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Saturday, July 26, 2014 2:58 AM

Who's Winning the War in Ukraine? Answer May Shock You!

Here's the question, not of the day, but of the month: Who's Winning the War in Ukraine?

That may sound like a simple question, but it isn't.

That question leads to a second question "In whose eyes?" It also depends on the definition of "war". And it also depends on the definition of "win". And finally it depends on which media source you believe.

Military Aspect

From a military aspect, I have seen reports from both sides. The Western media portrays Ukraine on the march with the rebels surrounded, and losing ground. Is that accurate reporting?

I will let you be the judge. Please consider this video released on Friday.

The caption reads "Всё что осталось от 72-й бригады ВСУ 25.07.2014".

Diving into the details here is my rough translation: "Ukraine's 72nd brigade is now an additional battalion short."

Where the bodies are, I don't know . But that is highly unlikely to be a fake video.

And contrary to Western media reports, my sources have said for a week "various Ukraine forces are trapped, looking for a way to escape to Russia".

Clearly, one of them failed to make it.

Are the Rebels Winning?

In whose Eyes? And what does "winning" mean?

In the eyes of the media, Ukraine is winning. The front page news everywhere you look says Ukraine is winning.

More importantly, the media has lined up behind Ukraine and now 22 US senators are willing to blame Putin and do everything they can to stop Russia.

Senator McCain, as always, is leading the pack.

Pat Buchanan exposed McCain the other day for the war-mongering hypocrite that he is. David Stockman has the details in My thoughts On Pat Buchanan’s Brilliant And Incisive Take On Washington’s Ukrainian Fiasco.

Senator John McCain’s call to arm the ruffians, opportunists, oligarchs and neo-fascists who took power in a street level coup in Kiev is downright lunatic. It causes Buchanan to ask, “Who is the real problem here?”

Propaganda War

When it comes to the propaganda war, McCain and his primary war-mongering ally (none other than president Obama) are clearly winning! The only difference between the two is McCain is a far bigger war-monger than Obama.

Obama is likely to catch up. He usually does.


Yet, one must step back and ask "What the hell is this war really about?"

Is it NATO? Or is it energy?

I happen to believe both. Starting from that scorecard, please consider my post on Thursday Ukraine Government Breaks Up: Prime Minister Resigns Over "Vital Laws on Energy and Army Financing"; Follow the Money

Synopsis: The Ukrainian Prime Minister Arseniy Yatseniuk resigned and that will lead to early elections in which pro-Russian MPs will be removed from parliament.

In essence, Ukraine will be more pro-NATO. But that's not all.

Biden's Son, Kerry Family Friend Join Ukrainian Gas Producer's Board

Please consider this resignation statement as noted by RIA: "Yatsenyuk also expressed disappointment with Ukrainian parliament’s decision to reject a bill that allows the government to hand over up to 49 percent of the country’s gas transport system to investors from the European Union and the United States."

In response I said "Follow the Money"

I neglected to report precisely where the money flowed.

The Wall Street Journal has all you need to know with this May headline regarding Biden, Kerry, and Ukraine: Biden's Son, Kerry Family Friend Join Ukrainian Gas Producer's Board.

Who's Winning?

You tell me. Before you do, please define "win".

Mike "Mish" Shedlock

Friday, July 25, 2014 7:59 PM

SBU Cleans Website of Bogus "Proof"; Mystery of 312 Grows

An image from the Security Service of Ukraine ("SBU") that purportedly showed a Buk heading back to Russia at nighttime, has now been removed from the site.

I made a screenshot of the image and posted it in Ukraine Caught in Third Major Lie? Magic Number 312.

The image once was at the bottom of this SBU page: Russia is trying to hide the evidence of his involvement in a terrorist attack in the skies over Ukraine.

Here is the image I posted, now removed.

CNN Complicit as Well?

Shortly after the crash, CNN's Kyung Lah conducted an interview with Vitaly Nayda, Ukraine's Director of Informational Security.

Nayda made serious, unfounded charges, pointed straight at Russia. He also showed Lah the evidence, including those bogus photos.
There are now two versions of the CNN video, both still available, if you know how to find them. One has the bogus photos and associated comments stripped, the other doesn't.

The only timestamps that I can see mark them from the same day. Perhaps both were edited.

Both are highly inflammatory. Play either one and it's crystal clear Lah plays straight into hands of Nayda. 

Here is CNN Video 1

Here is CNN Video 2

The first video is 3 minutes 11 second long; The second video is 1 minute 33 seconds long.

Bear in mind, I do not know the precise order in which these were released, but reader Sergey who notified me of the SBU editing claims to know.

Sergey copied me on an email he sent to CNN (slightly edited for typos, spellings, and ease in reading).

Dear Sirs,

On July 20, CNN reporter Kyung Lah interviewed Ukrainian security Chiev Mr. Vitaly Nayda. I saw the interview. The full version includes Mr. Nayda's comments on photos of "Buk" missile "moved from Ukraine to Russia by terrorists after the MH17 crash. But the images Nayda presented turned out to be fake.

Russia Today.Tv published a video dated March, 2014 where from this "Buk" night photo was taken.

Since then, the Ukrainian secret service deleted the photos from their webpage.

What was surprised me, and made me sad, is that you did the same! It is disappointing, that the original version of the interview was censored.  Only half of it is still there on your webpage.

Mrs Kyung Lah and CNN in general are not responsible for what Mr. Nayda said to your correspondent. But deleting the fake evidence he presented on behalf of the Ukrainian state makes you complicit in fraud.

Why you did it?

Best regards,
The mystery of 312 grows.

Mike "Mish" Shedlock

2:19 PM

France Unemployment New High, Output Down 15th Month; Prices Drop 27th Month; Activity Up in Peripheral Europe; Outlook for Germany

The grim economic news from France keeps piling up. Today, Europe Online reports Number of Unemployed in France Hits New High.

The number of unemployed people in France has hit a new high as the country grapples with the fallout of the financial crisis and a sluggish eurozone recovery, the Labour Department reported Friday.

At the end of June, there were 3.398 million people who were registered as being without a job in the eurozone‘s second-largest economy - 0.3 per cent more than in the previous month.

Compared to June of last year, the number of jobless was up 4 per cent.

In a glimmer of positive news, the number of unemployed youth was down compared to last year: those under 25 without a job decreased by 3.1 per cent to 535,000.

France‘s 10.1-per-cent unemployment rate is nearly twice as high as in neighbouring Germany, which registers a 5.1-per-cent rate.

French Private Sector Employment Contracts 9th Month

According to the Markit Flash France PMI, French private sector output contracts again, albeit at slower pace.
The latest flash PMI data signalled that France’s private sector remained in contraction at the start of the third quarter. Output was down for the third month in succession, although the rate of decline eased to a marginal pace that was the weakest in that sequence.

Driving the headline index higher was an improvement in the performance of the French service sector. Activity there increased for the first time in three months, albeit marginally.

On the other hand, the manufacturing sector sank further into contraction, with output falling at the sharpest rate in 15 months. New business received by French private sector firms decreased for a fourth consecutive month in July. Although moderate, the rate of decline was quicker than in June. Lower new work was signalled in both the services and manufacturing sectors, with the latter reporting the sharper fall.

Anecdotal evidence suggested that client budgets were under pressure, leading to a squeeze on new orders despite further reductions in prices charged by French private sector firms. Indeed, output prices fell for a twenty - seventh successive month in July , with the rate of decline accelerating since June. A number of panellists indicated that they had been forced to pare their margins in order to stem the loss of new business , with competitive pressures generally reported to be strong. Both service providers and manufacturers reported lower charges. In contrast, firms’ input prices continued to rise at a solid pace in July, with companies in both services and manufacturing signalling increases. There were reports from the survey panel of increased costs for labour and raw materials. Employment in the French private sector decreased for the ninth month running in July. That said, the rate of decline was marginal and the weakest since Marc h. Both service providers and manufacturers cut staffing levels
France Synopsis

  • Manufacturing down at sharpest rate in 15 months
  • New business down 4th month
  • Budgets under pressure
  • Input costs rising sharply
  • Output prices down 27th month and accelerating
  • Private sector employment down 9th month
  • Service sector activity improved slightly

Activity Picks up in Peripheral Europe

Meanwhile, things improve elsewhere in Europe. The Markit European Composite report makes this headline claim: Flash PMI signals rebound in Eurozone growth but French woes persist.
Eurozone economic growth rebounded in July, according to the „flash‟ estimate of Markit‟s Purchasing Managers‟ Index. The headline PMI, covering business activity across both manufacturing and services, rose from a six - month low of 52.8 in June to 54.0 in July. The latest reading matched the near - three year high seen back in April and exceeded the averages seen in the first two quarters of the year. Many companies reported that business had picked up again in July after an unusually high number of holidays and a knock - on effect of mild winter weather had depressed activity in prior months. However, growth of new orders slowed slightly in July amid signs that expansion , especially in manufacturing, is being subdued by geopolitical concerns, in particular the escalating crisis in Ukraine.

A lack of clarity on the economic outlook, as well as ongoing pressure to cut costs and boost competitiveness, meant employment rose only marginally once again in both sectors in July.

Output prices meanwhile continued to fall, with the rate of decline accelerating slightly on June. Average selling prices have now fallen continually since April 2012, although the rate of decline remains only modest and far weaker than that seen at the height of the financial crisis. A marginal rise in manufacturing factory gate prices was offset by a drop in charge s levied for services. Some rising cost pressures were evident. Average input prices in manufacturing rose for a second successive month, growing at the steepest rate for seven months, while service sector input costs also rose, albeit to a slightly lesser extent than June. Looking at the data by country, strong national divergences persisted, with France contracting while growth accelerated elsewhere.

Firms in France reported that output fell for a third month running after the brief return to growth seen in the spring. Although French service providers saw a marginal return to growth, output in the manufacturing sector fell at the steepest rate since April 2013.

Firms in Germany, in contrast, reported the strongest increase in business activity since April, with growth picking up sharply from the lull seen in June. Service sector activity picked up especially markedly, growing at the fast est rate for over three years.

Manufacturing output growth also revived in Germany, but remained much weaker than earlier in the year. Outside of France and Germany, the rest of the region recorded the largest monthly increase in business activity since August 2007. New orders also grew at the sharpest rate for seven years. Although manufacturers outside of France and Germany saw output growth moderate slightly, the pace of expansion in services hit a seven-year high.
Party is Over

The party is over (not that there was much of one outside the stock and bond markets) once German growth slows. And while the Markit report looks one way for Germany, other indicators don't.

Outlook for Germany

I side with Steen Jakobsen, chief economist for Saxo bank on the path for Germany, and it's not a pretty one.

Europe is not prepared for a German slowdown, but it is coming. France is obviously hopeless.

Mike "Mish" Shedlock

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