Dust Bowl 2.0: California's Historic Drought About To Get Even Worse As "Snowpack Melts Early Across The West"

It has been a bad year for California whose drought is rapidly approaching historic proportions: according to the LA Times, which cites climatologist Michael Anderson, "you’re looking on numbers that are right on par with what was the Dust Bowl." And it is about to get even worse. According to the USDA, the west-wide snowpack is melting earlier than usual, according to data from the fourth 2015 forecast by the United States Department of Agriculture's Natural Resources Conservation Service (NRCS). "Almost all of the West Coast continues to have record low snowpack," NRCS Hydrologist David Garen said. "March was warm and dry in most of the West; as a result, snow is melting earlier than usual."

White House Admits, US States Need To Be Better Prepared For Fiscal Volatility

“What the Great Recession has shown is that things have fundamentally changed,” The White House warned this week and, as Bloomberg reports, states would have to cut spending or raise revenue by a combined $21 billion in the event of a recession, further exacerbating economic weakness, Moody’s Analytics found in a stress test of state finances. While investors are willingly buying bonds with both hands and feet, The White House warns, states "need to be much more prepared for very volatile fiscal conditions than they had been in the past."


Japan QE Limit Approaching As Goldman Says BoJ Risks Losing Crediblity

Is the BoJ's back against the wall? We certainly think so as the evidence increasingly supports the notion that the central bank is bumping up against the limits of accommodative monetary policy and may soon be headed — as we've variously predicted —for "failed nation" status.

Germany Orders 100 Tanks To "Ensure Troops Are Ready To Respond To Russian Assertiveness"

With Jean-Claude Juncker demanding a Unified European Army, it appears Germany is wasting no time in simultaneously boosting its own economy with warfare spending and comforting a 'fearful populace' with more military might. As Reuters reports, Germany plans to procure more than 100 additional Leopard 2 tanks, increasing its total Leopard 2 tank inventory by a whopping 45% a government spokesman said on Friday, as it seeks to ensure its "troops are ready for action in response to concerns over recent Russian assertiveness."

Martin Armstrong Asks: "Is There Something Behind The Power Outage In Washington DC?"

"The April 7th, 2015 power outage in Washington DC is curious to say the least. Virtually instantaneously, the government declare it was not a terrorist attack. After all, how could that possibly be when the NSA guards the country. If there was an attack on the power-grid, then the NSA would have to answer for their failure. So clearly, if it was an attack, they would never admit it."

"I Wouldn't Say It's A Bubble," HSBC China Strategy Chief Says Of The Country's Leverage-Driven, Equity Frenzy

Amid a historic margin-fueled equity buying frenzy in mainland China that has tech stocks trading at 200X and drove more than 4 million new "investors" into the market in March alone, HSBC's Head Of China Equity Strategy sits down with FT to explain, on video, why it's different this time and why there may be more upside to come for Hong Kong's day-trading housewives.

VIX Closes At 5-Month Lows, BofA Warns Volatility Term Structure Is A "Significant Concern"

At 12.58, VIX closed today at its lowest level since December 4th 2014 (which makes perfect sense, given the forward-looking volatility implied by each and every macro data item and earnings release in the next month). However, as BofA notes, the VIX term structure (VXV / VIX) suggests "significant concern" about this advance in stocks being sustained.

5 Things To Ponder: Don't Fight The Fed

Randolph Duke: Money isn't everything, Mortimer.
Mortimer Duke: Oh, grow up.
Randolph Duke: Mother always said you were greedy.
Mortimer Duke: She meant it as a compliment.

Friday Humor: DOJ Bars Employees From Whoring; CBO Says It Won't Cost Taxpayers

Attorney General Eric Holder felt the need, following recent allegations that DEA agents had "sex parties" with prostitutes hired by local drug cartels in Colombia, to send a memo to all his staff..."I want to reiterate to all Department personnel, including attorneys and law enforcement officers, that they are prohibited from soliciting, procuring, or accepting commercial sex."

Fear Or Froth: Zero Rates Are Simply No Longer Needed

Zero rates are simply no longer needed. The Fed doesn’t need to stay ‘lower for longer’, because it has already done that.  Waiting until September would mean a much greater possibility of missing their window of opportunity.   Market conditions might deteriorate or geo-political tensions rise in a way that more deeply affects the US.  Alternatively, market froth might grow even frothier, causing a larger market reaction than otherwise would have been the case.  Lastly, it would also be prudent to hike well in advance of the $215 billion of Treasuries on the Fed’s balance sheet that matures in early 2016; which, if left un-reinvested, is a de facto-tightening.

How Much Longer Can OPEC Hold Out?

OPEC has been in the line of fire from the western world in light of its stance of not reducing the production levels of its member nations (excluding Iran). Most view this as a strategy to squeeze the American shale production and other non OPEC nations. How much longer can it hold out?