Friday, May 16, 2014

Today's Links

1--Global Growth Worries Climb, wsj

Underscoring the sense of angst, stock prices dropped sharply Thursday in Europe and the U.S. The Dow Jones Industrial Average fell 167.16 points, or 1.01%, to 16446.81.
Yields on bonds issued in big developed markets continued to fall Thursday. Yields on German bunds with 10-year maturities sank to 1.307%, their lowest level in a year, while yields on 10-year U.S. Treasury notes fell to 2.498%, the lowest level in six months. ...

It will take a long time before we see a real recovery," said Andrea Illy, Chairman and chief executive of Italian coffee maker Illy Caffè. "I'm really skeptical on how and if we can grow, and I hear the same feelings among entrepreneurs and consumers in Italy

The United States and Europe signaled their support for the Kiev regime’s “antiterror” operations to crush pro-Russian protesters in eastern Ukraine, even as the Kremlin indicated its support for so-called “round table” talks on Wednesday in Kiev and distanced itself from the protesters.

On Thursday, Ukraine’s acting President Oleksandr Turchynov boasted that the Ukrainian army had destroyed pro-Russian fighters’ bases in overnight operations. He claimed that regime forces attacked a base in the eastern city of Slavyansk and another near Kramatorsk—the industrial city in the north of Donetsk province where Kiev’s so-called “antiterror operation” began a month ago. The defense ministry in Kiev announced that the army took three prisoners, claiming that there were no casualties....

A six-year-old diplomatic cable written by then-US ambassador to Russia William Burns and recently published by WikiLeaks reads like a blueprint for the current events.
“NATO enlargement, particularly to Ukraine, remains ‘an emotional and neuralgic’ issue for Russia, but strategic policy considerations also underlie strong opposition to NATO membership for Ukraine and Georgia. In Ukraine, these include fears that the issue could potentially split the country in two, leading to violence or even, some claim, civil war, which would force Russia to decide whether to intervene,” Burns wrote.

5--Kiev crackdown persists despite agreement on roundtable talks, RT

Kiev has intensified its military crackdown in the region, deploying tanks, APCs and helicopters. It formed paramilitary forces which are now on the ground in Donetsk and Lugansk regions as part of an “anti-military operation.”
The self-proclaimed republics are demanding the withdrawal of Kiev fighters which continue to clash with local self-defense units.

The deadline for an ultimatum issued by the Donetsk People's Republic, which demanded that Kiev pull out its troops, passed on Friday.
A deputy commander of the pro-autonomy militia of Donbass, Sergey Zdrilyuk, said on May 15 that all Ukrainian armed forces had 24 hours to withdraw their armored vehicles and checkpoints from around “Donetsk, Mariupol, and other cities.”

He threatened to “destroy and burn down all of this” if the demand was not met. However, Kiev's forces still remain in the region. According to the Donetsk People's Republic, the troops were enlarged following the ultimatum.

So who are these "terrorists" that blew up a gas pipeline in west Ukraine?
The Head of Ivano-Frankivsk regional state administration Andriy Trotsenko told there were three explosions at the international high pressure gas pipeline Urengoy–Pomary–Uzhgorod in Nebyliv village, Ivano-Frankivsk region. As Radio Free Europe informs, Trotsenko has told all three explosions were similar, "the appropriate explosive devices were planted into the ground just below the pipeline”. In particular, the remnants of remote-controlled explosive device were found at the scene near Limnytsya River.
The Ivano-Frankivsk Prosecutor's office opened a criminal proceeding upon the explosion at international pipeline. The provisional crime determination is "terrorist attack".
The coup government in Kiev is waging a civil war against federalists in east Ukraine. It calls that war, in which it uses heavy weapons against civilians, an "anti-terrorist operation".
But are those "terrorist" the same "terrorists" that blew up the gas line in west-Ukraine? The coup government would likely be happy if the world starts to believe such. But there are other people, very different from the federalists, who had threatened to blow up these lines:
The leader of the far-right Ukrainian nationalist Pravy Sektor (Right Sector) party has reportedly threatened to attack Russia's lucrative gas pipeline which travels through Ukraine to prevent the Kremlin from sparking a "Third World War".
The pipeline in question, the Trans-Siberian Pipeline, supplies Europe with the majority of its gas imports. "We are well aware of the fact that Russia is earning money by transporting its oil and gas to the West through our pipe," [Dmitry Yarosh] said. "Therefore, we'll destroy this pipe in order to deprive Russia of its financing source."

We've had an unprecedented compression in US (and global) government bond yields in a short period of time. Here is one surprising fact: Treasury yields are now at the level they were during the US government shutdown. The level of uncertainty has diminished dramatically since then and the employment picture continues to improve (see Twitter post). Yet here we are again. This time however it's the global chase for yield and expectations of ECB's monetary easing driving rates to new lows.


No comments:

Post a Comment