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Daily Archives: March 10, 2014

Long Crude Oil Speculative Bets Rise To All Time High | Zero Hedge

Long Crude Oil Speculative Bets Rise To All Time High | Zero Hedge.

Whether or not institutional investors, read large speculators, decided to invest alongside Putin in the one trade that is most critical to the future prosperity and positive cash flow balance of Russia, namely keeping the price of Crude high, and rising, is unknown, however, as the following chart the net position in crude oil futures as of the week of March 4, just hit an all time high of $44.0 billion up from $42.4 billion the week prior, surpassing all prior peaks, and certainly any set during the summer of 2008 when oil was threatening to make a run on $150, and was set to hit $200 if one believes Goldman (which nobody does).

Needless to say, any de-escalation in the Crimea – which has certainly been the key catalyst for the full court press to bet on rising crude prices in recent weeks – will have a substantial knock on effect of forcing open call positions to close, and in the process lower the price of crude further beyond just fundamentals, assuming those still exist.

Meanwhile In Turkey… | Zero Hedge

Meanwhile In Turkey… | Zero Hedge.

The Turkish Lira is tumbling this morning (+150pips at 2.22); rapidly devaluing back towards pre-emergency-rate-hike levels and Turkish bond yields have surged back to levels seen in mid-2009. The driver appears to be the release of several political prisoners,suggesting the President is starting to lose control and given that ‘political stability’ is the key factor for many of these EM debt markets. The government, however, remains adamant that an “operation” by some institutional holders of lira bonds to “threaten” Turkey’s economy started after the probe into government corruption began in mid-December.

As Bloomberg notes,

Economy Minister Nihat Zeybekci says “operation” to undermine Turkey’s economy started after emergence of Dec. 17 probe into alleged govt corruption, state-run Anatolia news agency reports.

Zeybekci links lira volatility to “operation” by some institutional holders of Turkey’s lira bonds: Anatolia

Holders of Turkey debt dumped lira bonds, increased FX positions to “threaten” Turkish economy

Zeybekci says action against economy destined to fail

However one glance at the chart of Turkish bonds and it’s clear the selling began amid Taper fears last summer and was merely exacerbated by corruption concerns and EM crisis flows (and who would lock in rates for an allegedly corrupt government)

It would appear the driver of today’s weakness is an apparent loss of control by the President as several political prisoners are released by Turkey’s 13th high criminal court:

Turkey’s 13th high criminal court rejects release of some suspects in Ergenekon trial today, while 21st criminal court released others in same case, saying parliament’s abolition of specially authorized courts meant they had to be set free, HT reports.

* 21st court decided today to release Ergenekon suspects Tuncay Ozkan, Levent Goktas and Sedat Peker, who were being     tried for alleged involvment in the so-called Ergenekon plot to overthrow Prime Minister Recep Tayyip Erdogan’s govt

* 13th court, in contrast, didn’t release suspects, saying that parliament had no authority to dissolve the specially authorized courts that saw the cases, known in Turkish as OYMs

* HSYK, the body that appoints judges and prosecutors – and which was re-structured by the govt amid a corruption probe – says 13th court overstepped its authority and parliament does have the authority to open or shut courts down

* Nationalist lawyer known for suing authors including murdered Armenian journalist Hrant Dink and Nobel Prize-winning author Orhan Pamuk for “insulting Turkishness” freed today, state-run TRT reports.

* Kerincsiz among suspects freed after being jailed in so-called Ergenekon trial of people alleged to be plotting a coup against Prime Minister Recep Tayyip Erdogan

* Lieutenant General Mehmet Eroz also freed, TRT says

Chart: Bloomberg

 

Meanwhile In Turkey… | Zero Hedge

Meanwhile In Turkey… | Zero Hedge.

The Turkish Lira is tumbling this morning (+150pips at 2.22); rapidly devaluing back towards pre-emergency-rate-hike levels and Turkish bond yields have surged back to levels seen in mid-2009. The driver appears to be the release of several political prisoners,suggesting the President is starting to lose control and given that ‘political stability’ is the key factor for many of these EM debt markets. The government, however, remains adamant that an “operation” by some institutional holders of lira bonds to “threaten” Turkey’s economy started after the probe into government corruption began in mid-December.

As Bloomberg notes,

Economy Minister Nihat Zeybekci says “operation” to undermine Turkey’s economy started after emergence of Dec. 17 probe into alleged govt corruption, state-run Anatolia news agency reports.

Zeybekci links lira volatility to “operation” by some institutional holders of Turkey’s lira bonds: Anatolia

Holders of Turkey debt dumped lira bonds, increased FX positions to “threaten” Turkish economy

Zeybekci says action against economy destined to fail

However one glance at the chart of Turkish bonds and it’s clear the selling began amid Taper fears last summer and was merely exacerbated by corruption concerns and EM crisis flows (and who would lock in rates for an allegedly corrupt government)

It would appear the driver of today’s weakness is an apparent loss of control by the President as several political prisoners are released by Turkey’s 13th high criminal court:

Turkey’s 13th high criminal court rejects release of some suspects in Ergenekon trial today, while 21st criminal court released others in same case, saying parliament’s abolition of specially authorized courts meant they had to be set free, HT reports.

* 21st court decided today to release Ergenekon suspects Tuncay Ozkan, Levent Goktas and Sedat Peker, who were being     tried for alleged involvment in the so-called Ergenekon plot to overthrow Prime Minister Recep Tayyip Erdogan’s govt

* 13th court, in contrast, didn’t release suspects, saying that parliament had no authority to dissolve the specially authorized courts that saw the cases, known in Turkish as OYMs

* HSYK, the body that appoints judges and prosecutors – and which was re-structured by the govt amid a corruption probe – says 13th court overstepped its authority and parliament does have the authority to open or shut courts down

* Nationalist lawyer known for suing authors including murdered Armenian journalist Hrant Dink and Nobel Prize-winning author Orhan Pamuk for “insulting Turkishness” freed today, state-run TRT reports.

* Kerincsiz among suspects freed after being jailed in so-called Ergenekon trial of people alleged to be plotting a coup against Prime Minister Recep Tayyip Erdogan

* Lieutenant General Mehmet Eroz also freed, TRT says

Chart: Bloomberg

 

Ukraine Lieutenant Colonel In Charge Of Crimea Unit Defects To Russia, Takes Soldiers With Him | Zero Hedge

Ukraine Lieutenant Colonel In Charge Of Crimea Unit Defects To Russia, Takes Soldiers With Him | Zero Hedge.

Mere days ahead of Crimea’s referendum to join Russia (or not) and following reports of shots fired between Russian and Ukrainian forces, the Ukraine Defense Ministry reports (via Facebook):

  • *UKRAINE LIEUTENANT COLONEL DEFECTS TO RUSSIAN FORCES: MINISTRY
  • *UKRAINE OFFICER IN CHARGE OF CRIMEA UNIT DEFECTS: UKR MINISTRY
  • *OFFICER CONVINCES ‘SEVERAL’ SOLDIERS TO DEFECT: DEF MINISTRY

It would appear Crimea is annexing itself as this comesjust one week after the head of Ukraine’s Navy defected.

Ukraine Lieutenant Colonel In Charge Of Crimea Unit Defects To Russia, Takes Soldiers With Him | Zero Hedge

Ukraine Lieutenant Colonel In Charge Of Crimea Unit Defects To Russia, Takes Soldiers With Him | Zero Hedge.

Mere days ahead of Crimea’s referendum to join Russia (or not) and following reports of shots fired between Russian and Ukrainian forces, the Ukraine Defense Ministry reports (via Facebook):

  • *UKRAINE LIEUTENANT COLONEL DEFECTS TO RUSSIAN FORCES: MINISTRY
  • *UKRAINE OFFICER IN CHARGE OF CRIMEA UNIT DEFECTS: UKR MINISTRY
  • *OFFICER CONVINCES ‘SEVERAL’ SOLDIERS TO DEFECT: DEF MINISTRY

It would appear Crimea is annexing itself as this comesjust one week after the head of Ukraine’s Navy defected.

Russian Troops Open Fire In Crimea, Reuters Reports As Kerry Delays Russia Visit | Zero Hedge

Russian Troops Open Fire In Crimea, Reuters Reports As Kerry Delays Russia Visit | Zero Hedge.

That Ukraine “drill” may be coming at just the right time. Just out from Reuters:

  • RUSSIAN TROOPS OPENED FIRE DURING TAKEOVER OF UKRAINIAN MILITARY POST IN CRIMEA, NO ONE WOUNDED -INTERFAX QUOTES UKRAINIAN BASE COMMANDER

And at the same time:

  • RUSSIA’S PUTIN SAYS TOLD FOREIGN MINISTER LAVROV TO INVITE U.S. COUNTERPART KERRY FOR MORE CONSULTATIONS ON UKRAINE
  • RUSSIAN FOREIGN MINISTER LAVROV SAYS HAD INVITED KERRY TO RUSSIA TODAY, BUT KERRY SAID ON SATURDAY HE WOULD LIKE TO POSTPONE VISIT
  • RUSSIA’S LAVROV SAYS RUSSIA HAS OWN PROPOSALS TO RETURN UKRAINIAN SITUATION TO THE FRAMEWORK OF INTERNATIONAL LAW, TAKING INTO CONSIDERATION INTERESTS OF ALL UKRAINIANS

No de-escalation yet. Any minute now though. The market said so.

Russian Troops Open Fire In Crimea, Reuters Reports As Kerry Delays Russia Visit | Zero Hedge

Russian Troops Open Fire In Crimea, Reuters Reports As Kerry Delays Russia Visit | Zero Hedge.

That Ukraine “drill” may be coming at just the right time. Just out from Reuters:

  • RUSSIAN TROOPS OPENED FIRE DURING TAKEOVER OF UKRAINIAN MILITARY POST IN CRIMEA, NO ONE WOUNDED -INTERFAX QUOTES UKRAINIAN BASE COMMANDER

And at the same time:

  • RUSSIA’S PUTIN SAYS TOLD FOREIGN MINISTER LAVROV TO INVITE U.S. COUNTERPART KERRY FOR MORE CONSULTATIONS ON UKRAINE
  • RUSSIAN FOREIGN MINISTER LAVROV SAYS HAD INVITED KERRY TO RUSSIA TODAY, BUT KERRY SAID ON SATURDAY HE WOULD LIKE TO POSTPONE VISIT
  • RUSSIA’S LAVROV SAYS RUSSIA HAS OWN PROPOSALS TO RETURN UKRAINIAN SITUATION TO THE FRAMEWORK OF INTERNATIONAL LAW, TAKING INTO CONSIDERATION INTERESTS OF ALL UKRAINIANS

No de-escalation yet. Any minute now though. The market said so.

Ukraine Military Conducts Training Drill, To Test "Combat Readiness" | Zero Hedge

Ukraine Military Conducts Training Drill, To Test “Combat Readiness” | Zero Hedge.

Just out from the Ukraining defense ministry:

  • UKRAINE ARMED FORCES CONDUCT TRAINING DRILL: DEFENSE MINISTRY
  • UKRAINE DEFENSE DRILL AIMED AT TESTING `COMBAT READINESS’: MIN

It may not be an abrupt ICBM launch, but it certainly increases the odds of some unintentional, or fully intentional, provocation between the Ukrainian and Russian militaries which as we have been following over the weekend, are amassing in very disturbing numbers in Crimea and, soon, east Ukraine.

For those who missed our coverage over the past few days, here are some of the clips foreshadowing this “drill” announcement. The first clip below captured the 80th Airborne Regiment out of Lviv moving out, direction mainland, preparing to repel foreign attack.

The next video shows what are allegedly Buk SAM batteries deployed in the Donetsk region, a city in Eastern Ukraine which in the past week has swayed between Ukraine and Russian authority.

The clip below shows the 95th Airborne brigade also moving out of their barracks in Zhytomyr in western Ukraine, heading East, with an impressive deployment of trucks and APCs.

2S19 “Msta-S” 152mm Howitzers on the move to Crimea.

Finally, 20 T-64 tanks preparing to depart in Bila Tserkva, a city in central Ukraine:

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Ukraine Military Conducts Training Drill, To Test “Combat Readiness” | Zero Hedge

Ukraine Military Conducts Training Drill, To Test “Combat Readiness” | Zero Hedge.

Just out from the Ukraining defense ministry:

  • UKRAINE ARMED FORCES CONDUCT TRAINING DRILL: DEFENSE MINISTRY
  • UKRAINE DEFENSE DRILL AIMED AT TESTING `COMBAT READINESS’: MIN

It may not be an abrupt ICBM launch, but it certainly increases the odds of some unintentional, or fully intentional, provocation between the Ukrainian and Russian militaries which as we have been following over the weekend, are amassing in very disturbing numbers in Crimea and, soon, east Ukraine.

For those who missed our coverage over the past few days, here are some of the clips foreshadowing this “drill” announcement. The first clip below captured the 80th Airborne Regiment out of Lviv moving out, direction mainland, preparing to repel foreign attack.

The next video shows what are allegedly Buk SAM batteries deployed in the Donetsk region, a city in Eastern Ukraine which in the past week has swayed between Ukraine and Russian authority.

The clip below shows the 95th Airborne brigade also moving out of their barracks in Zhytomyr in western Ukraine, heading East, with an impressive deployment of trucks and APCs.

2S19 “Msta-S” 152mm Howitzers on the move to Crimea.

Finally, 20 T-64 tanks preparing to depart in Bila Tserkva, a city in central Ukraine:

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Why London, Too, Will Balk At Sanctions Against Russia (And Putin Knows It) | Zero Hedge

Why London, Too, Will Balk At Sanctions Against Russia (And Putin Knows It) | Zero Hedge.

A week ago, when the idea of sanctions against Russia was first officially announced, we made a statement, which was obviously in jest yet which, as so often happens, was so rooted in reality:

How is this an indication of reality? Well, for one, as we reported previously, the one country that has the most to lose from Russian sanctions, Germany, and specifically its industrial superlobby has already said “Nein” to any truly crippling trade blockade of Moscow would backfire on Germany’s own economy and bottom line.

But what about London? Here, the NYT explains why, once again, it was all about the money, and why were right even when we were being humorous:

The White House has imposed visa restrictions on some Russian officials, and President Obama has issued an executive order enabling further sanctions. But Britain has already undermined any unified action by putting profit first.

It boils down to this: Britain is ready to betray the United States to protect the City of London’s hold on dirty Russian money. And forget about Ukraine.

At this point, in standing with the ideological framework of the host media outlet, the author takes a detour into naive idealism – a world in which it is not money that talks, but a declining global superpower, whose hypocrisy has been exposed time and again, and where extinct words like “mission” and “moral” are used with reckless abandon:

Britain, open for business, no longer has a “mission.” Any moralizing remnant of the British Empire is gone; it has turned back to the pirate England of Sir Walter Raleigh.Britain’s ruling class has decayed to the point where its first priority is protecting its cut of Russian money — even as Russian armored personnel carriers rumble around the streets of Sevastopol. But the establishment understands that, in the 21st century, what matters are banks, not tanks.

The Russians also understand this. They know that London is a center of Russian corruption, that their loot plunges into Britain’s empire of tax havens — from Gibraltar to Jersey, from the Cayman Islands to the British Virgin Islands — on which the sun never sets.

British residency is up for sale. “Investor visas” can be purchased, starting at £1 million ($1.6 million). London lawyers in the Commercial Court now get 60 percent of their work from Russian and Eastern European clients. More than 50 Russia-based companies swell the trade at London’s Stock Exchange. The planning regulations have been scrapped, and along the Thames, up go spires of steel and glass for the hedge-funding class.

Britain’s bright young things now become consultants, art dealers, private banker and hedge funders. Or, to put it another way, the oligarchs’ valets.

Russia’s president, Vladimir V. Putin, gets it: you pay them, you own them. Mr. Putin was absolutely certain that Britain’s managers — shuttling through the revolving door between cabinet posts and financial boards — would never give up their fees and commissions from the oligarchs’ billions. He was right.

So, let us get this straight? It is great when the Russian oligrachs “invest” their stolen money in luxury London real estate, the FTSE100, and various other inflating assets which are mistaken for an improvement in the broader “economy”, but when the alarm clock of realpolitick rings, it was all bad?

What we are more stunned by is that while London has at least figured out the quid pro quo, the US, and its leader, so far seem completely incapable of doing so. Perhaps someone should explain to Obama that with the Fed tapering, the only incremental buyer of high end real estate are precisely the oligarchs from Russia, whom he will soon alienate, as well as those from China, which also may decide it is too risky to park “hot money” in New York triplexes, and instead once again, like in 2011, park it all in gold and other precious metals.

But going back to the NYT article, the author does make the following accurate observation: “This is Britain’s growth business today: laundering oligarchs’ dirty billions, laundering their dirty reputations.

His conclusion, too, is spot on:

The Shard encapsulates the new hierarchy of the city. On the top floors, “ultra high net worth individuals” entertain escorts in luxury apartments. By day, on floors below, investment bankers trade incomprehensible derivatives.

Come nightfall, the elevators are full of African cleaners, paid next to nothing and treated as nonexistent. The acres of glass windows are scrubbed by Polish laborers, who sleep four to a room in bedsit slums. And near the Shard are the immigrants from Lithuania and Romania, who broke their backs on construction sites, but are now destitute and whiling away their hours along the banks of the Thames.

The Shard is London, a symbol of a city where oligarchs are celebrated and migrants are exploited but that pretends to be a multicultural utopia. Here, in their capital city, the English are no longer calling the shots. They are hirelings.

Still think Putin is ready to “blink”?

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