E Sudetenland Revisited

The deal being worked out over eastern Ukraine sounds like the 1937 Munich capitulation and unlike the British rush to defend Polish borders 75 years ago in Sept. 1939—right down to the presence of a supposed outsider in the deal (Hitler in 1937; Putin in 2014.) For Ukraine, not a member of Nato and in a bad neighborhood, some kind of settlement with Putin's invaders is the only out.

Putin claimed Russia could take over the whole country with a 2-week Blitzkrieg unless the Sudenten Germans (sorry, I mean the Russian-speaking eastern Ukrainians) were granted some protection from their Heimat (or Maht Radnaya, motherland.)

This is not a lasting solution but the stock markets of the world are rallying.

Hitler turned out to have a problem with oil. Putin has a problem with gas, his main hold on the Near Abroad (Ukraine) and beyond (Germany.) The US is now the largest producer of natural gas in the world, thanks to fracking, according to the BP 2014 Statistical World Energy Review. US production rose over 20% in the past 5 years and hit a record high of 328 bn cu ft/day making us world champs. Putin will eventually face a problem with his Siberian gas cuts strategy especially if the US removes obstacles to exporting crude oil we no longer need at home.

New share pick from our returning reporter, Harry Geisel, plus news from Jordan, Israel, Britain, Canada, Japan, Ireland, Australia, Netherlands, Finland, Russia, and Ukraine.

*We start with a new stock idea, to replace the China choo-choo sold yesterday. Here is Harry Geisel again writing for us:

Commercial payments can only take place when there is trust between strangers. In cash economies,
specie and paper money were issued by recognized third parties, usually governments. Bills of exchange and checks were drawn on banks belonging to recognized third parties (clearing houses or the US Federal Reserve System) so funds could be transferred between payer and payee accounts.
In yesterday's digital payments world, "trusted" pieces of paper have been replaced by "trusted" electrons. Trust is created by verifying three identities in a transaction: the creator of the desired money transfer; the creator's bank or credit/debit card issuer; and the vendor's financial institution receiving the money. Digital systems also are used to verify non-financial paper like passports, cell phone calls, or drivers' licenses.
Gemalto (GTO on Amsterdam's Euronext or its sponsored ADR, GTOMY, each ADR 1/2 a GTO share) is world leader in supplying chips and embedded software to protect and verify digital identity. They are also the world's biggest creator of platforms allowing secure ID access for services. GTO will soon acquire SafeNet, the world's leading private supplier of data encryption and the accompanying cryptological management. (Ed: It announced last month that it will pay San Francisco's Vector Capital $890 mn to buy 100% of SafeNet.)

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Ferdinand E. Banks 5 years ago Contributor's comment

Putin has no problem with natural gas. He can sell all he wants to China and Japan, although perhaps later than sooner. What is/was the Point anyway of pretending that Russia could be punished by depriving western Europé of a valuable energy source?

- Fred Banks