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Crimea Is Just One Of The Many Catalysts That Could Spoil Stock Rally
post Posted: Apr 14 2014, 08:35 AM
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In Reply To: Barra's post @ Apr 8 2014, 03:36 PM

Putin now appears to have the pretext to roll in. Scary stuff and I pity Ukrainian soldiers at this point.

What will markets do if Russia does invade eastern Ukraine? Severe sanctions are virtually assured if that happens.

Clearly it won't be good for Euro markets - particularly DAX. Germany has the most to lose from sanctions against Russia.

EUR vs USD can't see it holding 1.38. May see support for Yen

Wheat prices could spike further as Ukraine produces a lot of it

Oil could spike .

And I guess after Friday's sell off all markets could head south, but then again I wonder if xjo might be deemed a safer place to invest- I got the sense we benefited when the Crimean problem surfaced, but we did have rumours of Chinese stimulus at the same time.

Or will the crisis be over in a few days and markets will move on?

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post Posted: Apr 8 2014, 03:36 PM
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In Reply To: Barra's post @ Apr 7 2014, 08:19 AM

Another day and another turn of the propaganda dial from Moscow.

How long before this smouldering situation catches fire and the Russian troops roll in?

post Posted: Apr 7 2014, 08:19 AM
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In Reply To: marketwinner's post @ Apr 5 2014, 12:55 PM

I would not say the situation in Ukraine has eased. It is merely in a holding pattern while Putin puts his story together for the takeover of Eastern Ukraine.

Putin has said all along his troops are ready to protect ethnic Russians wherever they are. How hard is it going to be to create a few street battles between pro Russian groups and some Ukrainian nationalists who Russian media are labelling Nazi's? Not hard as the above story shows the stage is being set.

The fact that the EU is looking at sending gas to Ukraine to reduce the impact of ludicrously steep gas price hikes just highlights how this is already spiralling out of hand. Why did Putin use this lever when he already has Crimea? Imo it wasn't to punish the Ukrainian government as reported, it's purpose is to foment bad blood within eastern Ukraine and provide the trigger he's looking for.

There is a lot of equipment on the border such as communications jamming vehicles which you wouldn't mobilize unless you were seriously considering (planning) an invasion.

Said 'Thanks' for this post: triage  grevillia  
post Posted: Apr 5 2014, 12:55 PM
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In Reply To: inthemoneystocks's post @ Mar 13 2014, 03:18 AM

Fortunately at this moment situation has cooled down. Any type of major prolonged war could lead to great depression. I don’t think anybody want to start major war at this time due to global economic situations. In some situations extreme care is very important. One party’s mistake could bring misery to many. It is high time to bring once and for all solutions to global political crisis. Otherwise we cannot expect economic prosperity. Everybody should learn to respect each other while building peace and harmony. Why do want to fight with their fellow humans?

post Posted: Mar 13 2014, 03:18 AM
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As we all know, the Russian-Ukraine tension in Crimea continues to escalate on a daily basis. While this event has been front page news it has not really affected the stock market in the United States. Traders and investors have basically shrugged off all of the geopolitical events; they have simply followed the action in the USD/JPY (U.S. Dollar Index vs Japanese Yen) for market movement. Basically, when the USD/JPY chart moves higher so does the S&P 500 Index, NASDAQ Composite, and the Russell 2000 Index. On the flip side, when the USD/JPY declines so does the major stock indexes. While this lockstep relationship between the stock markets and the USD/JPY will not last forever, it has been firmly intact since late 2012. So it is safe to say that the stock markets really only care about this current trade at this time.

Now we will point out some issues that could affect the USD/JPY chart...

One of the problems brewing around the world at this time is the high Japanese debt levels. Some reports are now saying that Japanese debt is 300 percent higher than its GDP. Any debt level that is this high is extremely alarming. The Bank of Japan is printing more money than the Federal Reserve, and their economy is only one third the size of the United States. How long can this continue? While a weak Japanese Yen helps to lift markets it cannot go on forever; any strength in the yen will disrupt the recent stock rally and an implosion of the Japanese economy could trigger it.

China is also facing a ton of problems. Some of the Chinese problems include shadow banking, high debt levels, and daily liquidity issues. The Shanghai Composite Index is now trading at a five year low and it is not very far from its 2008 lows. The stock chart of the Shanghai Composite is not very healthy looking and signals further weakness ahead for the Chinese economy. China is a major exporter to the United States and has the second largest economy in the world.

Japan and China have also been arguing over a chain of islands in the East China Sea. Any military conflict between China and Japan would affect the United States directly, as the U.S. military is obligated to defend Japan and its territories. This week, military officials will meet in Hawaii to review bilateral defense guidelines for the first time in 17 years. Both China and Japan have had a long history of dislike for each other and are very sensitive to the recent words spoken by the respected leaders of both countries. Any conflict between these two countries could escalate in major global tensions as other countries choose sides.

These are just a few of the problems that are brewing at the start of 2014. Any of these potential catalysts could trigger a decline in the stock markets around the world in the next few months.

Nicholas Santiago

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