U.S. ally cuts off communications with Obama and seeks new trade outside dollar
July 22, 2014
On July 21, Turkish Prime Minister Tayyip Erdogan spoke in an interview with Turkey’s ATV television, and confirmed that his office had cut off direct communications with President Obama, and in fact, were no longer even answering calls received from the White House. In addition to this startling announcement regarding a long standing U.S. ally, the Russian Ministry of Economic Development followed this up with a press release that stated that Turkey was quickly moving away from their reliance on the dollar as the global reserve currency, and is seeking increased trade with Russia in a mutually beneficial exchange of self-contained sovereign currencies.
Turkey’s cold shoulder against President Obama and the U.S. began shortly after the Syrian crisis failure by the United States back in September of 2013. And since that time, Turkey has begun to move away from its U.S. alliance and has started seeking increased trade agreements with America’s primary adversary Russia. Already the eighth ranked trading partner for Russia, Turkey is proposing an even greater share of this pie, and is willing to accede to Russia and China’s agenda for a de-dollarized trade system that cuts out the reserve currency from most or all transactions.
In 2013, the volume of trade between the countries amounted to 32.7 billion dollars. Russia is the second (after the EU) among foreign trade partners of Turkey, and Turkey – the eighth largest trade partner of Russia.
Minister Alexei Ulyukayev said that last year 4.5% drop was recorded in the Russian-Turkish trade. This is largely due to the unfavorable global economic environment. However, in January-May this year compared to the same period last year, turnover grew by 0.6%, which was due to increased deliveries of Russian exports. "Our task is to make every effort to save the positive dynamics of bilateral trade," – said the Minister.
A chessboard drenched in blood
By Pepe Escobar
"The intelligence and facts were being fixed around the policy." Everyone remembers the Downing Street Memo, which unveiled the Bush/Blair "policy" in the run-up to the 2003 bombing/invasion/occupation of Iraq. The "policy" was to get rid of Saddam Hussein via a lightning war. The justification was "terrorism" and (non-existent) weapons of mass destruction (WMD), which had "disappeared", mounted in trucks, deep into Syria. Forget about intelligence and facts.
The tragedy of MH17 – turned, incidentally, into a WMD – might be seen as a warped rerun of imperial policy in Iraq. No need for a memo this time. The "policy" of the Empire of Chaos is clear, and multi-pronged; diversify the "pivot to Asia" by establishing a beachhead in Ukraine to sabotage trade between Europe and Russia; expand the North Atlantic Treaty Organization to Ukraine; break the Russia-China strategic partnership; prevent by all means the trade/economic integration of Eurasia, from the Russia-Germany partnership to the New Silk Roads converging from China to the Ruhr; keep Europe under US hegemony.
The key reason why Russian President Vladimir Putin did not "invade" Eastern Ukraine – as much as he’s been enticed to by Washington/NATO – to stop a US military adviser-facilitated running slaughter of civilians is that he does not want to antagonize the European Union, Russia’s top trading partner.
Crucially, Washington’s intervention in Kosovo invoking R2P – Responsibility to Protect – was justified at the time for exactly the same reasons a Russian intervention in Donetsk and Luhansk could be totally justified now. Except that Moscow won’t do it – because the Kremlin is playing a very long game.
Cockpit Voice Recorder of MH17 Not Tampered With, Say Dutch Investigators
Updated: July 23, 2014 23:34 IST
The Hague: Dutch investigators, who examined the downed MH17 flight of Malaysia Airlines in Ukraine on July 17, today said that data from the cockpit voice recorder was intact and had not been tampered with.
"The cockpit voice recorder was damaged but the memory module was intact. Furthermore, no evidences or indications of manipulation of the cockpit voice recorder were found", the Dutch Safety Board (OVV) said as the black boxes were being analysed in Britain.
German Economy Hit by US, EU Sanctions on Russia
The Boomerang Effect: Sanctions on Russia Hit German Economy Hard
By Matthias Schepp and Cornelia Schmergal
Companies like oil producer Rosneft — here, a Rosneft drill site in eastern Siberia — have been slapped with US sanctions. That has created problems for German companies.
The United States and Europe last week announced the imposition of stronger sanctions against Russia in response to the ongoing crisis in Ukraine. German industry may be among the losers.
It wasn’t that long ago that Kremlin officials could hardly avoid laughing when asked about the economic sanctions imposed on Russia by the West. As long as every NATO member state jealously sought to protect its own business interests, things "weren’t all that bad," they gloated.
But since last week, their moods have darkened. For months, the European Union in particular had been reluctant to enact effective penalties against Moscow. Last Wednesday, though, the 28 EU heads of state and government cleared a psychological hurdle: For the first time, they opted go beyond sanctions targeting individual political leaders in Moscow, adding prohibitions against doing business with specific Russian companies that contribute to the destabilization of the situation in Ukraine. A concrete list is to be presented by the end of the month. European development banks have also been banned from providing loans to Russian companies.
The US, for its part, penalized a dozen leading Russian conglomerates, including oil giant Rosneft, natural gas producer Novatek, Gazprombank and the weapons manufacturer Kalashnikov. From now on, they are forbidden from borrowing money from American monetary institutions and from issuing medium- and long-term debt to investors with ties to the US.
Jim Sinclair’s Commentary
There are many out there that should carry this label, most certainly in the zombie banking system leveraged to OTC derivatives.
U.S. Poised to Label MetLife a Potential Threat to the Financial System
By Ian Katz and Robert Schmidt Jul 22, 2014 9:00 PM MT
A U.S. council of regulators is poised to label MetLife Inc. a potential threat to the financial system, subjecting the insurer to oversight by the Federal Reserve, two people with knowledge of the matter said.
A decision by the Financial Stability Oversight Council may come as early as July 31, when the panel is tentatively planning to meet, said the people, who asked not to be identified because the process isn’t public. The vote could be delayed briefly because the council hasn’t formally closed its review of the company, the people said.
MetLife, the biggest U.S. life insurer, could be subjected to stricter capital, leverage and liquidity requirements as a result of Fed supervision. The company has been under consideration as systemically important for more than a year, and its executives have met more than 10 times with council staff members to argue it doesn’t pose a risk.
John Calagna, a spokesman for New York-based MetLife, and Suzanne Elio, a Treasury spokeswoman, declined to comment. The council’s rules prohibit it from disclosing the names of companies unless a designation is made.
MetLife shares were little changed at $55.50 yesterday, after earlier falling as much as 1.8 percent.
The Baltic Dry Index Collapses To 18-Month Lows; Worst July Since 1986
Tyler Durden on 07/22/2014 17:51 -0400
The bulls will ignore it, shrugging that it’s merely over-supply of ships that the resurgent world economy will quickly soak up as it ‘recovers’… However, World GDP growth expectations are collapsing, trade volumes are slowing, and the Baltic Dry Index has continued to slump to its lowest since the start of January 2013 (a holiday period). For some context, this is the lowest July level for the Baltic Dry since 1986… "noise"
and then there’s this…
Jim Sinclair’s Commentary
Food inflation is not going away.
Price of Beef and Bacon Reach All-Time High
July 22, 2014 – 11:14 AM
By Ali Meyer
(CNSNews.com) – The price of beef and bacon hit its all-time high in the United States in June, according to data released Tuesday by the Bureau of Labor Statistics (BLS).
In January 1980, when BLS started tracking the price of these commodities, ground chuck cost $1.82 per pound and bacon cost $1.45 per pound. By this June 2014, ground chuck cost $3.91 per pound and bacon cost $6.11 per pound.
A decade ago, in June 2004, a pound of ground chuck cost $2.49, which means that the commodity has increased by 57 percent since then. Bacon has increased by 78.7 percent from the $3.42 it cost in June 2004 to the $6.11 it costs now.
In one month, beef increased from $3.85 in May 2014 to $3.91 in June 2014. Bacon increased from $6.05 in May 2014 to $6.11 in June 2014.
Each month, the BLS employs data collectors to visit thousands of retail stores all over the United States to obtain information on the prices of thousands of items to measure changes for the Consumer Price Index (CPI). The CPI is simply the average change over time in prices paid by consumers for a market basket of goods and services.
The BLS found that there was a 0.1 percent change in the food index in June, which tracks foods like meats, poultry, fish, eggs and dairy, as well as many others. “The index for meats, poultry, fish, and eggs increased in June, though its 0.2 percent increase was its smallest since December,” stated BLS.
“The index for food at home has increased 2.4 percent over the past year, with the index for meats, poultry, fish and eggs up 7.5 percent,” BLS stated.
Jim Sinclair’s Commentary
When it rains, it pours.
Deutsche Bank Suffers From Litany of Reporting Problems, Regulators Said
Letter From New York Fed Said Some Reports From Deutsche Bank’s U.S. Operations Were ‘Inaccurate and Unreliable’
By David Enrich, Jenny Strasburg and Eyk Henning
Updated July 22, 2014 6:57 p.m. ET
An examination by the Federal Reserve Bank of New York found that Deutsche Bank AG DB +2.56% ‘s giant U.S. operations suffer from a litany of serious financial-reporting problems that the lender has known about for years but not fixed, according to documents reviewed by The Wall Street Journal.
In a letter to Deutsche Bank executives in December, a senior official with the New York Fed wrote that reports produced by some of the bank’s U.S. arms "are of low quality, inaccurate and unreliable. The size and breadth of errors strongly suggest that the firm’s entire U.S. regulatory reporting structure requires wide-ranging remedial action."
The criticism from the New York Fed represents a rebuke to one of the world’s biggest banks, and it comes at a time when federal regulators say they are increasingly focused on the health of overseas lenders with substantial U.S. operations.
The Dec. 11 letter, excerpts of which were reviewed by the Journal, said Deutsche Bank had made "no progress" at fixing previously identified problems. It said examiners found "material errors and poor data integrity" in its U.S. entities’ public filings, which are used by regulators, economists and investors to evaluate its operations. The problems ranged from data-entry errors to not taking into account the value of collateral when assessing the riskiness of loans.
The shortcomings amount to a "systemic breakdown" and "expose the firm to significant operational risk and misstated regulatory reports," said the letter from Daniel Muccia, a New York Fed senior vice president responsible for supervising Deutsche Bank.
The New York Fed has various tools at its disposal to address shortcomings by banks it regulates. It can issue private letters demanding action, as it did with Deutsche Bank, or, in more severe cases, impose restrictions on banks’ activities.
The letter, which hasn’t been previously reported, ordered senior Deutsche Bank executives to ensure steps were taken to fix the problems. It also said the bank might have to restate some of the financial data it has submitted to regulators.
"We have been working diligently to further strengthen our systems and controls and are committed to being best in class," a Deutsche Bank spokesman said Tuesday. As part of this, he said, the bank is spending €1 billion ($1.35 billion) globally and appointing 1,300 people, including about 500 compliance, risk and technology employees in the U.S. Mr. Muccia declined to comment.