Tag: finance

Crimea 2.0: Donetsk Activists Declare Kiev Independence, Request “Temporary Peacekeeping” Support From Putin

Less than a month after the Crimean referendum which pulled the region away from Ukraine and ceded it to Russia, another east Ukraine regional city, Donetsk, has just declared its independence from Kiev following the previously reported mini coup yesterday in which pro-Russia activists seized the government building in the city, as well as the other two regional capitals. Specifically, as RT reports, today at 12:20 local time, a session of the people’s Council of Donbass (Donetsk region) took place in the main hall of the Regional Council and without the police (whose allegiance to Kiev also appears to be non-existent) intervening, unanimously voted on a declaration to form a new independent state: the People’s Republic of Donetsk.

Sure enough, promptly thereafter the Council of the new republic issued an address to Russian President Vladimir Putin, asking for deployment of a temporary peacekeeping force to the region. Just like Crimea.

And so another city pulls away from Ukraine and gives Russia the go ahead to create a toehold in East Ukraine, just according to Putin’s plan.

RT has the details:

The Council proclaimed itself the only legitimate body in the region until the regions in southeast Ukraine conduct a general referendum, set to take place no later than May 11.

The Council in Donetsk issued an address to Russian President Vladimir Putin, asking for deployment of a temporary peacekeeping force to the region.

“Without support it will be hard for us to stand against the junta in Kiev,” said the address.

Rallies in support of the federalization of Ukraine continue in a number of cities in southeast Ukraine. Thousands of citizens have joined the protests, demanding the earliest possible federalization of the country.

Ukraine’s Ministry of Interior said that last night unknown persons stormed the Security Service of Ukraine building in the city of Lugansk and seized a weapons warehouse there. During the night’s clashes, nine people were reportedly injured.

Rallies in support of the federalization of Ukraine continue in a number of cities in southeast Ukraine. Thousands of citizens have joined the protests, demanding the earliest possible federalization of the country.

Ukraine’s Ministry of Interior said that last night unknown persons stormed the Security Service of Ukraine building in the city of Lugansk and seized a weapons warehouse there. During the night’s clashes, nine people were reportedly injured.

Pro-Russian activistshold a rally in front of Ukraine's regional security service of Ukraine in Lugansk on April 6, 2014.(AFP Photo / Igor Golovniov )

In the city of Kharkov protesters erected barricades around the buildings of the city and the regional administrations and the regional headquarters of Security Service of Ukraine.

* * *

The ruble is sliding on the news, while wire services reported that Ukraine leader Tymoshenko will fly to Donetsk. Hopefully she will be safe upon arrival.




via Zero Hedge http://ift.tt/1e7t3fs Tyler Durden

No BTFD In Overnight Yen Carry/Spoos Means Momo Confusion Continues

No Yen carry levitation overnight and, naturally, no Spoo levitation, with the futures struggling following the Nikkei’s -1.7% drubbing (pushing it back to nearly -10% on the year) and down well from Friday’s closing print. Risk averse sentiment following on from lower close on Wall Street on Friday, NASDAQ 100 (-2.7%) marked the worst session since 2011 dominated the price action in Asia, with JGBs up 32 ticks and the Nikkei 225 index (-1.7%). The Shanghai Composite was closed for a market holiday. Overall, stocks in Europe have recovered off lows but remain in negative territory (Eurostoxx50 -0.64%), with tech sector under performing in a continuation of sector weakness seen in the US and Asia, however Bunds remained under pressure as speculation of QE by ECB continued to undermine demand for core EU bonds. No major tier 1 releases scheduled for rest of the session, with focus likely turning to any policy related comments from ECB’s Weidmann, Constancio and Fed’s Bullard.

Bulletin headline summary from Bloomberg and RanSquawk

  • Treasuries steady, 10Y yield holding just above 50-DMA at 2.711%, after weaker than forecast March jobs report damped concern about fed funds rate increases; 2Y and 3Y yields near lowest since March 19.
  • Stocks are dropping around the world, with European shares snapping the longest rally since October, as investors sold technology shares
  • Two weeks of selling in the Nasdaq 100 Index, where  valuations are double the rest of the market, has sent anxiety among options traders to the highest levels since the flash crash four years ago
  • Pro-Kremlin demonstrators seized administration buildings in Ukraine’s east and called for the regions to join Russia as the government in Kiev accused President Vladimir Putin of stoking separatist unrest
  • As Putin completes Russia’s annexation of Crimea, Azerbaijain is feeling pressure to join a Moscow-led customs union, raising concern that his next move will be to shift his attention southward
  • Dutch authorities are investigating the deaths of former ABN Amro Netherlands’s CEO Jan Peter Schmittmann, his wife and a daughter, whose bodies were discovered two days ago in their home after a possible homicide and suicide
  • The University of Kentucky and its five freshmen starters are the pick of oddsmakers to cap a record-setting men’s college basketball tournament with the ninth championship in school history
  • Sovereign yields mostly higher. Asian stocks mixed, Nikkei falls 1.6%, Shanghai +0.7%. European equity markets, U.S. stock futures fall. WTI crude and gold lower, copper little changed

US Event Calendar

  • 3:00pm: Consumer Credit, Feb., est. $14.075b (prior $13.698b)
  • 11:45am: Fed’s Bullard speaks in Los Angeles Supply
  • 11:00am: U.S. to announce plans for auction of 4W bills
  • 11:00am POMO: Fed to purchase $900m-$1.15b in 2036-2044 sector

EU & UK Headlines

Bunds failed to benefit from the risk averse sentiment which saw stocks in Europe trade lower (albeit off the worst levels), as potential introduction of QE by the ECB continued to undermine demand for core EU paper. At the same time, peripheral EU spreads pared the initial tightening and are now seen marginally wider, amid profit taking related flow following last week’s ECB inspired spread tightening.

Of note, ECB’s Nowotny said this morning that further rate cuts should not ruled out but no immediate need for further ECB action, adding that other tools may be more effective than rate cuts. ECB’s Weidmann and Constancio due to speak later.

Equities

Stocks in Europe (Eurostoxx50 -0.64%) have managed to recover off the worst levels of the session, but remain lower across the board, with tech as the worst performing sector, as risk averse sentiment remains the dominant theme following an aggressive sell off on Wall Street on Friday and a negative close by the Nikkei 225 (-1.7%) in Asia. Overall, focus now turns onto the upcoming earnings season over in the US with Alcoa due after the closing bell on Wall Street tomorrow.

FX

Overall, price action across major FX pairs this morning has been relatively subdued. Of note, there is approx. USD 1.3bln worth of USD/JPY intraday options due to expire at NY cut at 1500BST (0900CDT) between 103.00-50 levels.

Commodities

Reports that Libyan officials and rebels have reached a deal to reopen two oil ports, effectively doubling Libya’s capacity, resulted in selling pressure on both WTI and Brent Crude futures overnight and in Europe this morning, though prices have come off the worst levels since. According to Libya rebel spokesman, state oil company NOC is free to start exports any time. In spite of this, analysts at Commerzbank said they see oil recovering as Libyan supply is to stay curbed, whilst Morgan Stanley says Brent crude may weaken further in May and June. Also of note, JPMorgan raised its US NatGas forecasts in 2014 to USD 4.58/mmbtu and USD 4.50 in 2015.

* * *

Jim Reid’s overnight summary concludes the weekend event recap

There was certainly an element of mystique to the post-payrolls price action on Friday, with a sharp sell-off occurring later in the session after what had initially looked like a ‘Goldilocks’ employment report. Before we get to that, overnight markets are starting the week influenced by how they ended Friday with EM outperforming DM. The Nikkei gapped lower at this morning’s open and is trading -1.4% as we type, following in the footsteps of the S&P 500 (- 1.25%) which posted its worst loss in 43 sessions. The Hang Seng (-0.6%) and ASX200 (-0.14%) are also weaker today, in contrast to the more EM-exposed indices such as the HSCEI (+0.3%) and Jakarta Composite (+1.4%). Friday’s 8bp gap lower in 10yr UST yields and a decent rally at the front end is helping the bid for EM assets today across credit and equities. In India, the focus is on the start of the general election cycle which stretches until May 12th. Latest polls show that Modi’s National Democratic coalition is likely to win power campaigning on a pro-business platform.

Friday’s selloff took many by surprise, especially since the initial reaction in stocks seemed to be positive with the S&P 500 breaking new intra-day records shortly after the opening bell. The selloff started with the US tech sector but the reality is that anything from high growth to high beta to high P/E stocks were all targeted by sellers. Even some of the larger tech stalwarts such as Google (-4.7%), Microsoft (-2.8%) and Apple (-1.3%) performed poorly. Indeed, it’s a been a pretty bad run of late for tech, with stocks such as Google (Class A shares) down 11% from the peaks. The broader NASDAQ (-2.6%) fell back into negative territory on a YTD basis and is down about 5% from the year’s highs. Even the US biotech sector, which had a feverishly strong run in the first two months of this year, saw a strong reversal on Friday as it dropped 4%. The biotech index is now down 14% from the February peak. We’re not sure we could point to anything in Friday’s payrolls reports to explain the selloff. Indeed there was something for both the bulls and the bears, with the headline of +192k falling short of expectations of +200k but offset by +37k of net revisions to January and February numbers. The disappointment of flat month-on-month earnings was offset by a rise in the average work week. Similarly, some were disappointed by the rise in unemployment to 6.7%, but the optimists pointed out the substantial rise in participation rate to 63.2%.

One of the themes in weekend press was whether the DM central banks were doing enough to fight disinflation. Europe ended last week debating whether the ECB would eventually step up with some form of asset purchase program after Reuters reported on Friday that the central bank had modelled the economic effects of buying EUR1trillion of securities, citing German media sources. ECB board member Benoit Coeure was quoted on the weekend by France’s Le Figaro saying that the European economy could possibly do with lower rates. But he said that QE at this stage was not necessary, in a sense repeating what Draghi had said at the last ECB meeting. Staying with the topic of QE, Bloomberg has reported that the BoJ will probably double purchases of ETFs in a second round of easing in coming months, although it unlikely to occur at tomorrow’s BoJ meeting.

While the issue has been on the backburner over the last couple of weeks, tensions between Ukraine and Russia continue to simmer away. A $2.2bn gas bill is due to be paid by Ukraine to Russia this morning local time. While the Ukrainian government has said it will likely honour the payment, there is still plenty of animosity over Friday’s 80% price hike for Russian gas. Friday’s price increase was the second price hike in just three days (Reuters). According to Reuters, the new $485 price is the highest of any Gazprom customer and compares with about $370 on average for clients in the European Union. Adding to the tension, on Sunday a number of Ukrainian cities saw protests from Pro-Russian groups including in Donetsk where protestors stormed the region’s administration building calling for an independence referendum.

Administrative buildings in other Eastern Ukrainian cities, Kharkiv and Luhansk, were also occupied by protestors yesterday who also called a boycott of upcoming presidential elections on May 25th. NATO’s chief said late last week that Russian troops massed on the Ukrainian border have shown no
signs of decreasing.

Back to Europe, with Greece looking to return to international bond markets shortly, the ESM’s Regling warned Greece on the weekend not to overpay for international funding. Regling said that “it was natural that Greece wanted to test the markets, but warned it to not pay too steep a yield, to avoid increasing its debt load”. Ironically, while markets talk of a return of Greece, Germany’s FinMin Schaeuble said that he did not rule out Greece needing a third international bailout to cover the country’s funding gap over the next two years – although any international funding will be much smaller than the first two rounds (ekathimerini).




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China Lashes Out At North Korea

Submitted by Zacary Zeck via The Diplomat,

Tensions appear to be quickly mounting between the erstwhile allies North Korea and China.

Last week I noted that North Korea has reportedly begun hanging banners declaring that China is “a turncoat and our enemy” at its Kang Kon Military Academy. The characterization of China as a “turncoat and our enemy” was coined by Kim Il-Sung, North Korea’s eternal leader, in 1992 but has been invoked by Pyongyang on a number of occasions since to express its displeasure toward Beijing.

The feeling seems to be mutual these days, if the Global Times—a state-run Chinese newspaper—is any indication. As my colleague Shannon noted earlier today, the Global Times published an editorial on Thursday that contained unusually harsh criticism of North Korea. Although the editorial focused primarily on North Korea’s nuclear program, it also includes some other more general criticisms of Pyongyang. For example, it stated: “If Pyongyang continues to follow this [nuclear] path, it will suffer long-term isolation by the international community and the country’s poverty will never be eliminated. The risks these factors pose to the Pyongyang regime can hardly be offset even if North Korea truly becomes a nuclear state.” North Korea has been extremely critical of foreign leaders that characterize North Korea as being wrecked by poverty.

The Global Times editorial also suggested that North Korea’s claims about its nuclear progress were exaggerated, and warned against trying to exploit the divergence between China and America’s approaches towards its nuclear program. “The North’s nuclear issue has caused some divergence between China and the US,” the editorial stated. “If Pyongyang thinks this provides an opportunity for it to further develop its nuclear capabilities, it should give up such fantasies.”

At other points in the piece, the Global Times characterized North Korea’s heavy reliance on missile and nuclear tests as a clear demonstration of its overall weakness. “Nuclear tests and missile launches have become Pyongyang’s only diplomatic cards, which is unfortunate for Pyongyang and the entire Northeast Asia.” Similarly, it said the reason why North Korea emphasizes its nuclear program so much is because “Pyongyang’s deterrence is so weak that it has no other ‘leverage’ than nuclear weapons.” Nonetheless, the Global Times dismissed North Korea’s nuclear technology as primitive, and said that it is “not enough to truly deter Washington.” As a result, the Global Times said that North Korea should abandon its long followed path of isolation in Northeast Asia.

China has not limited itself to media criticisms of North Korea, however. As I noted earlier today, in response to North Korea’s medium-range ballistic missile tests last week, the UN Security Council openly condemned Pyongyang. This would not have been possible without China’s acquiesce (North Korea responded by threatening to conduct a “new form” of nuclear test, which was the proximate impetus for the Global Times’ editorial).

Probably more disconcerting for North Korean leaders, China has openly backed South Korean President Park Geun-hye’s new initiative that aims to ease the eventual reunification of the two Koreas, which have been divided since the end of WWII. Park made this initiative a central focus of her trip to Germany last week, stating: “Germany is an example and a model for a peaceful reunification of our own country.” Park also said while in Germany that she saw three ways to bring the Koreas closer together: more family reunions, more humanitarian aid and helping to build up North Korean infrastructure.

On Thursday, China came out strongly in favor of Park’s proposal. During a press conference, a Chinese Foreign Ministry spokesperson stated: “China always supports the ROK (South Korea) and the DPRK (North Korea) in improving their relations through dialogue, promoting reconciliation and finally realizing an independent unity.” This followed comments Chinese President Xi Jinping made during a meeting with Park on the sidelines of the Nuclear Security Summit last week, in which Xi announced his support for an “independent and peaceful reunification” of the two Koreas.

North Korea has been far less enthusiastic about President Park’s initiative. In fact, earlier this week North Korea’s state media blasted Park’s reunification plan for having a “sinister intention for ‘unification by absorption,’ which will escalate north-south confrontation and war danger and keep national division permanently.” The report was laced with extremely sexiest language directed toward Park, and suggested that she had given the speech in Germany because if she had made it in South Korea, “she would be shot to death like her father.” Its overarching conclusion was that Park had brought disgrace upon the Korean nation.

It’s worth noting, however, that North Korea has not stood idle as China has ratcheted up its rhetoric and actions toward Pyongyang. To begin with, it has opened up an official dialogue with Japan, a country that China is increasingly at odds with.

Similarly, South Korea media reports this week indicate that “North Korea has reinforced customs checks on shipments of mining products to China,” which has hindered North Korean exports to China and Chinese investment into North Korea’s economic development zones. New trade restrictions were anticipated following last December’s execution of Jang Song-thaek, North Korean leader Kim Jong-un’s uncle and the then-second most powerful individual in North Korea. Jang was largely seen as the North’s main interlocutor with the Chinese and a proponent of focusing on economic development. Among the long-list of trumpeted up charges that were leveled against Jang following his purge was the accusation  that he had allowed foreigners to exploit North Korea’s natural resources and land, which was widely seen as a not-so-subtle reference to Jang’s economic dealings with China.

 


    



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Government Confiscation And Lifting The Veil On “The 401(k) Scheme”

From Presidential edicts of ‘MyRA’ being for your own good and “will never go down in value” to Poland’s ‘precedent-setting’ confiscation of public pensions funds for the good of the nation’s debt load; and from the IMF’s “one-off” wealth tax ‘idea’ to Europe’s recent consideration of ‘wholesale savings confiscations and enforced redistribution’, it appears Marc Faber’s warning that “from now onwards, the bailouts will also be at the expense of the asset holders, the well-to-do people. So if you have money I am sure the governments will one day take away 20-30% of my wealth,” is becoming more likely every day. As the following mini-documentary explains, confirming Ron Paul’s warning that “there is more chaos to come,” Jim Rogers’ fear that “they won’t take our bank accounts…they will take our retirement accounts,” is coming true.

 


    



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CHINA’S VERSION OF NIGHT OF THE LONG KNIVES

CHINA’S OWN SPECIAL VERSION OF NIGHT OF THE LONG KNIVES 

“Pursuing reform in the face of vested interests is akin to stirring the soul” – Li Keqiang, Premier of China

 

“We must eliminate evil members of the herd.” — Xi Jinping, President of China

Between June 30 and July 2 of 1934, the Nazis carried out a series of political murders in what was called the Night of the Long Knives. A version of this large-scale purge is underway in China right now, starting with this week’s trial of Liu Han. Liu is accused of murder, among other crimes, and of being part of a “Triad” gang along with 35 others.

The trial and other investigations and arrests is being fully covered by the Chinese state media. This article from the English edition of the South China Morning Post lays out in strong language the case against Liu Han. President Xi Jinping’s crackdown is also being promoted through social media. It is effectively using tools like Weibo, China’s equivalent of Twitter, and WeChat to rally public opinion around the party’s anti-graft efforts.

I will be writing more about China’s new leaders in WinterActionables in the near future. For now, it suffices to say that China’s new Premier Li Keqiang is as close to a choir boy as this system can muster. Xi himself has managed to avoid serious corruption claims in his career. Therefore, these new leaders apparently feel the time has come to lay out China’s dirty linen for all to see, especially that of political opponents and specifically the “Shanghai Gang.”

I expect this will also involve the recovery or claw-backs of loot scammed from auntie’s wealth management products and seizures (as opposed to bailouts) as restitution of the ill-gotten gains of the kleptocrats — or at least those not well connected with the new Xi regime.

Xi Jinping is also going to personally chair and oversee the shadow banking reform committee. Normally this is chaired by the Premier or a more junior official, so it seems a clear signal that Beijing intends to get its shadow bank lending under direct control. Li Keqiang, in a speech in March, indicated a willingness to allow “selective” corporate defaults, no doubt as an instrument to rein in state enterprises, control power, implement reform and settle scores. Unless it fits one of the four following categories, stimulus and bailouts would be small.

– Building the social safety net
– Environmental projects
– Social housing, hospitals, schools, water treatment, urban public transport
– Agricultural modernization

The new leadership’s purge is largely directed at the power players called the Shanghai Gang. This is an element of Jiang Zemin’s old power base. Jiang was President of China between 1993 and 2003. Jiang, who is now 87 and was generally considered a stooge and flower pot even when in office, is almost begging for mercy now. Chinese social media, however, is relentless in calling for his head and the end to the Shanghai Gang. This report from China’s version of “alternative media” NTDTV.com is illustrative. It passes the censors mocking Zemin and accuses him of being involved in “live organ harvesting” and of “hanging out with Henry Kissinger.”

Zhou Yongkang, corrupt Shanghai Gang Leader

The Liu Han trial is the next salvo in the offensive that is really directed at the titular head of the highly corrupt Shanghai Gang, Zhou Yongkang. The Xi Jinping power structure emanates from a group called the “Chinese Youth League Gang.” Premier Li Keqiang headed the League from 1993 to 1998 and is drawing his associates into the power structure. This structure has been rapidly replacing the prior security and police forces with an aggressive anti-corruption cadre since coming to power in 2013. Li has urged auditors to be “brave in thoroughly probing violations [of the law].”

Zhou Yongkang is now retired, primarily as the fallout from his association with now-jailed Bo Xilai. There are claims he didn’t go without a fight and tried to have Xi assassinated (several times) during the party Congress when the successor was being selected. From 2007 to 2012 Zhou headed the powerful Politics and Law Commission, which oversaw all courts and police forces in China. As such, he was in a position to cover up all kinds of kleptocrat criminality in China. He facilitated a “strike black” campaign in Chongqing with now-convicted ally, Bo Xilai. This was little more than Mafia-style shakedowns of private business people. Zhou was also one of only nine members on the Politburo Standing Committee.

Zhou is under investigation and the net is closing rapidly. He is joining at least three of his former senior security officials, including two vice-ministers and the man who oversaw Beijing’s internal listening apparatus. A total of $14.6 billlion in assets have also been seized so far.

It sounds like the “court of public opinion” has ruled. One of China’s main newspapers put it succinctly:

But doubts about Zhou’s fate have now been dispelled by a recent flurry of uncensored news stories in the Chinese media that revealed shocking details of corruption involving Zhou’s family and former subordinates. It has been reported that the authorities recently searched the homes of Zhou’s two brothers. Though these stories have yet to implicate Zhou directly, it will only be a matter of time before the Chinese government officially charges him with corruption.

“Whispered reports are even more lurid. Zhou is said to have plotted to murder his first wife, and there are rumours that at the height of last year’s scandal involving disgraced former Chongqing party boss Bo Xilai , he attempted to assassinate Xi in the leadership compound at Zhongnanhai.

“Based on what the Chinese press has disclosed thus far, it is clear that the Zhou case will be the ugliest and most sensational scandal involving a senior party leader that the country has ever seen. It will make Bo, an ally of Zhou and a former Politburo member who was sentenced to life imprisonment for corruption, look like a petty thief.”

Nationwide, hundreds of thousands of people must have been caught up in the dragnet, based on the 11,879 people investigated in Shanxi Province alone. The heads of Chengdu Bank and a local investment corporation have been detained. In his long career, Zhou has headed or helped promote all of China’s big oilfields – Daqing, Liaohe and Shengli — and the gasfields of Tarim and Sichuan basins. At least six senior executives at oil company CNPC, including Jiang Jiemin, former CNPC head and head of the state assets watchdog, have been detained since August 2013.

?Shen Dingcheng, the party chief and vice-president of PetroChina International, disappeared shortly before the Lunar New Year holiday, the China Business Journal reported, citing an anonymous source. The Journal also highlighted Shen’s links with three other former secretaries to Zhou and even described Shen as being part of a “gang of four” secretaries. The other former secretaries are ex-CNPC deputy general manager Li Hualin; former deputy Hainan; governor Ji Wenlin; and the former chairman of the Federation of Literary and Art Circles in Sichuan, Guo Yongxiang.

Several members of Zhou’s former inner circle have also been rumored to be under investigation or have already been detained, including Sichuan officials Li Chuncheng and Li Chongxi.

Although not yet put directly in the Night of the Long Knives list, there is enough of a purge of the military underway to keep those actors in line and wary. Xi compares it to going after tigers and flies. These are indeed scary times for the corrupt kleptocrats of China.


    



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Ukraine PM Warns Russia’s “Economic Aggression” Is Unacceptable

"Russia was unable to seize Ukraine by means of military aggression," Ukraine's PM Yatsenyuk blasted, "Now they are implementing plans to seize Ukraine through economic aggression." His comments come after Russia's Gazprom raised prices for gas 81% from $268.50 to $485.50 (on the basis that the previous discount was a subsidy for allowing the use of the Black Sea port of Sevastopol, which Russia now has annexed) to which Yatsenyuk chided "political pressure is unacceptable, and we are not accepting the price of $500." Mr. Yatsenyuk, as WSJ reports, said his government will not pay the new price and will raise the issue in the Stockholm Arbitrage court, which was selected by the two countries years ago to settle the gas disputes – but warned his people that the country should prepare for Russia switching off natural-gas supplies.

 

As The Wall Street Jorunal reports, Ukraine's prime minister warned Saturday that the country should prepare for Russia switching off natural-gas supplies, as the energy monopoly Gazprom said it will raise the price for gas for Ukraine by 81%.

Speaking at a cabinet meeting, Arseniy Yatsenyuk, said Moscow's price increase was a form of "economic aggression," adding that Kiev will not recognize the new price and is ready to challenge it in the international arbitrage court.

 

Russia's natural gas monopoly Gazprom's Chief Executive Alexei Miller said Saturday in a televised interview the company has raised the cost of gas to Ukraine to $485.50 from $268.50 for 1,000 cubic meters from April 1.

 

Moscow says the price change is due to Kiev's failure to pay its bills.

Mr. Yatsenyuk responded aggressively:

"Political pressure is unacceptable, and we are not accepting the price of $500," Mr. Yatsenyuk told ministers.

 

"Russia was unable to seize Ukraine by means of military aggression," Mr. Yatsenyuk said. "Now they are implementing plans to seize Ukraine through economic aggression." he added.

 

He said Ukraine " will not touch" any of the gas destined for Europe if Russia limits supply for Ukraine. Mr. Yatsenyuk said Ukraine will continue to try to negotiate the new gas deal with Russia.

Gazprom's additional argument for raising the price (aside from credit-risk-adjusting for the billions already owed) is somewhat remarkable…

Mr. Miller said Ukraine owes Gazprom $2.2 billion for March deliveries, and another $11.4 billion the country saved as part of a discount agreement that Moscow recently scrapped.

 

Mr. Miller the discount was a prepayment for the Russian Navy's use of Ukraine's Black Sea port of Sevastopol through 2017, but as that port had been annexed by Moscow, along with the rest of Crimea, Ukraine should repay $11.4 billion it saved, Mr. Miller said, following similar statements by Russian Prime Minister Dmitry Medvedev.

In other words, because we annexed territory for which we had previously given you a discount for, you now need to pay us full price.

Mr. Yatsenyuk said his government will not pay the new price and will raise the issue in the Stockholm Arbitrage court, which was selected by the two countries years ago to settle the gas disputes.

With the US and IMF lining up to give "aid" to Ukraine, we wonder how all those taxpayers will feel when the hard-earned money gets greatly rotated from Ukraine's balance sheet straight to Gazprom's… or how the 'newly liberated' people of non-Crimean Ukraine will feel about their leaders when the country goes dark and cold…

And if Yatsenyuk thinks he can wait it out… starving Gazprom of potential revenue (that they are not even paying anyway) think again… As Reuters reports,

Gazprom Neft has not been affected by Western sanctions over Russia's annexation of Crimea but is ready to move away from dollars in its contracts and to redirect oil flows to Asia if needed, the CEO of Gazprom's oil arm said.

 

..

 

"As for sanctions, they have not affected the company's business in any way," Dyukov said in St. Petersburg, where Gazprom Neft is now based.

 

He suggested that Western companies did not want broader sanctions imposed on Russia, but that Gazprom Neft would reduce its reliance on the U.S. dollar if necessary and turn to Asia if doorways to the West were shut.

 

…

 

"No such task has been set (by the government)," he said. "But … we have discussed with our buyers the possibility of switching contracts to euros and … 95 percent said they are ready."

 

"This shows that in principle there is nothing impossible – you can switch from dollars to euros and from euros, in principle, to roubles," he told reporters in remarks authorised for publication on Monday.

 

"Of course, I have had meetings, contacts with representatives of Western business circles … In principle, they are not interested in escalation of tensions," Dyukov said.

So once again, actions by the West that were supposed to show strength will 'boomerang' back and do more to weaken the appearance of any global might that may remain.


    



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Ukraine Loses State Buildings In Key Eastern Cities To Protesters; Blames Putin For “Orchestrating Separatist Disorder”

 

Earlier this morning we reported that “Pro-Russia Protesters Seize Government Building In East Ukraine, Demand Autonomy.” We suggested that this was only the first city in eastern Ukraine that would see this kind of internal revolt. Sure enough, hours later, the largest city in East Ukraine and one located in close proximity to Russia, Kharkiv, also saw its state building fall to what appear to be pro-Russia protesters, making it the third major city after Donetsk and nearby Luhansk. This coordinated and largely unexpected pro-Russian action triggering accusations from the pro-European government in Kiev that President Vladimir Putin was orchestrating “separatist disorder.”

From Reuters:

Ukraine’s Interior Minister Arsen Avakov accused Russian President Vladimir Putin of being behind the seizure of state buildings by pro-Russia protesters in eastern Ukraine on Sunday and promised that police would restore order peacefully.

 

He also accused Ukraine’s ousted president Viktor Yanukovich of conspiring with Putin to fuel tensions in the region.

 

Earlier, pro-Russian protesters demanding a referendum on whether to join Russia seized a regional government building in the city of Donetsk and the offices of security services in nearby Luhansk.

 

“Putin and Yanukovich ordered and paid for the latest wave of separatist disorder in the east of the country. The people who have gathered are not many but they are very aggressive,” Avakov said in a statement on his Facebook page.

 

“The situation will come back under control without bloodshed. That is the order to law enforcement officers, it’s true. But the truth is that no one will peacefully tolerate the lawlessness of provocateurs,” he said.

As expected, Kiev is scrambling to restore the semblance that it is under control, which as we noted earlier, it isn’t:

Acting President Oleksander Turchinov called an emergency meeting of security chiefs in Kiev and took personal control of the situation, the parliamentary press service said.

The problem for Kiev is that suddenly the scramble for a referendum is reminiscent of what happened in Crimea. And everyone knows how that ended. Which means the acting government has to promptly halt the momentum toward sovereign independence or else East Ukraine is about to become a separate country, if not the latest annexation success for Russia.

Around 1,500 people protested in Donetsk on Sunday before breaking into the regional administration building, where they hung a Russian flag from a second-floor balcony, a Reuters witness said. Protesters outside cheered and chanted “Russia! Russia!”.

 

In the Luhansk protest, Ukrainian television said three people had been injured. Police could not confirm the report. Talking to the crowd over a loudspeaker, protest leaders in Donetsk said they wanted regional lawmakers to convene an emergency meeting to discuss a vote on joining Russia like the one in Ukraine’s Crimea region that led to its annexation.

 

“Deputies of the regional council should convene before midnight and take the decision to carry out a referendum,” one of the protest leaders said, without identifying himself.

 

A local Internet portal streamed footage from the seized building, showing people entering and exiting freely. Soviet-era music was being played over loudspeakers outside. The building houses the offices of Serhiy Taruta, a steel baron recently appointed by the interim government in Kiev as governor of a region with close economic and historical ties to Russia.

 

“Around 1,000 people took part (in the storming of the building), mostly young people with their faces covered,” said Ihor Dyomin, a spokesman for Donetsk local police. “Around 100 people are now inside the building and are barricading the building,” he added.

News of the mini coups quickly spread like wildfire across tiwtter and YouTube.

 

 

But the scariest news came moments ago from the Twitter account of Konstantin Rykov, who reported that the Russian troops in Rostov have just been put on military alert. We have not seen any independent confirmation anywhere else but this would be a very serious escalation in the superficial detente between Russia and the West via its proxy regime in Kiev.


    



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

The Day That BTFD Failed

We noted on Friday that something happened in the US stock market that day that has not been seen since the Fed unveiled QE4EVA. It went quietly under the radar of the mainstream media; talking-heads did not mention it; and strategists shrugged it off. What happened? BTFD Failed… and, as BofAML's Macneil Curry warns, popular trades are in trouble (bad news for equity bulls and treasury bears).

 

As a gentle reminder, the main investing thesis of the last few years has been BTFD (because buying the fucking dip has worked every time in the past, it will continue to work – therefore BFTD, BTFATH, and BTFWWIII)…

 

But – for the first time in 18 months… BTFD failed on Friday… (each dip was met with higher highs)…

 

 

Until Friday.. when the Nasdaq, having "dipped" to the 100DMA was "bought" back above the 50DMA but failed to make new highs and in fact made new lows…

 

So BTFD has failed.

As BofAML's Macneil Curry warns, Popular trades in trouble

Last week did not turn out like we thought it would. We came in aggressively bullish the S&P500, anticipating a resumption of its l/term uptrend for 1942, and we were equally bearish US Treasuries, recommending a short position in FVM4. Now both of those views appear to be in serious trouble.

The breakdown in tech stocks, with the NASDAQ Comp. closing below its 100d avg for the 1st time since Dec'1212, says that equities are likely to suffer more in the week ahead. This threatens the developing Treasury bear trend, particularly after Friday's Bullish Reversal Candles across much of the curve.

Chart of the week: NASDAQ Comp breaks key support 

 

The NASDAQ Comp has closed below its 100d avg for the 1st time since Dec'12. THIS IS BAD NEWS.

Historically, the 1st close below the 100d avg in 6 months or more has resulted in significant underperformance, with the avg 1wk, 2wk, and 1m returns all falling into negative territory. Beware, the 3968, Feb-05 low is vulnerable.

 

As the clip above says.. easy, you buy the fucking dip because "if you don't you're a fucking idiot".. unless this time it's dfferent…

 


    



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Faber On Gold Manipulation, The Fed’s Gold and Importance Of Not Storing Gold In U.S.

Gold finished 0.84% higher for the week and silver was 0.77% higher for the week. The disappointing jobs number Friday led to safe haven demand on concerns about the U.S. economy.



Marc Faber Interview This Morning (04/04/14) – Click Image To Watch

Bullishly for gold, U.S. Fed Chair Janet Yellen said this week that sluggish growth in labour markets mean accommodative policies will be needed for some time. Last month, she had said that the Fed may end bond buying this fall and raise borrowing costs six months after that.


While speculators continue to play games with the paper or digital price of gold at quarter, half year and year end, physical demand continues to be robust globally and especially in Asia. ANZ Banking Group said yesterday its gauge of demand in China increased last month. China, the world’s biggest buyer continues to import huge quantities of gold on a monthly basis and will likely have another record year of imports and total demand in 2014.


Gold in U.S. Dollars, 10 Year – (Thomson Reuters)

Middle Eastern demand remains firm too. Iraq’s central bank is diversifying into gold and also has plans to process 11 metric tons for public sale, and will import gold bars to sell to goldsmiths.

Video: Dr Marc Faber On The Manipulation Of Gold Prices, Bitcoin Risk,  Precious Metal Allocations and Safe Gold Storage In Singapore 

Today Dr Marc Faber gave insights into his strategies for protecting and growing wealth in 2014 and beyond. In the webinar, some of the topics covered with Dr Faber included:


  • Why he now believes that gold manipulation is a strong possibility

  • Technical risks of bitcoin and assets and money intermediated and dependent on technology?

  • Asian investment opportunities and why he likes Vietnam, Thailand, Hong Kong and Singapore

  • Western stagnation or collapse?

  • How to own precious metals?

  • Dollar cost average or lump sum?

  • Take profits/ rebalance or buy and hold for long term?

  • Allocations to precious metals?

  • Favoured asset allocation?

  • Other investment and business opportunities?

  • The yuan as global reserve currency?

  • Why small is beautiful when it comes to economies, nations and currencies
    Ireland, Spain, Italy, Greece and others should consider leaving the euro and returning to national currencies.


The interview was as informative as ever and Dr Faber took the time to answer some questions from participants. Key thoughts from Dr Faber:

On outlook for gold prices: “Gold price essentially should move higher, compared to all these factors I have mentioned, the price is relatively low at the current time.”

On gold manipulation: “I can believe it. Something is funny. If the U.S. cannot deliver the gold that Germany want to repatriate within one week, the question arises do they actually have the gold or not?”

On national currencies versus monetary unions: “I believe the best system in the world would be to have small countries and  avoid large sovereign states. If you look at which are the most prosperous countries – they are Singapore, Norway, Finland, Sweden, Switzerland, basically small sovereign states and democracy functions in a small society rather than a large society … I would recommend to any small country to leave the eurozone.”

On cryto currencies and bitcoin: “I don’t know the value of a bitcoin. I own gold because when the system breaks down, I want to have some cash. With a bitcoin, there is a scenario where the system breaks down and you have no internet access and then what is the value of your bitcoin?”

The interview can be watched here “Gold Bullion Stored In Singapore Is Safest – Marc Faber”


    



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