Wednesday, March 05, 2014

Today's Headlines

Bloomberg:
  • Russia Defies West’s Crimea Pleas as EU Offers Ukraine Aid. Russia defied pleas from the West to loosen its grip on Ukraine’s southern Crimea region, as the European Union promised 1.6 billion euros ($2.2 billion) in emergency aid to help the Ukrainian government avert a default. Russian Foreign Minister Sergei Lavrov said the western-backed government in Kiev no longer rules over Crimea, saying control has shifted to armed “self-defense” groups. U.S. Secretary of State John Kerry warned Russia against violating “very clear legal obligations” to uphold Ukraine’s unity. 
  • Moldova Warns of Contagion After Russia’s Intervention in Crimea. Moldovan Prime Minister Iurie Leanca said Russia’s troop buildup in Crimea, an autonomous province of Ukraine, could be replicated in other eastern European countries. “It is just a very dangerous development,” Leanca said in an interview at Bloomberg’s headquarters in New York today. “It’s indeed very contagious.”
  • China Bear Stearns Moment Seen by BofA in Solar Default Risk. A solar company’s potential default may be China’s “Bear Stearns moment,” prompting investors to reassess credit risks as they did after the U.S. lender was bailed out in 2008, according to Bank of America Corp. “We doubt that the financial system in China will experience a liquidity crunch immediately because of this default but we think the chain reaction will probably start,” Bank of America strategists David Cui, Tracy Tian and Katherine Tai wrote in a note today. During the U.S. financial crisis, it took a year “to reach the Lehman stage” when investors began to panic and shadow banking froze, the strategists added.
  • EU Says Italy Faces a ‘Major Challenge’ in Reducing Debt. Italy’s new government under Prime Minister Matteo Renzi faces a “major challenge” in achieving strong growth and lowering its public debt, the European Commission said today. “Italy has to address the very high level of public debt and weak external competitiveness,” the Brussels-based commission said today in a report on the EU member countries’ economic imbalances. “Both are ultimately rooted in the protracted sluggish productivity growth and demand urgent policy attention.”
  • European Stocks Little Changed After Data; Subsea Falls. European stocks were little changed, after rallying yesterday by the most in eight months, as data showed the region’s services output expanded faster than estimated while U.S. hiring missed projections. Subsea 7 SA tumbled the most since June after posting fourth-quarter profit that missed analysts’ forecast. Melrose Industries Plc (MRO) tumbled 7.8 percent after Numis Securities Ltd. advised investors to sell the stock. Admiral Group (ADM) Plc rose 7.5 percent, for the highest price in 2 1/2 years. The Stoxx Europe 600 Index slipped less than 0.1 percent to 337.06 at the close in London.
  • WTI, Brent Oils Decline on U.S. Supply Report. West Texas Intermediate and Brent crudes extended losses after a government report showed that U.S. inventories advanced for a seventh week.
    Futures fell as much as 1.8 percent in New York after the Energy Information Administration said supplies rose by 1.43 million barrels to 363.8 million last week. Refineries operated at 87.4 percent of capacity, down 0.6 percentage points from the prior week. Refiners are performing maintenance as they transition to summer from winter fuels. Oil also slipped on speculation that Ukraine’s crisis won’t disrupt shipments.
  • Americans Shut Out of Home Market Threaten Recovery: Mortgages. Kirk Rohrig is concerned he may soon join the growing ranks of Americans shut out of the housing recovery and the financial benefits that spring from it. Rohrig, who is unmarried, began hunting in November for his first home in Portland, Oregon, where cash buyers are driving up property prices. The software support specialist earns about $55,000 a year, has a high credit score of 790 and can’t find anything worth buying for about $200,000.
Wall Street Journal: 
Fox News:
  • Russia May Confiscate US Assets if Sanctioned. Secretary of State John Kerry will meet with Russian Foreign Minister Sergey Lavrov to discuss the crisis in Ukraine on Wednesday, a day after the U.S. escalated a war of words with Russian President Vladimir Putin over Moscow's military intervention in Crimea. Kerry and Lavrov are expected to meet on the sidelines of a long-planned conference on Syrian refugees, which is likely to be overshadowed by ongoing tensions in Ukraine.
ZeroHedge: 
Business Insider: 
StockTwits:
Reuters: 
Financial Times:
  • Ukraine crisis: Splits emerge in west’s stance on Russia. The west’s diplomatic efforts to counter Russia’s takeover of Crimea faced setbacks on multiple fronts on Wednesday as the Kremlin refused to engage with the new Ukrainian government and allies themselves were at loggerheads over how tough a line to take with Moscow.
  • China ramps up rhetoric battle with Japan. Chinese Premier Li Keqiang has warned Japan that China would not allow any country to “reverse the course of history”, as Beijing and Tokyo remain locked in an increasingly tense dispute over contested islands in the East China Sea.

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