Tag: finance

In a stunning 24 hours, it now appears that Russia and the Ukraine are one formal announcement away from a state of war. From moments ago, as reported by Bloomberg:

• UKRAINE ACTING PRESIDENT PUTS ALL FORCES ON FULL COMBAT ALERT

And this, as reported by the NYT, virtually assures the escalation to a hot war, as some provocation, somewhere will certainly take place: “a Ukrainian military official in Crimea said Ukrainian soldiers had been told to “open fire” if they came under attack by Russia troops or others.“

Finally, this:

• Ukraine protects all Ukrainians, acting President Oleksandr Turchynov says in Kiev briefing.
• Ukraine Prime Minister Arseniy Yatsenyuk: “diverting funds for military”
• Turchynov: untrue that Russians are under threat
• Turchynov: no reason for Putin request
• Turchynov calls for national unity
• Yatsenyuk says to take all measures to ensure peace
• Yatsenyuk: no reason for Russia to intervene in Ukraine

Too late.

via Zero Hedge http://ift.tt/1eMwxO6 Tyler Durden

A few days ago, we reported that, seemingly out of the blue, the city of Rome was on the verge of a “Detroit-style bankruptcy.” In the article, Guido Guidesi, a parliamentarian from the Northern League, was quoted as saying “It’s time to stop the accounting tricks and declare Rome’s default.” Of course, that would be unthinkable: we said that if “if one stops the accounting tricks, not only Rome, but all of Europe, as well as the US and China would all be swept under a global bankruptcy tsunami. So it is safe to assume that the tricks will continue. Especially when one considers that as Mirko Coratti, head of Rome’s city council said on Wednesday, “A default of Italy’s capital city would trigger a chain reaction that could sweep across the national economy.” Well we can’t have that, especially not with everyone in Europe living with their head stuck in the sand of universal denial, assisted by the soothing lies of Mario Draghi and all the other European spin masters.” And just as expected, yesterday Rome was bailed out.

As Reuters reported, Matteo Renzi’s new Italian government on Friday approved an emergency decree to bail out Rome city council whose mayor had warned the capital would have to halt essential services unless it got financial help.

The decree transfers 570 million euros ($787 million) to the city to pay the salaries of municipal workers and ensure services such as public transport and garbage collection. Renzi, under pressure from critics who say Rome is getting favorable treatment, attached conditions to the bailout.

 

Rome must spell out how it will rein in its debt, justify its current levels of staff, seek more efficient ways of running its public services and sell off some of its real estate, the government decree said. Rome’s finances have been in a parlous state for years and it has debts of almost 14 billion euros which it plans to pay off gradually by 2048.

…

 

The city has around 25,000 employees of its own with another 30,000 or so working for some 20 municipal companies providing services running from electricity to garbage collection. ATAC, which runs the city’s loss-making buses and metros, employs more than 12,000 staff, almost as many as national airline Alitalia. Rome’s administrators say it needs help with extra costs associated with housing the central government, such as ensuring public order for political demonstrations, and to provide services for millions of tourists.

Here is the punchline, about Rome’s viability, not to mention Italy’s and Europe’s solvency:

The city of some 2.6 million people has been bailed out by the central government each year since 2008.

What is certain is that this year will not be the last one Rome is bailed out either. In fact, it will continue getting rescued for years to come because contrary to the propaganda, the Italian economy continues to get worse with every passing month, yields on Italian bonds notwithstanding.

Ansa reports that in January the Italian unemployment rate rose to a record 12.9%, and that “reducing Italy’s “shocking” rate of unemployment must be the government’s highest priority, Premier Matteo Renzi said Friday.” How, by pretending everything is ok, kicking the Roman can and hoping things improve by bailing out anyone that is insolvent?

Youth unemployment is particularly vicious, with an average rate of 42.4% in January for people aged 15-24, the highest since 1977, Istat reported on Friday. Reflecting the hard times, Istat also reported that the number of people in Italy who have given up the search for work is still growing. The so-called “discouraged”, who have surrendered to the idea that there is no hope of finding employment, reached an average of 1.79 million people in 2013, growing by 11.6% over the previous year.

Putting 2013 in perspective, this is the year when according to national statistical agency Istat, some 478,000 jobs were lost in Italy in 2013, the worst year since the global financial crisis of 2008-2009, with an average annual jobless rate of 12.2% last year. The new year got off to an even more dismal start, with the January jobless rate up 0.2 percentage points over December, Istat said.

Between 2008 and 2013, a total of 984,000 jobs in Italy were lost to the economic crisis – something that is “shocking,” Renzi posted on his Twitter account during a meeting of his cabinet.

 

“Unemployment is at 12.9%. Shocking numbers, the highest for 35 years,” tweeted Renzi, who has previously described Italy’s unemployment rates as “merciless and devastating”.

And then comes the hope and prayer of change:

“That’s why the first measure will be the Jobs Act,” which Renzi, who formed his executive only one week ago, proposed last month before the leader of the Democratic Party (PD) became premier. Earlier this week, Renzi said he would have his labour reforms and job-boosting measures, based on the Jobs Act, ready before a bilateral summit with German Chancellor Angela Merkel next month.

 

Fast action is needed promote business investment, improve labour market efficiency while cutting relevant taxes, Labour Minister Giuliano Poletti said after Friday’s cabinet meeting.

 

One of the main aims of Renzi’s Jobs Act would be to simplify Italy’s labour system, eliminating many parts of the current myriad of work contracts and lay-off benefits. A key proposal of the package Renzi announced last month, before unseating his PD colleague Enrico Letta as premier and taking the helm of government, is to have a single employment contract with job protection measures growing with seniority.

 

At present, older workers with regular contracts tend to enjoy extremely high levels of job protection, while young people are often forced to accept temporary contracts or other forms of freelance employment that guarantee them few rights and little job security. The current system has been blamed for making firms reluctant to hire, as it is so hard to dismiss workers once they are on the books, and contributing to the high levels of joblessness, especially among the young. Making the task for Renzi’s government more difficult are grim economic forecasts.

 

Earlier this week, the European Commission forecast growth in the Italian economy will be weaker this year than previously forecast and the country’s debt as a percentage of gross domestic product will rise in 2014. The EC revised down Italy’s 2014 growth forecast to 0.60% but said 2015 looks brighter, as stronger consumer confidence and external demand boost the economy. It also warned that the jobless rate this year will likely be worse than expected, lowering its forecast to an average 12.6% unemployment for 2014 due to weak labour market conditions and still sluggish demand.

Finally, if all of that fails, there is always war to grow insolvent economies in a Keynesian world. Such as the now annual attempt to stir conflit in the middla east, and, as of this week, Ukraine. Fingers crossed for Italy, and the rest of the “developed world” the Keynesian priests get what they have so long been hoping for.

via Zero Hedge http://ift.tt/NgXP9i Tyler Durden

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

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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.

Russian Ambassador has been summoned to the Foreign Office over #Ukraine

— William Hague (@WilliamJHague) March 1, 2014

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 http://ift.tt/1jIxc8z Tyler Durden

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:

• UN SECURITY COUNCIL TO MEET 2PM TODAY TO DISCUSS UKRAINE
• EUROPEAN FOREIGN MINISTERS TO HOLD EMERGENCY MEETING ON UKRAINE IN BRUSSELS ON MONDAY -EU DIPLOMAT

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 http://ift.tt/1civCui Tyler Durden

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 http://ift.tt/1eLuqKd Tyler Durden

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

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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:

• RUSSIAN FEDERATION COUNCIL AGREES TO PUTIN’S REQUEST FOR MILITARY INTERVENTION IN CRIMEA – DPA

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.

via Zero Hedge http://ift.tt/1kC0up6 Tyler Durden

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.

via Zero Hedge http://ift.tt/OMQgs7 Marc To Market

Submitted by Mike Krieger of Liberty Blitzkrieg

How Facebook Exploits Underage Girls in its Quest for Ad Revenue

Sophie Bean, 14, of Sequim, Wash., said she was thought she was “liking” a Facebook ad related to fashion modeling. Instead, it promoted a Facebook page that recruited adult webcam models.

“I just thought it was for modeling, and I’m interested in that, and I thought it would help me out,” Sophie said.

Sophie wasn’t the only teen connecting with the page, which Facebook statistics show is most popular with users 13 to 17. Clicking on it didn’t pull the teens into nude webcam modeling, but did mean they would receive the page’s updates and could be mentioned in future versions of the ad.

– From the Wall Street Journal’s recent article: Nude Webcams and Diet Drugs: the Facebook Ads Teens Aren’t Supposed to See

With all that in mind, let’s move on to the third piece of the puzzle. The routine exploitation of the weakness and most gullible members of society, teenage girls.

The crazy thing here is not that some random selection of underage girls are being led to click on ads that direct them to adult video cam sites and dangerous dietary supplements, but that they represent the primary demographic clicking on these ads.

This story from the Wall Street Journal is sure to make your blood boil no matter who you are, but particularly if you are a parent with young children.

From the WSJ:

Ads for diet products containing a substance called HCG have run on Facebook. HCG, a hormone produced during pregnancy, is approved by the Food and Drug Administration as a prescription drug for infertility. But the agency, in a 2011 news release headed “HCG Diet Products Are Illegal,” said HCG doesn’t help with weight loss and isn’t approved for over-the-counter sale for any purpose.

A Florida outfit that has run Facebook ads in the past uses an “HCG Diet Kits” Facebook page as an online storefront to sell HCG serum and syringes. The page is most popular with Facebook users aged 13 to 24, according to Facebook’s statistics. On Feb. 20, the page posted “Back in stock!” and listed prices for its diet-shots kits to its Facebook following.

Sickening.

Full article here.

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