Bloomberg is reporting that the Austrian finance ministry is seeking ways to force holders of Hypo Aple-Adria-Bank debt, guaranteed by the province of Carinthia, to accept losses (Bloomberg). The bank is facing mounting losses and two-thirds of Austrians say the government “should walk away” according to a Gallup poll. Bloomberg is describing this as an interesting test case given that the bonds in question are guaranteed obligations of a 100% government owned bank.

Looking at the day ahead, we have a number of data releases including the Euroarea CPI estimate for February which is a key datapoint ahead of the March ECB meeting. The market is expecting a print of around 0.7% YoY, although a couple of the more recent analyst estimates have come in below that, possibly due to yesterday’s below-expectation German CPI reading. In Europe, we also get German retail sales (+1.0% MoM consensus) and Euroarea unemployment. Across the Atlantic, the highlights are the second estimate of US Q4 GDP, the Chicago PMI, UofM confidence and pending home sales. Canada will also report Q4 GDP and there are central bank speakers from the BoE (Carney) and Fed (Fisher). On Saturday, China will release its official February manufacturing PMI (consensus is 50.0 which would be a sixteen month low). Also over the weekend, Berkshire Hathaway will release its Q4 earnings and many are tipping the conglomerate will announce a record FY13 profit. There will also be plenty of focus on CEO Warren Buffet’s annual letter to shareholders which is scheduled to be released at the same time.


via Zero Hedge Tyler Durden

Ukraine Accuses Russia Of Invasion, Considers State Of Emergency After Masked Gunmen Occupy Two Crimean Airports

The bizarre events in the Crimea continued overnight, after unidentified masked men but dressed like those who took over the parliament in Simferopol yesterday, took over two airports by blockading one near the Russian naval base in Sevastopol and another in the capital of Simferopol. This prompted the Ukraine’s interior minister Arsen Avakov, to accuse Moscow’s military of blockading the airports, and in a Facebook post, he called the seizure of the Belbek international airport in the Black Sea port of Sevastopol a “military invasion and occupation.” He added: “It is a breach of all international agreements and norms.” As NBC reports, the Interfax news agency quoted Russian military sources as saying the incident at Belbek airport was intended to stop “fighters” flying in. However, Interfax later quoted a Russian official as saying that no units had approached the airport or blockaded it. In a nutshell, Russia continues to push with escalation ever further, and is testing just how far it can and will go without Ukraine responding.

Kyivpost has a more detailed account:

Two Crimean airports were taken over by Russian military troops, Interior Minister Arsen Avakov said on Facebook this morning. He said the situation in the autonomous republic has now escalated to “a military intervention” and called on the National Security Council to take urgent steps towards its regulation.


“My assessment of what’s going on is that it’s a military intervention and occupation in violation of all international agreements and norms,” he said in his statement. “This is a direct provocation of bloodshed on the territory of a sovereign state.”


Avakov said that Sevastopol’s military airport Bilbek at night was blocked off by the military units of the Russian navy, which is based in Sevastopol. He said the airport is surrounded by camouflaged military troops with no identification and carrying guns. He said they do not hide their Russian affiliation.


Inside the airport there is a group of Ukrainian soldiers and border guards, and Ukrainian police troops have surrounded the outer perimeter of the airport. “There have been no armed clashes so far,” he said.


The navy base is Sevastopol is key for the Russian army. Under agreements signed between two countries in 2010, the Russian military can continue to use Sevastopol until 2042, with an option of extending the lease to 2047.


Some 70 kilometers away from the coast, in Crimean capital Simferopol, another airport was taken over by a group of about 100 plain-clothed men, who went inside the airport and onto the runway.


“The interior troops and police pushed these people first into the airport building, and then out of the territory. No weapons were used,” Avakov said.


He said that after the armed men left, a new group of camouflaged men arrived around 1:30 in the morning. They carried automatic weapons and had no markings. Avakov said they entered the building and stayed int he restaurant.


“They are not hiding their affiliation with the army of the Russian Federation,” Avakov said. “Told by the Ukrainian Interior Ministry workers that they are military men and have no right to be there, they answer curtly that they have no instructions to negotiate with you.”


Avakov said that so far there have been no clashes, but tension is growing as Ukrainian police troops continue to arrive. “The law enforcement organs cannot oppose the army,” Avakov concluded.

In the meantine, Ukraine is starting to realize that it may have bitten more than it can chew, and as Interfax reported:


And the immediate re-escalation:



Yet none of this compares to today’s main event when a t 5pm local time, in the Rostov-on-Don Technical University, deposed Ukraine president Yanukovich who is currently in Russia, is expected to hold a press conference. Missing since the beginning of the week, the ousted ukrainian president had fled the country to Russia in the latest days, either by car through the Donetsk region, either escorted by military planes, according to different reports.

We doubt anything he says will difuse the situation.


via Zero Hedge Tyler Durden

Sugar: Not So Sweet

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Sugar is like a heroin addiction. The effects are bingeing, withdrawal and craving or cross-sensitization. But, you don’t just have to literally eat it to get the effect of the kick that it provides. Sugar is hot property right now and the prices are rising and that’s because there is going to be a fall in production for the first time in five years this year and it’s all down to the weather. Oh! I can hear the scare-mongers voicing off about the planet, doom, gloom and global-warming, citing the Brits that are water-logged up to their armpits. Sugar hasn’t increased as much for the past five months and yesterday raw sugar rose by 4.1%, reaching 17.41 cents per pound.

Sugar has gone up and down over the years as with any commodity, but in October 1974 it reached the all-time high of 64 cents per pound. The opposite end of the spectrum was when it fell to just 2 cents per pound in the 1960s. Today, it’s Brazil that is the largest world producer and it’s sugar-based ethanol that has managed to maintain prices of sugar over the past 8 years. The world’s (sugar) eggs are all in one basket these days as Brazil accounts for 80% of world production. World production stands at approximately 23.8 million hectares of sugarcane and a harvest of 1.69 billion tons. After Brazil the top producers are India, China, Thailand and Pakistan.

But, the dire weather conditions in Brazil over the past few months have meant that the country is now being rationed on water supplies in 11 states. Crops have been wiped out and there are 6 million people that are suffering directly from the consequences of the adverse seasonal conditions.

The International Sugar Organization is now warning that sugar will see its output fall this year for the first time in half a decade. Supply will be disrupted and that means that prices will rise. According to data from theCommodities Futures Trading Commission investors cut net short positions by 22% last week. Prices may come back to around 19 cents per pound this year at the end of the year when supply and demand have come back into equilibrium. Until then, it is the rise in prices that will be foreseen due to a lack of output.

Some might see the saving grace of the sugar losses with regard to the output falling. Sugar cane has the highest toll on biodiversity according to some experts, destroying the soil, the water and creating air pollution. The habitat is destroyed to make way for the planting of sugar cane and there is extensive irrigation and use of chemical pesticides, routinely discharged into the watertable. Or perhaps it will just lead to greater destruction as the farmers scramble to produce more to fill the shortfall in production. The world has gone mad on sugar and there is a growing appetite for it.

• At the end of 2013 Chinese imports of sugar soared by 20%. India consumes the most sugar in the world and is closely followed by China, importing 709, 873 metric tons
• China has increased by 109% its imports in comparison with 2012. 
• There are 40 million sugar farmers in China at the moment and the government is largely responsible for importing so much to support them. 
• High prices on the domestic sugar market have meant that importers have increased the quantities they are buying from the global market.

The International Sugar Organization shows that the price of sugar yesterday stood at 17.62 cts/lb for the daily price, 16.36 cts/lb for the last 15-day average and a white-sugar price index (average of the close of the quotes for the first two future positions of White Sugar Contract in the UK) of $479.65 per ton or 21.76 cts/lb.

Originally posted: Sugar: Not So Sweet



via Zero Hedge Pivotfarm