Late afternoon / Evening news items ....... Russia shifting to War footing ?
http://www.zerohedge.com/news/2014-04-25/russian-warplanes-repeatedly-enter-ukraine-airspace-helicopter-buildup-latvia-surges
http://www.zerohedge.com/news/2014-04-25/russian-doomsday-plane-spotted-flying-circles-finland-border
Russia goes silent.....
http://www.thedailybeast.com/articles/2014/04/25/exclusive-putin-halts-all-talks-with-white-house.html
AND from the Ukraine Government , consider the following moves / statements........
And....
http://www.zerohedge.com/news/2014-04-25/stocks-slammed-lower-ukraine-claims-invasion-possible-any-moment
From earlier today......
http://www.zerohedge.com/news/2014-04-25/nato-allies-unreassured-us-destroyer-departs-black-sea
( US moving Destroyer The Donald Cook out of harm's way ahead of what my come ??? )
http://www.zerohedge.com/news/2014-04-25/ukraine-warns-putin-we-will-eliminate-invaders-after-pro-russian-forces-down-ukraine
( Ukraine expects " provocation " just before Eastern Ukraine Regions Referendums ! )
http://www.zerohedge.com/news/2014-04-25/ruble-tumbles-despite-russian-rate-hike
http://www.zerohedge.com/news/2014-04-25/furious-russia-downgraded-just-above-junk-sp-proposes-scorched-earth-retaliation-aga
http://www.zerohedge.com/news/2014-04-25/russian-warplanes-repeatedly-enter-ukraine-airspace-helicopter-buildup-latvia-surges
Russian Warplanes Repeatedly Enter Ukraine Airspace; Helicopter Buildup By Latvia Surges
Submitted by Tyler Durden on 04/25/2014 15:12 -0400
If the following news had been "sourced" by Ukraine news agencies, we would caveat it by saying it is almost certainly propaganda. However, since the source for this AP story appears to be "US officials", we will only assign a 98% probability to it being propaganda. Hot on the heels of our report that the Russian "Doomsday Plane" had been seen in the vicinity of the Baltic states, we learn of more Russian airborne acrobatics, this time involving Russian fighter jets which flew into Ukrainian airspace a "handful of times over the last 24 hours, in what one called a continued provocation of the heightened tensions in the region." One, of course, being a "US source" - the kind that was behind the original armed coup in the first place, so one should take this "news" on a somewhat salty basis too.
More:
The officials say it's not clear what the intent was, but the aircraft could have been testing Ukrainian radar or making a show of force. The officials spoke on condition of anonymity because they were not authorized to talk publicly about the issue.The flights come as Russia increases military exercises along the Ukraine border, including moving a broad array of fixed wing and rotary aircraft, infantry and armor troops.
But that's not all: Bloomberg also reports that Russia has increased the number of helicopters at a military base close to the Latvian border from 30 to about 100 during the Ukrainian crisis, according to the Latvian Foreign Minister Edgars Rinkevics at news conference in Riga. In response, NATO has provided reassurance package for region, signaling that Baltic states are part of military alliance.
Well, yes: Russia did warn repeatedly that any escalations against east Ukraine citizens will provoke a retaliation, and when the Ukraine army launched its latest (however brief) anti-terrorist campaign, which lasted for about 12 hours before Kiev pulled it back after seeing a massive Russian army surge on its border it made sure of just that. Russia also warned NATO that any buildup in its forces would be met in kind. And since NATO did build up forces in East and Central Europe, why should one be surprised by Russia's response.
It is a very simple game theory strategy: tit for tat. And now we have finally entered the constant mutual defection phase. This will continue until at one point the cost to a player to continue defecting will be great enough that a military "release" will be the only option.
http://www.zerohedge.com/news/2014-04-25/russian-doomsday-plane-spotted-flying-circles-finland-border
Russian "Doomsday Plane" Spotted Flying By Finland Border
Submitted by Tyler Durden on 04/25/2014 13:24 -0400
The last time the Russian "Doomsday Plane" was seen in the air doing its trademark loops at 27,000 feet telegraphing Vladimir Putin was somewhere nearby, was on March 31, just days after the formerly Ukrainian region was annexed by the Kremlin. Until today, when over the past 4 hours, the Tu-214 has been quietly circling in position just shy of Finland and the Baltics, where as it is known, NATO has been depositing hundreds of western soldiers in a "defensive" build up.
What is the "Doomsday Plane"? Here is a reminder:
The Tupolev Tu-214SR is a Russian Special Mission Aircraft believed to act as a communication relay aircraft. This kind of aircraft is often dispatched by the Russian Air Force to accompany Putin’s presidential aircraft on its travels and for this reason it is considered the Russian version of the U.S. E-4B, a so-called “doomsday” plane, with an airborne command and control role.* * *America isn't the only superpower with a "Doomsday Plane" for its head of state. When Russian President Vladimir Putin needs to escape danger, he hops aboard this top-secret flying communications center.A special missions variant of the Tupolev Tu-214 commercial transport aircraft, the Tu-214SR is Russia's answer to the US E-4B, an airborne command and control plane built specifically for the Russian president's use and considered successor to the Ilyushin Il-20 Coot, which has been in service for the better part of four decades. Produced by Aviastar SP and Kazan Aircraft Production Association, the twin-engine, long-endurance jet can carry 62 passengers with comparable range and speed to a Boeing 757. But unlike the Boeing, the Tu-214SR is packed to the gills with cutting-edge sensor and communications equipment.While significantly less is known about capabilities of the 214SR than the E-4B , we do know that it carries an MRC-411 multi-intelligence payload, which includes electronic intelligence (ELINT) sensors, side-looking Synthetic Aperture Radar (to spot incoming air threats from long range), and a variety of Signals Intelligence (SIGINT) and Communications Intelligence (COMINT) equipment. Four onboard generators provide ample amperage while a set of external fuel tanks allow the plane to remain aloft for trips up to 10,000 km.The two such 214SRs entered service in 2008 with the Presidential Special Applications Squad and are operated by a crew of four. However, the plane was only declassified last year when it made its public debut at the Moscow Air Show. Since then, it's been spotted in the skies above both the Sochi Olympics, and more recently—and ominously—in Crimea.
Why was the Doomsday Plane circling so close to the Baltics today of all days, and is this nothing but a welcome sign from Russia to the NATO build out in Eastern and Central Europe? And does it indicate that Putin was - as he usually does - either traveling in the vicinity, or is it an omen of something more ominous?
As can be seen on the image below (courtesy of Flightradar24), after circling for hours just east of the Finland border, it is now en route to land back in St. Petersburg, from where it took off several hours ago.
Russia goes silent.....
http://www.thedailybeast.com/articles/2014/04/25/exclusive-putin-halts-all-talks-with-white-house.html
WORLD NEWS
04.25.14
Exclusive: Putin Halts All Talks With White House
Since the invasion of Crimea, President Vladimir Putin and President Barack Obama have had regular phone calls in an often half-hearted attempt to deescalate the ongoing crisis inside Ukraine. But as the U.S. and EU prepare to unveil new sanctions against Russia, Putin has decided the interactions should stop. The Kremlin has ended high-level contact with the Obama administration, according to diplomatic officials and sources close to the Russian leadership. The move signals an end to the diplomacy, for now.“Putin will not talk to Obama under pressure,” said Igor Yurgens, Chairman of the Institute for Contemporary Development, a prominent Moscow think tank, and a close associate of Russian Prime Minister Dmitry Medvedev. “It does not mean forever.”
Obama and Putin last spoke over the phone on April 14, a call that the White House said was initiated at Moscow’s request. Obama urged Putin in the call to end Kremlin support for armed, pro-Russian activists creating unrest in eastern Ukraine. Obama also warned that the U.S. would impose more “costs” on Russia if Putin continued his current course. According to the Kremlin’s readout of the call, Putin denied Russian interference in eastern Ukraine and said “that such speculations are based on inaccurate information.”
Obama and Putin have spoken to each other about Ukraine regularly over the past weeks, including calls on March 28, March 16, and March 6. But that these calls are now on hold for the indefinite future, due to their lack of progress and frustration on both sides.
On Friday, Kerry warned that new round of American financial assaults on Russia were on the way. “We are putting in more sanctions, they will probably come Monday at the latest,” he said in a private meeting in Washington, according to an attendee. Russian businesses and individuals close to Putin would be on the sanctions list, he added.
Diplomatic sources close to the process confirmed that Putin is not interested in speaking with Obama again in the current environment. The two leaders might talk again in the future but neither side is reaching out for direct interaction, as they had been doing since the Ukraine crisis began. The failure of the agreement struck last week in Geneva between the contact group of the U.S., EU, Russia, and Ukraine has made further direct Washington-Moscow interactions moot.
“‘We are putting in more sanctions, they will probably come Monday at the latest,’ Kerry said. Russian businesses and individuals close to Putin would be on the sanctions list, he added.”
Other top U.S. officials are also now out of direct contact with their Russian interlocutors. Defense Secretary Chuck Hagel is also getting the cold shoulder from his Russian counterpart Sergey Shoygu. Pentagon officials have reached out to Russia on Mr. Hagel’s behalf within the past 24 hours but have not gotten any response, according to Pentagon Spokesman Army Col. Steve Warren.
That leaves the channel between Secretary of State John Kerry and Russian Foreign Minister Sergei Lavrov as the only semi-functioning high-level diplomatic channel between Washington and Moscow. But even that often-frosty relationship has further chilled as the two sides hurled insults and accusations this week.
After speaking over the phone Monday and then again Tuesday about the now defunct Geneva agreement on Ukraine, Kerry and Lavrov are now conducting diplomacy through the press—and leveling harsh and undiplomatic charges against one another.
Kerry appeared at the State Department press room Thursday afternoon to declare publicly that Russia was not keeping its word.
“For seven days, Russia has refused to take a single concrete step in the right direction,” Kerry scolded. “Not a single Russian official, not one, has publicly gone on television in Ukraine and called on the separatists to support the Geneva agreement, to support the stand-down, to give up their weapons, and get out of the Ukrainian buildings. They have not called on them to engage in that activity. “
Kerry also lashed out at Russia Today, the Kremlin-sponsored television network, which Kerry said spends all its time “to propagandize and to distort what is happening or not happening in Ukraine.”
“Instead, in plain sight, Russia continues to fund, coordinate, and fuel a heavily armed separatist movement in Donetsk,” Kerry accused.
Lavrov publicly responded, “The U.S. is trying to pervert everything that is going on in Ukraine.”
On Friday, Kerry summed up his recent interactions with his Russian counterpart, “I’ve had 6 conversations with Lavrov in the last few weeks. The last one was Kafka-esque... It was bizarre.”
and.....
http://www.washingtontimes.com/news/2014/apr/25/chuck-hagel-cant-get-russian-defense-counterpart-p/
With Ukraine in turmoil, Hagel can’t get Russian counterpart to take his calls
Defense Secretary Chuck Hagel has been unable to get Russian Defense Minister Sergei Shoigu on the phone amid escalating tension near the country’s shared border with Ukraine.
Mr. Shoigu announced Thursday that Russia planned to engage in a new series of military exercises near the Ukraine border. The military move, he said, is in response to ongoing NATO training exercises in Poland and the death of at least two pro-Russia insurgents in eastern Ukraine.
Army Col. Steve Warren, a Pentagon spokesman, told reporters Friday that Mr. Hagel has been trying to communicate with Russian officials but has yet to hear back from Mr. Shoigu or anyone else. Pentagon officials have reached out to Russia on Mr. Hagel’s behalf within the past 24 hours, according to Col. Warren.
“We have made it clear to the Russians that Secretary Hagel is available for a phone call at any time,” he said. “We have reached out to them and made it very to them that he is willing to speak to his counterpart there at any time.”
Mr. Hagel intends to call on the Russians to de-escalate the situation in Ukraine and express to them that the new round of military exercises along the Ukrainian border are unhelpful, Col. Warren said. The Russians, he said, “need to withdraw their troops from the Ukranian border and place them back into their garrisons.”
Russia has “a broad array of forces aligned along the Ukranian border, according to Col. Warren. The Pentagon, he said, is tracking troop movements throughout the region and is “seeing all flavors of the Russian-combined armed force.”
http://freebeacon.com/national-security/pentagon-russian-spy-ship-tug-operating-near-u-s/
Pentagon: Russian Spy Ship, Tug Operating Near U.S.
Ships near nuclear submarine base at Kings Bay, Ga.
BY:
A Russian intelligence-gathering ship has been operating off the U.S. East Coast and near the Gulf of Mexico for the past month, the Pentagon said Thursday.
“We are aware that the Russian ships Viktor Leonov and Nikolay Chiker are currently operating in waters that are beyond U.S. territorial seas but near Cuba,” said Lt. Col. Tom Crosson, a Pentagon spokesman. “We respect the freedom of all nations, as reflected in international law, to operate military vessels beyond the territorial seas of other nations.”
The Leonov is an intelligence gathering ship outfitted with high-tech electronic spying gear. The Chiker is an ocean-going naval tug that has been accompanying the spy ship on its mission.
Pentagon officials suspect the ships were part of a spying operation since March against the U.S. nuclear missile submarine base at Kings Bay, Ga. and other U.S. military facilities
Both ships were detected operating off the coast of Florida near the U.S. Naval Station Mayport, Fla., which is south of the Naval Submarine Base Kings Bay.
The Russian intelligence gathering coincides with heightened tensions between the United States and Russia over Moscow’s recent military annexation of Ukraine’s Crimea.
An official said it is possible that the electronic spying is related to watching U.S. nuclear missile submarines as part of a Russian nuclear exercise.
According to Russian military press reports, some 10,000 Russian troops and 1,000 pieces of military equipment of the Strategic Missile Forces took part in an exercise April 17 to 19—coinciding with the transit of one of the ships, the Chiker, to Cuba from the coast off northern Florida on April 19.
“The exercises will test the cohesiveness and skills of units and commands in the process of alerting and the achievement of training objectives under various circumstances and in any time of the day,” Russian defense spokesman told Interfax.
The Chiker also is known to support submarines and is equipped with lift capability for servicing Russian submarines.
U.S. officials said in 2012 a Russian Akula attack submarine was detected operating near the East Coast. The Navy denied the sub sailed undetected in the Gulf of Mexico.
Crosson declined to comment further on the Russian naval activities. “It wouldn’t be appropriate for me to talk about the operations of non-U.S. vessels operating beyond U.S. territorial seas,” he said.
According to military enthusiast websites, the Leonov is a Vishnya-class medium intelligence ship home ported in Severomorsk and is part of the Kola Peninsula naval forces.
The ship was commissioned in 1988.
The ships are designed for signals and communications intelligence gathering through an array of ship-borne sensors. It also is equipped with two 30-millimeter guns and anti-aircraft missiles.
Wire services reports indicated the Leonov docked in Havana in February and March, and again this month.
Ukraine army launches next stage of military op 'to isolate Slavyansk'
Kiev authorities say “the second stage” of the military operation in the eastern Ukrainian city of Slavyansk has been launched, which will “completely isolate” the anti-government stronghold. Self-defense forces are preparing for an assault.
Ukrainian troops were ordered to commence the next stage of the so-called ‘anti-terrorist operation’ around 12pm local time (10:00 GMT), according to coup-appointed acting head of presidential administration Sergey Pashinsky.
“The aim is to completely isolate Slavyansk to localize the problem. At the moment, the operation is ongoing,” the official told media as quoted by RIA Novosti.
“The aim is to completely isolate Slavyansk to localize the problem. At the moment, the operation is ongoing,” the official told media as quoted by RIA Novosti.
The military do not intend to storm Slavyansk, fearing civilian casualties, the Ukrainian Security Service has claimed.
“We will not go the length of [civilian] casualties, to storm the city. We understand that this may lead to many people coming to harm,” General Vasily Krutov, first deputy head of the Ukrainian Security Service (SBU), was quoted as saying by Interfax.
Pashinsky meanwhile repeated earlier Kiev’s claims that “terrorists have placed their key strong points in kindergartens and hospitals,” branding the situation in Slavyansk as “classic terrorism.”The claims have been dismissed by Slavyansk activists as “ridiculous.”
Despite the promises of no storming of the city planned, Slavyansk self-defense activists have braced for an assault, which they fear may soon start under the guise of the city’s “blockade.”
Self-defense activists cited by ITAR-TASS have claimed that a convoy of military armored vehicles and troops bearing “no insignia” was spotted moving in the direction of Slavyansk and then “disappeared in the woods” surrounding the city.
Pashinsky meanwhile repeated earlier Kiev’s claims that “terrorists have placed their key strong points in kindergartens and hospitals,” branding the situation in Slavyansk as “classic terrorism.”The claims have been dismissed by Slavyansk activists as “ridiculous.”
Despite the promises of no storming of the city planned, Slavyansk self-defense activists have braced for an assault, which they fear may soon start under the guise of the city’s “blockade.”
Self-defense activists cited by ITAR-TASS have claimed that a convoy of military armored vehicles and troops bearing “no insignia” was spotted moving in the direction of Slavyansk and then “disappeared in the woods” surrounding the city.
And....
http://www.zerohedge.com/news/2014-04-25/stocks-slammed-lower-ukraine-claims-invasion-possible-any-moment
Stocks Slammed Lower As Ukraine Claims "Invasion Possible At Any Moment"
Submitted by Tyler Durden on 04/25/2014 14:38 -0400
While stocks have been fading every bounce so far - and credit markets are particularly weak - it seems the following headline sparked the most recent wave of selling:
- *UKRAINE HAS INFORMATION THAT IT IS 'IN DANGER', LUBKIVSKY SAYS
- *LUBKIVSKY SAYS INVASION IS POSSIBLE 'AT ANY MOMENT'
The Russell is the worst on the day but the Nasdaq is now at the day's lows, and all are negative for the week and April.
Credit leading the way...
as all the indices are sliding hard
From earlier today......
http://www.zerohedge.com/news/2014-04-25/nato-allies-unreassured-us-destroyer-departs-black-sea
( US moving Destroyer The Donald Cook out of harm's way ahead of what my come ??? )
NATO Allies "Unreassured" As US Destroyer Departs Black Sea
Submitted by Tyler Durden on 04/25/2014 08:39 -0400
Just 2 weeks ago, the USS Donald Cook entered The Black Sea on a mission to "reassure NATO allies and Black Sea partners." So, one wonders what it is to be made of the fact that, as ITAR-TASS reports, the US warship USS Donald Cook with the Aegis missile defense system onboard has left the Black Sea, according to a Russian Defense Ministry source. This leaves only the USS Taylor on its mission of "peace and stability"... should NATO allies be un-reassured?
On the way in...
“The Donald Cook’s mission is to reassure NATO allies and Black Sea partners of America’s commitment to strengthen and improve interoperability while working towards mutual goals in the region,” Pentagon spokesman Army Col. Steven Warren said.
Quiet on the way out...
USS Donald Cook left the Black Sea on Thursday , passed through the straits and entered the Aegean Sea, the source said.Two NATO warships remain in the Black Sea. French ship Dupuy de Lome and USS Taylor entered the sea on April 10 and April 22, respectively.The US frigate is in the western part of the sea near the Romanian port of Constanta, and the French ship is in the Georgian port of Batumi.The French destroyer Dupleix, earlier planned to enter the Black Sea on April 26-27, was not expected to arrive there at the time, the official said.USS Taylor previously remained in the sea from February 5 to March 9, eleven days longer than the maximum period of 21 days set by the Montreux convention for presence of warships from other regions in the Black Sea. The overstay was officially explained by propeller repair.
We can only assume that this means mission accomplished for the US... or maybe they see where it's heading and prefer to be less exposed?
http://www.zerohedge.com/news/2014-04-25/ukraine-warns-putin-we-will-eliminate-invaders-after-pro-russian-forces-down-ukraine
( Ukraine expects " provocation " just before Eastern Ukraine Regions Referendums ! )
Ukraine Warns Putin "We Will Eliminate Invaders" After Pro-Russian Forces Down Ukraine Chopper
Submitted by Tyler Durden on 04/25/2014 08:19 -0400
UPDATE: Ukraine Says Provocations Possible Over May 1-9 Holidays
The fighting-talk (and actions) is growing louder from Eastern Europe. Following Lavrov's "bloody justice" comments, Ukraine's Acting Head of the Presidential Administration Serhiy Pashynskyi expects a Russian invasion is imminent, warnings that "in case Russian troops cross the Ukrainian border we will qualify it as military invasion and eliminate invaders."
These strongly worded comments come after a Ukrainian military helicopter exploded at a base near the eastern town of Kramatorsk (held by pro-Russian forces) on Friday after being hit by a rocket-propelled grenade.
Pashynskyi concludes, rather ominously, "I would not recommend Mr. Putin experiment with lives of his servicemen."
A Ukrainian military helicopter exploded at a base near the eastern town of Kramatorsk on Friday after being hit by a rocket-propelled grenade, officials in Kiev said.
The Mi-8 helicopter was struck as it was on the tarmac of the base's landing zone. Its pilot managed to escape but was wounded, they said.
The nearby town of Kramatorsk is one of several under the control of pro-Kremlin gunmen.
+++++++++++++++
Acting Head of the Presidential Administration Serhiy Pashynskyi does not exclude the invasion of Russian troops on the territory of Ukraine at any time but Ukrainian servicemen are ready for that. It was stated by him in the course of the briefing.
"Unfortunately, it can happen at any time. In case Russian troops cross the Ukrainian border we will qualify it as military invasion and eliminate invaders," he said. He emphasized that "any false statements about some humanitarian mission" of the Russian government will not be perceived as an argument by Ukraine.
At the same time, he noted that Ukrainian servicemen are prepared for a possible attack of Russia.
"One and a half months ago our army was in complete ruins. To date, all modest resources of our state were allocated for its modernization and armament. I would not recommend Mr. Putin experiment with lives of his servicemen," S. Pashynskyi noted.
http://www.zerohedge.com/news/2014-04-25/ruble-tumbles-despite-russian-rate-hike
Ruble Tumbles Despite Russian Rate Hike
Submitted by Tyler Durden on 04/25/2014 07:52 -0400
The USDRUB rate is back above 36.00 - nearing its record lows - despite a surprise Russian rate hike this morning aimed at stalling the capital outflows. It seems Lavrov's comments that Kiev will face "bloody justice" geopolitical angst is trumping any arbitrage or macro data flows for now. Russian stocks are also fading.
The Ruble continues to weaken...
Goldman's view of the rate hike...
The CBR unexpectedly raised all its rates by 50bp and the key rate now stands at 7.5%, citing increased risks to its 5% end-year inflation target stemming from more pronounced exchange rate pass-through, a rise in inflation expectations and food price dynamics.In addition, the CBR indicated that it does not intend to lower policy rates in "the coming months" and that today's decision should ensure that inflation does not exceed 6% at year-end. In our view, there are two possible explanations for today's surprise rate hike: (i) concerns about risks to inflation expectations and CBR credibility against the backdrop of above-target inflation; and (ii) a desire to reduce demand for CBR liquidity provision so that the repo rate once again becomes the binding and market-determining policy rate.We think raising the key rate to a level where the higher rates, including the FX swap rate, do not draw demand is likely a prerequisite for resuming the move towards introducing greater Ruble flexibility.The fact that the CBR has raised rates today therefore suggests to us that the Bank intends to move in this direction more quickly than anticipated. Separately, the CBR announced the introduction of a new 3-year liquidity provision facility at 6.5% against collateral of state-guaranteed loans for investment projects but did not provide further details on eligible collateral, allotment or timing.We believe that the facility is at this stage more experimental and we will need to see the project pipeline to see its impact on liquidity and rates. Nevertheless, in our view it is a step backwards towards less transparency and a less equal playing field in the banking sector.
As Ransquawk adds, its been a volatile morning...
The Russian Micex traded lower at the start of the session after Russia was cut by S&P from BBB to BBB-. However, losses were trimmed after Russian foreign minister Lavrov said Russia will push to de-escalate the Ukraine conflict despite accusing US Secretary of State Kerry of using a prosecutorial tone.
This was later followed by reports of a Ukraine helicopter damaged after shot by a sniper and comments from Russian President Putin saying Russia should increase production of anti-missile systems.
http://www.zerohedge.com/news/2014-04-25/furious-russia-downgraded-just-above-junk-sp-proposes-scorched-earth-retaliation-aga
Furious Russia, Downgraded To Just Above Junk By S&P, Proposes "Scorched Earth" Retaliation Against NATO Countries
Submitted by Tyler Durden on 04/25/2014 04:42 -0400
- Bond
- China
- Eurozone
- France
- International Monetary Fund
- Money Supply
- Newspaper
- POMO
- POMO
- Rating Agency
- Sovereigns
- Ukraine
Cyprus and Russia - what's the difference (aside from the fact that the former was a money laundering offshore center of the latter until last year of course)?
If you said one is a lackey to statist, selfish banker interests, and after having its economy thoroughly destroyed by the great doomed European sociopolitical (and pathological) experiment, came crawling back to its Eurozone masters, while the other couldn't care one bit about Pax Petrodollariana and the global central bank cabal, you are right. In which case it will also be clear why a few hours ago that joke of a rating agency, Standard & Poor's, which also earlier announced it was "affirming" France at an AA rating making it very clear it will no longer accept being sued for telling the truth and downgrading sovereigns or otherwise have its offices abroad raided, not only upgraded Cyprus from B- to B (please deposits your funds in Cyprus banks now: they are safe, S&P promises), but - far more importantly - delivered a political message to the Kremlin, and downgraded Russia from BBB to BBB-, one short notch away from junk status. This was the first downgrade of Russia by S&P since December 2008.
"In our view, the tense geopolitical situation between Russia and Ukraine could see additional significant outflows of both foreign and domestic capital from the Russian economy and hence further undermine already weakening growth prospects," S&P wrote in its report.Moscow's MICEX stock index fell by 1.5% after the move. The ruble weakened 0.6% against the dollar to 35.977.A further cut to junk status would be a big move, given Russia's relatively modest level of debt, according to Tim Ash, an economist at Standard Bank."But if the crisis in Ukraine deteriorates further, and we see sustained capital flight and pressure on the ruble and Russian markets further, then it is possible," he said.
Russia's response was prompt.
First, in retaliation to the downgrade, Russian economy minister Alexei Ulyukaev said S&P’s downgrade of Russia’s rating was expected by investors, won’t significantly change their behavior, adding the obvious that the decision to cut Russia’s rating was partly political, partly based on economic situation. In other words, entirely symbolic - it is not as if Russia has access to bond markets anyway, plus as we wrote earlier this week in "Why Putin Is Smiling At The Bond Market's Blockade Of Russia", it is not as if it needs them.
But far more importantly, and ahead of yet another round of western sanctions which appears imminent unless Obama is to look even more powerless than he currently is (granted, a difficult achievement), Russian presidential adviser Sergei Glazyev proposed plan of 15 measures to protect country’s economy if sanctions applied, Vedomosti newspaper reports, citing Glazyev’s letter to Finance Ministry. According to Vedomosti as Bloomberg reported, Glazyev proposed:
- Russia should withdraw all assets, accounts in dollars, euros from NATO countries to neutral ones
- Russia should start selling NATO member sovereign bonds before Russia’s foreign-currency accounts are frozen
- Central bank should reduce dollar assets, sell sovereign bonds of countries that support sanctions
- Russia should limit commercial banks’ FX assets to prevent speculation on ruble, capital outflows
- Central bank should increase money supply so that state cos., banks may refinance foreign loans
- Russia should use national currencies in trade with customs Union members, other non-dollar, non-euro partners
In other words, a full-blown scorched earth campaign by Russia.
Granted, Russian holdings of US Treasurys are not that substantial (and could be monetized entirely in three months of POMO by the Fed), and western financial linkages to Russia, aside from trade routes, are not life-threatening, but if Russia were to take the baton, and other BRIC countries, already furious by the recent US decision to not boost their IMF status, follow suit, then Obama's life is about to become a living nightmare. Especially, if that most important BRIC member - China - does any of the many things it can do to indicate if, in this brand new Cold War, it is with or against the US...
http://www.zerohedge.com/news/2014-04-25/ukraine-accuses-russia-wanting-start-world-war-iii
Ukraine Accuses Russia Of Wanting To Start World War III
Submitted by Tyler Durden on 04/25/2014 04:56 -0400
Troubles in Ukraine reach to Southern Region of Odessa......
http://en.itar-tass.com/world/729556
Tired of being ignored by the west, which keeps promising financial and military aid, yet has done precisely nothing, Ukraine is stepping up the rhetoric to Hank Paulson levels. Moments ago, acting Ukraine PM Arseniy Yatsenyuk said at a cabinet meeting in Kiev that Russia wants to remove Ukraine’s pro-European government. Well of course - Russia has made it quiet clear, quite often how it feels about the illegitimate, "coup" government in Kiev which took power after Yanukovich signed a memorandum with the west that saw him remain in power until the next presidential election. But then Yatsenyuk also said:
- Russia has done nothing to implement Geneva accord
- Ukraine will continue to comply with Geneva accord
- Ukraine urges Russia to keep promises, condemn extremists
- Ukraine calls on international community to unite against Russia,
- Russian invasion will turn into Europe-wide conflict, and the punchline:
- Russia Wants to Start Third World War
So... in keeping with the Hank Paulson mold, could the west just sign the three page term sheet by the acting PM and deploy its armies to defend the country against the Russian bear. Yeah, crickets, much to the chagrin of HFT algos for which nothing is more bullish than flashing red headlines declaring the World War III buying momentum ignition now open.
http://rt.com/news/154828-kramatorsk-ukraine-airfield-explosion/
Series of explosions rock Kramatorsk airfield in eastern Ukraine (VIDEOS)
Kramatorsk airfield in eastern Ukraine is covered with smoke spreading over the area according to numerous videos emerging online. Explosions are heard in near the site.
According to preliminary reports of Kramatorsk.info, several explosions took place at about 11am local time (09:00 GMT). The explosions were followed by fire and smoke.
Ukraine’s Security Service (SBU) has confirmed the information about the explosion of the helicopter at the city airfield.
А video posted online shows a loud explosion at the site where a plume of smoke is already seen. The smoke was swiftly followed by an explosion. Witnesses say fire was also seen in the area of the blast.
There is a big amount of conflicting reports saying what is causing the explosions.
Meanwhile, according to SBU’s General Vasily Krutov, the helicopter was targeted by a sniper, who shot the fuel tank. He added that the pilot was injured in the incident.
Local witnesses add that the helicopter of Kiev military crashed in the airfield.
“An Mi-8 airplane has exploded at Kramatorsk airfield, with no victims reported. A pilot managed to jump [from the plane],” Dmitry Tyimchyuk, the head of the Center for War-Political Investigations told Kramatorsk.info news, “The preliminary theory is that the helicopter caught fire during a warm-up before a flight.
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http://rt.com/news/154844-life-news-donetsk-journalists/
Russian news crew 'attacked and abducted' by 30 masked men in Donetsk
Correspondents from Russia’s LifeNews media outlet have been attacked by an armed group and kidnapped while they were heading for an interview with an opposition leader.
Anti-Kiev protesters believe the seizure is a covert operation by Ukrainian security forces.
Journalist Julia Shustraya and Mikhail Pudovkin arranged a meeting with an activist of the federalization movement in Ukraine, nicknamed Topaz. On the way to the interview, their car was cut up by a dark blue Renault Logan with armed men inside.
An eyewitness said there were five young men, about 25 years old, in the car, armed with Kalashnikov assault rifles, Makarov pistols and wearing body armor. They said they were police, though they wore no uniform. Both journalists and their cameraman were ordered to get on their knees, stripped of their documents and electronic devices. Then about 10 police officers arrived.
The journalists were taken away, otherwise unharmed. Their current whereabouts remain unknown.
On Thursday, Ukraine’s SBU Security Service reported that a producer of the Russian NTV channel, Belorussian national Stepan Chirich, was detained in the city of Pershotravensk in the Dnipropetrovsk region. Chirich currently remains in custody, after being accused of bringing an undeclared video camera into Ukraine. A Ukrainian cameraman from the city of Lugansk who accompanied Chirich also remains under arrest.
http://rt.com/business/154568-gazprom-demands-ukrainian-debt/
Gazprom sends Ukraine $11.4bn bill for unshipped gas
Russia’s Gazprom, the world’s biggest natural gas producer, has sent a $11.4 billion bill to Ukraine’s Naftogaz. The money is for the two thirds of the gas it failed to use under its 2009 take-or-pay contract .
According to the contract Naftogaz had to consume 41.6 billion cubic meters of gas last year, while Ukraine used only 12.9 billion cubic meters, Bloomberg quotes Aliona Osmolovska, a spokeswoman for the Ukrainian company as saying.
In the take-or-pay contract Ukraine is obliged to pay for the volume agreed, whether it is used or not.
Ukraine is looking to avoid dependence on Russia, accusing President Vladimir Putin of using energy exports as a political tool.
About half of Ukrainian gas imports come from Russia and 15 percent of Europe’s annual gas consumption goes through Ukrainian pipelines. This makes the energy issue a central problem as tensions with Russia escalate.
“Russia is clearly whipping up tension before Ukraine’s talks with Europe, understanding that Naftogaz won’t pay,” Bloomberg quotes Bohdan Sokolovskyi, an energy adviser to former Ukrainian President Viktor Yushchenko. “Under the contract, Gazprom truly has the right to demand $11.4 billion. The other issue is the contract was unfair.”
In the talks with Europe Ukraine wants to reverse the flow in EU-bound pipelines to supply its domestic needs.
Last week Vladimir Putin said that Gazprom will switch to a pre-payment system next month if Ukraine doesn’t settle the accumulated $2.2 billion gas debt.
Currently Ukraine needs to pay $485 per a thousand of cubic metres of Russian gas, which compares to $268.5 agreed between Russia and Ukraine in December.
Kiev has repeatedly said this price is “unacceptable”, purely "political" and isn't ready to pay it.
http://rt.com/business/154780-visa-suffers-russian-sanctions/
Visa admits Russia sanctions hitting business
Visa, the world’s largest card services company, says its revenue growth slowed to a four-year low, as cross-border operations with Russia were hit by the political tension over Ukraine.
"We are caught between the politics of the United States and the politics of Russia,"Reuters quotes Byron Pollitt, Visa’s Chief Financial Officer."We're clearly seeing a drop-off in cross-border volume, and sanctions are expected to have some impact on volume."
For the first time in more than four years Visa’s quarterly revenue growth declined to single digit percentages amid a strengthening dollar. In the second quarter ended March 31 it was 7 percent, down from 11 percent in the first quarter. The company projects revenue growth to slow further this quarter.
In March Visa and another US-based payment system MasterCard suspended services to two Russian banks after President Barack Obama imposed sanctions on Russia.
President Vladimir Putin said Russia would develop its own payment system, which should start operating in about 6 months.
Visa in turn said it has assessed the situation and hopes it would still have a “meaningful opportunity” to continue business with Russia, as it would benefit both sides.
"We have 100 million cards there and it is not in anyone's best interest, inclusive of the Russians, to make those cards not available to their own citizens," Pollitt said.
Visa and MasterCard control 90 percent of the Russian market.
Troubles in Ukraine reach to Southern Region of Odessa......
http://en.itar-tass.com/world/729556
Seven wounded as gunmen hurl bomb at Ukraine’s Odessa checkpoint
April 25, 11:05 UTC+4
Police has launched an investigation into a blast that went off at a checkpoint of Kiev's armed gunmen in the Ukrainian Black Sea port city of Odessa
Police has launched an investigation into a blast that went off at a checkpoint of Kiev's armed gunmen in the Ukrainian Black Sea port city of Odessa
ODESSA, April 25. /ITAR-TASS/. Police has launched an investigation into a blast that went off at a checkpoint of armed gunmen from Ukraine’s capital, Kiev, in the Ukrainian Black Sea port city of Odessa. Gunmen hurled a bomb at the checkpoint from a car driving nearby, the regional police department told ITAR-TASS.
“The explosion occurred at 4.00 am local time on the road leading to Ovidiopol at one of largest wholesale marketplaces in the region. Wounded people affirmed that an explosive device was hurled at the checkpoint from a passing car. Seven people at the bonfire have got leg fragmentation wounds. All of them were taken to the city hospital, their life is not in danger,” the regional police department told ITAR-TASS.
“A group of detectives and operatives, bomb disposal technicians are investigating details of the blast at the crime scene,” the regional police department said.
Chief of the regional police department Petro Lutsyuk has demanded earlier that Odessa authorities should take away armed activists sent from Kiev as the latter destabilize the current situation in the region. “As a large number of people who were left in Kiev without supervision gathered in the city, it was decided to dispatch these formations to the city of Odessa. We do not need this. They came and created an unstable situation,” Lutsyuk said at a session of the regional council that opened on Thursday. In his words, the people “have set up 12 checkpoints in the region with an unclear legal status at which more than 500 people are on duty in shifts.”
Local media report numerous conflicts flaring up at these checkpoints. Odessa residents and guests of the city complain that they are stopped, checked and their money is extorted, meanwhile, numerous conflicts are sparking up that end in brawls, there were several incidents when glasses of checked cars were broken by clubs. Last week the police have spotted an arms depot in Odessa that belongs to radical nationalist organization Right Sector. The weapons depot contained cartridges, cold steel, clubs, incendiary bottles and smoke-puff charges .
Volodymyr Nemirovsky appointed as governor of Odessa Region by Kiev authorities spoke in protection of checkpoints which, in his view, “are needed to control police’s activity.”
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