Thursday, February 27, 2014


Sorry for the same.  A totally unanticipated event bubbled up a couple of days ago.  Nothing critical but it had to be dealt with.

The week is becoming eventful, picking up where we left off. The Ukraine, once a political problem is rapidly turning into a quasi ethnic mess as was feared with Ukrainians, Russians, Muslims of all breeds drawing lines in the sands while the Moscow Center Hood has put what in the old days would have been referred to as a "Shock Army" right on the border of the Crimea which is Ukrainian territory but inhabited by ethnic Russians.  Now, if the game plan is to be followed, the next step in the process will be some sort of an incident involving the Russian faction in the east, a warning from Putin that Russia will not tolerate anyone messin' with their folks, John Kerry warning Putin, Putin asking who the hell is John Kerry and talks scheduled at the U.N. to end this confrontation which has been totally manufactured by Putin.  Or not.  The market seems to be long the second option as the S & P reached an all-time, ALL-TIME high.  

Meanwhile, everybody is scrambling to find Kiev some money.  The Euros are making happy sounds and doing not much of anything.  The U.S. is talking $1 billion: they need about 15.  The IMF (oh no!) has lept into action and is preparing to send a team to explore how much Kiev needs and whether the Ukraine is eligible to receive funds.   Memo to the IMF:  about $15 billion and, no they are not.  You can come home now and not waste any more money.  Listen to Uncle Charlie would you?  This is not about finance about which you don't know much anyway and have proven that over the years but pure power politics played on a grand scale.  The decision is in Washington and Brussels as far as the West in concerned, assuming of course that there is someone around to make a decision.  Not knowing how this is going to work out, the 10 year traded to 3.54% in not exactly a flight but certainly a meander to safety, as opposed to the S & P rise on…confidence in the future..?   Give me a moment to figure this out…OK, I can't.

This week was going to be devoted to Italy and China--not necessarily in that order but for the moment the above is more important.  I thought I was getting a pretty good handle on China when all of a sudden the currency intervention stories started hitting the front pages and that set me back for reasons I will explain tomorrow.  Italy…well, I finally got to Massimo who has been involved with the Olympics--or at least with someone involving the Olympics.  He has a wonderful take on what's going on which I will try to get to as well.  I think we have a bit of time on the Ukraine but not too much which if that sound a bit scary it is because it is a scary situation.  Putin has no respect whatsoever for The Leader which makes it the EU's game to win or lose.  Told you it was scary.

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