Bloomberg: Asian Stocks sink,Gold gains as China concerns Mount

    Bloomberg reports,"the MSCI Asia Pacific Index sank 1.6 percent by 12:06 a.m. in Tokyo, set for its lowest close since Feb. 10. A gauge of Chinese firms in Hong Kong fell as much as 20 percent from a Dec. 2 high. The Nikkei 225 Stock Average slid 2.7 percent as the yen headed for its biggest weekly advance since Jan. 24. Standard & Poor’s 500 Index futures rose 0.1 percent. The cost of insuring Asia-Pacific bonds from default jumped 4 basis points. Gold advanced to a six-month high while copper headed for its biggest weekly slump since April".

About $1.2 trillion was wiped from global stocks this week through yesterday as Chinese economic data missed estimates, overshadowing signs of improvement in the U.S. economy. The Black Sea region of Crimea votes March 16 on becoming independent or rejoiningRussia, with the U.S. and Germany threatening Moscow with sanctions over its support for the secession. The U.K. reports trade data and India releases a key inflation indicator.

Bank of America Corp., UBS AG, JPMorgan Chase & Co. and Nomura Holdings Inc. lowered their forecasts for Chinese economic growth in 2014. Data yesterday showed factory output rose in January and February from a year earlier by the least since the global financial crisis, while retail sales grew at the slowest rate for the period since 2004. Reports at the weekend showed an unexpected plunge in overseas shipments.

The Hang Seng China Enterprises Index fell as much as 1 percent to 9,230.38, more than 20 percent below its high from December last year, before paring the decline to 0.8 percent. The Hang Seng Index (HSI) dropped 1.2 percent and is on track to cap its biggest weekly drop since May 2012. The Shanghai Composite Index retreated 0.7 percent.

WSJ: Russians Fret About Economic Impact of Sanctions Over Ukraine

      The Wall Street Journal reports,"since Russian forces took control of Crimea on Feb. 28, markets in Moscow have plunged to levels not seen since the global economic crisis, with the top 50 companies shedding $110 billion in capitalization".

The ruble has hit record lows and many economists have slashed their 2014 growth forecasts by more than half. And that is before any sanctions have even been introduced.

The increased nervousness within Russia's business community comes as Western leaders have turned up the volume in recent days on the threat of sanctions.

But so far, Mr. Putin has shown no signs of backing down from increasingly tough talk coming from the West, and appears ready once again to dismiss complaints from Russia's moguls.

His personal approval rating rose almost 10 points to a three-year high of 71.6% over the past month, state pollster VTsIOM said Thursday. Almost two-thirds of those polled last weekend cited the Ukraine crisis as the biggest factor in their opinion, while 32% cited the Winter Olympics in Sochi.

The government official said those in Mr. Putin's inner circle are convinced they have a historic opportunity to regain Crimea, a territory ceded to Ukraine only in 1954, and see the possible economic cost as less important.

A spokesman for the Russian president acknowledged that the country's leading businessmen had been in "constant contact with the government" about sanctions, but said Mr. Putin hadn't met with any of them.

A person who attended a recent meeting between some of Russia's richest industrialists and high-ranking government officials to discuss the overall economy said the mood turned tense when the issue of sanctions was brought up.

"Questions were asked about how the situation with Ukraine might further affect the market and how the government might respond," the person said. "People wanted to know exactly how things might go."

Still, veteran bankers in Russia say the threat alone has taken its toll on Russia's already sluggish economy.

"Even if they all start kissing and making up now, the momentum of the events of the last month means that any hope of the cavalry storming in and saving the day in terms of economic growth for this year has gone out the window," said a senior banking adviser in Moscow. "The damage has already been done."

Russia was already dealing with slowing growth, rising inflation, a weakening ruble and persistent capital flight. Economic growth last year clocked in at just 1.3%, and Russia's central bank has forecast just 1.5% growth this year.

Russia's primary stock index plummeted 11% on March 3, the first day of trading after Russian troops entered Crimea, and has lost ground since. The ruble has declined 11% against the dollar since the beginning of the year and the central bank was forced to spend $11.3 billion on the day of the market plunge to stabilize the currency.

On Wednesday, Mr. Putin said in a meeting with the heads of Russia's central bank, finance ministry and economy ministry that the current growth rate wasn't good enough, and "we need to achieve stronger dynamics."

Alexei Kudrin, a former finance minister who attended the meeting, warned in a speech in St. Petersburg on Thursday that the authorities were underestimating the potential impact of sanctions, the Interfax news agency reported.

"The negative impact isn't coming from sanctions at all. The negative impact here is more from the perception of Russia from the main sources of global capital as a tough place to justify investment," he said. "This takes 5% at the very least off the value of Russian assets for a long time to come."

In a recent research note, Deutsche's Bank John-Paul Smith advised clients to steer clear of Russia entirely and suggested no longer considering it an emerging market but rather a riskier frontier market.

WSJ: Asian Markets Tumble

     The Wall Street Journal reports, "Japanese stocks tumbled almost 3% on Friday, with the Nikkei on track for its worst week since August, as evidence that China's economy is slowing sharply and  rising tensions in Ukraine fuel a broad selloff in Asia in recent days.

The Nikkei lost 2.7% in early trade, with the market weighed by a yen that had strengthened substantially overnight, and continued to pull down markets. The dollar fell 0.9% overnight against the yen, its largest daily fall since early February, and stabilized in Asia at ¥101.81".

Slower-than-expected growth in Chinese industrial production and retail sales came out just before some markets closed in the previous session, giving Japan and South Korea little time to react. But by Friday morning, markets in Wall Street had suffered their worst day since February, in part due to the bad news from China, as well as continued tensions over Ukraine and Russia, which left Asia vulnerable to a selloff.

It was a similar story in Australia, where stocks stopped trading on Thursday before the Chinese data was released. On Friday, the S&P/ASX 200 fell 1.4%.

South Korea's Kospi was down 0.7%.

Trading in Asia all week has been centered on developments in China. Data out over the weekend showed a sharp decline in exports in February, raising concerns over the health of the world's second-largest economy. There were also jitters in the corporate sector, with fears that another solar company could default, just a week after China experienced its first default in its corporate debt market.

Markets dislike uncertanty.

This has translated into poor performance for the week, especially for markets linked to China. Hong Kong's Hang Seng Index is 4% lower since last Friday and the S&P/ASX 200—a market heavy with resource companies that sell to China—fell 2.3%. It was Japan, a market that has been particularly volatile in recent weeks, that was affected the most from the downbeat sentiment, and the Nikkei was down 5.6% over the same period.

WSJ: U.S. Balks at Ukraine Military-Aid Request

 The Wall Street Journal reports,"Ukraine's interim government has appealed for U.S. military aid, including arms, ammunition and intelligence support, according to senior U.S. officials. But the Obama administration has agreed to send only military rations for now, wary of inflaming tensions with Russia.

The U.S. decision reflects the Pentagon's reluctance to be seen as directly supporting Ukraine's beleaguered armed forces during the standoff with Russia, which has seized the Ukrainian region of Crimea.

The risk of escalation was underscored by Russia's move on Thursday to conduct another military exercise near Ukraine. The Kremlin also confirmed it has sent six Sukhoi fighter jets and three transport planes to another former Soviet republic, Belarus, for joint patrols.

Belarusian officials said the move came in response to increased air patrols in the region by the North Atlantic Treaty Organization amid the Ukraine crisis".

Jim Rogers Present Investment Ideas

Be prepared for the next great transfer of wealth. Buy physical silver and storable food.

The latest from Jim Rogers, author of A Gift to My Children: A Father's Lessons for Life and Investing andHot Commodities: How Anyone Can Invest Profitably in the World's Best Market.

“I started buying Russia in recent months. Yesterday (March 5) and the day before, I bought more. I haven’t bought too much, but have been looking for things to buy in Russia. I bought shares in the Moscow Stock Exchange. I bought Aeroflot. I own airlines around the world. And I’m looking to buy more in Japan, if given the chance.

I like to buy things that are depressed. Agriculture is very depressed. The American stock market is hitting all-time highs. I don’t find that particularly attractive.” 

Source: IB Times

Warren Buffet thoughts. Need to remind in time of Crisis

“Be Fearful When Others Are Greedy and Greedy When Others Are Fearful”

 “Someone's sitting in the shade today because someone planted a tree a long time ago.” 

  “I insist on a lot of time being spent, almost every day, to just sit and think. That is very uncommon in American business. I read and think. So I do more reading and thinking, and make less impulse decisions than most people in business. I do it because I like this kind of life.” 

“Risk comes from not knowing what you're doing” 

 “It takes 20 years to build a reputation and five minutes to ruin it. If you think about that you'll do things differently.” 

  “There comes a time when you ought to start doing what you want. Take a job that you love. You will jump out of bed in the morning. I think you are out of your mind if you keep taking jobs that you don't like because you think it will look good on your resume. Isn't that a little like saving up sex for your old age?”

 “It’s better to hang out with people better than you. Pick out associates whose behavior is better than yours and you’ll drift in that direction". 

Ukraine Crisis Latest Developments

"Moscow has deployed 10,000 troops along its border with Ukraine, deepening the crisis in Crimea ahead of a last desperate effort by the US secretary of state, John Kerry, to broker a deal with his Russian counterpart, Sergei Lavrov, in London on Friday".

      "Ukraine's prime minister, Yatsenyuk told the UN security council on Thursday he is convinced Russians do not want war. He urged Russia's leaders to heed the people's wishes and return to dialogue with Ukraine. "If we start real talks with Russia, I believe we can be real partners," Yatsenyuk said".

Russian troops now control the Crimean peninsula, where voters will decide on Sunday whether to become part of Russia.

Western diplomats have expressed little optimism ahead of the London talks, scheduled to begin on Friday . Nothing resembling a peace plan has been sketched out between the two sides, one said.

The Russian deployment coincided with a vote in the Ukrainian parliament to create a 60,000-strong national guard. Ukraine's national security chief, Andriy Parubiy, said the force would "ensure state security, defend the borders and eliminate terrorist groups".

US state department spokeswoman Jen Psaki said Kerry would reaffirm US support for Ukrainian sovereignty and territorial integrity without interference or provocation by Russia. The secretary of state had previously declined a Russian invitation to Moscow and his decision to go to London prompted speculation the Kremlin may have offered concessions to ensure he would not leave empty-handed.

Before leaving Washington for London, Kerry warned Russia that the EU was planning to join the US in imposing more sanctions on Moscow if the referendum went ahead. The sanctions would include a travel ban and a freeze on bank accounts.

Reuters reported that the German vice-chancellor, Sigmar Gabriel, warned that Germany would not hesitate to go beyond a second round of European sanctions planned for Monday if the referendum goes ahead.

David Cameron and foreign secretary William Hague will meet Kerry before his meeting with Lavrov. A Foreign Office spokesman said Hague had phoned both Kerry and Lavrov to encourage them "to hold talks in London with a view to de-escalating the situation in Crimea and setting up dialogue between Russia and Ukraine".

Source: theguardian

Nathan Rothschild-style buying opportunity? Two Russian Oil and Gas Plays

http://web.tmxmoney.com/financials.php?qm_symbol=LUKOY:US

http://web.tmxmoney.com/quote.php?qm_symbol=OGZPY:US

YANDEX Russian search engine by the numbers

                          Source:  DMR

UKRAINE Breaking News Bloomberg. Putin urged government to ensure ability to react immediately to Western sanctions

Russian bonds and the ruble fell for a fifth day as tension persisted. The Micex Index of equities dropped 2 percent, while Ukraine’s UX Index tumbled 3 percent in the biggest decline among 94 world stock gauges.

Putin’s approval rating among Russians climbed to a three-year high of 72 percent, the state-run All-Russia Center for the Study of Public Opinion said on its website. That compares with 67 percent last month when Russia hosted the Winter Olympics in Sochi. Another poll by the Levada Center found that 58 percent of Russians back some degree of military intervention in Ukraine.

Russia stepped up military maneuvers on the border with Ukraine, the Russian Defense Ministry said today, according to the Interfax news service. Six Russian fighter jets and three transport planes arrived in Ukraine’s northern neighbor, Belarus, for joint drills, the Defense Ministry there said.

“If negotiations with Russia don’t take place in the next days -- and by that is meant negotiations that bring results and don’t play for time -- then the EU foreign ministers will at their council meeting next Monday, March 17, seal further second-stage measures,” said Merkel, who likened Russia’s efforts to annex Crimea to the imperialism of centuries past. “That includes bars on travel, freezing bank accounts and cancellation of EU-Russia Summit.”

Russian government officials and businessmen are bracing for sanctions resembling those applied toIran, according to people with knowledge of the preparations. Putin met senior officials yesterday in Sochi, his spokesman, Dmitry Peskov, said by phone. Putin urged the government to ensure Russia’s “ability to react immediately to internal and external risks.”

U.S. positive data. Jobless claims in surprise drop; Retail sales climb in February

"The U.S. retail sales rose 0.3% last month, comparing favorably with the estimates of economists, who forecast a 0.2% rise. Over the prior two months, retail sales had dropped a combined 0.9%. The increase in retail sales in February came from a variety of sectors, including auto dealers, Internet retailers, clothing and sporting goods stores.

Data also showed the number of people who applied for unemployment benefits last week dropped to a three-month low. Jobless claims fell by 9,000 to 315,000. That belied expectations of a rise to 330,000 on a seasonally-adjusted basis.

Import prices also jumped 0.9% in February, mostly because of higher fuel costs. Economists polled by MarketWatch had expected a rise of 0.4%".

Source: Marketwatch

Losing Crimea Could Sink Ukraine's Offshore Oil and Gas Hopes

"Without Crimea, Ukraine looks set to lose an important piece of its economic and energy future: valuable undersea oil and gas fields that lie just offshore the Crimean peninsula. Exploiting those Black Sea fields could help reduce Ukraine’s dependence on Russian gas imports".

And Big Oil had been interested: Before the overthrow of former President Viktor Yanukovych, Ukraine was on the verge of signing a deal with a group, including Exxon Mobil  and Royal Dutch Shell , that was prepared to spend $735 million to drill two wells off Crimea’s southwest coast. “Exxon and Shell are now in a legal limbo,” Chris Weafer of Moscow investment group Macro Advisory told Bloomberg News. If Crimea votes in a March 16 referendum to secede from Ukraine, the government in Kiev “may soon no longer have jurisdiction over the region.”

The so-called Skifska area that Exxon and Shell want to develop is part of an undersea field that extends westward along the Black Sea coastline to Romania. Within the area now under Ukrainian jurisdiction, however, “the most interesting exploration areas are all effectively [under] Crimean waters,” says Julian Lee, an analyst at the Center for Global Energy Studies in London. Losing control of those areas “would be a significant loss for Ukraine.”

Source: BloombergBusinessweek

WSJ: Ukraine crisis outcome

   Inspite of tough talk from Chancellor Angella Merkel and her warnings to Russia.
"The Crimean crisis continues, but the markets hardly care. The growing sentiment is that Russia’s annexation of Crimea and possibly parts of eastern Ukraine is a fait accompli and that the West will hold off putting any real pressure on Russia. The strong words are just a political smokescreen–Germany and big swathes of eastern and central Europe are just too dependent on Russian gas to make a more forceful stand on a regional matter. Especially as Crimeans by and large seem happy to join Russia". 

Source: WSJ

WSJ: China Data Hold Back Markets But Reaction Muted

             The Wall Street Journal reports,"markets were a bit lower in Asia and Europe following another spate of poor Chinese data, but the news hasn’t come as the knockout blow it might have been.

The weakening Chinese growth picture is a worry for the rest of the world as so many countries’ own economic performance depends on Chinese demand.  But in addition to the fact that there are mitigating factors — such as the distorting effect of the Lunar New Year holidays last month – the news need not be taken so badly. Investors are perhaps accepting that for all the structural changes that China’s economy needs to go through – for the benefit of its own citizens and those of the rest of the world –  this degree of necessary slowdown is quite bearable". 

"CHINA: A bunch of fresh data points out of China Thursday disappointed: Industrial output rose 8.6% on-year in January-February (the data is combined to minimize distortion from the Lunar New Year holiday), down from 9.7% in December and vs. 9.5% expected. Fixed-asset investment grew by 17.9% on-year – the weakest pace since 2002 – down from 19.6%  in 2013. Retail sales rose 11.8% on-year in January-February, down from 13.6% in December. Construction starts fell by 27%.

The data add to the pile of evidence that China’s growth is slowing, but don’t materially change the picture. Indeed, markets – which have been hit quite a bit lately by the China outlook, especially for commodities — largely shrugged off Thursday’s news. Earlier in the day, Premier Li Keqiang said China could still meet its 7.5% growth target for the year, but also emphasized that the leadership was no longer pursuing growth at all costs. Li’s administration has been repeating that message quite a bit lately. It may involve some short-term pain now but in the long run it’s a good thing that China is putting its economy on a more sustainable path and getting its banking system under control".

WSJ : Gold Futures Rise to Six-Month High

"Gold for April delivery, the most active contract, rose $23.80, or 1.8%, to settle at $1,370.50 a troy ounce on the Comex division of the New York Mercantile Exchange. This was the highest close since $1,386.70 reached on Sep. 9.

Gold prices have gained 14% this year as instability in emerging markets and worries about U.S. economic growth reinvigorated investor demand for the haven asset. Some traders view gold as safer than stocks or government bonds because it isn't linked to a particular country or government.

Leaders of the Group of Seven advanced economies called on Russia to defuse the situation in Ukraine's Crimea region by reducing troop levels and halting annexation efforts. Russian troops have occupied Crimea since late February. Crimea will vote Sunday whether to secede from Ukraine and join Russia. The G-7 said it won't recognize the results of Crimea's referendum".

Source: WSJ

WSJ:Chinese Markets Hit by Signs of Sluggish Commodity Demand

          The Wall Street Journal reports,"signs of weakening Chinese demand for commodities are filling in a picture of a slowing economy and sparking a selloff in the country's currency, its stock market and in prices of the coal, copper and iron ore that China buys".

"The selloff rattled markets across the region Wednesday. Japan's Nikkei Stock Average fell 2.6%—its biggest decline in more than a month—and the offshore yuan, which is freely traded outside mainland China, dropped to its lowest level in eight months".

"Iron-ore traders say buyers are staying on the sidelines and stockpiles are rising in China's ports as a drop in exports and tightening credit make steel mills reluctant to add inventory. Copper prices are down on fears that inventory would flood the market if companies dumped the metal to unwind risky trades.

The price for premium hard coking coal from Australia fell 2.4% on Wednesday and is down 13% this year".

China's stock market, one of the world's worst performers this year with a 5.6% decline, sank to its lowest level in nearly eight months on Wednesday. The benchmark Shanghai Composite Index closed down 0.2% at 1997.69, after touching 1974.38, its lowest level since July 30, 2013.

The yuan weakened further against the U.S. dollar on Wednesday, falling 0.1% in Shanghai and leaving it down 1.5% this year. The decline is a reversal from years of steady appreciation, including a 2.9% gain in 2013.

"Copper extended its slide to a fourth day, falling more than 3% in Shanghai and bringing its decline for the year to around 15%. The metal is piling up in warehouses in China as demand from manufacturers slows. In addition, much of the stored copper is used as collateral for loans. As prices fall, borrowers could come under pressure to post more collateral, forcing them to sell copper to raise money".

Investors are awaiting data on Chinese industrial production and fixed-asset investment set to be released Thursday. Economists expect industrial production to have climbed 9.5% in January and February compared with the same two months a year earlier.

The question mark is if Chinese lately dissapointing data is because of a usually seasonally murky  economic indicators at the start of the year in China because of the long Lunar New Year holiday, which some years falls in January and others in February. 

The big debate among analysts has been whether the Chinese government will step in if growth slows.

The latest wave of selling in markets was driven by fears that another Chinese company was running into financial trouble.

Shares of Baoding Tianwei Baobian Electric Co. , a power-equipment maker that has made bad bets on the solar industry in recent years, fell 5.1%, the daily downside limit, and the company's bonds were suspended from trading for a second day.

Iron-ore prices are down 6% this week, as investors worry about rising supply and weakening demand. "The substantial decline in exports and significant increases in both Chinese port stocks of iron ore and finished steel inventories have sparked fears that spot cargoes could face prolonged downward pressure," said Kash Kamal, a London-based analyst at broker Sucden Financial.

Tim Condon, an economist at ING, said the lack of transparency in China's financial policies often generates uncertainties and anxiety for investors.

"Sentiment has definitely turned sour toward China and it does raise the question why it's so easy to accentuate the negative in this country," he said".

Is the Ukraine crisis a buying opportunity?

This is the question investors must consider in deciding whether the Ukraine crisis is a Rothschild-style buying opportunity or a last chance to bail out of equities and other risky assets before it is too late. The balance of probabilities in such situations is usually tilted towards a peaceful solution — in this case, Western acquiescence in the Russian annexation of Crimea and the creation of a new national unity government in Kiev that is acceptable to Putin.

To resolve the confrontation, such a government would probably have to guarantee the official status of the Russian language and preserve Russia’s effective veto over Ukrainian relations with NATO and the European Union. This is indeed the most likely scenario, and the one most investors and businesses are effectively assuming will happen by the end of the week.

The trouble is that the alternative, a civil war in Ukraine, while far less likely, would have far greater impact  on European and global economies, on energy prices and on stock-market prices around the world that are setting record highs.

In the 1991 and 2003 Iraq wars, for example, investors did well to “buy on the sound of gunfire,” but only after the outcome of the engagement was clear. In 2002, the Standard & Poors 500 index fell by 25 percent during the run-up to war. It only turned decisively in March, when the U.S. attack on Iraq began, gaining 35 percent by the end of the year.

Similarly in 1990 and 1991, it was only six months after Saddam Hussein’s invasion of Kuwait, when victory for the U.S.-led forces in Iraq had become inevitable, that equities advanced strongly. They gained 25 percent over the next four months.

A better analogy for the current confrontation may be the 1962 Cuban Missile Crisis. After a summer of nervous speculation in which stock markets around the world fell by 20 percent, President John F. Kennedy confronted Russian leader Nikita Khrushchev with a nuclear ultimatum to remove Soviet missiles from Cuba. Within a week, Wall Street started rising and ultimately gained almost 30 percent in six months.

But the 1962 rebound only started once it became clear that Khrushchev was backing down and Kennedy had won the war of nerves. A logical explanation for this week’s stock market movements is that investors now see a similar outcome in Ukraine.

But this time with Russia as the winner .

Source: Reuters

The Battle of Waterloo and Nathan Rothschild‏

Arriving at the Exchange amid frantic speculation on the outcome of the battle, Nathan took up his usual position beside the famous 'Rothschild Pillar.' Without a sign of emotion, without the slightest change of facial expression the stony-faced, flint eyed chief of the House of Rothschild gave a predetermined signal to his agents who were stationed nearby.

Rothschild agents immediately began to dump consuls on the market. As hundred of thousands of dollars worth of consuls poured onto the market their value started to slide. Then they began to plummet.

Nathan continued to lean against 'his' pillar, emotionless, expressionless. He continued to sell, and sell and sell. Consuls kept on falling. Word began to sweep through the Stock Exchange: "Rothschild knows." "Rothschild knows." "Wellington has lost at Waterloo."

The selling turned into a panic as people rushed to unload their 'worthless' consuls or paper money for gold and silver in the hope of retaining at least part of their wealth. Consuls continued their nosedive towards oblivion. After several hours of feverish trading the consul lay in ruins. It was selling for about five cents on the dollar.

Nathan Rothschild, emotionless as ever, still leaned against his pillar. He continued to give subtle signals. But these signals were different. They were so bubtly different that only the highly trained Rothschild agents could detect the change. On the cue from their boss, dozens of Rothschild agents made their way to the order desks around the Exchange and bought every consul in sight for just a 'song'!

A short time later the 'official' news arrived in the British capital. England was now the master of the European scene.

Within seconds the consul skyrocketed to above its original value. As the significance of the British victory began to sink into the public consciousness, the value of consuls rose even higher.

Napoleon had 'met his Waterloo.'

Nathan had bought control of the British economy.

Overnight, his already vast fortune was multiplied twenty times over.

George Soros eyes European Bank Shares

**European bank shares are “very depressed,” making it an “attractive time” to invest, Soros said. Still, he said it is going to be a “very tough year” for lenders as they try to shrink balance sheets and boost their capital to pass the European Central Bank’s stress tests, he said.

The 43-member Bloomberg Europe Banks and Financial Services Index trades at a 0.2 percent discount to book value, while the KBW Bank Index, which tracks 24 U.S. lenders, trades at a 14 percent premium, data compiled by Bloomberg show**.

Source: Bloomberg

Gazprom says Ukraine has not paid for February gas deliveries,it my halt future deliviries......

Gazprom says Ukraine owes US$ 1.89 billion for gas, has not paid for February deliveries.
 It may halt deliveries of gas to Ukraine as in early 2009.
Source: Dow Jones Wires

U.S. Department of labor Bureau of Labor Statistics Employment Situation February 2014 PR

THE EMPLOYMENT SITUATION -- FEBRUARY 2014


Total nonfarm payroll employment increased by 175,000 in February, and the 
unemployment rate was little changed at 6.7 percent, the U.S. Bureau of 
Labor Statistics reported today. Employment increased in professional and 
business services and in wholesale trade but declined in information. 



   ------------------------------------------------------------------
  |                                                                  |
  |         Effect of Winter Storms on Employment Estimates          |
  |                                                                  |
  | Severe winter weather occurred in much of the country during the |
  | February reference periods for the establishment and household   |
  | surveys. For information on how weather can affect employment    |
  | and hours data, see Question 8 in the Frequently Asked Questions |
  | section of this release.                                         |
   ------------------------------------------------------------------



Household Survey Data

Both the number of unemployed persons (10.5 million) and the unemployment 
rate (6.7 percent) changed little in February. The jobless rate has shown 
little movement since December. Over the year, the number of unemployed 
persons and the unemployment rate were down by 1.6 million and 1.0 
percentage point, respectively. (See table A-1.) 

Among the major worker groups, the unemployment rates for adult men (6.4 
percent), adult women (5.9 percent), teenagers (21.4 percent), whites (5.8 
percent), blacks (12.0 percent), and Hispanics (8.1 percent) showed little 
or no change in February. The jobless rate for Asians was 6.0 percent (not 
seasonally adjusted), about unchanged over the year. (See tables A-1, A-2, 
and A-3.)

The number of long-term unemployed (those jobless for 27 weeks or more) 
increased by 203,000 in February to 3.8 million; these individuals accounted 
for 37.0 percent of the unemployed. The number of long-term unemployed 
was down by 901,000 over the year. (See table A-12.)

Both the civilian labor force participation rate (63.0 percent) and the 
employment-population ratio (58.8 percent) were unchanged in February. The 
labor force participation rate was down 0.5 percentage point from a year 
ago, while the employment-population ratio was little changed over the 
year. 

The number of persons employed part time for economic reasons (sometimes 
referred to as involuntary part-time workers) was little changed at 7.2 
million in February. These individuals were working part time because their 
hours had been cut back or because they were unable to find full-time work. 


In February, 2.3 million persons were marginally attached to the labor 
force, a decline of 285,000 over the year. (The data are not seasonally 
adjusted.) These individuals were not in the labor force, wanted and were 
available for work, and had looked for a job sometime in the prior 12 
months. They were not counted as unemployed because they had not searched 
for work in the 4 weeks preceding the survey. 

Among the marginally attached, there were 755,000 discouraged workers in 
February, down by 130,000 from a year earlier. (The data are not seasonally 
adjusted.) Discouraged workers are persons not currently looking for work 
because they believe no jobs are available for them. The remaining 1.5 
million persons marginally attached to the labor force in February had not 
searched for work for reasons such as school attendance or family 
responsibilities. (See table A-16.)

Establishment Survey Data

Total nonfarm payroll employment rose by 175,000 in February. Job growth 
averaged 189,000 per month over the prior 12 months. In February, job 
gains occurred in professional and business services and in wholesale 
trade, while information lost jobs. 

Employment in professional and business services increased by 79,000 in 
February. Accounting and bookkeeping services added 16,000 jobs. Employment 
continued to trend up in temporary help services (+24,000) and in services 
to buildings and dwellings (+11,000). Over the prior 12 months, professional 
and business services added an average of 56,000 jobs per month.

In February, wholesale trade added 15,000 jobs, with nearly all of the 
increase occurring in durable goods (+12,000). Over the prior 12 months, 
the employment gain in wholesale trade averaged 9,000 per month. 

Employment in food services and drinking places continued to trend up in 
February (+21,000). Over the prior 12 months, this industry added an 
average of 27,000 jobs per month. 

In February, employment in construction changed little (+15,000). Over the 
past year, construction has added 152,000 jobs. Within the industry, 
employment in heavy and civil engineering construction rose by 12,000 in 
February. 

Employment in health care changed little in February (+10,000). This marks 
the third consecutive month of little employment change in this industry. 
Offices of physicians added 8,000 jobs in February. Employment in hospitals 
changed little over the month but is down by 10,000 over the past 3 months.

Retail trade employment changed little in February (-4,000). Among the 
component industries, a job gain in food and beverage stores (+12,000) was 
more than offset by declines in electronics and appliance stores (-12,000); 
sporting goods, hobby, book, and music stores (-9,000); and department 
stores (-7,000). Over the year, retail trade has added 282,000 jobs.

Information lost 16,000 jobs in February. Most of the decline occurred in 
motion picture and sound recording (-14,000); employment in this industry 
can be volatile from month to month. 

Employment in other major industries, including mining and logging, 
manufacturing, transportation and warehousing, financial activities, and 
government, changed little over the month.

The average workweek for all employees on private nonfarm payrolls edged 
down by 0.1 hour to 34.2 hours in February. The manufacturing workweek was 
unchanged at 40.7 hours, and factory overtime edged down by 0.1 hour to 3.3 
hours. The average workweek for production and nonsupervisory employees 
on private nonfarm payrolls declined by 0.2 hour to 33.3 hours. For 
production workers, the manufacturing workweek has declined by 0.6 hour 
over the past 3 months. (See tables B-2 and B-7.)

In February, average hourly earnings for all employees on private nonfarm 
payrolls rose by 9 cents to $24.31. Over the year, average hourly earnings 
have risen by 52 cents, or 2.2 percent. In February, average hourly 
earnings of private-sector production and nonsupervisory employees increased 
by 9 cents to $20.50. (See tables B-3 and B-8.)

The change in total nonfarm payroll employment for December was revised 
from +75,000 to +84,000, and the change for January was revised from 
+113,000 to +129,000. With these revisions, employment gains in December 
and January were 25,000 higher than previously reported. 

_____________

Macro Horizons: Stay Tuned for Jobs Report, But Don’t Read Too Much Into It

""For a few hours on the first Friday of the month, not much else matters in markets than the wait for, followed by the digestion of, the monthly U.S. jobs numbers. And then it all blows over and we’re often left wondering what all the fuss was about. Get ready for more of the same today.

The government’s labor report has been strikingly erratic since October. First it was the government shutdown, which may have confused some respondents in their responses and led to distortions in the unemployment rate, and after that the unseasonably cold winter, which has continued unabated and has interrupted various job-providing projects. So, by all means stay glued to your computer screen for those few hours today but don’t go imagining that this report is the final word on the state of the U.S. labor market. 

UKRAINE: The city council of Crimea’s port city Sevastopol, home of Russia’s Black Sea Fleet, voted to join Russia and break links with Ukraine. At the same time Russia’s parliament says it will support Crimea if it seeks to join the Russian Federation.  U.S. and European leaders argue such a referendum would be contrary to international law.

The Ukrainian situation is bound to become more complicated before it’s resolved. It seems likely that Crimea will be absorbed into Russia, reversing a strange piece of administrative boundary shuffling by the Soviets. Will eastern Ukraine follow suit? How will Western governments respond? Will Ukraine make efforts to preserve its sovereign integrity? Unfortunately there aren’t likely to be nice, clear answers to intractable questions. This will rumble for a while"".

Source: WSJ

GLOBAL MARKETS-Buoyant stocks await U.S. payrolls, ECB inaction spurs euro

World shares were at a six-year high and heading for a fifth week of back-to-back gains on Friday as the ongoing tug-of-war over Crimea and uncertainty ahead of U.S. jobs data did little to sap market confidence.

With the tussle between Ukraine and the West and Russia over Crimea expected to drag on, investors turned their focus to non-farm payrolls due at 1330 GMT, though there was a sense they would still be distorted by the recent icy U.S. weather.

European stock markets <.FTEU3> took a step back as they consolidated after a volatile week which nevertheless has left equity markets globally <.MIWD00000PUS> at their highest level in more than six years.

As midday approached futures prices pointing to a steady start on Wall Street later but Europe's benchmark FTSEurofirst 300 index was down 0.4 percent, with Frankfurt <.GDAXI> again leading the falls.

The region's close links to Russia has meant it has significantly underperformed other parts of the world this week. The FTSEurofirst is heading for its first weekly drop since the end of January and some of the big German firms who sell to Russia have fared particularly badly. [.EU]

There were further developments on Friday. Russian President Vladimir Putin rebuffed a warning from Barack Obama over Moscow's military intervention in Crimea, saying he could not ignore calls for help from Russian speakers in Ukraine.

After an hour-long telephone call, Putin said in a statement that Moscow and Washington were still far apart on the situation in the former Soviet republic, where he said the new authorities had taken "absolutely illegitimate decisions on the eastern, southeastern and Crimea regions."

Despite the nervousness around the region's stocks, there appeared to be no stopping the euro however.

It hit a fresh 2014 high of $1.3892 on the dollar as a big repayment of ECB crisis loans came after the European Central Bank on Thursday all but killed off bets of further interest rate cuts in coming months.

"The market was looking for some action from the ECB, yet we got nothing, in fact what Draghi outlined was the improvement in the economic activity," said Jane Foley, senior currency strategist at Rabobank in London.

"It actually gives us the impression that that might be it from the ECB and we have seen everything we are going to see."


U.S. JOBS

With the jobs data later key for the Federal Reserve as it gradually scales back its massive stimulus programme, the figures dominated attention across most assets classes.

The dollar index <.DXY>, which weighs the dollar against a basket of major currencies, was at 79.614, after skidding as low as 79.590, its lowest since late October, in wake of the euro's surge.

A Reuters poll of economists expected around 149,000 jobs to have been added up from the weather-depressed gains of 113,000 in January, though that was taken before Wednesday's soft ADP jobs report.

Speaking in London late on Thursday, Fed policymaker Charles Plosser said he would take the reading "with a pinch of salt" whatever it was, and that it was likely to be "a couple more months before all the noise of the weather gets filtered out." 

Source: Reuters

Xinhua In-Depth: The West's fiasco in Ukraine

For a brief moment, Western leaders might have stopped to congratulate themselves for their "accomplishments" in Ukraine.

With their backing, Ukrainian opposition protesters successfully toppled the pro-Russian government, forcing out the president they loathe and dealing a humiliating blow to the Kremlin.

The West might have scored a major victory in this latest round of goepolitical fight. But things turned out otherwise.

Shortly afterwards, Russia struck back. Now, with Russian military personnel deployed in eastern Ukraine to protect Russia's legitimate interests and pro-Russian regions clamoring for a secession from Kiev, Ukraine is teetering on the brink of total chaos and disintegration.

The West's strategy for installing a so-called democratic and pro-Western Ukrainian government did not get anywhere at all. On the contrary, they have created a mess they do not have the capacity or wisdom to clean.

Their ill-fated plan was fundamentally flawed from the very beginning. First of all, they were destined to shoot their own feet when they, under the cliche pretense of supporting democracy, interfered in Ukrainian domestic affairs by engaging in biased mediation.

Second, they underestimated Russia's will to protect its core interests in Ukraine. Russia may no longer be interested in competing for global preeminence with the West, but when it comes to cleaning a mess the West created in the country's backyard, Russian leaders once again proved their credibility and shrewdness in planning and executing effective counter moves.

Last but not least, Western leaders were delusional when they believed they, with dented moral authority and shrinking financial coffers, could still take up such a grand task of nation-building.

Unfortunately, Ukraine and its people have become a big victim in this grueling process.

The Ukrainian people do not get the democracy or prosperity the West promises. Instead, all they can see in their beloved country now is political confusion and economic depression.

The West itself also becomes a loser as the fiasco in Ukraine will surely erode its credibility.

For the rest of the world, once again, people see another great country torn apart because of a clumsy and selfish West that boasts too many lofty ideals but always comes up short of practical solutions.

But the world does not need to be too pessimistic. The game in Ukraine is far from over. The international community still has the opportunity to salvage the country by working together.

Major powers should set their animosity aside and start working for a compromise. The Ukrainians should abandon their political infighting and work to restore law and order in their country as soon as possible.

After all, an independent, complete and stable Ukraine best serves the interests of all, including China.

China eyes top FDI host economy globally

Despite rising labor costs, China's allure for foreign companies is increasing due to the growing market, high return on investment and government efforts to improve the business environment.

TOP FDI CHOICE

"We will continue to utilize foreign investment actively and efficiently, open up more service sectors to foreign capital, and level the playing field for domestic and foreign enterprises to compete on fair terms so as to ensure that China remains a top choice for foreign investment," Premier Li Keqiangsaid earlier this week in his government work report delivered to the nation's top legislature.

A combination of rising labor costs and a slowdown of economic growth from the past double-digit economic expansion rate seems to have created a perception that China has lost its allure for foreign companies. In fact, the truth is quite the opposite.

The Chinese mainland registered 127 billion U.S. dollars of foreign direct investment (FDI) inflows in 2013, closing the gap with the United States to about 32 billion dollars, according to the United Nations Conference on Trade and Development (UNCTAD).

Despite signs of recovery in some developed countries, FDI flows to the United States failed to reverse their decline, contrary to other signs of economic recovery over the past year. FDI flows to developed countries remained at a historically low share (39 percent) of total global FDI flows for the second consecutive year in 2013, the UNCTAD said earlier this year in a report.

BIG MARKET, HIGH RETURN

"Foreign investors are still very interested in China. In the past, many came because of low wages and the opportunity to export. Now investors are more interested in the domestic market," contended David Dollar, a senior fellow at Washington's Brookings Institution.

"Higher wages are good for stimulating domestic demand, so higher wages are not an impediment to the new kind of investment coming to China," Dollar told Xinhua.

Dollar's view is echoed by Ryan Rutkowski, a China Research Analyst with Washington's Peterson Institute for International Economics, who believes that it still makes sense that multinationals continue to invest in China.

"China is a leading global consumer of many goods and services with strong growth prospects. The middle class in China's wealthiest provinces are already major global consumers of goods and increasingly services, while many markets in the interior are only just beginning to catch up. Manufacturers in China can now count on selling more goods to the Chinese market whereas before they focused primarily on exporting to advanced economies," Rutkowski told Xinhua.

Foreign companies remain attracted to China because it still offers superior returns. The income generated by foreign enterprises in China is among the highest in the world. The returns generated by FDI stock in China averaged 9.4 percent between 2002 and 2012, compared with only 5.8 percent for investment in the United States, he said in a recent analysis article.

Moreover, foreign companies can now invest in more diverse businesses in China. In the past, the vast majority of investments were confined to the export manufacturing sector, but today manufacturing represents only two fifths of foreign investment inflow, while the service sector share is now over half of new FDI inflow.

The recent string of reforms - the Shanghai pilot free trade zone (FTZ), experimenting with the "negative list" approach, opening up more service sectors and reducing government approval requirements - has helped bolster investor confidence and improved the business environment.

Lured by better trade, investment and administrative rules, about 100 companies have registered in the FTZ every day since September, according to the FTZ managers.

Yang Xiong, mayor of Shanghai, said earlier this week that the "negative list" identifying bans or restrictions on foreign investment in the FTZ will be shorter in its 2014 incarnation.

Nationwide, newly registered businesses increased by 27.6 percent last year, and private investment was up to 63 percent of total investment.

"We are all sharing the fruits of fast economic growth," commented Bian Chenggang, General Manager of Intel Products (Chengdu) Ltd..

By the end of December 2013, 252 Fortune 500 companies had set up branches in Chengdu, capital of southwest China's Sichuan Province. Last year alone, an additional 22 Fortune 500 companies settled in the city.

Source: Xinhua