Russia To Add “Stealth” Subs To Mediterranean Force

Many have been surprised by the lack of public response by Russia to the ongoings in Ukraine. Aside from some comments by Siluanov, the response has been concerning in its absence from the iron fist. However, quietly and with little new coverage, RiaNovosti reports that the combat capability of Russia’s naval task force in the Mediterranean will increase significantly – for the first time in decades – following the first deliveries of Varshavyanka-class submarines (with advanced stealth technology dubbed “black holes in the ocean) to the Black Sea Fleet.

 

Via RiaNovosti,

Russia formed a permanent naval task force in the Mediterranean last year to defend its interests in the region. The move was widely seen, however, as a response to calls for international intervention in the worsening civil war in Syria, Russia’s longtime ally.

The task force currently consists of 12 warships and auxiliary vessels, including the nuclear-powered missile cruiser Pyotr Veliky and aircraft carrier Admiral Kuznetsov.

According to Chirkov, the Russian warships are taking part in an international operation to remove chemical weapons stockpiles from Syria.

“In general, the tasks assigned to the Mediterranean group are absolutely clear: to thwart any threat to Russia’s borders and security,” the admiral said, adding that it is normal practice for any country to keep naval assets in vital regions around the globe.

Chirkov said that the first Varshavyanka-class diesel-electric submarine, the Novorossiisk, will join the Black Sea Fleet in 2015.

The Defense Ministry has ordered a total of six Varshavyanka-class subs, dubbed “black holes in the ocean” by the US Navy because they are nearly undetectable when submerged.

The Varshavyanka-class (Project 636) is an improved version of the Kilo-class submarines and features advanced stealth technology, extended combat range and the ability to strike land, surface and underwater targets.

The submarines are mainly intended for anti-shipping and anti-submarine missions in relatively shallow waters.

The Black Sea Fleet has not received new submarines for decades and currently operates only one boat: the Kilo-class Alrosa, which joined the navy in 1990.


    



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

Russia To Add "Stealth" Subs To Mediterranean Force

Many have been surprised by the lack of public response by Russia to the ongoings in Ukraine. Aside from some comments by Siluanov, the response has been concerning in its absence from the iron fist. However, quietly and with little new coverage, RiaNovosti reports that the combat capability of Russia’s naval task force in the Mediterranean will increase significantly – for the first time in decades – following the first deliveries of Varshavyanka-class submarines (with advanced stealth technology dubbed “black holes in the ocean) to the Black Sea Fleet.

 

Via RiaNovosti,

Russia formed a permanent naval task force in the Mediterranean last year to defend its interests in the region. The move was widely seen, however, as a response to calls for international intervention in the worsening civil war in Syria, Russia’s longtime ally.

The task force currently consists of 12 warships and auxiliary vessels, including the nuclear-powered missile cruiser Pyotr Veliky and aircraft carrier Admiral Kuznetsov.

According to Chirkov, the Russian warships are taking part in an international operation to remove chemical weapons stockpiles from Syria.

“In general, the tasks assigned to the Mediterranean group are absolutely clear: to thwart any threat to Russia’s borders and security,” the admiral said, adding that it is normal practice for any country to keep naval assets in vital regions around the globe.

Chirkov said that the first Varshavyanka-class diesel-electric submarine, the Novorossiisk, will join the Black Sea Fleet in 2015.

The Defense Ministry has ordered a total of six Varshavyanka-class subs, dubbed “black holes in the ocean” by the US Navy because they are nearly undetectable when submerged.

The Varshavyanka-class (Project 636) is an improved version of the Kilo-class submarines and features advanced stealth technology, extended combat range and the ability to strike land, surface and underwater targets.

The submarines are mainly intended for anti-shipping and anti-submarine missions in relatively shallow waters.

The Black Sea Fleet has not received new submarines for decades and currently operates only one boat: the Kilo-class Alrosa, which joined the navy in 1990.


    



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

The Sovereignty Series – You Can’t Make Me!

You Can’t Make Me!

Self Victimization through Personal Speech Patterns

The Sovereignty Series

By

Cognitive Dissonance

 

 

Introducing a new portal into the mind of Cognitive Dissonance www.TwoIceFloes.com

 

 

We’ve all heard of word association tests administered by the psychiatric profession which are used to determine our unconscious psychological makeup. The same goes for various other tests, such as the Rorschach test, that are (supposedly) designed to detect underlying thought disorder and overall personality characteristics.

I have often spoken about the hijacking of language to control and manipulate people, both as individuals and as the collective herd. George Orwell’s classic “Nineteen Eighty-Four” is a wonderful examination of the concept of language hijacking. I suggest that regardless of whether you have read “1984” or not, that you do so again in light of what we all see coming round the bend.

I tend to cringe whenever I use the word ‘hijack’ because it implies that our language has been forcibly taken from us, transformed into a weapon to be used against us, and then placed back in our hands disguised as an everyday tool of essential living. Even if the process I just described is actually what happened (in practice it’s more evolution than blunt force trauma) in order for the hijacking to be effective it still requires our consent and willingness to utilize and embrace the weaponized language.

So let’s try something a little different here. Instead of a word association test I would like to try a phrase association test with you. And I’ll bet that even if you tried you could not stop yourself from inserting a word into the blank at the end of the following phrase.

“You make me so <……….>.”

 

You make me so....

 

The lists of words you may have inserted into the <blank> are wide and varied. As well if I were to structure the sentence differently, such as “Sometimes you make me…..” or “Every time you do that you make me…..” the list may grow even longer. Sometimes we even declare that “It makes me so……” thereby giving inanimate objects or situations control over us. If you give it some thought you can come up with all kinds of variations.

The one commonality among most, if not all, of the words we place after ‘make me’ are words or possibly phrases that describe emotions, usually strong (triggering) emotions. In keeping with the theme of hijacking a language in order to control or manipulate, one of the techniques used is to distort the meaning of words or phrases in such a way as to promote a ‘victim’ mentality.

Other examples of victim phrases are “You can’t fight city hall” or “There’s nothing we can do to change the situation”, both classics because what we really mean when we say those things is that since we can’t change everything immediately why even try. This is what non sovereign entities say to each other and to their masters. We beg for permission from the ‘authorities’ to do what we as true sovereigns would never consider asking permission to do. This ‘conditioning’ begins with the language we use to speak and thus to think.

So my question here is simple. Since when is someone else responsible, as in “You make me…,” for our emotional ‘State of Mind’? Think about that for a few seconds before you respond because I would be willing to bet that your initial response, the one that quickly rolls off your mental or physical tongue, would itself be a triggered response rather than a logical and rational answer.

Now before you say, “Well, that’s just something we say. It doesn’t mean anything.” I beg to differ. Just watch two people verbally fight, or even just argue, and count the number of times one assigns the other blame for their own emotional state. If there is any emotional attachment between the parties, or the confrontation is emotionally triggering, blame will likely be assigned to the other. That’s the beauty of left/right politics as a control mechanism, to promote triggering emotions in order to divide and pacify a population.

 

Just Say No to Self Victimization

 

We are all guilty of this, including myself. Just ask Mrs. Cog. To counter this tendency I try to remain mindful of what I am saying at all times, especially when I’m feeling emotional or I’m triggered by something someone else said. For me one of the signs that I‘ve been triggered is when I won’t let the other person finish speaking or I’m just waiting for my turn to speak rather than actually listening to what they are saying.

I attempt to counter this in the same why I try to avoid using the words ‘I believe’. Often when I use that term I am simply regurgitating some doctrine or thought bubble that is commonly used among those I associate with. Or it is a label I can quickly assume or wear that enables the view I wish to express to be quickly or easily understood. What I should be saying is that ‘I think’ or ‘My opinion is’. Doing so changes the dynamic of my thoughts and speech because now I am expressing my own ‘State of Mind’ rather than repeating someone else’s.

One of the things that drives Mrs. Cog crazy, especially when we are having ‘words’, is that I sometimes reject her assignment of blame. She’s even turned the tables on me a few times to her everlasting amusement. More often though, whether or not we are having words, I try to slow down and think about what I am saying. If I force myself to take full and exclusive ownership of my emotional state by avoiding the “You make me…” statements, not only must I phrase my words differently, but I must think differently about not just whom I’m talking to or what I’m talking about, but I must also think differently about myself.

By accusing someone else of being responsible for my emotional outbursts I am in essence avoiding responsibility for my own actions. By blaming others for my ‘State of Mind’ I’m assigning myself to the ‘role’ of victim status. If it weren’t for you I wouldn’t be in this ‘State of Mind’. So you fix yourself and I’ll be all better. That is one of the definitions of a victim, someone who has no control over their ‘self’, who has had the control of their body and/or mind taken from them, often by force or deceit. Only in this case, because I self assign myself as victim, it is entirely by my consent that I am a victim.

While that assessment might sound simplistic and even childish, I contend that there are few conversations/arguments more childish than two or more adults blaming each other for their own (dysfunctional) emotional state. If you don’t believe me, just spend an hour or so in a public park or gathering place where young children are playing. You will hear little fights erupt now and then and if you are honest with yourself you will see the parallels between what is said on the playground and what is said in the heat of an argument with a friend, spouse or other loved one.

 

Round One

 

So……..are you ready to take the Cognitive Dissonance challenge? For one entire week starting from this moment let ‘us’ attempt to be mindful at all times, not just when we are emotionally triggered or in the middle of conflict or confrontation, but at all times, of the language we use that sheds us of personal responsibility for our own emotional ‘State of Mind’.

I suspect that at some point during our little experiment we will begin to recognize other words, phrases or mannerisms we regularly use that also directly or indirectly absolve ourselves of personal ‘blame’ or ‘responsibility’ for all manner of things. No one can ‘make you’ do, feel or say anything without your consent and the first consent we quickly (and often without conscious thought) give up/away is when someone else triggers our own inner emotional dysfunction.

The ultimate goal of this thought experiment is to elevate our awareness, our mindfulness, and our inner presence in order to begin to reclaim our own personal sovereignty. In my opinion (see, I didn’t say ‘I believe’) we cannot even begin to assert our own personal sovereignty if we can’t even accept responsibility for our own (emotional) State of Mind. 

 

02-23-2014

Cognitive Dissonance

www.TwoIceFloes.com


    



via Zero Hedge http://ift.tt/1fujWDm Cognitive Dissonance

Reviving The ‘Real World’ Scenario That’s Disappeared From Government Reports

Submitted by F.F.Wiley of Cyniconomics blog,

For 50 years or so the federal government has deliberately and to an increasing extent misstated probable future budget deficits. Democrats and Republicans are guilty. The White House is guilty. And so is Congress. Private firms that deliberately misrepresent their financial statements in this fashion would be guilty of a crime… The magnitude of the misrepresentation is breathtaking.

– Former St. Louis Federal Reserve Bank President William Poole, writing in the Wall Street Journal last April

In the op-ed excerpted above, William Poole harshly criticizes government budget projections, including those published by the Congressional Budget Office.

We’re guessing he was especially miffed with the annual budget outlook released by the CBO on February 5th.

Consider that Poole favored the “alternative scenario” that can sometimes be found deep within CBO reports and spreadsheets. This scenario corrects for at least a few of the absurd assumptions in the primary budget projections (the “baseline scenario”) that receive 99% of the media’s attention. Poole called the alternative scenario “the only truly honest and useful effort in town.”

Alas, the alternative scenario is no more – the CBO removed it from their annual outlook. Taxpayers can no longer find meaningful budget projections anywhere in the CBO’s work.

Let’s see if we can fill in the gap.

We’ll start with the baseline from this month’s report:

real world versus baseline chart 1

The chart shows a shrinking deficit over the next couple of years, but don’t get too excited. Apart from other issues we’ll discuss, this is explained by a long-standing prediction for a robust economic recovery, which hasn’t yet come to pass. It’s not so much a budget outlook as a hopeful forecast.

After the supposed economic boom levels off in 2018/19 (according to the assumptions), the figures no longer hide our deteriorating finances. But the deterioration is likely to be much worse than the chart suggests, as we’ll explain below.  To create a more realistic outlook, we’ll adjust the baseline scenario for four different types of deficiencies in the CBO’s approach:

Step #1: We deal with dishonest lawmakers

One of the challenges in budget forecasting is that tax and spending laws are full of provisions that are all but guaranteed to be reversed before they take effect. These dead-on-arrival provisions only exist to create the appearance of fiscal rectitude. And the deception works because the CBO is required by governing statutes to build the phony provisions into its baseline, which the media then endorses as an authoritative view of public finances.

Fortunately, though, the CBO’s new report provides data we can use to neutralize some of the lawmakers’ tricks, as explained in Table 1 below:

real world versus baseline table 1

Step #2: We get real with the economy

The good news in the CBO’s latest report is that they made a few needed changes to the underlying economic assumptions. The bad news is that they have much more to do – the economic outlook remains unrealistic.

Once again, though, we can use data in the report (Appendix E, in this case) to improve the projections. We explained our adjustments in detail in “Why Mr. Smith Has More Work To Do,” and they’re summarized in Table 2 below.

Note that we’ve accepted the CBO’s strongly optimistic outlook for the next four years, not because we like it but because it’s easier to show inconsistencies and come up with a more realistic scenario in later years (after the assumed recovery reaches historic extremes).

real world versus baseline table 2

Step #3: We put on our actuarial hats

It doesn’t take much business experience to know that budget plans are regularly thrown off track by unexpected events, and the federal budget is no different. In fact, the CBO always acknowledges the risks of such setbacks. Yet, its governing statutes don’t permit accounting for most types of unexpected events in the baseline scenario.

In any case, the CBO doesn’t provide sensitivity analysis estimating their possible effects. Here’s what we had to say about this in an earlier post:

[M]any events are deemed too unpredictable to be estimated – an excuse that defies both collective knowledge and common practice. Actuaries, accountants and financial risk managers are all trained to place numeric estimates on unforeseen risks. Insurance premiums, credit loss provisions and investment decisions are all based on these numeric estimates.

The key is that any positive number is better than nothing. We can see the problem with nothing just by noticing that the debt debate almost never gets around to the risks of recessions, financial crises, wars, natural disasters, and so on. Political leaders and pundits habitually ignore the CBO’s warnings that these events will occur from time to time, relying instead on its incomplete projections.

In the same post, we explained our approach to adjusting budget projections for unforeseen events. One of our recommendations, which accounts for the effects of automatic stabilizers and doesn’t violate the CBO’s statutes, was implemented by the CBO for the first time in this month’s report. The other adjustments are summarized in Table 3 below:

real world versus baseline table 3

Step #4: We recognize that debt owed to trust funds is, indeed, debt

The question of whether to look at gross debt (including obligations to trust funds such as the Social Security and Medicare hospital insurance funds) or net debt (excluding those obligations and other intra-governmental holdings) is a tired subject. It’s probably fair to say that net debt advocates don’t care much about debt to begin with, while those who point to gross debt do care. We offered our two cents here. Among other points, we described the paradox that fiscally profligate governments can lower net debt (but not gross debt) by merely expanding certain types of entitlement programs, even if the expansions are fiscally unsustainable. In fact, America’s current financial position shows that this is exactly what we’ve done. For this reason and others, trust fund debt should be added back to the net figures highlighted by the CBO.

Putting it all together

Note that the figures in the tables above exclude debt service costs. After breaking the baseline into components and making our adjustments, we then create new projections that include recalculation of debt service.

The Steps 1 and 3 adjustments are combined into a projection that we call “Congress does what it usually does,” while the Step 2 adjustment is blended into our “and the economy does what it usually does” projection. The Step 4 adjustment is shown in the “and trust fund debt counts” projection in the final chart.

Here are our results, for deficits first and then debt:

real world versus baseline chart 2

real world versus baseline chart 3

While the charts speak for themselves, we’ll turn again to Poole’s op-ed to sum up America’s finances:

U.S. fiscal policy is in a chaotic state. Policy decisions are wrapped around the convoluted budget accounting that Congress and the White House use to obfuscate, dissemble and hide what is really being done. That is a tragedy, and our democracy is worse for it.

Indeed.

(Click here for an appendix to this post containing the year-by-year added deficits for each of our adjustments, in dollars.)


    



via Zero Hedge http://ift.tt/1dkmj7G Tyler Durden

Reviving The 'Real World' Scenario That's Disappeared From Government Reports

Submitted by F.F.Wiley of Cyniconomics blog,

For 50 years or so the federal government has deliberately and to an increasing extent misstated probable future budget deficits. Democrats and Republicans are guilty. The White House is guilty. And so is Congress. Private firms that deliberately misrepresent their financial statements in this fashion would be guilty of a crime… The magnitude of the misrepresentation is breathtaking.

– Former St. Louis Federal Reserve Bank President William Poole, writing in the Wall Street Journal last April

In the op-ed excerpted above, William Poole harshly criticizes government budget projections, including those published by the Congressional Budget Office.

We’re guessing he was especially miffed with the annual budget outlook released by the CBO on February 5th.

Consider that Poole favored the “alternative scenario” that can sometimes be found deep within CBO reports and spreadsheets. This scenario corrects for at least a few of the absurd assumptions in the primary budget projections (the “baseline scenario”) that receive 99% of the media’s attention. Poole called the alternative scenario “the only truly honest and useful effort in town.”

Alas, the alternative scenario is no more – the CBO removed it from their annual outlook. Taxpayers can no longer find meaningful budget projections anywhere in the CBO’s work.

Let’s see if we can fill in the gap.

We’ll start with the baseline from this month’s report:

real world versus baseline chart 1

The chart shows a shrinking deficit over the next couple of years, but don’t get too excited. Apart from other issues we’ll discuss, this is explained by a long-standing prediction for a robust economic recovery, which hasn’t yet come to pass. It’s not so much a budget outlook as a hopeful forecast.

After the supposed economic boom levels off in 2018/19 (according to the assumptions), the figures no longer hide our deteriorating finances. But the deterioration is likely to be much worse than the chart suggests, as we’ll explain below.  To create a more realistic outlook, we’ll adjust the baseline scenario for four different types of deficiencies in the CBO’s approach:

Step #1: We deal with dishonest lawmakers

One of the challenges in budget forecasting is that tax and spending laws are full of provisions that are all but guaranteed to be reversed before they take effect. These dead-on-arrival provisions only exist to create the appearance of fiscal rectitude. And the deception works because the CBO is required by governing statutes to build the phony provisions into its baseline, which the media then endorses as an authoritative view of public finances.

Fortunately, though, the CBO’s new report provides data we can use to neutralize some of the lawmakers’ tricks, as explained in Table 1 below:

real world versus baseline table 1

Step #2: We get real with the economy

The good news in the CBO’s latest report is that they made a few needed changes to the underlying economic assumptions. The bad news is that they have much more to do – the economic outlook remains unrealistic.

Once again, though, we can use data in the report (Appendix E, in this case) to improve the projections. We explained our adjustments in detail in “Why Mr. Smith Has More Work To Do,” and they’re summarized in Table 2 below.

Note that we’ve accepted the CBO’s strongly optimistic outlook for the next four years, not because we like it but because it’s easier to show inconsistencies and come up with a more realistic scenario in later years (after the assumed recovery reaches historic extremes).

real world versus baseline table 2

Step #3: We put on our actuarial hats

It doesn’t take much business experience to know that budget plans are regularly thrown off track by unexpected events, and the federal budget is no different. In fact, the CBO always acknowledges the risks of such setbacks. Yet, its governing statutes don’t permit accounting for most types of unexpected events in the baseline scenario.

In any case, the CBO doesn’t provide sensitivity analysis estimating their possible effects. Here’s what we had to say about this in an earlier post:

[M]any events are deemed too unpredictable to be estimated – an excuse that defies both collective knowledge and common practice. Actuaries, accountants and financial risk managers are all trained to place numeric estimates on unforeseen risks. Insurance premiums, credit loss provisions and investment decisions are all based on these numeric estimates.

The key is that any positive number is better than nothing. We can see the problem with nothing just by noticing that the debt debate almost never gets around to the risks of recessions, financial crises, wars, natural disasters, and so on. Political leaders and pundits habitually ignore the CBO’s warnings that these events will occur from time to time, relying instead on its incomplete projections.

In the same post, we explained our approach to adjusting budget projections for unforeseen events. One of our recommendations, which accounts for the effects of automatic stabilizers and doesn’t violate the CBO’s statutes, was implemented by the CBO for the first time in this month’s report. The other adjustments are summarized in Table 3 below:

real world versus baseline table 3

Step #4: We recognize that debt owed to trust funds is, indeed, debt

The question of whether to look at gross debt (including obligations to trust funds such as the Social Security and Medicare hospital insurance funds) or net debt (excluding those obligations and other intra-governmental holdings) is a tired subject. It’s probably fair to say that net debt advocates don’t care much about debt to begin with, while those who point to gross debt do care. We offered our two cents here. Among other points, we described the paradox that fiscally profligate governments can lower net debt (but not gross debt) by merely expanding certain types of entitlement programs, even if the expansions are fiscally unsustainable. In fact, America’s current financial position shows that this is exactly what we’ve done. For this reason and others, trust fund debt should be added back to the net figures highlighted by the CBO.

Putting it all together

Note tha
t the figures in the tables above exclude debt service costs. After breaking the baseline into components and making our adjustments, we then create new projections that include recalculation of debt service.

The Steps 1 and 3 adjustments are combined into a projection that we call “Congress does what it usually does,” while the Step 2 adjustment is blended into our “and the economy does what it usually does” projection. The Step 4 adjustment is shown in the “and trust fund debt counts” projection in the final chart.

Here are our results, for deficits first and then debt:

real world versus baseline chart 2

real world versus baseline chart 3

While the charts speak for themselves, we’ll turn again to Poole’s op-ed to sum up America’s finances:

U.S. fiscal policy is in a chaotic state. Policy decisions are wrapped around the convoluted budget accounting that Congress and the White House use to obfuscate, dissemble and hide what is really being done. That is a tragedy, and our democracy is worse for it.

Indeed.

(Click here for an appendix to this post containing the year-by-year added deficits for each of our adjustments, in dollars.)


    



via Zero Hedge http://ift.tt/1dkmj7G Tyler Durden

EU Offers Conditional “Aid” For Ukraine’s “Catastrophic, Pre-Default” Economic State

There is no money in Ukraine’s Treasury account,” exclaimed ‘Interim President’ Oleksandr Turchynov to the Ukrainian parliament; adding that the Ukraine economy is in a “catastrophic state.”

  • *THERE ARE PROBLEMS WITH BANKING SYSTEM AND HRYVNIA: TURCHYNOV
  • *PROBLEMS WITH PENSION FUND ARE “COLOSSAL”: TURCHYNOV
  • *UKRAINE’S ECONOMY IS IN A `PRE-DEFAULT’ SITUATION: TURCHYNOV

Hardly surprising given the months of protest; but with Russia ‘conditionally’ postponing its EUR2bn ‘loan’, the Europeans are riding to the nation’s aid with promises of EUR20bn (if Ukrainian authorities meet certain conditions). But, as the map below shows, a great deal of the nation’s wealth lies in the eastern (pro-Russia) region.

 

  • *NEW UKRAINE GOVT’S PRIORITY IS TO RETURN TO EU PATH: TURCHYNOV
  • *RUSSIA SHOULD RECOGNIZE UKRAINE’S EUROPEAN CHOICE: TURCHYNOV

 

Russia is on hold but the Europeans are willing… conditionally…

The European Commission has said it is ready to conclude a trade deal with and offer aid to Ukraine once a new government is in place in Kiev, Reuters reported Feb. 23. An EU official added that the European bloc could give the country more than 20 billion euros (some $27 billion) if Ukrainian authorities meet certain conditions, The Wall Street Journal reported. According to the official, this figure is a conservative estimate of the potential assistance Ukraine could receive from EU members. Russia is currently holding out on economic aid to Ukraine as it waits to see how the country’s political crisis plays out.

But as a reminder, a great deal of the nation’s wealth resides in non-pro-Europe eastern Ukraine

The Economic Consequences of Ukrainian Federalism (via Stratfor)

For a country like Ukraine, the appeal of federalism, which divides authority between the central government and its constituent regions, is undeniable. Located in Europe’s borderlands, Ukraine has been contested by its neighbors for centuries, a competition that has left it internally divided along linguistic, cultural and religious lines. Broadly speaking, Ukraine is divided between the east and the west, with eastern Ukraine favoring Russia and western Ukraine favoring Europe. Ukraine’s regions are also distinct economically. The country’s industrial base is located in the east. The east’s close proximity to Russia creates strong cross-border trade that enriches regional economies. According to Ukraine’s government statistics service, manufacturing contributes at least three times more than agriculture to the country’s gross domestic product. Thus, eastern regions generally have higher per capita GDP rates. In 2011, the per capita GDP in the eastern region of Dnipropetrovsk, the country’s most important industrial center, was 42,068 Ukrainian hryvnia ($4,748), while it was only 20,490 hryvnia ($2,312) in Lviv region, which is one of western Ukraine’s industrial centers.

Seven of Ukraine’s 10 largest private companies by revenue are either headquartered or maintain the majority of their operations in eastern Ukraine. These firms are owned by some of Ukraine’s wealthiest and most influential individuals. Three of these 10 corporations — mining and steel company Metinvest, energy firm DTEK and its subsidiary Donetskstal — are based in the eastern industrial city of Donetsk and are owned by Ukraine’s wealthiest man, Rinat Akhmetov. Interpipe, the company that controls 10 percent of the world market share of railway wheels and more than 11 percent of the world market share of manganese ferroalloys, is based in Dnipropetrovsk and belongs to businessman and politician Victor Pinchuk.

The country’s most important businessmen are embedded in the east, where their businesses make disproportionately high contributions to the Ukrainian economy and national budget. Westerners staunchly oppose federalism because they believe it would threaten their economic and security interests. Others believe it could dissolve Ukraine as a country, leaving the west weak and defenseless against the Russia-backed east. Whether or not these concerns are misplaced, federalism would in fact benefit eastern regions disproportionately by giving them more control over state revenue, aggravating the socioeconomic tensions between the regions.

 

However, the Ukrainians are keeping their options open…

  • *`WE ARE READY TO HAVE A DIALOG WITH RUSSIA:’ TURCHYNOV
  • *UKRAINE TIES WITH RUSSIA SHOULD BE ON EQUAL FOOTING: TURCHYNOV


    



via Zero Hedge http://ift.tt/1lckr93 Tyler Durden

EU Offers Conditional "Aid" For Ukraine's "Catastrophic, Pre-Default" Economic State

There is no money in Ukraine’s Treasury account,” exclaimed ‘Interim President’ Oleksandr Turchynov to the Ukrainian parliament; adding that the Ukraine economy is in a “catastrophic state.”

  • *THERE ARE PROBLEMS WITH BANKING SYSTEM AND HRYVNIA: TURCHYNOV
  • *PROBLEMS WITH PENSION FUND ARE “COLOSSAL”: TURCHYNOV
  • *UKRAINE’S ECONOMY IS IN A `PRE-DEFAULT’ SITUATION: TURCHYNOV

Hardly surprising given the months of protest; but with Russia ‘conditionally’ postponing its EUR2bn ‘loan’, the Europeans are riding to the nation’s aid with promises of EUR20bn (if Ukrainian authorities meet certain conditions). But, as the map below shows, a great deal of the nation’s wealth lies in the eastern (pro-Russia) region.

 

  • *NEW UKRAINE GOVT’S PRIORITY IS TO RETURN TO EU PATH: TURCHYNOV
  • *RUSSIA SHOULD RECOGNIZE UKRAINE’S EUROPEAN CHOICE: TURCHYNOV

 

Russia is on hold but the Europeans are willing… conditionally…

The European Commission has said it is ready to conclude a trade deal with and offer aid to Ukraine once a new government is in place in Kiev, Reuters reported Feb. 23. An EU official added that the European bloc could give the country more than 20 billion euros (some $27 billion) if Ukrainian authorities meet certain conditions, The Wall Street Journal reported. According to the official, this figure is a conservative estimate of the potential assistance Ukraine could receive from EU members. Russia is currently holding out on economic aid to Ukraine as it waits to see how the country’s political crisis plays out.

But as a reminder, a great deal of the nation’s wealth resides in non-pro-Europe eastern Ukraine

The Economic Consequences of Ukrainian Federalism (via Stratfor)

For a country like Ukraine, the appeal of federalism, which divides authority between the central government and its constituent regions, is undeniable. Located in Europe’s borderlands, Ukraine has been contested by its neighbors for centuries, a competition that has left it internally divided along linguistic, cultural and religious lines. Broadly speaking, Ukraine is divided between the east and the west, with eastern Ukraine favoring Russia and western Ukraine favoring Europe. Ukraine’s regions are also distinct economically. The country’s industrial base is located in the east. The east’s close proximity to Russia creates strong cross-border trade that enriches regional economies. According to Ukraine’s government statistics service, manufacturing contributes at least three times more than agriculture to the country’s gross domestic product. Thus, eastern regions generally have higher per capita GDP rates. In 2011, the per capita GDP in the eastern region of Dnipropetrovsk, the country’s most important industrial center, was 42,068 Ukrainian hryvnia ($4,748), while it was only 20,490 hryvnia ($2,312) in Lviv region, which is one of western Ukraine’s industrial centers.

Seven of Ukraine’s 10 largest private companies by revenue are either headquartered or maintain the majority of their operations in eastern Ukraine. These firms are owned by some of Ukraine’s wealthiest and most influential individuals. Three of these 10 corporations — mining and steel company Metinvest, energy firm DTEK and its subsidiary Donetskstal — are based in the eastern industrial city of Donetsk and are owned by Ukraine’s wealthiest man, Rinat Akhmetov. Interpipe, the company that controls 10 percent of the world market share of railway wheels and more than 11 percent of the world market share of manganese ferroalloys, is based in Dnipropetrovsk and belongs to businessman and politician Victor Pinchuk.

The country’s most important businessmen are embedded in the east, where their businesses make disproportionately high contributions to the Ukrainian economy and national budget. Westerners staunchly oppose federalism because they believe it would threaten their economic and security interests. Others believe it could dissolve Ukraine as a country, leaving the west weak and defenseless against the Russia-backed east. Whether or not these concerns are misplaced, federalism would in fact benefit eastern regions disproportionately by giving them more control over state revenue, aggravating the socioeconomic tensions between the regions.

 

However, the Ukrainians are keeping their options open…

  • *`WE ARE READY TO HAVE A DIALOG WITH RUSSIA:’ TURCHYNOV
  • *UKRAINE TIES WITH RUSSIA SHOULD BE ON EQUAL FOOTING: TURCHYNOV


    



via Zero Hedge http://ift.tt/1lckr93 Tyler Durden

Setting the Stage for March: The Week Ahead

The week ahead is a transitional week.  It is important in terms of price action, as the euro and sterling are threatening to break out to the upside, while the Canadian dollar is threatening a downside break.  We caution that ahead of the key events in early March, which includes the ECB meeting and US employment data, breakouts, if they do materialize, are unlikely to be sustained.

 

The macro economic picture in the US is unlikely to be clarified.  Durable goods orders the main release, and with Boeing orders off, a second contracting month is likely, while the end of the week is likely to see Q4 GDP revised lower from the initial 3.2% annualized pace.  Weaker retail sales and net exports and less inventory accumulation could see growth marked down to something closer to 2.5%.

 

The FOMC minutes were clear that the growth in H2 13 was due in part to transitory factors and that growth would be slower in H1 14.  The minutes also revealed that there was talk about the possibility that the first interest rate hike might be needed sooner rather than later.  Some in the media played this up.  We regarded it as noise, not the signal, and indeed, at the end of last week, one Fed official, St. Louis Fed President Bullard the weakness of recent data has pushed him away from expecting a hike this year.

 

Fed Chair Yellen delivers her weather-postponed semi-annual testimony to the Senate. Her prepared remarks are unlikely to change.  The key message is that barring a significant economic deviation from Fed expectations, the measured tapering of long-term asset purchases will continue.  Yellen may be asked about the weather’s impact on the economy.  Reasonable people may differ on trying to assess the impact of the unusually cold and snowy winter.  

 

We suspect the a reasonable working hypothesis is that it is roughly evenly divided between weather and other economic factors, (e.g. inventory cycle, expiration of emergency jobless benefits and expiration of tax credit on capex).   The new home sales report will likely illustrate both:  They are likely to have fallen for the third consecutive month and are back to levels seen last summer.   Cleaner data, and less adverse weather impact is likely in the coming weeks.  Those who do not sufficiently appreciate the impact of the adverse weather, and perhaps play up the impact of the tapering, may be surprised how perky the economy appears in the early spring.

 

The European Central Bank identifies two pillars of its monetary policy:  money supply and inflation.  Both are reported in the week ahead and the outcome is expected to be instrumental in the central bank’s decision on March 6.  The final January CPI and the preliminary February estimate will be reported, Monday and Friday respectively.  There is a risk that the 0.7% of the preliminary January estimate gets rounds up to 0.8% in the final estimate, while the preliminary February estimate is likely to move back to 0.7%.

 

The January money supply figures may show some recovery from the extra weakness that the last minute adjustments ahead of year-end, which is the period that will be assessment in the Asset Quality Review and Stress Tests.  However, lending to the private sector has been contracting for more than a 1 1/2 years.  It has not been arrested by Draghi’s rate cuts.  Some soft of funding-for-lending scheme is still be advocated by many and Draghi shows interest in asset-backed securities, but neither seems imminent.

 

Since the German Constitutional Court cast aspirations on the ECB’s OMT program, Moody’s upgraded its outlook for Italy’s rating to stable from negative, and before the weekend, it unexpectedly upgraded Spain to Baa2 from Baa3 and maintained a positive outlook.  For the record, this is equivalent with Fitch’s BBB rating and puts S&P as the odd-man out with its BBB- rating.

 

Separately, we note that Fitch maintained its AAA rating for Austria, with a stable rating.  We had thought there was a reasonable chance the outlook could have been cut due to the banking sector challenges.  Moody’s is set to deliver its opinion on Austria at the end of this week.  It currently has a negative outlook for its AAA rating.  S&P cut Austria to AA+ early last year.

 

The third largest economy in the euro zone will have a new prime minister this week.  Florence Mayor Renzi will lead Italy.  On one hand, he has suggested he wants to serve through the current parliamentary session that ends in 2018,  which would be unusually long by Italian standards.  On the other hand, he has taken on an agenda that could help raise the PD’s chances in an election next, perhaps next Spring, under new electoral rules.

 

Italy becomes the rotating EU President in H2 and by then Renzi has promised nothing short of a revolution.  Electoral reform, largely already agreed upon with Berlusconi, is he first priority.  By then end of next month, Renzi has promised labor reforms.  By the end of April, public administration reforms and, by the end of May, tax reform.

 

It is a full week for Japanese data, which includes industrial output, CPI, employment and real spending data.   The data is largely irrelevant for three reasons.  First, last week’s news poor Q4 GDP, with the deflator remaining in negative territory, and a record large January trade deficit provides the more comprehensive sense of the state of the economy.  Second, the BOJ extended its low interest rate loan programs last week, seemingly taking it out of the picture.  Third, the pending retail sales tax increase on April 1, if anything, would be expected to boost economic activity ahead of it and a decline afterward.

 

Turning to emerging markets, outflows, according to EPFR continued for the seventeenth consecutive week.  Equities continue to bear the burden of the adjustment.  However, the weekend news; both, developments in the Ukraine and news that Mexico captured an important drug cartel leader may help improve sentiment.  At the same time, the MSCI Emerging Markets equity index consolidated recent gains most of last week, but appears poised to move higher in the week ahead.  After finishing last week just above 959, there is potential toward 980, with only 966 standing in the way.  Recall the low was recorded near 913.5 on February 4.  

 

Three central banks from the emerging markets meet in the week ahead:  Brazil, Israel and Colombia. Only Brazil is expected to move and a 25 bp hike (to bring the Selic rate to 10.75%) looks most likely. Over the course of the week, India reports Q4 GDP and industrial production figures will be reported by Taiwan, SKorea, Singapore and Thailand.   

 

China reports its official manufacturing PMI figures on Saturday March 1.  It is expected to confirm the economic slowing, but may remain above the 50 boom/bust level.  The yuan was particularly soft last week, falling about 0.4% against the dollar.  The offshore yuan (CNH) was off more than twice as much, prompting some concern that that is where the pressure started.  The only thing that seems clear, though, is that the weakening of the currency was officially sanctioned.  

 

The central bank, which tends to be among the strongest advocates of reform, has indicated it will increase the 1% band that the yuan-dollar is allowed to trade within (in “an orderly manner” this year). Some suspect that may do so shortly, and more likely in a softer yuan environment, or at least during a consolidative phase.   Investors will continue to be closely scrutinize the yuan’s performance in the days ahead.  


    



via Zero Hedge http://ift.tt/1pemxpl Marc To Market

Seen On An ATM In Western Australia

With iron-ore stockpiles at record highs in China amid the escalating cash-for-steel financing debacles, one can only imagine the squeeze that is about to occur on the banks of a nation that is almost entirely economically dependent on said iron-ore mining production… which made us think when we saw this sign “justifying” holding low cash amounts in an Aussie bank ATM

 

 

So no need for a withdrawal halt per se when you simply make it impossible for customers to get their money out…

 

h/t AS


    



via Zero Hedge http://ift.tt/1pemx8X Tyler Durden

Netflix Folds; Agrees To Pay Comcast To End Streaming Congestion

There go the margins… For months, Netflix and Comcast have been ‘negotiating’ over whether the video streaming service should pay for the apparently excessive load it places on Comcast’s network, but now, as the WSJ reports, Netflix has agreed to pay to stop the network provider slowing its stream and impacting customers. According to Netflix data published in January, the average speeds of Netflix’s prime-time streams to Comcast subscribers had dropped 27% since October.

Percentage share of traffic on the web…

 

With Netflix accounting for almost 30% of web traffic at peak times, it is no surprise that Comcast’s squeeze finally paid off. There are no details yet on the multi-year “mutually beneficial” deal but it is clear that broadband providers are gaining leverage over content providers.

Via WSJ,

Netflix Inc. has agreed to pay Comcast Corp. to ensure Netflix movies and TV shows stream smoothly to Comcast customers, a landmark agreement that could set a precedent for Netflix’s dealings with other broadband providers, people familiar with the situation said.

 

In exchange for payment, Netflix will get direct access to Comcast’s broadband network, the people said.

 

 

For months Netflix and Comcast have been in a standoff over Netflix’s request that Comcast connect to Netflix’s video distribution network free of charge. But Comcast wanted to be paid for connecting to Netflix’s specialized servers due to the heavy load of traffic Netflix would send into the cable operator’s network.

 

 

Netflix Chief Executive Reed Hastings decided to strike the deal after Netflix saw a deterioration in streaming speeds for Comcast subscribers. According to Netflix data published in January, the average speeds of Netflix’s prime-time streams to Comcast subscribers had dropped 27% since October. Mr. Hastings didn’t want streaming speeds to deteriorate further and become a bigger issue for customers, the people said.

 

 

The deal could force Netflix’s hand in its standoff with other major U.S. broadband providers, including AT&T Inc., Verizon Communications Inc. and Time Warner Cable Inc.? all of whom have also refused to connect with Netflix’s servers without compensation. Netflix’s streams with Verizon in particular have gotten worse in recent months.

 

Netflix has little room to pay more to transmit its TV shows and movies. In a February regulatory filing, Netflix said that if providers don’t interconnect with its servers, its ability to deliver streaming video, its business and operating results could be “adversely affected” due to increased costs.

The deal is the latest sign that broadband providers are gaining leverage in their dealings with content companies.


    



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