From the Free Press….

Another of the nation’s leading credit rating agencies has downgraded the City of Detroit’s credit rating to junk bond status, Mayor Ken Cockrel Jr. said today.
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The announcement by Moody’s follows Standard & Poor’s assignment of junk bond status to the city’s debt last week. The downgrade to junk bond status allows certain investors to claim a payout from the city totaling $400 million, an amount that could force the city into bankruptcy.

So far, no investors have requested the money from the city, according to the advisory from Moody’s.

Moody’s downgraded Detroit’s debt to Ba2 from Baa3 and to Ba3 from Ba1. It attributed the downgrade to the city’s $300-million budget deficit, delays in producing a required annual audit and the declining local economy.

This is why rating agencies are a joke. Any sane person knew that the city of Detroit’s debt was junk a long time ago.

From the Guardian…..

Despite an EU-brokered agreement on Monday to allow outside monitors to verify the gas flows and get the gas pumping immediately, the Russians continued to supply insufficient gas to power the system through to Europe yesterday while the Ukrainians also kept some pipelines closed, Brussels said.

“We opened the tap, and are ready to supply gas, but on the other side, the tap is closed,” said Vladimir Putin, the Russian prime minister.

But according to Brussels, the Russians were pumping less than a third of the volume of gas needed to supply Europe and deliberately entered it into the wrong pipeline across Ukraine. “If the agreement is not honoured, it means that Russia and Ukraine can no longer be considered reliable partners for the EU in matters of energy supply,” warned Barroso.

Despite the tough talk, the Europeans have little leverage over the Russians in the short term. Barroso was said to have had a “robust” conversation with Vladimir Putin, the Russian prime minister, by telephone. “This is getting close to breaking point,” said a commission official. “There is a feeling that Putin is being duplicitous, to put it mildly.”

This is all very confusing. But if I am making sense of this all, Ukraine is keeping some pipelines shut is due to the fact that they can’t get enough gas to run their entire pipeline net work all at once. Thus, they have to make a choice about which pipelines to open up and which ones to keep closed. And Russia is deliberately making it impossible for them to do this.

But various newspapers determination to be even handed is making it difficult to make sense of it all. Why is it so hard for the Guardian to spell out in plain English why Ukraine is keeping some pipelines shut?

On the plus side, Russia should be commended for teaching Europe the importance of energy security. It is a lesson that they have long needed to learn.

From the Telegraph….

EU sources told The Daily Telegraph that the crisis is expected to escalate on Wednesday as European patience runs out with Russia.

Russia has “done everything it can to damage the Ukraine’s credibility as a transit country”, said the source.

According to EU monitors sent to check pipelines in Ukraine and Russia, the Russians resumed supply only to then deliberately channel gas via difficult routes and at insufficient pressure to guarantee supplies to Europe.

Officials close to negotiations have also reported that Russia has tried to physically block EU monitors, sent to both countries to monitor gas flows.

“Russia played a trick by saying it would resume supply. Russia set this up to convince everyone it is the Ukraine’s fault not their own,” said a European source.

So far so good right? But Spiegel is telling a different story…..

But before the supplies could even get to the EU, the pipelines were reportedly shut down again. European Union observers in place to monitor gas flows said they had measured “little or no gas” in Ukraine. They said it was too early to draw conclusions from the observation, but the situation “is obviously very serious and must be improved quickly.”

Kiev soon admitted that it had, in fact, blocked the transit of Russian gas through its territory, citing “unacceptable conditions for transit” that had been imposed by Gazprom, a spokesperson for Ukraine’s state-owned Naftogaz, which manages the pipelines, told the French news agency AFP.

Regardless of who is right, it does not look like the EU is going to get its gas anytime soon.