White House Refutes European Complacency: Warns Grexit Threatens Global Economic Recovery

Despite our exposure of the contagious risk increases in peripheral bond spreads, "many European officials believe a Greek exit would be manageable, and in contrast to 2010-2011, we wouldn’t see the same cascading effect on countries like Spain or Ireland,” according to the European Centre for International Political Economy in Brussels and EU Chair Jeroen Djisselbloem even noted that "the Greek situation can be isolated." It appears America is getting nervous at Europe's apparent complacency... White House economic adviser Jason Furman says a Greek exit from the euro zone would present "VERY LARGE AND UNNECESSARY RISK FOR GLOBAL ECONOMY."

Egypt's Clinton-Backed Former President Jailed For 20 years

Deposed former Egyptian President Mohammed Morsi was sentenced to 20 years in prison today in connection with a crackdown on protesters during demonstrations against his rule in late 2012. Morsi assumed the Presidency in 2012 after Hosni Mubarak was toppled a year earlier during the Arab Spring. Morsi's "democracy" lasted all of 4 months before he granted himself special autocratic powers triggering unrest that would eventually lead the military to assume power.

European Banks Are Paid To Borrow For First Time Ever As Euribor Goes Negative

Mario Draghi said this week that the transmission channels for European Q€ were opening up and crowed how well his cunning plan was working (by well we assume he means stocks are up). Today we get the ultimate test of that 'transmission' as 3-Month EURIBOR fell below 0.00% for the first time ever (likely wreaking havoc on European derivative pricing models). In English that means banks are being paid to borrow from one another in the interbank money-markets (which sounds a lot like a 'glut' of excess cash) seemingly confirming ICMA's de Vidts fears: "We are scared about the [repo] market freezing," as the ECB is "driving without headlights in the dark." Of course this is yet another disturbing distortion on the heels of homeowners being paid to take out mortgages...

First Chinese State-Owned Firm Defaults On Its Bonds

In what may be a harbinger of things to come and in a sign that Beijing will allow the market to play a greater role in determining companies’ financial future, a subsidiary of China South Industries Group has missed a coupon payment, marking the first default by a Chinese state-owned firm.

Frontrunning: April 21

  • The Fed Still Wants Easy Money (BBG) - you don't say
  • ECB Is Studying Curbs on Greek Bank Support (BBG)
  • Banks Paid to Borrow as Three-Month Euribor Drops Below Zero (BBG)
  • Baoding Tianwei is first state-owned Chinese enterprise to default (Reuters)
  • Major Chinese Developer Says It Can’t Pay Dollar Debts (BBG)
  • Wall Street Has No Idea How Much Money Venezuela Has (BBG)
  • Goldman Sachs, Morgan Stanley Find Different Paths to Profits (WSJ)
  • Does the Collapse of a Chinese Developer Signal the Start of More Defaults? (BBG)
  • Retail Traders Wield Social Media for Investing Fame (WSJ)

Stunned Greeks React To Initial Capital Controls And The "Decree To Confiscate Reserves", And They Are Not Happy

Several hours after the Greek government decreed the confiscation of local government reserves, this order has finally percolated among the population, and the response to what even ordinary Greeks realize is now the endgame, is less than exuberant. Bloomberg reports, that "as Greece struggles to find cash to stay afloat, local authorities say they oppose a government decision to use their reserves for short-term financing." “The government’s decision to seize our reserves not only raises legal and constitutional issues, but also a moral one,” said George Papanikolaou, mayor of Glyfada, the third-largest municipality in the metropolitan region of Attica after Athens and Piraeus. “We have a responsibility to serve our citizens."

Ron Paul Tells Obama: "It's Time To Try Something New"

While some journalists here in the US have started to notice the strange series of opposition killings in Ukraine, the US government has yet to say a word.

Compare this to the US reaction when a single opposition figure was killed in Russia earlier this year.

"Too Many Zeros": China's Stock Bubble Proves Too Much For Computers

"The exchange's trading turnover exceeded 1 trillion yuan ($161.28 billion) for the first time on Monday, but the data could not be properly displayed because its software was not designed to report numbers that high," Reuters reports, in what looks like further evidence that China's self-feeding equity mania is reaching epic proportions. On the bright side, it's not often in today's market that man overcomes software, so score one for human traders.

Noam Chomsky: "The Idea Of A Media Which Does Not Repeat US Propaganda Is Intolerable To American Leaders"

"Take the New York Times -- the greatest newspaper in the world. Take one example, at the first article that appeared today, that the tentative [nuclear] agreement with Iran was reached. It’s a thinkpiece, by Peter Baker, one of their main analysts. He discusses in it the main reasons to distrust Iran, the crimes of Iran. It’s very interesting to look at. The most interesting one is the charge that Iran is destabilizing the Middle East because it’s supporting militias which have killed American soldiers in Iraq. That’s kind of as if, in 1943, the Nazi press had criticized England because it was destabilizing Europe for supporting partisans who were killing German soldiers."

Steen Jakobsen: Get Ready For The Biggest Margin Call In History

Economist Steen Jakobsen, Chief Investment Officer of Saxo Bank, believes 2015 will be another "lost year" for the economy. And he predicts the Federal Reserve will indeed start to raise rates later this year, surprising the market and taking the wind of out asset prices. He recommends building cash and waiting to see how the coming storm - which he calls the "greatest margin call in history" - plays out...

Chinese Economic Outlook "Skewed Heavily To The Downside," BNP Says

"The outlook for Chinese demand, in contrast to optimistic forecasts of producers, is skewed heavily to the downside," BNP says, in a new note warning of further deflationary pressures and protracted weakness in iron ore prices. For those who still think a "hard landing" can still be avoided, look no further for evidence to the contrary.

Another Reason To Move Away From California: "Conditions Are Like A Third-World Country"

All over the southwest United States, we are seeing conditions that we have not witnessed since the days of the Dust Bowl in the 1930s. If anyone actually needed another reason to move out of the crazy state of California, now it is being reported that conditions in some areas of the state “are like a third-world countrydue to the multi-year megadrought that has hit the state. Millions of Californians have fled the state in recent years, and this water crisis could soon spark the greatest migration out of the state that we have ever seen.

Secretary Of State For Hire: Hillary Clinton Made Millions From Foreign Donors In Exchange For "Favors"

What will be revealed in a new book "Clinton Cash: The Untold Story of How and Why Foreign Governments and Businesses Helped Make Bill and Hillary Rich,” by Peter Schweizer, is something very sinister: foreign entities made payments to the Clinton Foundation and to Mr. Clinton through high speaking fees expected, and received, favors from Mrs. Clinton’s State Department in return.  This means that during her tenure as Secretary of State, Hillary Clinton may or may not have been working in the best interest of the US population; she was, however, certainly working in the best interest of the biggest Clinton Foundation donor du jour. Such as, for example, the country of Ukraine.

The Crowning Glory Of Keynesianism

Many have forecast the creation of a new monetary system by which governments and banks gain total control over all monetary transactions. On the surface of it, this may seem an impossible goal, as it would be so all-encompassing and would eliminate economic freedom entirely. Surely, it would not be tolerated. However, we believe that it’s not only relatively easy to create, but it will be sold in such a way that the public will see it as an absolute panacea to their economic woes. Only those who are far-sighted will understand its level of destruction in advance of its implementation.

US Navy Sends Aircraft Carrier, Warships To Intercept Iranian Weapons Shipments In Yemeni Waters

Update: Because the report from AP does not play well with "Everyday Americans", US CentCom is denying: U.S. DENIES REPORT SHIP SENT TO INTERCEPT IRAN VESSEL, SAYS SHIP SENT TO KEEP SHIPPING LANES IN REGION OPEN

The 'proxy' war is escalating very rapidly. As AP reports, Navy officials confirm that the aircraft carrier USS Theodore Roosevelt is headed to Yemeni waters to intercept an Iranian weapons shipments. Just as we warned 10 days ago, the probability of a major escalation over the latest proxy Middle Eastern civil war escalated substantially when Iran parked two warships off the Yemeni coast.