Caterpillar Retail Sales Plunge By 13%, Most Since February 2010; Decline For 17 Consecutive Months

The drubbing in sales across all other markets excluding the US continued, with sales in Asia/Pacific, EAME and Latin America all dropping by more than 20% compared to last year. End blended result: global retail sales have now declined Y/Y for 17 consecutive months, which incidentally is just shy of the longest stretch of declining retail sales on record. Worse: the -13% drop in world retail sales matched the biggest annual drop since February of 2010.

Deutsche Bank: "Perhaps The Fed And Other Central Banks Are Controlling The Market Too Much These Days"

"Perhaps the Fed and other central banks are controlling the market too much these days with their guidance. In the old days central banks used to like to create an element of surprise to ensure that markets didn't become complacent. With the crisis fresh in people's minds, with the stock of debt still huge and with the recovery still so uncertain they feel they cannot risk creating too much uncertainty at the moment. " - Deutsche Bank

Italian Bad Loans Surge 26% YoY To Record High (59th Month In A Row)

Welcome to the recovery. For the 59th month in a row, the stock of bad loans across Italian banks rose (up ~26% YoY). At EUR 164 billion, this is a new record high and remains the biggest problem for Italian banks (non-performing loans now make up a reord 8.6% of total lending) as they suggest in their reports that profitability is improving. If that was not enough to have you piling cash into the heart of Europe's periphery, then the 22nd month of declines in loans to the private sector should do it. Despite a pick up in mortgage loans, private credit creation tumbled 3.1% YoY in April... not exactly the quasi-Keynesian dream that record low rates would suggest as transmission mechanisms remain entirely plugged.

China Signs Non-Dollar Settlement Deal With Russia's Largest Bank

Slowly - but surely - the USD's hegemony is being chipped away whether by foreign policy faux pas, crossed red-lines, or economic fragility. However, on Day 1 of Vladimir Putin's trip to China it is clear that the two nations are as close as ever. VTB - among Russia's largest banks - has signed a deal with Bank of China to pay each other in domestic currencies, bypassing the need for US Dollars for "investment banking, inter-bank lending, trade finance and capital-markets transactions." Kirill Dmitriyev the head of Russia’s Direct Investment Fund notes, "together it’ll be possible to discuss investment in various projects much more efficiently and clearly," as Russia's pivot to Asia continues to gather steam.

Gold Slammed As 'Panic-Seller' Dumps $520 Million In Futures

You can't make this up. An initial dump in gold happened when Europe was getting going late last night but as the US wakes up and markets get active, someone (panic-seller) decided it was an entirely optimal time to sell $520 million notional gold futures - sending the price of the precious metal down $7. Intriguingly, though the notional size was large, the actual move is not as large as we have become used to with the ubiquitous Slamdowns (and it's a Tuesday). At the same time, USDJPY was ramped... because we must maintain the appearance that stock markets are operating normally despite civil wars, coups, global growth slowdowns, and de-dollarization growing.

Frontrunning: May 20

  • "May?" New Cold War May Emerge in Ukraine Crisis, Medvedev Says (BBG)
  • Wristslaps will be fast and furious: EU Commission charges HSBC, JPMorgan, Credit Agricole with rigging (Reuters)
  • Credit Suisse Rises as U.S. Guilty Plea Ends 3-Year Probe (BBG)
  • After Martial Law Declaration, Thailand Waits for General's Next Move (WSJ)
  • China property slowdown spells trouble for Asia bonds (FT)
  • Russia Close to $400 Billion Gas Pipeline Deal in Pivot to China (BBG)
  • Dimon-by-the-Sea Shows London Banking’s Engine of Growth (BBG)
  • Modi Faces Greece-Sized Snag to Economic Revival (FT)
  • U.K. Inflation Accelerates on Airfare Surge (BBG)

China "Sanctions" US, Bans Use Of Windows 8 On Government Computers

Considering the epic production and sales flop that Windows 8 has been, one probably does not need an actual sales ban from preventing anyone sane from using it let alone buying it, however in yet another symbolic step, banning its government employees from using the latest Windows operating system is precisely what China did in retaliation to yesterday's DOJ announcement it was charging five PLA members with hacking offenses against the US. According to Reuters, this latest blow to Microsoft came when the Central Government Procurement Center issued the ban as part of a notice on the use of energy-saving products. So Windows 8 lead to global warming? Who knew...

Futures Taking Their Time Before The "Turbo Tuesday" Ramp

Not much going on tonight, except for the non-coupy martial law announcement in Thailand where the government is said to still be in charge of everything except for martial law decisions taken by the army of course, which in turn is in charge of everything else apparently including the central bank which intervened so extensively in the market, the Baht was barely changed at one point. There was also news of explosions and clashes in Benghazi but as everyone knows, what difference does Libya make at this, or any other, point. Additionally overnight there were reports that the cities of Slavyansk and Kramatorsk in east Ukraine were being shelled by the Ukraine army but that too barely registered as bullish for the USDJPY (which in now traditional fashion ramped during the US day session then sold off during Asia hours).

Chilean Activist Burns $500 Million Student Loan Docs In Protest Against Debt Serfdom

The current war/civil unrest cycle is an interconnected global phenomenon. Since the parasitic Central Bank driven financial system is more or less entrenched in every country on earth, every country on earth is experiencing increased concentrations of wealth into the pockets of a handful of oligarchs. Meanwhile, those nations which heretofore had a middle class are finding that this entire socio-economic class is disappearing into the dustbin of history via a variety of methods, not the least of which is criminal quantities of student loans. These loans are pushing an entire generation into inescapable serfdom, while many university administrators are enriching themselves at their expense. So it appears student loan based debt serfdom is also a major issue in Chile, and one activist, known as “Papas Fritas,” decided to take matters into his own hands. During a takeover at Universidad del Mar, he was able to get his hands on $500 million of student debt, which he subsequently torched.

Thai Stocks Tumble As Army Censors Media To "Avoid Provoking Unrest"

Despite proclamations that markets would open 'normally', Thai SET50 (stock market) futures are indicated to open -4.2% - its biggest drop since January's collapse. Thai CDS are modestly wider (+5 to 130bps) but early Bhat weakness has been rescued back by a mysterious bidder (rumored to be the central bank by several traders). The last 2 times martial law was invoked - in an entirely non-coupy-coup-like manner - general market weakness was less than we  have seen so far. Of course, the army has decided that in the interests of avoiding the "provocation of unrest and triggering fear" it will "ban the broadcast and distribution of news." Nothing like a military-coup, that is not a coup, with total media censorship to encourage capital flows and maintain peace in the nation.

Thailand Army Declares Martial Law

With Russia massing troops on the border with Ukraine, China doing the same with Vietnam, the already volatile situation in Libya and Syria imploding with every passing day, the only geopolitical variable that was missing was a martial law and/or national coup. Moments ago Thailand just declares the former and while the latter is still absent it too is likely just a moment of time. AP reports that "Thailand's army has declared martial law after six months of anti-government protests and political crisis, Associated Press said on Tuesday, citing an army statement issued in Bangkok." In other words, after not sternly not taking sides in the near civil war situation in Thailand for the longest time, the army finally picked a side: its own.

China Publishes Data Claiming US Is World's Largest Cyber Attacker

Well that didn't take long. Having already responded angrily to the US charging 5 military officers with cyber espionage, China has published details of the US cyber attacks:

*CHINA CALLS U.S. THE BIGGEST ATTACKER OF CYBER SPACE: XINHUA

From 3/19 to 5/18, they claim to have found 135 host computers in the US carrying 563 phishing pages targeting Chinese sites that directly controlled 1.18 million computers. But Jay Carney said earlier that "the US does not engage in economic espionage." Of course, the real way the Chinese can quiet down the US is by signing that Russian "holy grail" gas deal this week.

"Wolf Of Wall Street" Set To Make $100 Million This Year, Warns "Greed Is Not Good"

It seems crime pays... or "committing crimes, writing about them, having them adapated into a screenplay, and made into an oscar-winning movie" pays. Jordan Belfort, the "Wolf of Wall Street", as Bloomberg reports, expects to make more money this year than he "ever made in his best year as a broker." Having spent 22 months in jail in the 1990s, Belfort comments that 'my goal is to make north of a $100 million so I am paying back everyone this year," and adds some remarkably irresponsbible philosophy given the markets today and the world in which we are told we live in... "Greed is not good. Ambition is good, passion is good." How do we BTFD if we are not greedy?

"Conflict Between China And Vietnam Is Imminent" - China Piles Troops, Tanks, Artillery And APCs Near Vietnam Border

Earlier today, Putin did his usual "we are pulling our forces away from the Ukraine border" gambit (sure he is... and is replacing them with a massive airforce drill), and as usual the algos fell for it, after European stocks suddenly surged out of nowhere on the now quite generic bounce catalyst, but what is shaping up as a far more dangerous escalation is what China is doing next to its border with Vietnam, where as reported previously protesters destroyed Chinese factories and killed Chinese civilians in retaliation over yet another maritime territorial spat. According to the Epoch Times, "troops, tanks, trucks, artillery, and armored personnel carriers of China’s military were seen heading to the Vietnamese border on May 16 and 17, according to photographs taken by by residents near the border."

'Smoking Gun' From The Federal Reserve's Murder Of The Middle Class

During the bubblicious years from 2000 through 2014, while Wall Street used control fraud and virtually free money provided by the Fed to siphon off hundreds of billions of ill-gotten profits from the economy, the average middle class family saw their income drop and their debt load soar. This is crony capitalism success at its finest. The oligarchs count on the fact math challenged, iGadget distracted, Facebook focused, public school educated morons will never understand the impact of inflation on their daily lives. The pliant co-conspirators in the dying legacy media regurgitate nominal government reported income figures which show median household income growing by 30% over the last fourteen years. In reality, the real median household income has FALLEN by 7% since 2000 and 7.5% since its 2008 peak. Again, using a true inflation figure would yield declines exceeding 15%.

What Would Warren Do?

Having been described by Warren Buffett as "the best single measure of where valuations stand at any given moment," Advisor Perspectives' Doug Short is perplexed at Warren's recent note to his CNBC brethren that "markets are not too frothy." Perhaps, as the following chart will shockingly identify, it is time to listen less and study more as Buffett's "Market Cap to GDP" indicator has risen seven quarters in a row and is only trumped in its absolute bubble exuberance by the very peak in 2000. Maybe, despite all the talking heads trying to explain what he meant, Tepper is right to be concerned, that the market is "dangerous" and given his historical comments - looking at this chart - what would Warren do?

Dramatic Aerial Video Of Worst Ever Balkan Flooding

Wondering what Eastern Europe will blame its economic weakness on? No, not sanctions... but perhaps the second coming of Noah might slow things down a little. The overall death toll in the worst flooding in the Balkans has risen to at least 47 people. The images have to be seen to be believed.

Ron Paul Warns Tax Reform is Useless Without Spending Reform

Recently, Republican leaders in Congress unveiled a "tax reform" plan that they claimed would provide the American people with a simpler, fairer, and more efficient tax system. While this plan does lower some tax rates and contains some other changes that may make next April a little less painful for Americans, there is little in it to excite supporters of liberty. Sadly, politicians in Washington refuse to consider any tax plan that would decrease government revenue. This is because the prevalent attitude in DC favors protecting the welfare-warfare state over protecting our liberties. As the obsession with the Laffer curve shows, even many alleged supporters of the free market only pretend to support liberty as a means to enhance the well-being of the welfare-warfare state.