Dozens Killed In Ukraine's (Not Quite) Civil War, White House Outraged Again

The Ukrainian health minister just state that at least 64 have died since February 18th; protesters claim the number is over 100 – either way, this is horrific (and we suspect, once the Olympics is over, will get worse). As Martin Armstrong outlines below, Ukraine is the pawn on the chessboard. The propaganda war is East v West.

  • WHITE HOUSE URGES UKRAINE PRESIDENT TO IMMEDIATELY WITHDRAW SECURITY FORCES FROM DOWNTOWN KIEV, RESOLVE CRISIS BY POLITICAL MEANS
  • WHITE HOUSE SAYS OUTRAGED BY IMAGES OF UKRAINIAN SECURITY FORCES “FIRING AUTOMATIC WEAPONS ON THEIR OWN PEOPLE” (more YouTube justifications)

And Russia proclaims US/EU calls for sanctions as “Blackmail”

Via NY Times,

 

Russia on Thursday denounced moves by the United States and Europe to impose sanctions on Ukrainian officials following the eruption of violence in the capital, Kiev, and other cities, saying they amounted to blackmail against the government of President Viktor F. Yanukovych.

 

Russia’s foreign minister, Sergey V. Lavrov, also criticized a visit by the foreign ministers of France, Germany and Poland, saying the European Union had dispatched its “latest uninvited mission” to Ukraine’s capital, Kiev, to impose a solution by forcing Mr. Yanukovych to compromise.

 

“How can you expect that your services will be in demand when the parallel threat of sanctions makes everything very similar to blackmail?” Mr. Lavrov said in remarks during a visit to Iraq, according to Interfax.

However, those power plays are masking the core issue that began with the Orange Revolution – corruption. Armstrong warns that Yanukovych is a dictator who will never leave office. It is simple as that. There will be no real elections again in Ukraine.” This is starting to spiral down into a confrontation that the entire world cannot ignore.

 

h/t @VICEUK

 

The Funding Begins

Via Martin Armstrong,

For months before the proposed alignment with the EU, there were signs all over Ukraine pro and con about joining Europe that was a campaign in part funded by the EU to sell the idea to Ukraine. This funding has been CONFUSED with the funding for the “rebels” to engage in revolution that Putin calls a coup. There is HUGE difference from the funding Germany and the EU was providing to sell Ukraine on the idea of joining the Europe compared to funding a revolution as the Saudis are doing in Syria.

But overlooked, was the resentment with corruption. After all, Ukraine’s 2004 Orange Revolution that toppled the government without a shot fired. That too was over corruption. For you see, the Orange Revolution swept then-prime minister Yanukovych out in 2004 and that brought Tymoshenko to power. It is widely viewed that Yanukovych stole his current position of power and his decision not to sign the deal  with the EU centers on the EU’s demands that he release from jail former Prime Minister Yulia Tymoshenko, his political opponent who he had imprisoned. So you are starting to get a sense of the depth to this corruption.

The changes that followed the Orange Revolution simply weren’t deep enough and Yanukovych has always been more pro-Russian. To the Western Ukrainians, this is a chance to get on a different trajectory and they did not expect this would turn violent since there was no such resistance during the Orange Revolution. On this score, they are wrong.

This resentment toward corruption has been rising sharply once again. Make no mistake about it, at the core is ALWAYS economics. Ukraine is desperately in need of a cash injection because the government is so corrupt. Yanukovych, who has been in power since 2010, and he said that Ukraine could not afford to sign the EU deal. The question was really who was putting more money is his pocket.

Germany is now starting the funding or the “rebels” as is the USA. Russia is funding the mercenaries and gave Ukraine $2 billion with demands to crush the rebels. Russia is portraying this as a coup funded by the USA. Ironically, funding is now starting. Nobody funded the “rebels” initially for had they done so,they would have been armed. The Orange Revolution was bloodless and they expected the same result so they did not seek funding for that purpose.

Of course, there was funding for “promotion” selling the EU deal to the people coming from Germany and the EU. But this was more directed into a marketing campaign that filled the cities with signs and posters. That was NOT funding that was going in with the expectation of civil war. There is a GREAT difference. Nonetheless, the violent attacks by Yanukovych’s mercenaries is now showing the West they need to fund the rebels.

The constitutional reforms that are demanded by the protesters demonstrates that this is at its core about corruption and not about joining the EU or Russia as the media is playing up. Nor are the reforms just about money. This is all about political power. This is about Yanukovych who has effectively established a de facto dictatorship. The opposition have called for the ouster of Yanukovych and the ordering of new elections for he stole the elections and imprisoned the former President who ousted him. The general view is that control of the government is a dictatorship for far too much power rests with Yanukovych and not enough with parliament. There are no checks and balances. This is the corruption that lies at the core demand – something that Yanukovych will sooner murder the entire West before ever letting go of any power. This is the core issue and why thousands of protesters have staked their lives on their desire for political change. This is NOT about joining the EU v Russia. They want HONEST government.

The very next day when protester approached his mansion, he enacted a law that it was illegal for more than 5 cars to travel together. He had his mercenaries not “killing” people but imprisoning them as hostages and others were being left in the forest stripped of all identification to die. One girl who was just helping the protesters as a nurse was seen at the train station taken by Yanukovych’s goons, and left in the forest at night to die.

BOTH the USA and EU will now fund the rebels as Russia will fund Yanukovych. At the political level, Ukraine is the pawn on the chessboard. The propaganda war is East v West. However, those power plays are masking the core issue that began with the Orange Revolution – corruption. Yanukovych is a dictator who will NEVER leave office. It is simple as that. There will be no REAL elections again in Ukraine. This is starting to spiral down into a confrontation that the entire world cannot ignore.


    



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Thursday Trivia: Why Are Wall Street Economists Paid Millions Of Dollars?

The answer: to be horrible weathermen.

Behold:

In retrospect, it is hardly surprising that two years ago in a head to head between Joe LaVorgna and the world’s most famous weatherman, Groundhog Phil, the Deutsche Bank cheerleader was solidly trounced.


    



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European Consumer Confidence Plunges; Misses By Most In 30 Months

Despite record low yields on sovereign bonds, record high stock prices, and a political elite proclaiming it’s all shits and giggles from here… it seems record unemployment, record suicide rates, record bad loans, and record low credit creation were finally enough to trump the ‘wealth effect’ exuberance that European consumer confidence has envisaged in recent months. This is the biggest drop in confidence in 18 months and the biggest miss since Aug 2011. This is a 3 sigma miss from expectations and below all 25 “economist” guesses. How’s the weather in Europe?

 


    



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The one investment you want to avoid at all costs

February 20, 2014
Sovereign Valley Farm, Chile

4.1%.

I read it twice to make sure my brain had processed the number correctly. Yep, 4.1%.

This was the annual yield promised on a new 5-year bond investment that a private banker colleague had sent to me. I couldn’t believe it.

The bond issuance was by a state-owned company in India. And despite the Indian government having a -very- recent history of capital controls, price fixing, and asset confiscation, and despite the company being rated near JUNK status, the bond only carried a yield of 4.1%.

This is really amazing when you think about it. Central bankers have destroyed money and interest rates to the point that near-bankrupt companies in shaky jurisdictions can borrow money for practically nothing.

It’s an utter farce. The rate of inflation is -at least- 3% in many developed countries. Central bankers will even say they are targeting 3% inflation.

This means that if investors simply want to generate enough income so that their after-tax yield keeps pace with inflation, they have to assume a ridiculous amount of risk.

This is a really important point to understand given that the global bond market is so massive– roughly $100 trillion, with nearly $1 trillion traded each day in the US alone.

This is almost twice the size of the global stock market. And even if people never invest in a bond themselves, they’re directly connected to the bond market.

Your pension fund owns bonds. The bank that is holding on to your money owns bonds. The companies listed on the stock market that you invest in own bonds.

Yet bonds are some of the worst investments out there right now. And that’s saying a lot given how overvalued stock markets are.

Here’s the bottom line: adjusting for both taxes and inflation, bondholders are losing money, even on risky issuances.

Think about it– if you make a 4% return and pay 25% in taxes, your net yield is 3%. If inflation is 3%, your entire gain is wiped out… so you have taken that risk for nothing.

If inflation rises just a bit then you are in negative territory.

There are those who suggest that deflation is a much greater risk right now than inflation… and that bonds are great investments to own in the event of deflation.

But here’s the thing– even if deflation takes hold and prices fall, anyone who is deeply in debt is going to feel LOTS of pain. Instead of their debt burden inflating away, now they’ll be scrambling to make interest payments.

So while bonds are a sensible deflationary investment in theory, in practice deflation will only increase the likelihood of default. This puts many bond investments at serious risk.

Last, if interest rates rise from these all-time lows, a bond’s value in the marketplace will plummet. So not only will you have made zero income, you would be looking at a steep loss if you try to sell.

Longer term, fixed rate bonds in weak currencies are almost guaranteed losers and should be avoided at all costs. You would be much better off setting your cash ablaze in a bonfire. It’s at least a better story to tell and will save you years of anguish watching your position erode.

Premium members: watch out for an alert this afternoon in which Jim Rickards (author of the acclaimed Currency Wars and one of the smartest guys in finance) gives some really great investment advice and thoughts on how to structure one’s portfolio amid all of this insanity.

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Philly Fed Plunges To 1 Year Low; Misses By Most Since Aug 2011

On the heels of a dismal series of global macro data points (all weather-related we are sure as G10 Macro drops to 8-month lows), this morning’s US PMI debacle (nope, no weather there) has been followed up by a much more reassuring disastrous (and of course we are sure weather-related) miss. Philly Fed printed -6.3, missing expectations of +8.0 by the most since Aug 2011. This is the lowest print in a year. New orders and shipments collapsed, employment plunged, and the average workweek dropped notably. Just imagine all that pent-up demand… oh wait, expectations for future new orders fell to at least 6 month lows.

 


    



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Caterpillar Global Retail Sales Decline For 14th Consecutive Month

While the stock of Caterpillar may be discounting some improvement in global industrial demand, the current situation as reflected by the company’s latest monthly retail sales update is hardly as optimistic: as was just reported by the company (in a revised retail sales format), global three month rolling retail sales declined by 8% in the month of January, which was the 14th consecutive drop, and the longest string of contracting sales since the Lehman crisis and the “last” recession. What’s worse, Asia/Pacific, read China, retail sales have tumbled by double digits, -17% in January, every month since January 2013.

 

If there was any good news in the report it is that North American retail sales broke the trend of three consecutive drops and posted a tiny 1% Y/Y increase. This, however, was offset by a 11% decline in Latin American retail sales, the biggest drop since April of 2012 and confirmation that the EM troubles are starting to affect corporate top lines.


    



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The “Ukraine Situation” Explained In One Map

Sadly, everything you need to know about the crisis in Ukraine in one worrisome map which summarizes all the relevant “red lines.”

 

 

Given this – is there any doubt this will not end with peaceful resolution.

As Martin Armstrong warned this morning:

BOTH the USA and EU will now fund the rebels as Russia will fund Yanukovych. At the political level, Ukraine is the pawn on the chessboard. The propaganda war is East v West. However, those power plays are masking the core issue that began with the Orange Revolution – corruption. Yanukovych is a dictator who will NEVER leave office. It is simple as that. There will be no REAL elections again in Ukraine. This is starting to spiral down into a confrontation that the entire world cannot ignore.

h/t JS


    



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

The "Ukraine Situation" Explained In One Map

Sadly, everything you need to know about the crisis in Ukraine in one worrisome map which summarizes all the relevant “red lines.”

 

 

Given this – is there any doubt this will not end with peaceful resolution.

As Martin Armstrong warned this morning:

BOTH the USA and EU will now fund the rebels as Russia will fund Yanukovych. At the political level, Ukraine is the pawn on the chessboard. The propaganda war is East v West. However, those power plays are masking the core issue that began with the Orange Revolution – corruption. Yanukovych is a dictator who will NEVER leave office. It is simple as that. There will be no REAL elections again in Ukraine. This is starting to spiral down into a confrontation that the entire world cannot ignore.

h/t JS


    



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What Weather? US PMI Explodes To Highs, Ignites USDJPY Momentum, Sends Futures Surging

WTF will be the head-scratching meme of the day. After spending weeks ‘denying’ facts and blaming weather for just how bad all the macro data in the US has been recently (US Macro index at six-month lows), Markit’s US PMI just smashed expectations, printing at 56.7 (vs 53.6 exp.). All the main sub-indices from new orders to employment rose markedly suggesting all is well with the recovery and that weather has had no effect whatsoever. In fact, US PMI jumped the most on record in February. Of course, USDJPY was spanked on this ‘great news’ and that smashed US equity markets higher, filling the China PMI miss gap down.

 

Despite US Macro at six-month lows (blamed on the weather effect…

 

US PMI is soaring… What Weather effect?

 

It’s all good – no weather here…

 

And sure enough that’s all we need to smack USDJPY back above 102 and fill the gap from China PMI on S&P futures…

 

Charts: Bloomberg


    



via Zero Hedge http://ift.tt/1gKYM4u Tyler Durden

What Weather? US PMI Explodes To Highs, Ignites USDJPY Momentum, Sends Futures Surging

WTF will be the head-scratching meme of the day. After spending weeks ‘denying’ facts and blaming weather for just how bad all the macro data in the US has been recently (US Macro index at six-month lows), Markit’s US PMI just smashed expectations, printing at 56.7 (vs 53.6 exp.). All the main sub-indices from new orders to employment rose markedly suggesting all is well with the recovery and that weather has had no effect whatsoever. In fact, US PMI jumped the most on record in February. Of course, USDJPY was spanked on this ‘great news’ and that smashed US equity markets higher, filling the China PMI miss gap down.

 

What Weather effect?

 

It’s all good – no weather here…

 

 

Charts: Bloomberg


    



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