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Testosterone Pit – Home – The “Sanction Spiral” Elegantly Spirals Out of Control

Testosterone Pit – Home – The “Sanction Spiral” Elegantly Spirals Out of Control.

The “Sanction Spiral” Elegantly Spirals Out Of Control

THURSDAY, MARCH 20, 2014 AT 11:41PM

Attorneys with the SEC’s Investment Management Division are exhorting managers of registered investment funds, such as your mutual fund, to disclose their holdings in Russia and warn of the risks associated with them, now that the Crimean debacle has turned into a magnificent sanction spiral. “Several people familiar with the matter” had been talking toReuters. The SEC is apparently fretting that the funds aren’t truthful with investors and aren’t even thinking about how to respond to the possible outcomes of the crisis.

Investment Management Division Director Norm Champ, when contacted by Reuters, didn’t even deny it. “We want to be proactive,” he said.

The Division contacted asset managers on other occasions when civil unrest erupted or when things threatened to blow up; it wanted to make sure managers weren’t omitting or misrepresenting material information – for example, during the uprising in Egypt in 2011, when the Cairo stock market simply shut down. But this time it’s different: the lawyers at the Investment Management Division were joined by another group of SEC lawyers who focus on risk examinations.

Would the White House be trying behind the scenes to give investors second thoughts about plowing money into Russia? Would it be trying to demolish Russian stocks, bonds, and the ruble? Naw.

The efforts by the SEC, which started “over a week ago,” were accompanied by a White House announcement that 5 million barrels would be released from the Strategic Petroleum Reserve. WTI tanked. Russia, a huge energy exporter, depends on its oil and gas revenues, and knocking down the price of oil could wreak havoc on the Russian economy. It was a declaration that commodities would be used as a weapon against the Putin Regime. 

Then on Tuesday, White House spokesman Jay Carney launched another attack on the Russian markets at a press briefing. In light of the sanctions the US and the EU were slapping on Russia, its economy would pay the price, he said. “I wouldn’t, if I were you, invest in Russian equities right now, unless you’re going short.”

Shaken to its roots by these threats, Russia annexed the Crimea and picked a new target: Estonia. A Russian diplomat told the UN Human Rights Council in Geneva on Wednesday that Russia was “concerned” by the treatment of the ethnic Russian minority “in Estonia as well as in Ukraine” … even while Vice President Joe Biden was in Lithuania to calm tattered nerves in the Baltics and the EU.

On Thursday, German Chancellor Merkel announced in Parliament, shortly before the EU summit in Brussels, that the EU would come up with new sanctions, such as expanding the list of Russians subject to travel limitations and freezing assets. And if the situation escalates, there would be “without doubt” economic sanctions, she said. Russia was “largely isolated in all international organizations.” And the G-8, which includes Russia, and whose upcoming shindig has already been cancelled, “no longer exists.”

She was immediately attacked by the parliamentary leader of the opposition Left Party, Gregor Gysi, who accused the government of double standards; the separation of Kosovo too had been a breach of international law, he said, but it had been supported by the German government at the time. The transitional Ukrainian government wasn’t legitimate, he said. “Fascists are part of this government, and we want to give them money?!” Under pressure from the US, Merkel was imposing sanctions on Russia to the detriment of Europe, he said. That’s “moral cowardice.”

The “Putin Doctrine” was what SPD parliamentary leader Thomas Oppermann, who is part of Germany’s governing Grand Coalition, was fretting about. Under that doctrine, Russia could intervene if ethnic Russians were perceived to be in danger outside Russia. It would give Russia an automatic right to intervene anywhere, he said. “Such a right does not exist, and such a right cannot exist.”

Hours later, President Obama announced he’d slapped new sanctions on a “number” of oligarchs, additional Russian government officials, and a bank that provides services to them. The White House was working “closely” with the EU “to develop more severe actions that could be taken if Russia continues to escalate the situation.” Then he urged US Lawmakers to approve the aid package for Ukraine and urged the IMF to put its aid package together pronto. Alas, read…. Aid for the Ukraine “Will Be Stolen” – Former Ukrainian Minister of Economy

As Obama’s words were still echoing around the world, the Russian Foreign Ministry shot back: nine US officials, including Speaker of the House John Boehner and Senate Majority Leader Harry Reid, would be barred from entering Russia. And it published the list on its website.

Delicious irony: that boring list with nine names on it, issued by a Russian ministry whose website rarely gets shared in the social media, lit up a mini-firestorm on VK.com, the second largest social network in Europe after Facebook, and one of the most popular sites in Russia. The list got, as I’m writing this, 538 VK “likes.” Not sure if Obama’s list got anyFacebook likes.

Not to be left out, Standard & Poor’s slammed Russia by lowering its outlook to Negativefrom Stable. “In our view, heightened geopolitical risk and the prospect of US and EU economic sanctions following Russia’s incorporation of Crimea could reduce the flow of potential investment, trigger rising capital outflows, and further weaken Russia’s already deteriorating economic performance.”

The Sanction Spiral works in a myriad ways and performs, as we can see every day, outright miracles. It spirals elegantly higher and higher and takes on grotesque forms. And by the looks of it, no one at the top has a clue how to back out of it. Yet stock and bond markets in the US and Europe, stuffed to the gills with central-bank liquidity and intoxicated by free money, the only thing that really matters anymore these crazy days of ours, are blissfully ignoring the entire drama, and what may eventually come of it.

The first official warning shot was fired. Not by a Putin advisor that can be brushed off, but by Alexey Ulyukaev, Russia’s Minister of Economy and former Deputy Chairman of the Central Bank. A major escalation. Read…. Kremlin: If The US Tries To Hurt Russia’s Economy, Russia Will Target The Dollar System

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Venezuela Also Is Being Overthrown By The Criminal Regime In Washington — Paul Craig Roberts – PaulCraigRoberts.org

Venezuela Also Is Being Overthrown By The Criminal Regime In Washington — Paul Craig Roberts – PaulCraigRoberts.org.

Dear Readers, now that US Secretary of State John Kerry has issued an ultimatum to Russia, telling Putin that he has until Monday to follow Washington’s orders or else,
hopefully everyone can see the repeat of the March of Folly that produced World War 1.
In my last column, “Merkel Whores For Washington,” I mistakenly attributed to Khrushchev all transfers of Russian territory to Ukraine. The first gifts of Russian territories to Ukraine were made by Lenin, and the last was Sevastopol in the early 1990s. I have posted today Alexandr Solzhenitsyn’s account of how Russian territory was given to Ukraine. In the meantime, Washington’s puppet regime in Kiev has sent in thugs to commit violence against protesting Russians who want nothing to do with Washington’s stooges in Kiev, prompting Russia to issue another warning that the Russian military will protect Russians. Clearly, Washington is doing everything it can to provoke Putin into sending the Russian Army into eastern Ukraine. Now that Merkel has sold out Europe, the course of Ukrainian events seems clear, which provides an opportunity for me to address Washington’s coup-in-the-making against Venezuela.

Venezuela Also Is Being Overthrown By The Criminal Regime In Washington

Paul Craig Roberts

The Washington orchestrated coup in Ukraine has kept Venezuela out of the headlines.
A confrontation with nuclear armed Russia is more dangerous than with Venezuela. But the violence that Washington has unleashed on Venezuela almost simultaneously with Ukraine is testimony to Washington’s stark criminality.

South America has always consisted of a tiny Spanish elite with all the money and power ruling over large majority populations of indigenous peoples who have not had political representation. In Venezuela, Chavez broke this pattern. An indigenous president was elected who represented the people and worked in their behalf instead of looting the country. Chavez became a role model, and indigenous presidents were elected in Ecuador and Bolivia.

Chavez was hated by Washington and demonized by American presstitutes. When Chavez died of cancer, Washington celebrated.

Evo Morales, President of Bolivia, was inclined in favor of granting asylum to NSA whistleblower Edward Snowden. Consequently, Washington ordered its European puppet states to deny overflight permission to President Morales’ airplane on its return to Bolivia from Russia. Morales’ airplane, in violation of every diplomatic protocol, was forced down and searched. Morales has since suffered other indignities at the hands of the Washington criminals.

Rafael Correa, President of Ecuador, made himself a target of Washington by granting political asylum to Julian Assange. On Washington’s orders, Washington’s British puppet state has refused to grant free passage to Assange, and Assange is spending his life in the London Embassy of Ecuador, just as Cardinal Mindszenty spent his life in the US Embassy in Communist Hungary.

With Chavez’s death, indigenous Venezuelan Nicolas Maduro became president. Maduro does not have Chavez’s charisma, which makes him an easier target for the tiny Spanish elite that owns the media.

Washington began the attack on Maduro by attacking the Venezuelan currency and driving down its value in currency markets. Then university students, many of whom are the children of the rich Spanish elites, were sent out to protest. The falling Venezuelan currency raised prices and spread dissatisfaction among Maduro’s poor indigenous base. To put down the rioting, property damage, and unrest that Washington is using to launch a coup, Maduro had to turn to the police. Secretary of State John Kerry has labeled the government’s effort to reestablish public order and forestall a coup a “terror campaign against its own citizens.”

Having orchestrated the protests and plotted a coup, Kerry blamed Maduro for the violence that Kerry unleashed and called on Maduro “to respect human rights.”

For Washington, it is always the same script. Commit a crime and blame the victim.

If Washington can overthrow Maduro, the next target will be Correa. If Washington can get rid of Correa and re-empower a puppet government of rich Spanish elites, Washington can have the Ecuadoran government revoke the political asylum that Correa granted to Julian Assange. The Ecuadoran Embassy in London will be ordered to kick Assange out into the waiting arms of the British police who will send him to Sweden who will send him to Washington to be tortured until he confesses to whatever Washington demands.

The poor gullible dupes demonstrating in Venezuelan streets have no more idea of the damage they are doing to themselves and others than their counterparts in Ukraine had. Venezuelans have already forgot what life for them was like under the rule of the Spanish elites. It appears that Venezuelans are determined to help Washington to return them to their servitude.

If Washington reconquers Venezuela and Ecuador, Bolivia will be next. Then Brazil. Washington has its sights on Brazil, because the country is a member of the BRICS (Brazil, Russia, India, China, South Africa), and Washington intends to destroy this organization before the countries can establish a trading bloc that does not use the US
dollar.

Not long ago a US official said that as soon as we (Washington) get Russia in a bind, we will deal with the upstarts in South America.

The program is on schedule.

Angela Merkel Furious At Nuland’s “Fuck The EU” Comments | Zero Hedge

Angela Merkel Furious At Nuland’s “Fuck The EU” Comments | Zero Hedge.

A few short months after Putin cornered the US state department into a disastrous foreign relations dead end with the false flag Syrian escalation which achieved none of the predetermined nat-gas-to-Europe pipeline ambitions, instead alieanting the US from both staunch allies Saudi Arabia and Israel, the Russian president has just managed to inflict yet more pain on US foreign policy this time by infuriating (even more) a core US ally in Europe – Angela Merkel. Just two days after the phone recording of Victoria Nuland emerged in which she not only made it explicitly clear it was the US who was the puppetmaster behind the Ukranian opposition with the traditional CIA tractics as was expected all along, but also explained just how the US freels toward the EU with the now infamous “Fuck the EU” comment, Angela Merkel called the obscene remark “absolutely unacceptable.”

And then, Nuland not knowing when to stop, proceeded to insert foot in mouth just a little deeper: “”I am not going to comment on private diplomatic conversations. But it was pretty impressive tradecraft. The audio was extremely clear,” she told reporters during a visit to Kiev.”

At least she indirectly complemented Putin on being smart enough to not only intercept what appears to have been an unencrypted phone call, but to release it at just the right time as the entire world’s attention turns to Russia and by extension, the Ukraine.

Because in retrospect Putin does deserve praise: having won the Ukraine over Europe’s cries of horror, he has also managed, in the past year, to alienate the US from Israel, Saudi Arabia and now, Germany. And all this without saying a single word, let along firing a shot.

So now that we know the apriori winner, the loser has no choice but to engage major damage control, which is borderline delusional. From Reuters:

[Nuland] said she did not foresee damage to relations with opposition leaders, saying they “know exactly where we stand in respect of a non-violent solution to the problem.”

 

Of relations with Russia, she said Washington and Moscow had “very deep, very broad and complex” discussions on a range of international issues including Iran and “frank and comradely discussions” on Ukraine.

 

U.S. officials did not deny the authenticity of the recording and said Nuland apologized to EU colleagues for the comment.

 

Angela Merkel, already furious with Washington for several months over reports that U.S. officials bugged her own phone, found Nuland’s remarks “totally unacceptable”, a spokeswoman for the German chancellor said.

Yet, it’s one thing to delude oneself that the US is still the undisputed world’s superpower, it is far worse to express the kind of hubris that Nuland did, when she communicated and discussedconfidential US geopolitical strategy on an unencrypted phone line – traditionally a fireable offense, if not worse.

In Washington, U.S. officials said Nuland and Pyatt apparently used unencrypted cellphones, which are easy to monitor. The officials said smart phones issued to State Department officials had data encryption but not voice encryption.

 

In Nuland’s call, apparently recorded about 12 days ago when Ukrainian opposition leaders were considering an offer from Yanukovich to join his cabinet, she suggested that one of three leading figures might accept a post but two others should stay out. In the end, all three rejected the offer.

The biggest loser here, however, continues to be the Ukraine, whose people are facing a cold winter without assurances they will have Russian nat gas, and a government that is a chess piece in an ongoing power play between Europe and Russia, now that the CIA has taken a back seat. Incidentally, Russia made it quite clear that it demands Ukraine’s full allegiance and as Russian finance minister Anton Siluanov told reporters overnight, Russia  would withold its second loan payment to the troubled nation unless the Ukraine, which owes a “not insignificant” sum for natgas, makes the payment.

In other words, just like Greece has become a money “tolling” intermediary for the ECB and German banks, in which Europe pretends to bail out the crushed country when in reality it is just funding debt payments to its own banks, so the Ukraine has now become an intermediary, in which loan payments from Russia go to pay… Russia’s Gazprom. And in the process Russia pulls the Ukraine from the European sphere of influence and back into that of the New Normal USSR.

Game, set, match Putin. Again.

But wait, there’s more. Because Putin, unsatisfied with simple making a mockery of the US State Department, decided to rub it in some more. The Hill reports:

Rising animosity between the former Cold War powers was on full display Friday when Russia chose a former figure skater who tweeted out a racially charged picture of President Obama for the symbolic lighting of the Olympic cauldron.

 

Russian President Vladimir Putin hoped hosting the first Games since the 1980 Moscow Olympics, which the U.S. boycotted, would showcase a “new Russia” emerging from the ashes of the Soviet Union as he enters his 15th year in power.

 

Instead the U.S. and its western allies have consistently painted the picture of a corrupt autocracy.

 

The media’s focus on the persecution of gays in Russia, terrorism and Russia’s lackluster infrastructure – many hotels don’t have potable water even though the Games are estimated to have cost more than $50 billion, the most ever – have further infuriated the Kremlin.

 

“I understand how the press here works. They need hot issues in order to be read, to have high circulation,” Sergey Kislyak, Putin’s envoy to Washington, told The Washington Diplomat last month.

That’s ok – as long as the US population can keep itself distracted from the sheer implosion of US standing internationally by looking at tweeted images of decrepit toilets and busted Sochi plumbing from a self-indulgent US press corps, and continue feeling good about itself, then all is well. After all, that’s just what Putin wants.

Obama Said to Favor Limits on Spying on Foreign Leaders – Bloomberg

Obama Said to Favor Limits on Spying on Foreign Leaders – Bloomberg.

Photographer: Jock Fistick/Bloomberg
The administration is fighting a domestic and international backlash over revelations the NSA spied on leaders including German Chancellor Angela Merkel.

President Barack Obama will call for tighter limits on U.S. spying on foreign leaders in response to a global uproar over government surveillance, according to an administration official familiar with the proposal.

The restrictions are part of an Obama plan to curb National Security Agency spying exposed last year in documents leaked by former contractor Edward Snowden. With the proposal, to be announced as soon as next week, the administration is seeking to rein in U.S. surveillance without sacrificing its ability to use electronic intelligence gathering to fight terrorism.

It’s unclear how far Obama will go to limit spying on foreign leaders, and the official who confirmed the restrictions on condition of anonymity declined to provide further details. White House officials have suggested that Obama may be willing to curtail snooping on allies while preserving the ability to listen on leaders from hostile nations.

The administration is fighting a domestic and international backlash over revelations the NSA spied on leaders including German Chancellor Angela Merkel (GOOG), hacked into fiber-optic cables to get data from Google Inc. and Yahoo! Inc. (YHOO), and intercepted Americans’ communications without warrants. Most of the spying was exposed by Snowden, who’s in Russiaunder temporary asylum.

Photographer: Andrew Harrer/Bloomberg

White House officials have suggested that U.S. President Barack Obama may be willing to…Read More

A White House panel reviewing U.S. surveillance programs recommended in a report last month the creation of new criteria for spying on foreign leaders, including determining whether electronic surveillance is necessary and whether there are other means to obtain the needed information.

Obama Meeting

Obama plans to unveil the changes without waiting for a separate independent privacy board to release its finding on whether the collection of bulk phone records is legal. He’s widely expected to call for putting a privacy advocate on the secret court that oversees the NSA programs, and is considering limits on the government’s ability to collect and store phone records.

A meeting Obama held yesterday with the five members of the Privacy and Civil Liberties Oversight Board, all of whom he nominated, “was a useful opportunity for the president to hear the group’s views,” Caitlin Hayden, a spokeswoman for the National Security Council, said in a statement.

The board said after the meeting that it plans to issue a report by late January or early February on whether the collection of bulk phone records is legal and recommendations on “the right balance between national security and privacy and civil liberties.”

Not Waiting

Obama isn’t waiting for that report, which could run counter to his decisions. He will announce his proposals for altering NSA surveillance programs before his annual State of the Union address on Jan. 28, and perhaps as early as next week, according to an administration official familiar with the deliberations who requested anonymity in discussing the matter.

Obama thanked members of the privacy board for “their thoughtful work” and “made clear that it will be factored into the administration’s thinking” as decisions are made, Hayden said.

The president and his aides previously have hinted at a willingness to reduce spying on some foreign leaders and create a public advocate to represent privacy concerns before the secret court that oversees the Foreign Intelligence Surveillance Act.

Obama is “still in the process of deliberating,” White House press secretary Jay Carney told reporters yesterday. He is using meetings with stakeholders this week to shape his decisions and “appreciates very much the opinions and counsel he’s getting on these matters,” Carney said.

Review Panel

The Review Group on Intelligence and Communications Technology recommended in its reportlast month putting limits on the NSA, including prohibiting the agency from collecting and storing billions of phone records. Instead, the data should be held by Verizon Communications Inc. (VZ)AT&T Inc. (T) and other U.S. carriers or another third party and only accessed by the NSA with a court warrant, the panel said.

The panel also recommended legislation allowing Google, Facebook Inc. (FB) and other Internet companies to publicly release information about government orders compelling them to turn over data about their users, and how many users are affected.

Carney said in October that the U.S. wasn’t monitoring, and wouldn’t monitor going forward, Merkel’s communications, after a backlash following revelations that the U.S. had spied on friendly foreign leaders including Merkel and Brazilian President Dilma Rousseff.

While Obama called Merkel yesterday to wish her a speedy recovery following a ski accident, a White House statement about the call did not mention any discussion of his upcoming NSA announcement.

Privacy Advocates

Obama plans to meet today with top lawmakers on the Senate and House judiciary and intelligence committees. Separately, privacy advocates from the Electronic Frontier Foundation, Open Technology Institute and Cato Institute plan to meet with White House Counsel Kathy Ruemmler.

“I would certainly hope the president is adopting the bulk of the panel’s recommendations, which were generally favorably received within the privacy community,” David Sobel, senior counsel for the San Francisco-based Electronic Frontier Foundation, said in a phone interview.

Privacy advocates will be disappointed if Obama doesn’t make significant changes, Sobel said. “In light of the review panel’s findings, it’s difficult to see how that approach would be justified,” he said.

Tomorrow, White House staff members will meet with executives from technology companies to discuss U.S. surveillance programs, according to an administration official who asked not to be identified discussing the meeting.

Senate Testimony

The intelligence review panel’s five members are scheduled to testify about their recommendations before the Senate Judiciary Committee on Jan. 14.

The privacy board said it also plans to release a separate report on an NSA program that compels Internet companies to turn over data on users.

Under that program, the NSA can intercept the communications of innocent Americans without a warrant, as long as they aren’t the target of a counterterrorism investigation. A warrant is required by law if an American citizen becomes the target.

To contact the reporters on this story: Chris Strohm in Washington atcstrohm1@bloomberg.net; Margaret Talev in Washington at mtalev@bloomberg.net

To contact the editors responsible for this story: Bernard Kohn at bkohn2@bloomberg.net; Steven Komarow at skomarow1@bloomberg.net

Merkel’s ObamaPhone Scandal Escalates: US Ambassador Summoned By German Foreign Minister | Zero Hedge

Merkel’s ObamaPhone Scandal Escalates: US Ambassador Summoned By German Foreign Minister | Zero Hedge. (source)

The diplomatic farce in the aftermath of the most recent revelations that Obama had tapped not only Hollande‘s butMerkel’s cell phone as well, continued when moments ago Germany’s Foreign Ministry summoned the U.S. ambassador to explain if it was indeed true the NSA “may be spying” on Merkel, a ministry spokeswoman said. They used the word “may” loosely.  John B. Emerson, the newly appointed U.S. ambassador to Germany, will meet Foreign Minister Guido Westerwelle Thursday afternoon.

But while the latest diplomatic escalation will have zero impact whatsoever on either US spying intentions, mostly of US citizens let alone foreigners, or German-US relations, what is missing is that had this “scandal” happened four short months ago, the farce would have been truly complete as the summoned US Ambassador would be none other than former Goldman senior director and head of Goldman Germany, Philip Murphy, who alas stepped down in August. Had that been the case someone may have just put two and two together.

From the WSJ:

The German government’s position will be clearly presented to [Mr. Emerson],” the spokeswoman said. The U.S. Embassy referred questions back to the German Foreign Ministry.

Germany’s Parliamentary Control Committee, which oversees the intelligence services, will meet for an impromptu session on the cellphone scandal at 1200 GMT, said the head of the committee, Thomas Oppermann.

Ms. Merkel spoke by phone with President Barack Obama on Wednesday to discuss the claims that the U.S. monitored her communications. The chancellor made clear that surveillance among allies would be “fully unacceptable” and a “grave breach of trust,” her spokesman said in a statement released late Wednesday in Berlin.

The White House said Mr. Obama assured Ms. Merkel in the call that the U.S. “is not monitoring and will not monitor” her communications. “The United States greatly values our close cooperation with Germany on a broad range of shared security challenges,” White House spokesman Jay Carney said.

In other news, the German Parliament security committee meets today on merkel phone tap, German govt spokesman Seibert comments in text message. A text message which it goes without saying, was intercepted by the NSA.

And here is Angie herself showing just where the NSA’s bug was planted:

 

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