Futures slip, gold gains after Ukraine vote


S&P 500 futures are off marginally as - to no one's surprise - the vast majority of voters in the Crimean referendum chose to secede from Ukraine and join Russia. Up next will be Western reaction should Russia move to annex the region. President Obama has authorized financial sanctions and EU ministers meeting tomorrow will discuss asset freezes and visa bans.

The largest reaction is in precious metals, with gold ahead 0.6% to $1,387 per ounce - the highest since around Labor Day last year. Silver is up 0.6% to $21.55.

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Comments (32)
  • Patent News
    , contributor
    Comments (1464) | Send Message
     
    "The markets were expecting the Crimean to agree to join Russia. So that alone is unlikely to move markets. The focus is on what kind of actions Russia and the West will take next," said Tohru Sasaki, the head of Japan rates and FX research at JPMorgan Chase.

     

    More than 90 percent of Crimeans chose the option of annexation by Moscow in a referendum, which Western powers have denounced as a sham."
    16 Mar 2014, 08:43 PM Reply Like
  • ianxponent
    , contributor
    Comments (738) | Send Message
     
    With the Russians now so intent on having votes for self determination, when will we see plebiscites in Chechnya, Dagestan, Ingushetia, North Ossetia, and Tatarstan?
    16 Mar 2014, 09:01 PM Reply Like
  • dieuwer
    , contributor
    Comments (2910) | Send Message
     
    Kosovo
    16 Mar 2014, 11:59 PM Reply Like
  • Philip Marlowe
    , contributor
    Comments (1549) | Send Message
     
    I really hope the US and the EU do not over-react. It is not that big of a deal if a region that has historically been part of Russia and whose population overwhelmingly identify as Russian goes back to Russia.

     

    Regarding asset freezes, one must keep in mind that a lot of US and European companies have assets in Russia as well. This will not help anyone. I am not sure whether the Americans or the Russians will get hurt more, but there will be pain all around. And if the west goes all the way and succeeds in isolating Russia, that will just bring them closer to China.

     

    And for what? To force a bunch of Russians to pretend to be Ukranians against their will.
    16 Mar 2014, 09:15 PM Reply Like
  • ThetaDecay
    , contributor
    Comments (103) | Send Message
     
    I wonder: if the internet had existed 80 years ago, would some people get on Seeking Alpha and claim that the Anschluss was "not that big of a deal" and opine that Hitler had a claim to "a region that has historically been part of [Germany] and whose population overwhelmingly identify as [German]."

     

    As to your claim that the US and Russia with suffer equally: Russia is the US's 20th largest trading partner, while the US is Russia's 5th biggest trading partner (source: http://bit.ly/PH44Vw). Additionally, Russia will lose the EU, a region responsible for half of their total exports.

     

    China may be playing both sides. But if push comes to shove and China is forced to pick a side, they will undoubtedly side with the US. China owns $1.317 trillion of US government debt - their interests are considerably intertwined with the interests of the US (source: http://fxn.ws/PH4aw4)
    16 Mar 2014, 10:06 PM Reply Like
  • John Leszar
    , contributor
    Comments (268) | Send Message
     
    California was historically part of Mexico and over 50% of the entire state population are now Hispanic. Even far more Hispanics live in the in southern half of California. I don't think it would be a good idea for part of California to succeed from our country.

     

    The Ukraine is not much different. In addition to Crimea (which is geographically and economically strategic, the eastern half of Ukraine is Russian speaking too. Should we let the Russians have that too?

     

    The are other countries that were part of Russia and are now happy not to fall under the the brutal power of the Russians. This is a lot more serious than is being suggested. Although it certainly fits with the amateurish foreign policy of the current administration.
    16 Mar 2014, 10:28 PM Reply Like
  • Philip Marlowe
    , contributor
    Comments (1549) | Send Message
     
    Oh no the Hitler comparisons start rolling in. I am not generally against Hitler comparisons because I love history, but if you are going to use them, you should try to actually look up the history.

     

    Austria had not at the time been historically part of Germany. In fact before the Anschluss it had never been part of Germany. And the majority of the Austrian population as well as the lawfully elected government were against the Anschluss. The Austrian government called a referendum to prevent annexation and not to cause it, and it was widely believed that the referendum would result in a vote for independence. However, the Nazis staged a coup d'etat before the referendum could happen.

     

    In Crimea, the lawful regional parliament which was elected under Ukranian law long before this crisis started called for the referendum and for annexation. There is no doubt that the majority of the Crimean population want this to happen.

     

    Regarding the results of sanctions, you are probably right, Russia may be hurt more than us. But is that a win for us? If you lose a finger would you be happy because the other person loses a hand? My point is that there will be losses all around.

     

    And I agree that sometimes a country has to make sacrifices and take losses for a good cause, but what is the cause here?
    16 Mar 2014, 10:46 PM Reply Like
  • Philip Marlowe
    , contributor
    Comments (1549) | Send Message
     
    I do not think many people in California would vote for annexation into mexico. This is especially true of the hispanics, many of whom underwent many personal hardships to get away from mexico. So not the situation is not comparable.
    16 Mar 2014, 10:52 PM Reply Like
  • ThetaDecay
    , contributor
    Comments (103) | Send Message
     
    Philip,

     

    I agree, the analogy is not perfect. Still, I feel like your points of contention are little more than the splitting of hairs.

     

    Yes, Austria had never been a part of the country of Germany. But Austria was part of the German Confederation until 1866, and, before that, a part of the Holy Roman Empire. The cultural ties were there. In fact, following WWI there was a movement within Austria that pushed for a unified German-Austrian state.

     

    Yes, unlike this situation, the Austrian referendum was called to prevent annexation. They say the devil's in the details, but please tell me how the details make these situations wholly unalike: 1) to invade a country and "oversee" the voting in response to the government calling a referendum, vs. 2) to invade a country, have armed men take the parliament, hold a closed-door session where parliament members are forced to surrender all cell phones to these armed men, have that parliament arrive at the conclusion they want a referendum, and then "oversee" the voting.

     

    I really don't understand how you can determine with such confidence that this is what the Crimean people want. I would love for you to explain that to me. I can site the 99%+ pro-German results of the Austrian referendum, yet we both agree that the majority of Austrians did not favor annexation.

     

    Your point about there being losses all around is well taken. But being a student of history, I think you would agree that sometimes it is important for a collation of countries to take a stand against a global aggressor. Sure, we can hope that this is that last we ever hear out of Putin's Russia and do nothing more that condemn the man's actions. But, at the risk of overusing the Hitler analogy, you must appreciate how a similar line of thinking lead to the failed policy of appeasement, propagated by a war-shy West in the late 1930s.
    16 Mar 2014, 11:35 PM Reply Like
  • Philip Marlowe
    , contributor
    Comments (1549) | Send Message
     
    The Crimean parliament has declared independence from the Ukraine multiple times before this invasion.
    17 Mar 2014, 12:53 AM Reply Like
  • ThetaDecay
    , contributor
    Comments (103) | Send Message
     
    Philip,

     

    I cannot find any source indicating the Crimean parliament declared independence before this invasion. The first mention I could find of parliament declaring independence occurred on March 6th, a full week after armed troops had surrounded airports, military bases, and government buildings in Crimea.

     

    Furthermore, I don't know how you can consider the parliament of Crimea legitimate. The vote to hold a referendum was held in a closed-door session, in which cell phones were prohibited, overseen by a group of 50 armed soldiers. Additionally, "some Crimean legislators who were registered as present have said they did not come near the building" (http://ti.me/PHqeqr). As the Time article aptly notes: "in any case, those who did arrive could hardly have voted their conscience while pro-Russian gunmen stood in the wings with rocket launchers."

     

    Clearly, anything coming from the Crimean parliament has been provided under extreme duress. It seems like a, uh, mischaracterization to claim that these are the actions of a freely-elected government.
    17 Mar 2014, 01:31 AM Reply Like
  • filipo
    , contributor
    Comments (4635) | Send Message
     
    Philip,
    "Austria had not at the time been historically part of Germany."

     

    Not true:
    http://bit.ly/1hqOlRD
    17 Mar 2014, 01:51 AM Reply Like
  • filipo
    , contributor
    Comments (4635) | Send Message
     
    Theta,
    You are right to some degree: the Crimean Tatars (12% of population) did not vote as a protest against the referendum.
    However, since the majority of the Crimeans are ethnic Russians, it's but normal that they vote in favor of adherence to Russia.
    It is not by denying these facts that a solution for the political stalemate will be found.
    17 Mar 2014, 02:01 AM Reply Like
  • Philip Marlowe
    , contributor
    Comments (1549) | Send Message
     
    Thetadecay,

     

    I am having trouble finding sources, because it seems that someone has been changing the Crimea wikipedia pages, but here is an example of a previous attempt at independence that was stopped by the Ukraine:

     

    http://bit.ly/1fCaqdo
    17 Mar 2014, 02:18 AM Reply Like
  • Philip Marlowe
    , contributor
    Comments (1549) | Send Message
     
    filipo,

     

    It is a bit of a stretch to call that incarnation of the Holy Roman empire a country. It was more of a close alliance of many various entities. But we are getting off topic.
    17 Mar 2014, 02:26 AM Reply Like
  • robo_roll
    , contributor
    Comments (17) | Send Message
     
    did you mean secede?
    17 Mar 2014, 02:36 AM Reply Like
  • filipo
    , contributor
    Comments (4635) | Send Message
     
    Philip,
    "It is a bit of a stretch to call that incarnation of the Holy Roman empire a country"

     

    At the time there simply were no European (or American) national entities or countries according to the definition that we use today.

     

    I didn't call it a country. I simply pointed out to you that at some point in history Austria has formed a common structure with Germany.

     

    And later on, as a result of the Treaty of Vienna in 1815 they again were put together:
    http://bit.ly/1iU1IPK
    17 Mar 2014, 04:12 AM Reply Like
  • filipo
    , contributor
    Comments (4635) | Send Message
     
    robo,
    I hope he did......
    17 Mar 2014, 04:14 AM Reply Like
  • solarcircle
    , contributor
    Comments (320) | Send Message
     
    so I guess the EU won't mind if the Russians shut off 1/3 of their fuel supply. And I suppose the U.S. won't mind if the Russians start selling their oil without the dollar, hastening the demise of the petrodollar. The Russians aren't toothless. The U.S. should start minding their own business and stop instigating (they funded the overthrow of the Ukraine government - and are supporting the new neo-nazis in power)
    17 Mar 2014, 04:16 AM Reply Like
  • COBeeMan
    , contributor
    Comments (2970) | Send Message
     
    Agreed. Crimea is an example of Western governments suddenly realizing it might not just be middle eastern people who are dissatisfied with their governments and want options. As you said, this started long ago. It is now exacerbated by Ukraine having become the latest economic deadbeat nation (like Greece was?) defaulting on billions and needing bailouts, high unemployment and inflation, scarce food, demonstrators in Kiev being shot, and the elected President of Ukraine being overthrown (or is this more like Egypt?). Putin did not start this, but he is the main focus of our idiot media for some reason. The people of Crimea are doing what democratic republics do, they are voting on several levels how they want to be governed. Why would that by a bad thing in any rational mind (unless the true goal is maintaining control of the status quo instead of accomodating the will of the people).
    17 Mar 2014, 01:51 PM Reply Like
  • COBeeMan
    , contributor
    Comments (2970) | Send Message
     
    ThetaDecay - If such a vote had been tried with pro-Ukrainian gunmen guarding the doors you would be happier and claiming it to be more objective?
    17 Mar 2014, 02:13 PM Reply Like
  • John Leszar
    , contributor
    Comments (268) | Send Message
     
    Philip,
    "Personal hardships"..Like walking across our border, and getting everything handed to them like free healthcare, reduced tuition, food stamps and fraudulent tax refunds. No, they wouldn't vote to secede (Thanks Robo_roll for correcting my spelling) but I wasn't actually serious in my suggestion. I simply thought you were making all of those Russian soldiers sound like heroes. Your "lawful regional parliament" voted with Russian rifles pointed at them too. A bit too much spin for me.
    17 Mar 2014, 02:18 PM Reply Like
  • filipo
    , contributor
    Comments (4635) | Send Message
     
    John,
    In our eyes it's mind boggling why those Crimeans honestly want unification with Russia, but you simply can't explain this referendum by saying they're brainwashed or put under pressure.
    Around 65% of the Crimeans are ethnic Russians. That explains part of their behaviour: they feel solidarity with Russia.
    And then, they're fed up with the kind of nasty experiences that Serbia had to go through. They really want to be protected.
    From a sociological point of view one can also say that they want social status quo: no capitalistic hard work for life, no stressful responsibilities...
    they like communism à la Putin.
    17 Mar 2014, 04:48 PM Reply Like
  • sethmcs
    , contributor
    Comments (3535) | Send Message
     
    Score: Putin 1 Obama 0
    16 Mar 2014, 10:07 PM Reply Like
  • Copious28
    , contributor
    Comments (442) | Send Message
     
    Actually, Putin lost on the 'soft power' strategy supporting Viktor Yanukovych.
    16 Mar 2014, 11:28 PM Reply Like
  • COBeeMan
    , contributor
    Comments (2970) | Send Message
     
    Obama shouldn't even be involved (unless asked to step in by one of the sides in this civil separation issue), and there is no match with Putin to score.
    17 Mar 2014, 02:20 PM Reply Like
  • Tack
    , contributor
    Comments (16182) | Send Message
     
    "Up next will be Western reaction should Russia move to annex the region."

     

    Is his a joke? The Russians already have over 20,000 troops in Crimea. Game, set, and match.
    16 Mar 2014, 11:01 PM Reply Like
  • Copious28
    , contributor
    Comments (442) | Send Message
     
    Isnt this whole thing really interesting: the US is supporting a country that had overthrown their democratically elected prime minister by rebellion; and the US is against an autonomous region voting to secede to join Russia?

     

    If that's not the antithesis of our values, I dont know what is.

     

    To Putin (and I believe all the leaders since and including Khrushchev), Ukraine joining the West is a red line. I doubt the US will do anything more than sanctions.
    16 Mar 2014, 11:38 PM Reply Like
  • Robert K. Stuart
    , contributor
    Comments (162) | Send Message
     
    Democratically elected - but only leads by consent of the people - Ukraine didn't want to be under Russia's thumb.

     

    Crimea can go to Russia (forgone anyways) - the issue was the show of force - I would like to see Putin back off now and go to the UN and ask that Crimea be allowed to secede by legal means (ha-ha i know) - allow the referendum to stand as a symbolic affirmation of the Crimean peoples' intentions - avoid sanctions - Putin is setting a precedent that the world doesn't need - also, let's hope the iron curtain isn't descending here.
    17 Mar 2014, 12:49 AM Reply Like
  • The Sociology of Finance
    , contributor
    Comments (955) | Send Message
     
    I don't get how Russia "won". Last year, Ukraine was firmly in the Russian camp. Now it is not. We never had any interests in the Crimea. Ever. We lost nothing.

     

    If I was in the State department, I'd be very happy: we get to denounce the whole affair while Russia looks bad in the eyes of the world community. At minimal cost to US taxpayers, we get an ally right on the border with Russia, trade ties etc. The wedge between China and Russia has grown, and now we have a great bargaining chip with Syria and Iran: "Look Russia, we'll let the Crimea thing slide, but you gotta rein in the crazies on your side in the Middle East".
    17 Mar 2014, 12:02 AM Reply Like
  • rubber duck
    , contributor
    Comments (194) | Send Message
     
    Russia got what it wanted, it didn't want Ukraine's debt, we will get that.
    17 Mar 2014, 10:28 AM Reply Like
  • Bioalchemy
    , contributor
    Comments (175) | Send Message
     
    Looks now Ukrainians got what they want: a pissed off Russia and an independent Crimea. It was very smart to trust EU, though nothing practical could be provided.
    17 Mar 2014, 03:30 AM Reply Like
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