Monday, December 1, 2014

Today's Links

1--Putin: Russia forced to withdraw from S. Stream project due to EU stance, RT


Russia is forced to withdraw from the South Stream project due to the EU’s unwillingness to support the pipeline, and gas flows will be redirected to other customers, Vladimir Putin said after talks with his Turkish counterpart, Recep Tayyip Erdogan.
"We believe that the stance of the European Commission was counterproductive. In fact, the European Commission not only provided no help in implementation of [the South Stream pipeline], but, as we see, obstacles were created to its implementation. Well, if Europe doesn’t want it implemented, it won’t be implemented,” the Russian president said.


According to Putin, the Russian gas “will be retargeted to other regions of the world, which will be achieved, among other things, through the promotion and accelerated implementation of projects involving liquefied natural gas.”
“We’ll be promoting other markets and Europe won’t receive those volumes, at least not from Russia. We believe that it doesn’t meet the economic interests of Europe and it harms our cooperation. But such is the choice of our European friends,” he said.
...
Putin believes that Bulgaria “isn’t acting like an independent state” by delaying the South Stream project, which would be profitable for the country.
He advised the Bulgarian leadership “to demand loss of profit damages from the European Commission” as the country could have been receiving around 400 million euros annually through gas transit.
The South Stream was intended to transport Russian gas through the Black Sea to Bulgaria – and through Serbia, Hungary, and Slovenia, further to Austria.


Russian gas giant Gazprom began construction of the onshore facilities for the pipeline back in 2012.
But the €23.5 billion project ran into difficulties, as it violated European Union regulations which state that the same company cannot both own the pipeline and the gas which is transported through it.
The crisis in Ukraine has turned the legal debate over the pipeline into a political issue, affecting the EU’s willingness to find a solution to the deadlock.


The EU Commission has been pressuring member states to withdraw from the project, with the new Bulgarian government saying it will not allow Gazprom to lay the pipeline without permission from Brussels.
Putin said that Russia is ready to build a new pipeline to meet Turkey’s growing gas demand, which may include a special hub on the Turkish-Greek border for customers in southern Europe....




For now, the supply of Russian gas to Turkey will be raised by 3 billion cubic meters via the already operating Blue Stream pipeline, he said. Last year, 13.7 bcm of gas were supplied to Turkeyvia Blue Stream, according to Reuters.
Moscow will also reduce the gas price for Turkish customers by 6 percent from January 1, 2015, Putin said.
“We are ready to further reduce gas prices along with the implementation of our joint large-scale projects," he added


However, the sides still disagree on the future of Syrian President Bashar Assad, which Ankara wants removed from power.
"We sincerely expressed our attitude towards this [Assad's] regime. Mr. President has another stance on the issue. But in general, we have reached a certain agreement on [the] resolution of the Syrian conflict,” Turkish President Recep Tayyip Erdogan said.
“The only thing that we were unable to agree on is the way to resolve the crisis," he added


2--Fresh smart moves by Putin in the geopolitical field , failed evolution


From RT:
Gazprom CEO Aleksey Miller said the energy giant will build a massive gas pipeline that will travel from Russia, transit through Turkey, and stop at the Greek border – giving Russia access to the Southern European market. The pipeline will have an annual capacity of 63 billion cubic meters. A total of 14 bcm will be delivered to Turkey, which is Gazprom’s second biggest customer in the region after Germany. Russia’s energy minister Aleksandr Novak said that the new project will include a specially-constructed hub on the Turkish-Greek border for customers in southern Europe.

While the pipeline will be registered as a Russian company, Miller said that Gazprom will 'consider offers from Turkish partners if they express an interest in buying into the project.' [...] Moscow will also reduce the gas price for Turkish customers by 6 percent from January 1, 2015, Putin said. Later, Novak said the discount could reach 15 percent, subject to negotiations.

Novak later confirmed that Vladimir Putin personally ordered for the South Stream project to be mothballed, and its existing facilities to be repurposed for the new Turkish pipeline. The much-delayed South Stream was supposed to connect underwater Black Sea pipelines with a network in Eastern Europe, with Bulgaria as the entry point.”



3--Will the West Take the Damascus Road?, Larouche


"Ossy told me that IS (Islamic state) had brought up 15 American-made Abrams tanks, captured in Mosul, Iraq. They had been transported hundreds of kilometers on trailers. “They must have been seen by the American satellites, but were never attacked,” he said. Ossy did not believe the U.S. war against IS was for real.
Minister of Information Ahed presented us with documentation about the thousands of terrorists who had been attacking Syria, in the form of books with the documentation and picture of each terrorist. Different books were for different countries and the book with the Saudis was the thickest. One book had the flags of most European nations, as well as the U.S., Canada, and Australia. All the books formed a pile 0.4 meters high. They had been presented at the UN Security Council, but were pushed aside and not mentioned in the Western media.


For anyone wanting to fight IS, this information is invaluable, as it allows mapping out the whole international IS and al-Qaeda terrorist apparatus. The refusal of the West to use this material shows that there is no earnest crackdown against these terrorist networks, even domestically in the Western countries.

For instance, the Swedish government is currently supporting the “Syrian opposition” in many ways. The claim is that the now almost nonexistent Syrian National Council is only being provided with humanitarian aid. However, the aid goes to an organization and its refugee camps that is conducting an armed rebellion and is working with the most barbaric terrorists. The Swedish government has also supported the terrorists in Syria for four years, while not using the available information to stop young Swedes from joining the war. This means that these young people are part of the country’s foreign policy and are being used as cannon fodder....


The IS and al-Qaeda cannot be stopped without Syria, which stands on the front line, and its allies Russia and China. Both Syria and Iraq must be supported as nations. Iran and Egypt are necessary to stabilize the situation; and Turkey, Qatar, and Saudi Arabia, which have been the tools of the British geopolitical policy to use terrorism as an instrument of warfare, must be told to stop.
http://www.larouchepub.com/other/2014/4147west_damascus_rd.html



4---World investors cut stocks and hold cash as uncertainty dominates, yahoo


5---Does the Oil Price Collapse Put the High Yield Market at Risk, forbes


The fact is, due in large part to the Federal Reserve’s (Fed) QE asset purchase and zero interest rate programs, oil prices were pushed sky high. Then, again, underwritten in large part by those Fed programs, investors gobbled up the high-yielding debt of all too many marginal oil and oil service companies eager to capitalize on that boom. Banks, via direct investments or loans, dove in too. And they both did it at some of the lowest interest rates/credit spreads and some of the weakest debt covenant terms in history.
That debt is now in question as debt defaults and possibly bankruptcies loom.
But that may only be the half of it. Indeed, the entire high yield market could be at risk.


First, according to a November 24th BofA Merrill Lynch Research report roughly 15% of the high yield market resides in the energy sector; 23% in the banking sector. That’s means a whopping 38% of the high yield market has direct exposure to the collapse in oil prices. What’s more these two sectors combined account for 46% of the short end of the market (energy sector being roughly 10%), defined by debt maturing in 1-3 years. This means debt default and bankruptcy issues are going to be a near term problem for companies and investors alike.


Second, never in history has the secondary market for high yield debt been more illiquid than it is today. While high yield debt new issuance is up about 1.5 times from the 2008-09 credit crisis lows, due to Dodd-Frank imposed regulations broker-dealers have dramatically sliced their dealer inventories. Indeed, according to that same BoA Merrill Lynch Research report, the ratio of dealer inventories to daily trading volumes has gone from a pre-credit crisis level of roughly 10 to 1 to 1 to 1. In other words, broker-dealers have largely exited their market making/liquidity buffer role in the high yield market leaving mutual/ETF fund, pension fund and hedge fund investors directly and immediately exposed to a liquidity run.


Third, due to the explosion in ETF trading instruments, never in history has the redemption-vulnerable high yield mutual fund space been more exposed to ETFs; i.e., instruments which sport an instantaneous margin call on the underlying securities they hold when investors want out. According to a recent study by Blackrock, ETF assets under management (AUM) as a share of the high yield mutual fund space have grown from 4% at the 2008-09 credit crisis bottom to plus 10% today, a space that in terms of AUM is up 2.5 times over that period.


Fourth, as we most recently wrote here, owing to a Fed QE led money supply boom that has created one of the great asset bubbles in history, the entire high yield market is sporting the lowest interest rates and close to the lowest credit spreads against the weakest debt covenant terms in history.
Fifth, and also discussed there, we are now living in a post Fed QE world, where the potential for monetary induced boom to turn to bust is in play.
These five factors suggest to us that the oil price collapse hints at contagion possibilities, a potential canary in the coal mine for not only the high yield market but maybe risk markets at large

6--Putin declares gas discount for Turkey, issues warning on South Stream, Hurriyet 
ANKARA
Turkey and Russia have signed fresh documents in a bid to boost ties. The highlight of Russian President Putin's press conference with his Turkish counterpart Erdoğan was his announcement of a six percent discount in natural gas prices for exports to Turkey, as well as his warning for the South Stream pipeline. Meanwhile, the two leaders did not refrain from voicing their disagreements over Syria ...

Turkey and Russia have signed fresh documents in a bid to boost already growing economic, energy and trade ties, reiterating their ambitious mutual target to augment the bilateral trade volume to $100 billion by 2020.

Led by President Recep Tayyip Erdoğan and Russian President Vladimir Putin and with senior officials from both sides, the lengthy Turkey-Russia High-Level Cooperation Council meeting produced key agreements in the fields of energy, banking, industry, nuclear energy training, justice and trade, in line with both side’s intention to strengthen and diversify economic ties.

“This visit of Putin is a clear sign of the progress of the relations between Turkey and Russia,” Erdoğan said in a joint press conference on Dec. 1. “Our political will to increase our trade volume to $100 billion is still valid.”

He added that they had studied in detail the pace of works for the $20 billion Akkuyu nuclear plant investment in a bid to speed up the accomplishment of the project. The two presidents also discussed the ongoing natural gas deal between the two countries, as Turkey is the second largest market for Russia.

For his part, Putin touched on Turkey's position as Russia’s second top trading partner after Germany. "Regarding our energy cooperation with our Turkish partners, we will make a six percent discount from January 1," he said

Meanwhile, Putin warned that the project to build the South Stream Offshore Pipeline, which was already approved by Turkey as a transit country, could be cancelled if Bulgaria, its destination country, keeps failing to give the final approval.

Turkey and Russia performed their 5th High-Level Cooperation Council meeting with the participation of numerous ministers from each side, after Erdoğan and Putin had a nearly one-and-half hour long tete-a-tete meeting. The Turkish team included the ministers of foreign affairs, economy, energy, labor, transportation and justice.

Turkey and Russia established the high-level cooperation council in 2010 to enhance economic, trade and energy ties. However, the two leaders did not refrain from voicing their disagreement over the situation in Syria this time.

After Putin said Syrian President Bashar al-Assad had shown he was "his people's choice" by winning elections, Erdoğan expressed his opposition.

"We see in other countries, like in Egypt, how coup-makers win elections," he said, stressing that polls are not conducted fairly in Syria.

"They ask who will replace al-Assad? We say that whoever the Syrian people choose," Erdoğan added, noting that "the making of conditions for a fair election is all that we need to do."

7--Washington torpedoes south stream, guardian comments section

Who puts pressure on EU and Bulgaria to abandon the South Line gas line ?
"At this time there is a request from the European Commission, after which we've suspended the current works, I ordered it," Oresharski told journalists after meeting with John McCain, Chris Murphy and Ron Johnson during their visit to Bulgaria on Sunday. "Further proceedings will be decided after additional consultations with Brussels."
McCain, commenting on the situation, said that "Bulgaria should solve the South Stream problems in collaboration with European colleagues," adding that in the current situation they would want "less Russian involvement" in the project.
Sen. McCaine is essential deal brocker in our foreign policy playing poker
with Al Nusra in Syria , shaking hands with Oleg Tyahnybok the " near fascist leader of Svoboda or presuring a small Eastern European government to bend over despite its own interests....


Standupwoman


2728
South Stream could only have been good for Europe. It's intolerable for our gas supplies to be at the mercy of a crackpot country like Ukraine that doesn't hesitate to hold us to ransom when it can't pay its debts. We're now desperate for an alternative.
Which is exactly what the US has been working towards, because they want us to buy it from them instead. According to Condoleeza Rice, we 'don't want gas from either Russia or Ukraine', we want gas from the magnificent 'bounty' of the United States. It is, of course, all for our own good.
If you can watch that little clip without cringing at the insufferable air of patronage, then you're not a European. Frankly it makes me sick.
....

67
You made a mistake. In 2009 Russia continued the supply of gas intended for Europe at a volume of 300 million cubic meters per day, but levels 'unaccountably' dropped when Ukraine began syphoning off European gas for its own use. Given Ukraine's virtual bankruptcy and its established habit of stealing, we can't ever be sure they won't do the same thing again this time. And the next after that...
...

Babeouf

1718
As is well known by the US quislings running the EU's Russian policy when Russia gets a $ for its gas from Turkey that will be inferior to any $ that it gets for its gas from the EU. And it is this moral property that the EU brings to its gas expenditure that makes ,what otherwise seems insane, sense of the Eu's foreign policy. So Turkey, China etc will buy the new Russian gas flowing down new pipelines but the EU won't. Proving that the EU is likely to be an historical institution of short temporal duration. The EU works. But it works for its masters in Washington ,via Berlin , and not at all fort the the ordinary person in or out of it....


hfakos Arcosanti


1314
It was. All participating countries passed the necessary legislation. The other day there was an article on the BBC about the world's largest ship, which was departing the Netherlands for the Black Sea to start laying the pipeline. Your "knowledge" leaves a lot to desire, to put it mildly


hfakos Mr. Russian


2728
Thank you EU and Germany's Mr. Oettinger. South Stream would have brought Russian gas transit fees to Hungary as well. Instead, those transit fees will stay with gas-stealing, Hungarian language-banning Banderastan. In the meantime, Germany is happily operating her own North Stream, buying evil Vlad's gas. Disgusting hypocrisy. Another nail in the coffin of the current EU and its inept German "leadership".


NikoNista Mr. Russian


1011
Or part of the EU won't buy gas at all.Seems Ukraine haven't made prepayment for December, and today was last day.Tommorow could be interesting day for south europe, as most of us is dependent on flow through Ukraine.
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    1516
    The Ukraine will just steal gas, as she did in 2006 and 2009. This is the land the EU prefers to its existing Eastern European members


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