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* Waiting for Crimea: Although final results have not yet been confirmed, with

reports of a "record-breaking" turnout we expect the Crimean referendum will

deliver a result in favor of joining with Russia. Early “exit polls” claimed that 93%

voted for union with Russia. Following new legislation from the Russian parliament,

Crimea could become part of the Russian Federation in as little as a month.

* Only Disconnect: The G7 indicated it would not recognize the referendum, saying

in a March 12 statement that it would "have no legal effect". This underscores the

likelihood of continued diplomatic and trade tensions even if no further military

action takes place.

* Russia's Position: Kosovo As a Blueprint for Crimea: Russia has framed its

support for Crimean independence in parallel to Western support for Kosovo's

independence from Serbia, a move which was later enshrined in a 2010 decision by

the European Court of Justice. Senior Russian officials have also made

comparisons of Ukraine's importance to Russia as exceeding that of the Falkland

Islands to the United Kingdom. One compared the situation to the Comoro Islands’

secession from France.

* Lack of "Common Vision" Between Moscow and the West: World leaders are

likely to respond to Crimea joining Russia with harsh rhetoric and threats of tougher

sanctions, increasing headline risks. However, barring a dramatic escalation, we do

not at this stage foresee the imposition of sanctions against Russia beyond the

previously announced travel bans and asset freezes on an as-yet unnamed group

of individuals. Recent days have illustrated a focus from the US and EU on

supporting the new government in Kiev rather than tough economic sanctions

against Moscow, with broader sanctions likely to spark retaliatory measures that

could impact US and European companies. Even so, given Russia's view that

Ukraine's interim government is illegal, what the West regards as carrots for Kiev

may be construed as sticks for Moscow.

Link to Google Translation : {http://bit.ly/1nx0o7w}

Link to French aticle { http://bit.ly/1d677Rq}...Article in French also below

Elysium: an embarrassing appointment conversation pieces!

The revelations of the Sunday newspaper , which says François Hollande received March 7 to 19 hours in a private audience the two journalists from Le Monde article writers involving Sarkozy and his lawyer, could cause collateral damage among employees President of the Republic. It is indeed Sylvie Hubac, Chief of Staff of Francois Hollande, who has responsibility for the President's agenda. It centralizes all maintenance requests then it validated by Holland himself. Then she moves down the book appointments to the Secretary General and the Secretaries-General. Private services of the President in turn briefed the president's agenda. Finally, the security group president and his doctor are also in confidence.

Sylvie Hubac is a central figure in the Elysee. Although giving Holland lost during the Socialist primary, she found herself in this strategic position. At Solferino, on the said member of the "helicopter left," referring to the last minute parachute that arose at the Elysee, to share important functions around François Hollande not to campaign in his favor.

Sylvie Hubac champion lobbying?

According to a former employee, administrative staff Elysee knew the name of the future head of cabinet before his formal appointment. For Sylvie Hubac had access to the Elysee with her husband. She is married to Philippe Crouzet, Chairman and CEO of Vallourec, which is also known to lobby in favor of the exploitation of shale gas. It lends some influence Castle. It was even believed to have worked behind the scenes to get the head of Delphine Batho , the former Minister of the Environment. Philippe Crouzet is also very close to Christian Frémont , the Chief of Staff of Nicolas Sarkozy at the Elysee, which he visited regularly.

ARTICLE EN FRANCAIS :

Élysée : un embarrassant rendez-vous qui fait jaser !

La fuite du rendez-vous entre Hollande et les journalistes du "Monde" auteurs de l'article mettant en cause Sarkozy révèle un dysfonctionnement de plus.

Les révélations du Journal du dimanche, qui affirme que François Hollande a reçu le 7 mars à 19 heures en audience privée les deux journalistes du Monde auteurs de l'article mettant en cause Sarkozy et son avocat, pourraient causer des dommages collatéraux parmi les collaborateurs du président de la République. C'est en effet Sylvie Hubac, directrice de cabinet de François Hollande, qui détient la responsabilité de l'agenda du président. Elle centralise toutes les demandes d'entretien puis les fait valider par Hollande lui-même. Ensuite, elle fait redescendre le carnet de rendez-vous au secrétaire général puis aux secrétaires généraux adjoints. Les services privés du président sont à leur tour mis au courant de l'agenda présidentiel. Enfin, le groupe de sécurité du président de la République puis son médecin sont également dans la confidence.

Sylvie Hubac est un personnage central à l'Élysée. Bien que donnant Hollande perdant durant les primaires socialistes, elle s'est retrouvée à ce poste stratégique. À Solférino, on la dit membre de la "gauche hélicoptère", en référence aux parachutés de dernière minute qui se sont posés à l'Élysée, pour se partager les fonctions importantes autour de François Hollande sans faire campagne en sa faveur.

Sylvie Hubac championne du lobbying ?

Selon un ancien collaborateur, le personnel administratif de l'Élysée connaissait le nom de la future dircab avant sa nomination officielle. Car Sylvie Hubac avait ses entrées à l'Élysée grâce à son époux. Elle est mariée à Philippe Crouzet, P-DG de Vallourec, qui est connu par ailleurs pour faire du lobbying en faveur de l'exploitation du gaz de schiste. On lui prête une certaine influence au Château. On l'a même soupçonné d'avoir oeuvré en coulisses pour obtenir la tête de Delphine Batho, l'ex-ministre de l'Environnement. Philippe Crouzet est également très proche de Christian Frémont, le directeur de cabinet de Nicolas Sarkozy à l'Élysée, auquel il rendait visite régulièrement.

A civil case filed Thursday by the Securities and Exchange Commission against former SAC tech analyst Ronald Dennis mentioned three unnamed portfolio managers who received his illicit tips — netting SAC $3.8 billion in profits and avoiding losses.

The SEC did not name the portfolio managers, but Bloomberg Businessweek has identified “Portfolio Manager C” as none other than SAC boss Cohen.

The SEC alleges that Portfolio Manager C earned profits of $1.1 million trading off illicit tips about tech company Dell that came from Dennis.

Dennis fed those tips to the other portfolio managers who were his bosses, identified by Businessweek as Alec Shutze and Eric Gerster.

The government’s decades-long insider trading probe has long focused on Cohen.

The powerful investor has not been charged with any criminal wrongdoing. Cohen was directly named in two prior criminal insider trading trials that led to convictions of SAC employees.

Famed strategist Jeremy Grantham views the market as 65% overvalued, but still sees some pockets of attractive investments.

For Jeremy Grantham, founder and strategist at GMO, a Boston-based money manager that oversees about $120 billion, it hasn't been easy watching equity markets rack up huge gains. As of Dec. 31, GMO was forecasting an annual real return of minus 1.7% for large-cap U.S. stocks over the next seven years. Grantham and his colleagues don't see much hope for bonds, either. Still, Grantham, 75, says the current stock boom has a much different feel than the tech bubble of 1999 and 2000. Back then, "there were clients who not only wanted to fire us, but who didn't want to ever see us again," he recalls. "It was personal." GMO runs various strategies, including its benchmark-free allocation funds, which aim for 5% annual real returns over a market cycle. The Wells Fargo Advantage Absolute Return fund (ticker: WARAX), which GMO subadvises, returned 9.65% last year. Grantham, whose market view is marked by an inherent bearishness and skepticism, is an engaging speaker. His passions include financial history, climate change, and other environmental issues.Barron's recently visited him at his office overlooking Boston Harbor.

Barron's: How frothy does the U.S. stock market look?

Grantham: There are two good standards for a bubble. One is boring statistics, and the other is an exciting behavioral frenzy, on which so many good books have been written. And based on the boring statistics, the data is really very clear: We are not even that close to a bubble. With the S&P 500 at around 1860 recently, we are at about a 1.4- to 1.5-sigma event. Another way to say that is that we are between one and two standard deviations outside the normal distribution of stock-valuation levels. A two-sigma event would put the S&P 500 at 2350. So using the standard definition, it has to go up another 30% from here to get to a bubble. But you don't know when an ordinary market move is a bubble; you only know that in hindsight. As for the second test, which is euphoria, I like to joke that in 2000 here in Boston, Celtics replays were displaced at lunchtime at the greasy spoons by talking heads on TV. You would go to one, and they would be touting the latest Internet stock. But I've noticed recently that they are still playing the sports highlights on the televisions in the pubs here.

There is a high level of enthusiasm from the financial professionals, hedge funds in particular. This time you have a very high level of confidence from the professionals—but not a very high level of confidence from the individual investors. The individuals are a bit more down to earth. They felt the pain of 2009 longer than the institutions did, and they have been slow to come back into stocks when you look at net buying of mutual funds. There has never been a bubble where individuals were not flooding into the market at the very end, though sometimes they are pretty late to the game. By the end of a real bubble, individuals are gung-ho, and they are not gung-ho yet. That says a lot.

What's brought about the discrepancy?

The belief in the Greenspan-Bernanke-Yellen put gets greater and greater each time there's a crisis. So we start in '94 with a bond crisis and a very successful bailout. Then we have the Long-Term Capital Management blowup in 1998. There's a bailout, which is very successful again. We have the Y2K bailout, which was a little unnecessary. And then we have the 2000 bubble and the ensuing collapse—the biggest bubble in American equity history. Uniquely, the stock market does not go below trend, even though the market is down 50%.

In 1929, it crashed through the trend line and stayed there for 20-odd years. The Nifty Fifty crashed through the trend line in 1973 and stayed down there until '86-'87. What is not typical is a bubble like the one in 2000. The market tumbled over three years, but it didn't even reach trend. And the cavalry comes over the hill with enormous stimulus and moral hazard, the kind of implicit promise that they would bail investors out in a crisis, which they did. And the market, never having hit even fair value for a minute, then doubles. I described it as the greatest sucker rally in history.

So that turned out to be a prescient call.

That was a lucky call, as much as anything else, because it took the breaking of the housing bubble in 2007 to end that rally. Obviously, the housing bubble was the absolute direct result of the Fed's bailout techniques, which included incredibly lower interest rates, and then there was eventually some help from the ridiculous financial instruments that were sold, along with very low standards for getting a mortgage. The U.S. housing market had been so stable and diversified historically. It had never bubbled, so to speak, in every district in America simultaneously until [Fed Chairman Alan] Greenspan got his hands on it. Then, starting in 2002, the U.S. housing market shoots up so much that, given its stable background, it statistically looked like the most magnificent outlier that we have had ever seen. And it wasn't just in housing, but in any American asset class. It was much worse than the 2000 equity bubble. It actually reached a 3½-sigma, or standard-deviation, event, which should occur randomly every 5,000 years. And at that point, Ben Bernanke was saying that the housing market largely reflected a strong U.S. economy.

How does this tie in with your point about institutional investors versus individuals?

The hedge funds said: "Boy, this is really great. The Fed did it once, they did it twice, they did it three times, including in the 2000 crash, and now they are probably going to come back and even bail out the housing bust." And, sure enough, the Fed busts its tail to do everything that mortals could possibly do, and everyone says how wonderful it was. To which I say it is like rewarding the captain of the Titanic for helping women and children into the lifeboats with admirable bravery, forgetting that it was only his recklessness in driving through the dark night in a famously glacier-intensive part of the ocean that caused the accident in the first place.

The key is that, for the hedge-fund guys and the smart institutional players, their faith in the Greenspan-Bernanke-Yellen put is getting massive. So they say that whenever things break, the Fed comes back in and puts the floor way higher than where it used to be. And the institutional players become more and more bullish. In each cycle, they use a bit more leverage and take a bit more risk. That's where we are surely now.

How overvalued are U.S. stocks?

They're 65% overpriced. If they go up another 30%, you would have a true bubble, at which point stocks would be close to twice their fair value. Similarly, in 2000, stocks were more than double their fair value. So they are quite capable of doing that. But my point is that with the professionals getting reinforced by the Fed going back to 1994, it will be very surprising if they don't keep on playing this game until the market at least hits a classic bubble definition. Bubbles don't usually stop until sensible investors, value investors, and prudent investors have been hung out to dry and kicked around the block. That hasn't happened yet, so that tells you there is probably quite a bit left in this rally.

If there is a bubble and it bursts, will the consequences resemble what we saw in 2008 and 2009?

No. That's the easy part. But the follow-up question—How will this play out?—is pretty well unanswerable. There have been plenty of times when individuals had too much debt, and there have been plenty of times when corporations were exposed. We've had times when chunks of the emerging-market countries have been exposed to foreign debt. What we haven't had is the major developed countries' governments strung out on debt. Debt levels have not dropped, but they have moved magnificently to federal governments, which now have the highest level of debt, on average, they have ever had. Those governments will be a stress point when the next bubble breaks. But how that plays out is difficult to say, because there is no historical precedent, with the possible exception of the 1930s.

So how is GMO positioning its portfolios?

There is an enormous creative tension for a sensible investor. On one hand, you know the market is worth a lot less than it is selling at, but you know about the Fed's policies. So it is very difficult for people like us at GMO because, for one thing, we have a seven-year forecast. It has had a terrific record—not because it is rocket science, but because the market, over a seven-year horizon, is mean-reverting, and it really does pay to avoid the particularly overpriced asset classes. But on a shorter time horizon, you can get whacked around the head, as we have been frequently.

What assets do look attractive?

Because of some secondary factors, there are pockets of global equities that haven't been swept along to anywhere near bubble territory. Emerging markets collectively are selling at very close to fair value. And the value stocks in most of Europe are pretty close to fair value. High-quality stocks in the U.S. are not nearly as bad as the rest of the market. So you can patch together global equities and get a semi-respectable-looking portfolio. Because of that, we have a substantial equity weighting in a typical account. The Wells Fargo Advantage Absolute Return fund has a 49% global equity weighting. That's a lot, when you look at our seven-year forecast and you see how many assets, including bonds and much of the U.S. stock market, are overpriced. But we have learned over the years not to invest everything on this month's data or this week's data or today's data—but to average in over a year. If nothing happens by October, our equity allocation will be down to about 38%, which would be completely compatible with our seven-year forecast.

What about bonds?

They look absolutely, nerve-rackingly overpriced, and in a crisis, who knows what will happen to those securities? They could make stocks look like a safe haven if the next bust occurs at the federal levels of the large countries. Bonds, including government bonds, are a lot more dangerous than people imagine.

What else is on your mind these days?

I worry about food, and I worry about Africa. The global economy has really two civilizations, or two systems. One is everything outside of Africa, where Taiwan, Thailand, Canada, Mexico, and other countries are all one big system moving together—trading oil and everything else. And then there is Africa, which, with the possible exception of South Africa, is its own little world. But it's the only part of the world where the population, on a broad basis, still is growing rapidly. It probably will decline, but these countries can't produce enough food, unless they get good advice and capital and fertilizer—or they become really clever farmers, and get a lot of help and sensible governments.

The countries I worry about most immediately are in North Africa, curling all the way into Syria, because they eat wheat. The price of wheat is two, three times what it used to be, and the price of energy is four times what it used to be. These are not rich people, so they have been desperately squeezed, and the weather is bearing down on agricultural production. The most dependable aspect of climate change is more droughts and more floods.

All of this has many implications, from countries like Egypt being able to feed its population to immigration policy in Europe to the impact on high-grade, low-cost phosphate, a big chunk of which comes from Morocco. Phosphorus is crucial for farming. The much higher prices of wheat, oil and, to some extent, fertilizers have helped destabilize various societies in this region. I worry about what happens if the deterioration spreads to Morocco.

Link to google translation : {http://bit.ly/1hr0E0r}

Link to french article : {http://bit.ly/1kWegGh}

Four criteria have played for Numericable: value, execution risk, liquidity and industrial project.

Caisse des Dépôts is on the lookout, and offers financial support Bouygues in case the deal would not happen.

Numericable and SFR are engaged. Friday morning, the Supervisory Board of Vivendi voted unanimously with one voice (Pascal Cagni, Apple Europe ex-president) entered into exclusive negotiations with the controlled by Patrick Drahi cable operator. The directors have therefore preferred contractor to 2,000 employees without mobile network, Bouygues, industrial known which employs 8,500 people in the fixed and mobile telephony. The aim is to sign the deed of sale of the second French telecom operator Numericable within three weeks. The transaction will then be a consultation with employees and will be reviewed by the Competition Authority, to be completed in the second half.

If the choice was clear Vivendi Friday, three weeks granted to Patrick Drahi could also be utilized by the clan of losers to refine a new proposal. The owner of SFR said that only after this period and after further consideration of the offer Numericable he would "stop the other options considered" selling Bouygues or introduction Stock Exchange of its subsidiary. If Fleur Pellerin, the Minister of Digital Economy, noted yesterday in the "Journal du Dimanche" Vivendi's decision, the government would not be completely demobilized. In an interview with "Echos", says Jean-Pierre Jouyet and "Caisse des Dépôts, which is a shareholder of Vivendi, could, if the hypothesis were to materialize, and without incurring Bpifrance, support capital rapprochement between Vivendi and SFR and Bouygues. " According to our information, the public institution would even be willing to go up to 5% of the capital of this possible new set. Arnaud Montebourg, who did everything to support Bouygues, do not admit defeat and ensures that "the struggle continues" (see next page).

Crazy scenario

For now, it is Numericable was chosen by Vivendi to buy its subsidiary SFR. This merger created a new French telecom giant number two behind Orange. It will have a little more than 18 million subscribers in mobile and 6.7 million in the fixed, for a turnover of € 11.5 billion. It is also one of the largest transactions in Europe since last year. "And there is something to be proud of his country, with all these French billionaires to the negotiating table," says one banker, referring Xavier Niel (Free), Martin Bouygues and Patrick Drahi. For many, the decision of the Board of Vivendi is incomprehensible, because the losing side had won in the opinion.

Indeed, the offensive against Martin Bouygues in two weeks has been meteoric, and even brave - or the financial analysts . nor the government had not considered this crazy "scenario we had offers of extraordinary quality, greets a investment banker Vivendi. Candidates were able to put over $ 10 billion in cash on the table, so close in a few days. The speed with which Bouygues moved is incredible for an industrialist. And what ingenuity, what a spectacular trading weekend with Xavier Niel! "

Despite the feat, Numericable has always remained the favorite, says a source close to Vivendi. This is confirmed by a frame in the clan Bouygues-Free: "Despite the media and stock market boom, we knew it was far from won. "And for objective reasons. The supervisory board, and before him the committee to consider nominations (six meetings), led by Henri Lachmann who dedicated it "50 to 60 hours," voted based on 4 criteria. First, the value of SFR - roughly equivalent, close to 15 billion euros and 19 billion before synergies after. Price - 11,750,000,000 in cash against $ 11.3 billion for Bouygues - weighed in the balance. "450 million euros, no spit, says Henri Lachmann. But the main thing was the complexity generated by the Bouygues proposal, with the risk that competitive remedies destroy synergies and social difficulties delay the execution. "

Execution risk was the second key criterion. Even after the sale of the network Free, competitive risk for Bouygues remained high. In addition, the integration of two giants doing the same jobs promised last three or four years, with 700 shops to close. Third, liquidity, related to the execution: if sites protracted, markets have time to fall, the price war can be restarted, reducing the minority interest Vivendi "Do not lose sight of. that the group's objective was to get [SFR]. On the one hand, only 32% retained with a "put" to fall to 30%, another 40% were kept and dust "says Henri Lachmann. Fourth, the industrial project. To a source close to Vivendi, the directors were eager to escape the trap of mobile: "With Bouygues, we created a mobile giant, with one perspective the decline of its market share . And providing a network Free cheaply, we strengthened to the extreme. "The statements of Xavier Niel Thursday evening in" Les Echos "to support the project Bouygues had the opposite effect. The merger with Numericable, it was synonymous with growth, with a large empty fixed network and market power of the brand SFR. "The convergence of fixed-mobile offers, is the sense of history, with online sights very high speed, "says Tariq Ashraf, at Bearing Point. It is not sure that we should, as leader of Bouygues, to lament "the victory of financial capitalism of the few against the industrial project and the public interest. "