Biggest Global Banks Go to Pieces Under Pressure From Regulators

Jakarta Globe - Bloomberg, Michael J. Moore, Yalman Onaran & Nicholas Comfort, Feb 27, 2015

The logo of HSBC Private Bank in Geneva, Switzerland, 18 February 2015.
(EPA Photo/Martial Trezzini)

Global regulators have issued dozens of rules aimed at making the biggest banks safer. That’s leading to another result some wanted: making them shrink.

HSBC Holdings, Europe’s biggest bank by market value, said this week it’s considering “extreme solutions” for some of its units. Royal Bank of Scotland Group is reducing its US trading staff and getting out of two-thirds of the countries where it operates. JPMorgan Chase & Co. is closing branches, raising fees on some institutional deposits and looking for ways to shrink its trading businesses.

Increasingly strict capital rules over the past three years may be forcing the breakup of the financial supermarkets built in the decade before the financial crisis. Lenders, unable to use borrowed money to fund as much of their business as they once did, have cut profitability targets and are weighing more drastic actions to meet them.

“We’re beginning to see discussions that these capital charges are sufficiently large it’s causing those firms to think seriously about whether or not they should spin off some of their enterprises to reduce their systemic footprint,” Federal Reserve Chairman Janet Yellen told the House Financial Services Committee on Wednesday. “And frankly, that’s exactly what we want to see happen.”

Bank capitulation

Banks have been cutting assets since the financial crisis, selling smaller units and unwinding derivatives that carried high capital charges. The latest moves represent a capitulation in which many of the largest banks may be ending their ambitions of offering all services in all regions.

Regulators’ tools have included minimum capital ratios, stress tests and demands that more bank assets be the types that are easy to sell in a crisis. That combination, along with tepid economic growth and low trading levels, drove return on equity, a measure of profitability, to an average of 3.3 percent last year at 10 of the largest banks from 17 percent in 2006.

“Banks certainly anticipated the direction of travel on capital rules, but with hindsight not the severity, which is why combined with low economic growth we are seeing repeated changes to strategies to try to improve return on equity,” Jon Peace, an analyst at Nomura Holdings, wrote in an e-mail.

While RBS’s decisions were driven by seven straight annual losses, other banks may face pressure to downsize based on profits that aren’t high enough to meet investors’ demands. Bank of America and Citigroup, each with more than $1.8 trillion in assets, haven’t topped a 7 percent return on equity since the financial crisis.

‘Intense pressure’

Deutsche Bank is weighing job cuts, winding down business lines at its investment bank and selling assets, including consumer-lending unit Postbank in Germany, as part of a strategy review at the Frankfurt-based lender, a person with knowledge of the matter said last month.

“In 18 to 36 months, there will be a much more intense pressure on some number of banks to break up,” Lazard Vice Chairman Gary Parr said in an interview last month with Bloomberg TV. “It’s a Darwinian exercise, and what’s fascinating to me is how slowly it’s going.”

JPMorgan Chief Executive Officer Jamie Dimon, who runs the most profitable of the 10 banks, has taken the strongest stand against radical change. Dimon has defended his bank against analysts’ suggestions that it would be worth more broken up, saying the lender’s structure is what clients want and offers $18 billion in additional revenue and cost savings.

Black knight

A year ago, JPMorgan said it could earn a 15 percent return on tangible equity, which excludes items such as goodwill, even though it would have to maintain a 10 percent common-equity ratio. In December, the Fed proposed stricter capital rules for the biggest banks. JPMorgan said this week that it will cut more costs and earn 15 percent with a 12 percent common-equity ratio.

“Jamie Dimon is playing the role of the Black Knight in ‘Monty Python and the Holy Grail’: He’s saying it’s just a flesh wound,” said Mike Mayo, an analyst at CLSA, referring to the 1975 British film in which the knight loses his limbs. “If this is just a flesh wound and they can get a 15 percent ROE with all the additional regulatory impediments, then the call from investors to break up subsides.”

Still, JPMorgan acknowledged at its annual investor day this week that it’s trading at the biggest discount among the eight largest US banks relative to analysts’ estimates of future profitability. Glenn Schorr, an analyst at Evercore ISI in New York, asked if tinkering at the margins failed to grasp the message regulators are sending.

“Are we missing the forest for the trees?” Schorr asked JPMorgan Chief Financial Officer Marianne Lake. “You’re optimizing, but is the Fed going to look at that and say, ‘I don’t get it, how many ways do we need to tell you you need to shrink, both in size and complexity?’”

Onerous rules

It isn’t only the rules forcing banks to cut their reliance on borrowing that have limited profitability. So-called return on assets, which measures how much profit a bank can make for every dollar of assets it holds, has also fallen.

For 10 of the largest European and US banks, profit on each $100 of assets on the balance sheet fell to 22 cents last year from 81 cents in 2006.

With all the capital rules, banking is still highly leveraged compared with other industries. The risk arising from that model has led regulators to attempt to ensure that banks can be wound down in a crisis.

‘Safer system’

“They are saying we’ve got to go back to a much safer system and that means everyone needs to shrink,” said David Ellison, a Boston-based money manager at Hennessy Advisors, which oversaw $5.9 billion at year-end. “They are using Basel, the CCAR stress test, to say this is what we want you to do. They have effectively nationalized the banking system.”

At first, it looked as if the rules wouldn’t be that onerous. Capital requirements revised in 2010 after the crisis were watered down under pressure from some European governments. So were the harshest elements of the US Dodd-Frank Act the same year after intense industry lobbying.

The failure of more European banks and the emergence of scandals that revealed rate-rigging and tax-dodging by others changed the political climate, leading to increased desire for stiffer measures. Global regulators added capital surcharges for the largest institutions. US supervisors almost doubled those.

Winding down

There’s nothing in Dodd-Frank or the global capital rules that tells banks to break up, according to Thomas Hoenig, vice chairman of the US Federal Deposit Insurance. The law says they should be capable of being wound down in a crisis, which is pushing some firms to shrink, he said.

“We’re not going to break you up, but we want you to structure yourself so that your failure doesn’t bring the economy down next time,” Hoenig said. “If you can’t get to that point with your current organization structure, then you should sell assets to get to that state.”

That message is finally getting through.

“Everybody knew capital levels would have to rise, but the magnitude of what regulators plan now probably exceeds most people’s expectations,” said Carola Schuler, co-head of European bank ratings at Moody’s Investors Service. “These higher capital requirements could be interpreted as an acknowledgment that the too-big-to-fail containment framework that was in place isn’t working properly.”

Bloomberg

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"The Recalibration of Awareness – Apr 20/21, 2012 (Kryon channeled by Lee Carroll) (Subjects: Old Energy,Recalibration Lectures, God / Creator, Religions/Spiritual systems (Catholic Church, Priests/Nun’s, Worship, John Paul Pope, Women in the Church otherwise church will go, Current Pope won’t do it), Middle East, Jews, Governments will change (Internet, Media, Democracies, Dictators, North Korea, Nations voted at once), Integrity (Businesses, Tobacco Companies, Bankers/ Financial Institutes, Pharmaceutical company to collapse), Illuminati (Started in Greece, with Shipping, Financial markets, Stock markets, Pharmaceutical money (fund to build Africa, to develop)), Shift of Human Consciousness, (Old) Souls, Women, Masters to/already come back, Global Unity.... etc.) -(Text version)

“… The Shift in Human Nature

You're starting to see integrity change. Awareness recalibrates integrity, and the Human Being who would sit there and take advantage of another Human Being in an old energy would never do it in a new energy. The reason? It will become intuitive, so this is a shift in Human Nature as well, for in the past you have assumed that people take advantage of people first and integrity comes later. That's just ordinary Human nature.

In the past, Human nature expressed within governments worked like this: If you were stronger than the other one, you simply conquered them. If you were strong, it was an invitation to conquer. If you were weak, it was an invitation to be conquered. No one even thought about it. It was the way of things. The bigger you could have your armies, the better they would do when you sent them out to conquer. That's not how you think today. Did you notice?

Any country that thinks this way today will not survive, for humanity has discovered that the world goes far better by putting things together instead of tearing them apart. The new energy puts the weak and strong together in ways that make sense and that have integrity. Take a look at what happened to some of the businesses in this great land (USA). Up to 30 years ago, when you started realizing some of them didn't have integrity, you eliminated them. What happened to the tobacco companies when you realized they were knowingly addicting your children? Today, they still sell their products to less-aware countries, but that will also change.

What did you do a few years ago when you realized that your bankers were actually selling you homes that they knew you couldn't pay for later? They were walking away, smiling greedily, not thinking about the heartbreak that was to follow when a life's dream would be lost. Dear American, you are in a recession. However, this is like when you prune a tree and cut back the branches. When the tree grows back, you've got control and the branches will grow bigger and stronger than they were before, without the greed factor. Then, if you don't like the way it grows back, you'll prune it again! I tell you this because awareness is now in control of big money. It's right before your eyes, what you're doing. But fear often rules. …”

US, Cuba resume normalization talks

Yahoo – AFP, Jo Biddle, 27 Feb 2015

The US and Cuban flags are seen in the George C. Marshall Conference Center 

while representatives from the two nations meet at the US State Department

on February 27, 2015 in Washington, DC (AFP Photo/Brendan Smialowski)

Washington (AFP) - The United States rebuffed a Cuban demand to be taken off the US list of state sponsors of terror Friday as they opened a second round of historic talks to restore long severed diplomatic ties.

US Secretary of State John Kerry said the terror designation, in place since 1982, would be reviewed separately but was not a matter for negotiation.

"The state sponsored terrorism designation is a separate process, it is not a negotiation," he said.

Jeffrey DeLaurentis (2L), Roberta Jacobson

(3L), Alex Lee (4L) and others meet with

Cuban officials at the US State Department

February 27, 2015 in Washington, DC

(AFP Photo/Brendan Smialowski)

"And that evaluation will be made appropriately and nothing will be done with respect to the list until the evaluation is completed."

A top Cuban foreign ministry official, Gustavo Machin, had argued before the start of the latest round of talks that the terror designation was in "contradiction" with full diplomatic relations.

The issue has practical as well as symbolic importance to the Cubans because the designation complicates its access to the global banking system.

Friday's talks at the State Department are only the second since President Barack Obama and Cuba's President Fidel Castro surprised the world in December with their decision to restore ties after more than a half century of Cold War enmity.

The hope is that within the coming months, both nations will agree to reopen embassies in each other's capitals and appoint full-fledged ambassadors. Currently they operate through so-called interests sections in Havana and Washington.

US President Barack Obama is due to attend the Summit of the Americas in Panama on April 10-11, which Cuba will also attend for the first time.

Differences to overcome

Observers say that both nations, long mired in tension stemming from the Cold War, are keen to relaunch full diplomatic relations around that date.

But as the contretemps over the terror list shows, a common history of distrust and antagonism has left the path strewn with obstacles.

An initial round of talks in Havana last month -- the highest level since US-Cuban relations were severed in 1961 -- broke the ice but ended with little sign of a breakthrough.

The band 'California Repercussions' from

San Francisco in the United States, perform

at a park in old Havana, on February 16,

2014 (AFP Photo/Adalberto Roque)

Kerry described the talks as technical in nature -- "fairly normal negotiations with respect to movement of diplomats, access, travels, different things."

Washington has insisted that its diplomats and embassy be granted full powers under the Vienna Convention to operate freely, including meeting with Cuban dissidents.

The negotiating teams met at the State Department just before 9:00 am (1400 GMT).

Roberta Jacobson, assistant secretary of state for Western Hemisphere affairs, faced Josefina Vidal, the Cuban foreign ministry's director for US affairs, across a long table flanked by their respective delegations.

Neither said anything during the few minutes journalists were allowed into the room to record the encounter. Press conferences were scheduled for later in the day.

'Rolling up sleeves'

"I certainly think that our presidents and my secretary would be delighted if we could have everything worked out in time for the Summit of the Americas," a senior State Department official told reporters ahead of the talks.

"But that depends a lot on how our counterparts come to the table prepared to get things done and whether they are comfortable with the things we need in order to run an embassy the way we do in other places around the world."

The talks may be a "little bit disappointingly workman-like in their nature this time. But this is where we roll up our sleeves as diplomats and sit down at the table and make sure that we hammer out all of the details out to get embassies up and running."

US Assistant Secretary of State for Western Hemisphere Affairs, Roberta S.Jacobson

-- the most senior American official in Havana since 1980 -- speaks during

a press conference in Havana on January 23, 2015 (AFP Photo/Adalberto Roque)

Restoring diplomatic ties "doesn't take very long if we get agreement on things," the official added.

Obama has called on the US Congress to lift the decades-old biting economic embargo of Cuba.

But some lawmakers -- as well as parts of the Cuban dissident community -- remain wary of the diplomatic demarche, arguing Obama has failed to secure guarantees about progress on human rights.

One of the aims of the meeting is to set a date for the first ever US-Cuba discussion on human rights.

"It will be the first time that we would be able to sit down with the government directly and have an in-depth conversation about our differing perspectives," the State Department official said.

Net neutrality activists score landmark victory in fight to govern the internet

FCC says ‘we listened and we learned’, and passes strict broadband rules that represent ‘a red-letter day for internet freedom’

The Guardian, Dominic Rushe in Washington, 26 February 2015

Protesters hold a rally at the FCC headquarters in Washington to
support net neutrality. Photograph: Karen Bleier/AFP/Getty Images

Internet activists scored a landmark victory on Thursday as the top US telecommunications regulator approved a plan to govern broadband internet like a public utility.

Following one of the most intense – and bizarre – lobbying battles in the history of modern Washington politics, the Federal Communications Commission (FCC) passed strict new rules that give the body its greatest power over the cable industry since the internet went mainstream.

FCC chairman Tom Wheeler – a former telecom lobbyist turned surprise hero of net neutrality supporters – thanked the 4 million people who submitted comments on the new rules. “Your participation has made this the most open process in FCC history,” he said. “We listened and we learned.”

Wheeler said that while other countries were trying to control the internet, the sweeping new US protections on net neutrality – the concept that all information and services should have equal access online – represented “a red-letter day for internet freedom”.

“The internet is simply too important to be left without rules and without a referee on the field,” said Wheeler. “Today’s order is more powerful and more expansive than any previously suggested.”

Barack Obama – who had pushed for the regulations – praised the decision and thanked the people who had protested for tighter rules. “I ran for office because I believed that nothing can stand in the way of millions of voices calling for change. That’s the backbone of our democracy–and you’ve proven that this timeless principle is alive and well in our digital age.So to all the people who participated in this conversation, I have a simple message: thank you,” the president wrote.

But Republicans and cable companies were quick to attack the move. The National Cable and Telecommunications Association said the rules would hurt “everyday broadband users” by raising costs and reducing investment.

Broadband providers will be banned from creating so-called “fast lanes” blocking or slowing traffic online, and the regulator will oversee mobile broadband as well as cable. The FCC would also have the authority to challenge unforeseen barriers broadband providers might create as the internet develops.

Activists and tech companies argue the new rules are vital to protect net neutrality – the concept that all information and services should have equal access to the internet. The FCC’s two Republican commissioners, Ajit Pai and Michael O’Rielly, voted against the plan but were overruled at a much anticipated meeting by three Democratic members on the panel.

Republicans have long fought the FCC’s net neutrality protections, arguing the rules will create an unnecessary burden on business. They have accused Obama of bullying the regulator into the move in order to score political points, with conservative lawmakers and potential 2016 presidential candidates expected to keep the fight going well into that election campaign.

Pai said the FCC was flip-flopping for “one reason and one reason only: president Obama told us to do so”.

Wheeler dismissed accusations of a “secret” plan as “nonsense”. “This is no more a plan to regulate the internet than the first amendment is a plan to regulate free speech,” Wheeler said.

“This is the FCC using all the tools in our toolbox to protect innovators and consumers.”

Obama offered his support to the rules late last year, following an online activism campaign that pitched internet organisers and companies from Netflix and Reddit to the online craft market Etsy and I Can Has Cheezburger? – web blog home of the Lolcats meme – against Republican leaders and the cable and telecom lobbies.

Broadband will now be regulated under Title II of the Communications Act – the strongest legal authority the FCC has available. Obama called on the independent regulator to implement Title II last year, leading to charges that he unduly influenced Wheeler’s decision that are now being investigated in Congress.

Broadband providers hit back immediately. The National Cable and Telecommunications Association said the rules would hurt “everyday broadband users” by raising costs and reducing investment.

“Today’s decision by the FCC to encumber broadband Internet services

with badly antiquated regulations is a radical step that presages a time

of uncertainty for consumers, innovators and investors,” said Michael Glover, Verizon’s senior vice-president for public policy and government affairs.

To illustrate what Verizon saw as the FCC’s old-fashioned thinking, the company put out its news release in typewriter font and dated it 1934. The release also went out in Morse code.

.@Verizon doesn't give a font. #NetNeutrality #FCClive http://t.co/Nu08lnMf6T pic.twitter.com/IrJYXV0d8T
— dominic rushe (@dominicru) February 26, 2015

Before the meeting on Thursday, a small band of protesters gathered in the snow outside the FCC’s Washington headquarters, in celebration of their success in lobbying for a dramatic U-turn in regulation. Wheeler and his Democratic colleagues, Mignon Clyburn and Jessica Rosenworcel, were cheered as they sat down for the meeting.

Joining the activists outside was Apple co-founder Steve Wozniak, who said the FCC also needed more power to prevent future attacks on the open internet.

“We have won on net neutrality,” Wozniak told the Guardian. “This is important because they don’t want the FCC to have oversight over other bad stuff.”

What a legend. RT @dominicru: @stevewoz outside #NetNeutrality vote. @FCC needs power to stop "bad stuff". pic.twitter.com/qxz1j2NOwR
— Craig Hitchings (@craighitchings) February 26, 2015

Tim Berners-Lee, inventor of the world wide web, addressed the meeting via video, saying he applauded the FCC’s decision to protect net neutrality: “More than anything else, the action you take today will preserve the reality of a permission-less innovation that is the heart of the internet.”

“It’s about consumer rights, it’s about free speech, it’s about democracy,” Berners-Lee said.

Clyburn compared the new rules to the Bill of Rights. “We are here to ensure that there is only one internet,” she said. “We want to ensure that those with deep pockets have the same opportunity as those with empty pockets too succeed.”

The fight for net neutrality has been largely fought online. The millions of messages were sent to the FCC during its comment period on the rules before Thursday’s landmark series of votes.

Last year the FCC looked set to approve rules that would have allowed internet service providers to create “fast lanes” on the internet. Critics charged such a move would create a two-tiered internet and stifle competition.

Tiffiniy Cheng, co-founder of internet advocacy group Fight for the Future, said: “This is our free speech struggle in the digital age. Institutions of power should know by now: internet users will not stand idly by while anyone tries to take their freedom away.”

The FCC passed two new orders on Thursday. The first, equally controversial but eclipsed by the net neutrality debate, overturned bans on municipal broadband companies competing with private cable firms.

Municipal broadband companies in Chattanooga, Tennessee, and Wilson, North Carolina, pushed for the expansion plans, against which private cable and telecom rivals have been lobbied intensely. Twenty US states currently have limits or bans on local governments building, owning or partnering with others to give local businesses and residents a choice in high-speed internet access. That vote, too, fell along party lines, potentially opening many US cities to wider competition.

Voting for the municipality change, Clyburn said millions of people had been left in “digital darkness” because cable companies did not want to expand in their areas. The Republican commissioners, O’Rielly and Pai, called the change “appalling” and “un-constitutional”.

“Unfortunately for the Commission, all the lipstick in the world cannot disguise this pig,” said Pai.

Christopher Mitchell, director of community broadband networks at the Institute for Local Self-Reliance, said Thursday’s vote could set “an historic precedent” that could “profoundly impact the lives of three-quarters of Americans who are without broadband or a choice in their service because of big cable underinvestment in their towns”.

The FCC was forced to rewrite its broadband rules after Verizon successfully challenged its authority to stop it creating fast lanes or to more broadly regulate the industry under its last set of regulations, the Open Internet Order of 2010. Legal challenges for the new rules are also inevitable.

“When internet users come together to fight for something they believe in,” said Fight for the Future’s Cheng, “nothing can stop them.”

Obama: ‘We cannot allow ISPs to restrict the best
access.’ Photograph: Reuters

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Ex-Yemen President Saleh amassed 'up to 60 billion,' UN reports

Ali Abdullah Saleh, the former president of Yemen, allegedly siphoned billions of dollars into his own coffers while in power. The evidence stems from a UN report about the deposed leader.

Deutsche Welle, 26 Feb 2015

An expert panel presented the UN Security Council with a report this week outlining the alleged corruption practices of former Yemeni President Ali Abdullah Saleh. The main finding of the report highlighted the fortune - estimated to be between $32-$60 billion (28 billion-53 billion euros) - which the former strongman amassed during his 33 years in power.

"These assets are said to take the form of property, cash, shares, gold and other valuable commodities," the expert report said, adding that he had transferred the majority of those assets to roughly 20 countries under false names.

According to the findings of the UN probe, Saleh was able to hide the funds with the help of five prominent Yemeni businessmen. Using companies and other individuals as fronts also helped shield him from assets freezes.

"The origin of the funds used to generate [Saleh's] wealth is believed to be…particularly [related] to gas and oil contracts where he reportedly asked for money in exchange for granting companies exclusive rights to prospect for gas and oil in Yemen."

The investigators estimated that he earned nearly $2 billion annually during his presidency.

"Many have argued that the country's spiraling debt and economic problems would be alleviated with a repatriation of these alleged stolen assets," it added.

Saleh and Yemen's political turmoil

Yemen has devolved into economic instability and political turmoil in the time since Saleh's forced resignation in 2012 after Yemen's Arab Spring uprising. Most recently, Shiite Houthi rebels have solidified their power in Yemen's north and taken over the capital city, Sanaa. The political crisis resulted in house arrest for President Abd Rabu Mansour, who recently fled to the south and rescinded his resignation.

Wednesday's report included information from sources who alleged that Saleh has been stockpiling weapons since being deposed, supporting allegations that he has played a role in the current unrest.

Many countries, including Germany, the United States and Middle Eastern nations have closed their embassies in Yemen amid security concerns. Late last week, rival factions in Yemen agreed to create a transitional council under UN oversight in order to help govern the country along with the parliament. The council is to include representatives from social groups that have traditionally lacked a voice in Yemeni politics.

kms/sms (AP, dpa)

First death-free day of Ukraine ceasefire, US sees no compliance

Yahoo – AFP, Marc Burleigh with Jo Biddle in Washington, 25 February 2015

Ukrainian servicemen check documents of a local resident at a checkpoint 

near Slavyanoserbsk, in the region of Lugansk on February 25, 2015 (AFP

Photo/Oleksandr Ratushniak)

Kiev (AFP) - A UN-backed ceasefire showed signs of finally taking hold in Ukraine on Wednesday, with no deaths reported on the front for the first time since the truce took effect 10 days ago.

However, Secretary of State John Kerry told US lawmakers: "To date, neither Russia nor the forces it is supporting have come close to complying with their commitments," renewing warnings that Moscow would face further sanctions.

US Secretary of State John Kerry speaks 

during a hearing of the House Foreign

Affairs Committee on February 25, 2015

in Washington,DC (AFP Photo/Brendan 

Smialowski)

A day earlier, Kerry had said the Russians were persisting in "lies... to my face" about their activities in Ukraine. The US dismisses Moscow's denials about giving military backing to the separatists in east Ukraine.

Russia has in turn warned it could cut off gas supplies to Ukraine within days -- and, by extension, to parts of the European Union.

The geopolitical tensions between the old Cold War foes overshadowed a lull in fighting that produced the first day without fatalities since the ceasefire came into effect on February 15.

"Over the past day, one soldier was wounded but there were no dead," Ukrainian military spokesman Andriy Lysenko told journalists in Kiev. The rebels also reported no deaths on their side.

There was still no confirmation, though, from the Organization for Security and Cooperation in Europe (OSCE) of a pull-back of heavy weapons from the frontline -- the other key plank of the truce.

Rebels insisted they were withdrawing artillery, rocket launchers and tanks from some areas, and journalists saw a column of howitzer guns being driven along a road near the separatist stronghold of Donetsk.

But the OSCE mission in Ukraine said the warring sides had not provided the information needed to determine what, if any, arms withdrawals have occurred.

Kiev says it will not carry out an arms pull-back until a full and "comprehensive" ceasefire is observed and has accused Russia of continuing to send military hardware in to bolster the rebels.

Exasperation with Russia

Pro-Russian rebels move heavy-artillery

 from close the eastern Ukrainian town of 

Starobecheve, on February 25, 2015

 (AFP Photo/Vasily Maximov)

The West has thrown its hopes of finding a negotiated solution to the 10-month conflict fully behind the truce, which last week won unanimous backing from the UN Security Council.

But continued breaches by rebel forces -- especially their assault on Debaltseve, a strategic transport hub, and attacks on Ukrainian army positions near the port city of Mariupol -- have exasperated the EU and US.

British Prime Minister David Cameron this week announced his country will send up to 75 soldiers to Ukraine on a "training mission". He said they would not be sent to the conflict zone.

Poland on Wednesday announced its own plans to send a small contingent of troops to Ukraine to help train Kiev's military officers.

Cameron urged the EU to look at wide-ranging sanctions on Russia's economy, which is already toppling into recession because of a drop in oil prices.

View galleryThe key industrial hub of Mariupol has become the latest …

The key industrial hub of Mariupol has become the latest hotspot in the conflict in east Ukraine, st …

Russia, though, is flexing its muscles in readiness for any additional sanctions.

Its state-run gas giant Gazprom has warned it could cut off supplies to Ukraine, amid a dispute over payment.

President Vladimir Putin said Wednesday that Ukraine had paid only enough "for three or four days' gas supplies. Unless there is a prepayment, Gazprom... will terminate the supply," according to the Interfax news agency.

Much of the gas that flows through Ukraine goes on to supply the EU market.

Putin, in televised comments, also claimed Ukraine had cut off gas supplies to separatist-held territories in the east in what "smacks of genocide."

Workers of the Separate Repair - Recovery Battalion restore tanks, armored personel 

carriers and other heavy weapons in a factory in the eastern Ukrainian city of Donetsk 

on February 25, 2015 (AFP Photo/Andrey Borodulin)

Russian drill

The instability is torpedoing Ukraine's fragile economy. The country's central bank on Wednesday increased currency controls in a bid to stop a free-fall of the hryvnia.

Also of concern to EU neighbours is a Russian military drill launched near the borders with Estonia and Latvia.

Some 1,500 Russian paratroopers were to descend from the skies en masse in an exercise to capture and destroy an enemy's airfield, defence ministry spokeswoman Irina Kruglova told AFP. She said the drill was to continue into Saturday.

Since the start of the Ukraine crisis, Russia has staged a series of wargames that have alarmed its post-Soviet neighbours and the West.

Lithuania said on Tuesday it would return to limited conscription later this year because of "the current geopolitical environment".

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Russian President Vladimir Putin chairs a cabinet meeting outside 

Moscow, on February 4, 2015 (AFP Photo/Michael Klimentyev)

Matthew message (Channelled by Suzanne Ward, Feb 8, 2015)

Matthew message (Channelled by Suzanne Ward, Aug 3, 2014)

Archangel Michael: Peace on Earth is Not a Dream

Golden Age of Gaia, Steve Beckow, February 13, 2015

Archangel Michael will find a way to get his message out. Linda was not planning on giving a reading today, but a caller begged her. And in the course of the reading, AAM sent a message to all of us. Here it is:

Greetings I am Michael, Archangel of Peace, Warrior of Love, bringer of news.

Our time is at hand and you know this. As we nudge, encourage and conjoin with so many upon the planet to bring forth in form not merely in heart but in form, not only the promise of peace but the actuality of peace.

This is not a dream. This is not an unreality. This is not, as some think, ‘pie in the sky.’

This is what our partnership, our sacred union, our co-creation together, is capable of. And always has been. Only now the human vibration, frequency and knowingness has risen to a level where humans are consciously aware that they are able and capable of anchoring peace on Earth with us right now.

This is not merely an exercise of intent, but of will and action. It is a glorious day. It is not a day of defeat. It is not a day of fear. It is not a day of worry. It is a glorious day!

So I reassure you, my beloved one, and I reassure many, peace is at hand. And I thank you for all the assistance, the diligence, all the consistency that you have offered to and with me – you are cherished.

"Recalibration of Free Choice"–  Mar 3, 2012 (Kryon Channelling by Lee Caroll) - (Subjects: (Old) Souls, Midpoint on 21-12-2012, Shift of Human Consciousness, Black & White vs. Color, 1 - Spirituality (Religions) shifting, Loose a Pope “soon”, 2 - Humans will change react to drama, 3 - Civilizations/Population on Earth,  4 - Alternate energy sources (Geothermal, Tidal (Paddle wheels), Wind), 5 – Financials Institutes/concepts will change (Integrity – Ethical) , 6 - News/Media/TV to change, 7 – Big Pharmaceutical company will collapse “soon”, (Keep people sick), (Integrity – Ethical)  8 – Wars will be over on Earth, Global Unity, … etc.) - (Text version)

“…  8 - The End of War

The last one is the best. For thousands of years on this planet, Human Beings have warred with each other. If you take a look at the reasons they warred with each other, you will quickly see there aren't any good ones - land, resources, greed. Those are not reasons. That is a description of old energy. Those are not reasons. Reasons would be perhaps defense against an aggressor. But what if there is no longer the consciousness of the aggressor?

When I appeared in my partner's life more than 20 years ago, I said to him privately that the first messages we're going to give will be unbelievable. There would be laughter. We told him that Human nature and consciousness itself would change, and that the seeds of peace would be planted and there would come a time where there is no more war. Indeed, the laughter was great because humans look at history and they see patterns based on an absolute energy called Human Nature. "Impossible! There always has to be war. There always has been. Therefore, there always will be." This is you, in a box, in a black and white potential, where you can only see the black and white of what is and the black and white of what has been. You have no idea the shades of color that are there in your consciousness and the beauty of the love of God.

North Korea is on the edge of change, as we told you it might be. What did this require? The death of the old energy, and I want you to watch this take place. The advisors of the young leader are going to do their best to pull him back into an old energy. This free choice of his will be far different than his father, for he sees some color. Watch for these things. They'll take longer than you want, but it is the beginning of the beginning.

You'll see a fresh unification of South America sooner than not, for what is going to take place potentially this year in Venezuela. You'll see Iran changing. We have no clock. These are the potentials. These can change with free choice. These are not prophecies. This is a reality shift, dear ones, so number eight becomes the propensity not to war again. This is what Humans are going to want. This is what governments are going to want. There is a wisdom factor that will begin to happen on the planet that is grander than what you think is possible. For when you look at government, what do you think about? You see dysfunction, and there is an axiom that says the more people that try to do something together, the worse it gets. It all settles to the lowest common denominator. I'm telling you even those things are going to become old energy concepts. Instead, you're going to watch wisdom become the top potential.

I have no clock. I cannot tell you when. I can just tell you it is in the works, and there will be the seeds of it for you to observe soon - right now, in every single of the eight categories I showed you.

There are those who will say, "Well, Kryon, you're doing a lot more predictions than you used to." I want to tell you what's going on, dear one. I am not predicting anything. I am just telling you what's already there in the potential soup of your reality. That's what Humans are doing on this planet, and for those who believe this communication, you should breathe a sigh of relief and say, "It's about time." ….”

Iran sees progress but 'long road' ahead in nuclear talks

Yahoo – AFP, 23 Feb 2015

Iranian Foreign Minister Mohammad Javad Zarif (R) and US State Secretary
John Kerry have held numerous talks in a bid to smooth the way towards a
nuclear deal (AFP Photo/Rick Wilking)

Tehran (AFP) - Talks with world powers on Tehran's disputed nuclear programme have made progress but significant work remains for a final deal, Iranian Foreign Minister Mohammad Javad Zarif said on Monday.

"Some progress was made on certain subjects but there is still a long road ahead to reach a final agreement," Iranian media quoted Zarif as saying after talks in Geneva with US counterpart John Kerry.

The foreign minister said talks had been "serious, useful and constructive with the P5+1 countries, especially with the American side".

A senior US administration official in Geneva said a new round of talks between Iran and the P5+1 group of Britain, China, France, Russia, the United States and Germany will take place next Monday in Switzerland.

The meeting will be held at the level of political directors, the official said after the Kerry-Zarif discussions on Sunday and Monday.

Wang Yi and his Iranian counterpart Mohammad Javid Zarif

give a press conference in Tehran, Feb. 15. (Photo/Xinhua)

Related Articles:

China calls for 'sprint finish' to Iran nuclear talks marathon

Leaked cables show Netanyahu’s Iran bomb claim contradicted by Mossad - New

US helped Israel with H-bomb - 1980s report declassified

First death-free day of Ukraine ceasefire, US sees no compliance - New

AAM on the Ukrainian “Nuclear Bomb” and Peace

Golden Age of Gaia, Steve Beckow, February 21, 2015

A concerned reader asked what about the galactics’ promise that no nuclear bombs would be exploded on the planet? How does that fit with the explosion in the Ukraine? I asked Archangel Michael the question in a reading I had with him on Feb. 20, 2015.

He also acknowledged that he wants to leave the last step in bringing peace on Earth to us, which is a theory that I’d been coming to recently. Here are his comments.

Steve: Was the nuclear bomb in the Ukraine a real nuke?

Archangel Michael: You mean the one that was disarmed?

S: Was it disarmed? I thought the tactical nuclear bomb had exploded.

AAM: It has been absolutely disarmed. Was there an explosion? Yes. Was the nuclear component taken out of it by your star brothers and sisters? Yes.

It is the promise that has been made to Gaia.

S: What happened around the peace initiative.  I’ll give you my take on what happened. You want us to walk the last step.

AAM: Yes!

The beginning has happened and it has happened more in unseen ways.

But you are not done yet. Now I know that many of you are tired. So you are saying, “Oh, I do not need another campaign.”

But it is like a campaign, within and without, observer, participant.

And the more that is created of peace within, it explodes. It doesn’t simply softly, gently caress. Now if you want to talk about nuclear implosion and explosion, the peace will explode upon the planet.

And as the lightworkers, loveholders are holding that energy, what you do not full understand is the tacit support, the permission that yuou are giving to those who are involved in violent action of the entire range to say “No” [to war?] and to say “Yes” to peaceful solutions. So does the initiative continue? Yes, it does.

"Fast-Tracking" - Feb 8, 2014 (Kryon Channelling by Lee Carroll) - (Reference to Fukushima / H-bomb nuclear pollution and a warning about nuclear  (> 20 Min)

"Recalibration of Free Choice"–  Mar 3, 2012 (Kryon Channelling by Lee Caroll) - (Subjects: (Old) Souls, Midpoint on 21-12-2012, Shift of Human Consciousness, Black & White vs. Color, 1 - Spirituality (Religions) shifting, Loose a Pope “soon”, 2 - Humans will change react to drama, 3 - Civilizations/Population on Earth,  4 - Alternate energy sources (Geothermal, Tidal (Paddle wheels), Wind), 5 – Financials Institutes/concepts will change (Integrity – Ethical) , 6 - News/Media/TV to change, 7 – Big Pharmaceutical company will collapse “soon”, (Keep people sick), (Integrity – Ethical)  8 – Wars will be over on Earth, Global Unity, … etc.) - (Text version)

“…  8 - The End of War

The last one is the best. For thousands of years on this planet, Human Beings have warred with each other. If you take a look at the reasons they warred with each other, you will quickly see there aren't any good ones - land, resources, greed. Those are not reasons. That is a description of old energy. Those are not reasons. Reasons would be perhaps defense against an aggressor. But what if there is no longer the consciousness of the aggressor?

When I appeared in my partner's life more than 20 years ago, I said to him privately that the first messages we're going to give will be unbelievable. There would be laughter. We told him that Human nature and consciousness itself would change, and that the seeds of peace would be planted and there would come a time where there is no more war. Indeed, the laughter was great because humans look at history and they see patterns based on an absolute energy called Human Nature. "Impossible! There always has to be war. There always has been. Therefore, there always will be." This is you, in a box, in a black and white potential, where you can only see the black and white of what is and the black and white of what has been. You have no idea the shades of color that are there in your consciousness and the beauty of the love of God.

North Korea is on the edge of change, as we told you it might be. What did this require? The death of the old energy, and I want you to watch this take place. The advisors of the young leader are going to do their best to pull him back into an old energy. This free choice of his will be far different than his father, for he sees some color. Watch for these things. They'll take longer than you want, but it is the beginning of the beginning.

You'll see a fresh unification of South America sooner than not, for what is going to take place potentially this year in Venezuela. You'll see Iran changing. We have no clock. These are the potentials. These can change with free choice. These are not prophecies. This is a reality shift, dear ones, so number eight becomes the propensity not to war again. This is what Humans are going to want. This is what governments are going to want. There is a wisdom factor that will begin to happen on the planet that is grander than what you think is possible. For when you look at government, what do you think about? You see dysfunction, and there is an axiom that says the more people that try to do something together, the worse it gets. It all settles to the lowest common denominator. I'm telling you even those things are going to become old energy concepts. Instead, you're going to watch wisdom become the top potential.

I have no clock. I cannot tell you when. I can just tell you it is in the works, and there will be the seeds of it for you to observe soon - right now, in every single of the eight categories I showed you.

There are those who will say, "Well, Kryon, you're doing a lot more predictions than you used to." I want to tell you what's going on, dear one. I am not predicting anything. I am just telling you what's already there in the potential soup of your reality. That's what Humans are doing on this planet, and for those who believe this communication, you should breathe a sigh of relief and say, "It's about time." ….”