Ukraine Accuses Russia Of Imminent Gas Cut-Off, Russia Denies, Germans Anxious

So much for the Russia-Ukraine talks bringing the two sides together as even Germany’s Steinmeier could only say it’s “hard to say if breakthrough made.” Shortly after talks ended, Ukrainian Premier Yatsenyuk stated unequivocally that “we know about the plans of Russia to cut off transit even in European Union member countries,” followed by some notably heavy-on-the-war-rhetoric comments. The Russians were quick to respond, as the energy ministry was “surprised” by his statements on Ukraine gas transits and blasted that comments were an “attempt at EU disinformation.”

 

As National Radio reports,

Russia to halt gas transit to Europe via Ukraine in winter – Ukrainian Premier

 

“We know about the plans of Russia to cut off transit even in European Union member countries. That’s why [Russian] companies were ordered to maximally pump gas to the storage facilities on the territory of Europe,” he said before starting the regular Cabinet meeting on Wednesday.

 

The Premier said that Russia is also forming plans to stop all supplies of energy resources to Ukraine.

 

We know about Russia’s plans to basically switch off all energy resources for Ukraine,” he added.

 

Yatseniuk added that Ukraine had accumulated nearly 15 billion cubic meters of gas in its underground storages and now deals with diversification of coal supplies to the country, “since the Russian Federation and its mercenaries bomb and destroy coalmines [in eastern Ukraine].”

 

Besides, Yatseniuk reported that Ukraine hopes to continue the talks and consultations in the trilateral Ukraine-EU-Russia format to address energy concerns.

*  *  *
Of course, amid all this disinformation, the Russians remain confident that Ukraine will simply be syphoning what it needs (and the European leaders are worried about the implications of Ukraine’s threats and actions)…

h/t @Erula1

*  *  *
The Russians responded…

  • *RUSSIAN ENERGY MINISTRY SURPRISED ON UKRAINE TRANSIT COMMENT
  • *RUSSIA: UKRAINE TRANSIT COMMENT IS ATTEMPT AT EU DISINFORMATION
  • *RUSSIA WILL FULFILL ALL CONTRACT OBLIGATIONS: ENERGY MINISTRY
  • *RUSSIAN ENERGY MINISTER NOVAK COMMENTS IN E-MAILED STATEMENT

*  *  *
Of course -the question is – does Russia have a ‘contractual obligation’ with Ukraine if it is not paying the bills…

*  *  *

We leave it to the Germans to summarize the de-escalation…

  • *STEINMEIER: UKRAINE WORST CRISIS IN EAST EUROPE SINCE COLD WAR
  • *STEINMEIER SEES DANGEROUS ESCALATION IN UKRAINE IN RECENT DAYS




via Zero Hedge http://ift.tt/1C2KAho Tyler Durden

The Five Cities Most At Risk For The Next Big Earthquake

Damages from the earthquake that hit the San Francisco area this weekend are estimated to be as high as $4 billion. For many cities around the world, particularly coastal cities situated on the geologically active Ring of Fire, an earthquake could be catastrophically destructive. Bloomberg looks at the five cities that are most vulnerable to earthquakes.

 

 

As Michael Snyder rather ominously warns, the quake last weekend is just the start of the shaking in California...

 

Don't get too excited about what happened on Sunday.  Scientists assure us that it is only a matter of time before "the Big One" hits California.

In fact, the 6.1 magnitude earthquake that hit northern California on Sunday was not even the largest earthquake along the Ring of Fire this weekend.  According to the U.S. Geological Survey, a 6.4 magnitude earthquake shook the area around Valparaiso, Chile on Saturday and a 6.9 magnitude earthquake struck Peru on Sunday.

As I mentioned above, we have moved into a time when seismic activity is steadily rising.  It has gotten to the point where even the mainstream media cannot ignore it anymore.  For example, just check out the following excerpt from a recent CBS News report…

The average rate of big earthquakes — those larger than magnitude 7 — has been 10 per year since 1979, the study reports. That rate rose to 12.5 per year starting in 1992, and then jumped to 16.7 per year starting in 2010 — a 65 percent increase compared to the rate since 1979. This increase accelerated in the first three months of 2014 to more than double the average since 1979, the researchers report.

Something is happening that scientists don't understand, and that is a little scary.

As I wrote about the other day, earthquake activity seems to particularly be increasing in the United States.  While the west has been relatively quiet, the number of earthquakes in the central and eastern portions of the nation has quintupled over the past 30 years…

According to the USGS, the frequency of earthquakes in the central and eastern U.S. has quintupled, to an average of 100 a year during the 2011-2013 period, up from only 20 per year during the 30-year period to 2000.

 

Most of these quakes were minor, but research published by the USGS earlier this year demonstrated that a relatively minor magnitude 5.0 quake caused by wastewater injection after conventional oil drilling triggered a much bigger, 5.7 magnitude quake in Prague, Okla.

 

“We know the hazard has increased for small and moderate size earthquakes. We don’t know as well how much the hazard has increased for large earthquakes. Our suspicion is it has but we are working on understanding this,” said William Ellsworth, a scientist with the USGS.

What in the world could be causing this to happen?

Oklahoma, which used to rarely ever have significant earthquakes, has experienced over 2,300 earthquakes so far in 2014.

That is absolutely staggering.

And of course volcanic activity has been rising all over the planet as well.  In 2013, the number of eruptions around the globe set a new all-time high, and right now persistent rumbling under Iceland's Bardarbunga volcano has much of Europe on alert

For more than a week the earth has been rumbling beneath Iceland’s looming Bardarbunga volcano. The almost continuous small earthquakes led the government to activate its National Crisis Coordination Centre this week and block off access to the largely uninhabited region around the Bardarbunga caldera.

 

Major airlines are making contingency plans for a potential eruption that could throw dust into the atmosphere and disrupt flight paths between North America and Europe.

Some scientists are saying that if that volcano erupts, it "could trigger Britain’s coldest winter ever".

Clearly something is happening.

All over the world seismic activity is on the rise.

That means that the shaking in California (and in much of the rest of the world) may soon get a whole lot worse.

So what do you think is causing all of this?




via Zero Hedge http://ift.tt/1C2yPaX Tyler Durden

ECB Hires Blackrock For ABS-Buying Advice; Crushes Idea Of Upcoming QE

Just in case futures buying algos forgot what the regurgitated “catalyst” that activated the overnight ramp was, the ECB was kind enough to remind everyone that the main event over the past 12 hours was the Deutsche Bank leak that while the ECB will not announce outright QE any time soon, thus denying the rumor spread in the past weak by the likes of Citi and JPM, the formerly preannounced and thus already priced-in (by the EURUSD which was about to take out 1.40 a few months ago) ABS purchase program, or as DB called it “private QE” is about to be unleashed. The ECB confirmed this earlier this morning when it announced that it had appointed BlackRock, the world’s biggest money manager, to advise on developing a program to buy asset-backed securities.

In other words, BlackRock wil strongly advise the ECB to purchase all those subprime auto loan and rental-securitized ABS securities that Blackrock currently holds. Keep an eye out for UofPhoenix CCC-rated student loan securitization OWICs.

In yet other words, Europe’s largest public-sector hedge fund has just hired the world’s largest private-sector hedge fund to “fix things.”

One thing is certain to come out of this: nothing in Europe will actually be fixed, but at least Blackrock’s Christmas bonuses will be the highest ever.

From Bloomberg:    

BlackRock Solutions, a unit of the New York-based company, will provide advice on the design and implementation of a potential ABS-purchase plan, an ECB spokesman said in response to e-mailed questions. Safeguards against any conflict of interest are included in the agreement, the spokesman said.

 

ECB President Mario Draghi said in June that the central bank is intensifying preparations to purchase ABS as it strives to revive the faltering euro-area economy. While the effort could help revitalize a $1.9 trillion market that has contracted 34 percent since 2009, and at the same time inject liquidity into the financial system, officials have yet to agree on what such a program should look like.

 

BlackRock’s contract requires it to ensure effective separation between the project team working for the ECB and its staff involved in any other ABS-related activities, the spokesman said. External audits related to the management of conflicts of interest will be made available to the ECB. The company, headed by Chief Executive Officer Laurence D. Fink, had more than $4 trillion of assets under management last quarter.

 

The final decision on the design and implementation of any ABS-purchase program will be taken by the ECB’s Governing Council, and the execution will remain the responsibility of the central bank, the spokesman said.

And here is the ECB’s oracular equivalent of Jon Hilsenrath, DB’s team of Wall and Moec, explaining what is about to happen next week (ABS) and what isn’t about to happen any time soon (QE). From DB:

Private QE in September

  • We are bringing forward the timing of private QE (ABS purchasing) to 4 September. Recent weak data and Draghi’s latest comments on inflation expectations we think are enough to believe the ECB will supplement the TLTRO in the next few months. Our baseline is to expect this as soon as the next ECB meeting on 4 September, but this is a very close call. An announcement could wait, although the markets will be unhappy to be told that inflation expectations are potentially dis-anchoring if the ECB has no new policies to announce.
  • What we expect is not generic QE with government bond purchases, as other central banks have done. We believe the ECB will engage in private QE, that is, ABS purchasing as a complement to the TLTRO. If private QE does not emerge in September, we think it will follow shortly thereafter.

Our baseline had been to expect the ECB to initiate private QE in early 2015. Our view is that the ECB won’t want to take any chance with the capacity of the TLTRO to alone end this protracted period of low inflation. We thought the preliminary staff estimates for 2017 HICP inflation, to be published in December, could be the trigger for private QE or to at least give rise to a more vocal debate on QE.

Mario Draghi’s speech in Jackson Hole was significant, in our view. It opens the door to earlier action by the ECB. It is a close call, but we now think the ECB will announce private QE (ABS purchasing) on 4 September. There are several reasons for the faster move to private QE.

First, recent real economy data have been disappointing, e.g. Q2 GDP and August PMI. There are several distortions which might have weighed on GDP in Q2, overpowering the underlying momentum of the recovery. This includes weather and holiday effects. The geopolitical uncertainties of the Russia/Ukraine situation might have also have dragged. The geopolitical effects are lingering into H2. We recently reduced our forecast for euro area GDP growth in 2014 to 0.8% (from 1.1%) in 2015 to 1.3% (from 1.5%), but most of this revision was due to the weaker than expected Q2 2014. There remains vulnerability in growth expectations for H2 and into 2015, as hinted at recently by the Bundesbank in its monthly report.

Second, HICP inflation has continued to undershoot expectations. In fairness, the downside surprises this year come predominantly from food prices. Core inflation, though a little volatile, has effectively moved sideways this year around 0.8-0.9% yoy. The trouble is the Russia story is now spilling into the inflation debate. Russia’s ban on imports of certain European foods is set to increase supply and dampen prices further. The low point in the HICP inflation cycle has not been reached yet.

Third, although credit flows were better recently (and the credit impulse positive) and signs of some (limited) improvement in bank funding costs and margins are perceptible, the benefits of the TLTRO are lagging and might not have a strong enough bearing over current conditions to quickly stabilise growth and inflation expectations.

Fourth, the crucially, market-based inflation expectations have declined in the last couple of weeks. The SPF survey-based indicator showed the first increase in the 5-year ahead inflation expectations balance for about 2 years, despite drops in nearer term expectations. But the rise was tiny (1.86% from 1.84%).
The current crop of ECB Executive Board members seems keen to take a steer on medium-term expectations from market breakeven rates. These have weakened in the last couple of weeks. Draghi referred to this in unprepared comments in his speech at Jackson Hole on Friday. He said B/Es point to “significant declines at all horizons”. The 5Y5Y inflation swap he singled out as falling 15bp to below 2%. This is the third time the 5Y5Y has fallen below 2% since the start of the credit crisis. Draghi said “this is the metric that we usually use for defining medium-term inflation”.

Draghi said the Governing Council “will acknowledge” these developments with inflation expectations and within its mandate “will” use all available instruments needed to ensure price stability over the medium term. There is a definitiveness to the message. Having questioned the stability of inflation expectations, it would be very difficult for the ECB to credibly claim on 4 September that inflation expectations “remain firmly anchored”, at least not without announcing a new policy to better anchor those expectations.

On balance, we think the data and Draghi’s comment puts pressure on the ECB to accelerate the next phase of monetary easing. We believe the ECB will accelerate the announcement of a private QE (ABS purchasing) to 4 September. Draghi has some history of deviating off-script at a conference and subsequently convincing the Council to act. For example, his “whatever it takes” precursor to OMT in mid 2012.

The risk is the Council plays for more time, arguing that Q2 GDP was distorted, inflation is close to its trough, that once inflation starts rising after the trough it could help stabilise inflation expectations, that the TLTRO benefits are still to be seen, the EUR exchange rate is declining, etc. But one way or another, it feels to us like ABS purchasing begins before December.

Our view is the ECB announces a “private” QE, that is, not sovereign bond purchasing and not a mixed package of private and public purchases. We don’t expect sovereign bond purchasing to be ruled out, but it faces political, legal and technical questions in a way that private QE does not. Government bond purchases will remain in reserve for a more outright deflationary episode.

How effective is ABS purchasing? The objective will be to incentivise banks to lend. The incentive depends on exactly which ABS the ECB purchases and in what scale. The TLTRO is implemented in a way to not directly incentivise mortgage lending, but in July Draghi intimated that the set of assets the ECB would consider for ABS purchasing includes RMBS. This raises the set of existing ABS by 10 fold to about E500bn. Draghi talks about incentivising a new market for ABS, implying the ECB focus may be more on primary (new ABS) rather than secondary (existing ABS). Still, the ECB can play the portfolio reallocation channel for QE by purchasing existing ABS.

The ECB has talked of a twin track effort on ABS — regulatory easing as well as a commitment to ABS purchasing, if it proves necessary. At last month’s press conference, Draghi implied that the purchasing decision is not conditional on achieving regulatory easing. Proposals have been published for an easing of the Solvency II capital charges on ABS, but no action has been taken yet. Beyond changing the capital charges to incentivise banks to lend and create ABS, the best way for the ECB to do so is by buying the mezzanine tranches of ABS. It is not obvious that the ECB has the risk appetite for this.

If the ECB does not have an appetite for mezzanine, the route to the success of ABS purchasing will be via the expansion of the ECB balance sheet and the impact of this on the EUR exchange rate. Our FX strategists reckon that of the roughly 4% decline of the euro trade-weighted index since March roughly a quarter of this was the negative deposit rate and the remainder implies an expectation of roughly E300bn of ECB balance sheet expansion. ABS purchasing will have to go beyond this to keep the EUR on a downward trajectory. Maybe this is what the ECB has most in mind. As Draghi said on Friday, outright ABS purchases “would meaningfully contribute to diversifying the channels for us to generate liquidity”.

To summarise, recent data and Draghi’s latest comments we think are enough to believe the ECB will supplement the TLTRO in the next few months. Our baseline is to expect this as soon as the next ECB meeting on 4 September, but this is a very close call. An announcement could wait — but the markets will be unhappy to be told that inflation expectations are potentially dis-anchoring and the ECB announces no new policies to address this. But what we expect is not generic QE with government bond purchases, as other central banks have done. We believe the ECB will engage in private QE, that is ABS purchasing as a complement to TLTRO. If private QE does not emerge in September, we think it will follow shortly thereafter.




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

Why Artifice Rules The World: We Have No Choice

Submitted by Charles Hugh-Smith of OfTwoMinds blog,

There's only one small problem with relying on artifice: we haven't actually fixed what's broken in the real world.
 

As I noted yesterday, we now game dysfunctional systems rather than actually repair them. Rather than fix the dysfunctional system of higher education, for example (as I proposed in my book The Nearly Free University and The Emerging Economy), students and their parents go to extraordinary lengths to game the Ivy league university admissions system.
 
Rather than actually address the structural causes of unemployment, we lower interest rates to zero and reckon the resulting financial bubble will fix unemployment (and everything else).
 

To avoid having to deal with unemployment as an issue, the unemployment rate is heavily gamed by counting marginal jobs (working 1 hour a week–you're employed!) and removing tens of millions of unemployed people from the work-force.

 

The primary tool of increasing prosperity is the expansion of asset bubbles that supposedly boost the wealth effect, an internalized belief that one is wealthier. This internal belief is presumed to encourage more borrowing and spending which is then presumed to lift all boats in the economy.
 
This is of course all artifice: the elaborately choreographed applications to the Ivy League, the massaged statistics designed to manage our perceptions of reality rather than address reality itself, and the selling offree money for financiers as a policy that magically helps everyone, even those far from the money spigots of the Federal Reserve.
 
How did we arrive at a systemic dependence on contrivance and artifice to manage problems? We have no choice. Why do we have no choice?
 
Because any attempt to actually fix dysfunctional systems necessarily steps on the toes of deeply entrenched vested interests that profit from the dysfunctional Status Quo— interests who will devote every resource in their command to water down, co-opt, divert or defeat any reforms that lessen their share of the national income or their political power.
 
As a result, true reform of hopelessly dysfunctional systems is politically impossible. Since politicians are elected to give everyone more of what they want, politicos have no choice to but to game the dysfunctional systems via perception management and statistical sleight of hand to make them appear to give everyone more of what they want. Meanwhile, the politicos collect personal fortunes from the Elites and insiders benefiting from the dysfunctional Status Quo.
 
Artifice and perception management appear to be win-win: everybody seems to win if they see dysfunction as not just "the way the world works," but as a positive approach that benefits everyone in some fashion.
 
There's only one small problem with relying on artifice: we haven't actually fixed what's broken in the real world, and those dysfunctions continue to fester beneath the glossy surface of gamed statistics and happy stories we tell ourselves about how well everything is working.
 
At some point–the actual date is unpredictable, but 2021-2025 is as good a guess as any–the dysfunctional systems will break down and no amount of artifice, bogus statistics or perception management will mask the rot.
 

Once reality crashes through the thick constructs of artifice, faith in the Status Quo will be lost. At that fragile juncture of destiny, the opportunity to fix what is broken will finally emerge.




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

Feeling Worthless? The 10 Majors Most Likely To Lead To Underemployment

When it comes to worthless majors, it is no secret that “liberal arts” are at the top of the heap. This is the conclusion of not just the real world: a recent survey of 68,000 workers by salary information firm PayScale confirmed as much when asking the humanities majors themselves, and where employees with degrees in fields like English, general studies, and graphic design were among the most likely to report feeling “underemployed” at their current jobs.

Also, that the list was topped of by Criminal Justice majors probably speaks more about the current captured state of US crony capitalism than anything else.  But what is surprising is that graduates with more “practical” degrees in fields like business administration, ranking second in terms of pay dissatisfaction, also said their jobs didn’t put their education, training or experience to work as much as they should. In other words, Wall Streeters thought they were underpaid. Actually did we say “surprising”… scratch that.

Some more from the WaPo:

Why the poor showing for business majors? PayScale notes that in many cases, a simple bachelor’s degree in business might not get you very far – a more advanced degree like an MBA might be necessary “in order to set up recipients for jobs in their fields.”

 

At the other end of the spectrum, STEM fields produced graduates with the least likelihood of underemployment. Engineering degrees accounted for six of the ten least underemployed majors. Law, physics, geology and mathematics made up the remaining four.

 

What causes workers to feel underemployed? Most survey respondents cited poor pay as a leading factor. PayScale also notes that “nine of the 10 most underemployed majors are female-dominated,” making underemployment a factor in the gender wage gap. Conversely, many of the least underemployed majors are dominated by men, according to a 2013 Georgetown survey.

In total, about 43 percent of respondents to the PayScale survey reported feeling underemployed. It was unclear if the other 57% were just unemployed to begin with.




via Zero Hedge http://ift.tt/1mRL68l Tyler Durden

WHO Worker Ebola Infections Mount: Sierra Leone Lab Shut, Senegal Doctor Flown To Hamburg

There is reason to be concerned “about whether the proposed resources would be adequate,” warns a Harvard professor as the World Health Organization ‘battle strategy’ draft calls for more than $430 million to bring the worst Ebola outbreak on record under control. This morning we hear of yet another health worker infected – and being flown home to Hamburg for treatment from Sengal and the WHO has shut a lab in Sierra Leone after health workers became infected. A glimpse at the following 3 charts should have the entire world throwing money at at them…

 

As Bloomberg reports,

More than $430 million will be needed to bring the worst Ebola outbreak on record under control, according to a draft document laying out the World Health Organization’s battle strategy.

The plan sets a goal of reversing the trend in new cases within two months, and stopping all transmission in six to nine months. It requires funding by governments, development banks, the private sector and in-kind contributions, according to the document obtained by Bloomberg News.

 

 

There is reason to be concerned “about whether the proposed resources would be adequate,” said Barry Bloom, a public health professor at Harvard University who also questioned whether the funds would be made available fast enough, and whether the organization’s latest plan “would ensure the expertise from WHO that is needed.”

 

The WHO plans to publish the plan by the end of this week at the earliest and details may change, said Fadela Chaib, a spokeswoman for the Geneva-based agency. United Nations Secretary-General Ban Ki-Moon this month appointed health crisis expert David Nabarro to coordinate the UN response.

Previous outbreaks pale in significance…

 

and it is getting worse very fast…

Charts: Bloomberg, WHO, and Ecologically Oriented

* * *

And it gets worse – WHO shuts Sierra Leone Lab…

The World Health Organization (WHO) said on Tuesday it had shut a laboratory in Sierra Leone after a health worker there was infected with Ebola, a move that may hamper efforts to boost the global response to the worst ever outbreak of the disease

 

The WHO said it had withdrawn staff from the laboratory testing for Ebola at Kailahun — one of only two in Sierra Leone — after a Senegalese epidemiologist was infected with Ebola.

 

“It’s a temporary measure to take care of the welfare of our remaining workers,” WHO spokesperson Christy Feig said, without specifying how long the measure would last. “After our assessment, they will return.”

And another WHO health worker is sick (and being flown home to Hamburg)

An employee of the World Health Organization (WHO) who contracted Ebola in Sierra Leone will be flown to the German city of Hamburg for treatment, a spokesman for the city said.

 

Rico Schmidt, spokesman for the Hamburg Health Senate, said the patient would arrive later on Wednesday and be treated at Hamburg university clinic’s tropical medicine institute. The WHO in Geneva said the patient was a Senegalese epidemiologist.

 

One of the deadliest diseases known to man, Ebola is transmitted by contact with body fluids and the current outbreak has killed at least 120 healthcare workers.

  *  *

We leave it to the WHO to conclude:

It’s not “a
question of incompetence or complacency,” according to Morrison, who
said the WHO should be able to raise the money needed. “It’s the fact we’re catching up with the unknown, and it’s way ahead of us.”




via Zero Hedge http://ift.tt/1qw36tn Tyler Durden

The Greatest Depression? German Yields Now Negative Through 2017

Another night, another sell-side bank suggests European QE must be getting closer and, along with more un-de-escalation in Russia-Ukraine, the bid for German bonds continues to surge as Europe’s greater depression appears increasingly priced into bonds. Yields on all German bonds out to 3 years are now negative and 10Y Bunds have collapsed to 90.5bps – record lows. This in turn – as we explained here – is dragging Treasury yields lower (10Y 2.36%) but leaves the spread to Bunds at record highs.

Bund tests 90bps…

 

as the entire German yield curve is now negative out to 3 years…

 

Massively divergent from stocks…

 

and US Treasuries follow suit…

 

Charts: Bloomberg




via Zero Hedge http://ift.tt/1vQP4Dm Tyler Durden

The DSKing Of Christine Lagarde: IMF Head Formally Charged In Fraud Probe

Ah, the perils of European power politics.

A day after France revealed its new government, the person who so eagerly stepped in after DSK’s infamous and choreographed fall from grace and the IMF presidency (not to mention his derailed French presidential ambitions, greenlighting Hollande as what would become the worst French president ever), Christine Lagarde is about to be DSKed herself after “someone” clearly has set their sights on the former French finance minister.

Several hours ago the news hit that a French court has put Christine Lagarde, head of the International Monetary Fund, under a formal probe for negligence in a corruption investigation dating back to her days as finance minister.  To be sure, this development is hardly a shock: recall that it was over a year ago when “IMF’s Lagarde Flat Raided Over French ‘Payout’ Probe” with her ascent to the head of the IMF also riddled with numerous allegations of impropriety involving the Tapie matter. However, until now, such outside interventions were below the radar, and certainly never escalated to anything formal or official. Alas, it now appears that Madame’s time has come, even if Lagarde hasn’t grasped it just yet.

From the WSJ:

Ms. Lagarde confirmed the decision in a statement but said it was “without basis,” adding she would challenge it with a higher court. She said she was heading back to Washington Wednesday and would brief the IMF board about the latest development.

 

The investigation is part of a complex, drawn-out probe into the alleged misuse of state funds. The case stems from a decision in the 2008 to use arbitration to settle a dispute with business tycoon Bernard Tapie. The arbitration panel awarded €420 million to Mr. Tapie.

 

“The magistrates of the court of justice of the Republic have decided to place me under formal investigation,” Ms. Lagarde said in statement. “After three years of procedure, the sole surviving allegation is that through inadvertence or inattention I may have failed to intervene to block the arbitration that brought to an end the longstanding Tapie litigation,” she added.

Bloomberg adds:

IMF issues statement after Managing Director Christine Lagarde put under formal investigation for her role in an arbitration case during her time as French finance minister.

 

IMF spokesman Gerry Rice: “She is now on her way back to Washington and will, of course, brief the board as soon as possible. Until then, we have no further comment”

Regardless of the spin, at this point it’s all over for the first female president of the IMF, whose departure has come with the same facility as her ascent.

The only question is who and why was angered by her policies over the past three years, and who will be her replacement. And most importantly, is the imminent shift at the top of the IMF indicative of what the CFR pitched yesterday when it proposed that the time has come for Bernanke’s money paradrop. After all, one would need an even more obedient puppet at the head of the monetary fund if such an idiotic plan is to even be able to take off the ground, so to speak.

As for Lagarde, we are confident she and Angelo Mozillo will have enough fake tanning tips to exchange during their long and worry-free retirement.

And with that, Bill was finally Killed.




via Zero Hedge http://ift.tt/1vQP3Q2 Tyler Durden