Chanos: "China's Treadmill To Hell" Will Break This Year And The Bubble Will Pop, Kynikos Is Shorting Chinese Developers And...

In a Charlie Rose interview to air later, Jim Chanos repeats his warning about all hell breaking loose once the China bubble bursts and puts a timeline on the event - late 2010 or 2011. "Supply will equal demand at some point. It always does, and then there is this precarious tipping point when suddenly you can't sell a project and then it's just as if everyone from the port side of the cruise ship goes to the starboard side of the cruise ship all at once. You get a tipping point, you get this light-bulb moment - "I've got to get out while I can." And the buyers dry out. It's as old as market itself." Chanos also voices his opinion on the CNY, and ever the contrarian, he, just like Edwards and Zero Hedge, implies that the CNY is actually overvalued, contrary to what the NYT's paywall may want you to believe: "Chinese exports aren't the problem here. And what if it turns out that by having to nationalize lots and lots of real estate bad debts, the RNB is devalued." All spot on, however we disagree with Chanos' conclusion that this is something that nobody is expecting: note here and here.

So Much For Austerity: Greece Has Already Overspent In Just The First Two Months Of The Year

For one reason why Greece thought that the EU and the IMF were just keeeding about all that austerity mumbo jumbo, here is one explanation, from Kathimerini (via Eurointelligence), according to which three of the Greek "ministries have already disbursed more funds than they should in the first two months of the year." Shockingly, the department of health insurance for the self-employed has already disbursed almost 50% of the allotted funds in just the first two months of 2010! One can see why Greece may suddenly be worried that Europe, and especially the IMF, were actually quite serious about all those spending cut threats. And if Greece already had violent demonstrations, general strikes and bombings without in fact having instituted any austerity, then one can see why John Taylor sees civil war as one of the most unpleasant, yet realistic implications of a Greek bailout (as well as lack thereof, hence the Catch 22).

Bullish. No Matter What

Anyone wishing to capture the mindset of the lemmings that still desire to be front run by every imaginable SkyNet algo out there, needs to read no further than this list prepared by the Daily Bell.

How "Sub-Pennying" In Dark Pools Ignores SEC Rule 612, Makes A Mockery Of The NBBO, And Is Another Illicit Source Of Billions For Wall...

One of the key "market integrity" (actually, much more appropriately said, lack thereof) topics that has not been touched at all by the Mainstream Media is the issue of Sub-Pennying, or the process of stepping in in front of displayed orders in blatant violation of NBBO rules as determined by Rule 612, in which broker-dealers profit to the tune of billions of dollars from "playing inside the spread" and in the process compromising the NBBO, having stocks being propped up by passive limit orders, pushing legitimate liquidity providers out of the market (after all,who wants to be constantly front run by block sniffing algos) and in general hurts the price discovery process. With regular exchanges predominantly used by schmucks and market small-timers, who trade in small volumes as the bulk of block order traffic has moved to various ATS and dark pools (primarily that of Goldman Sachs' Sigma X) leave it to the pros to find a way to make a mockery out of the market. Of course, as long as everyone is buying (with the taxpayer selling involuntarily) nobody has much reason to complain. However, when the ponzi ends and the rush to offload hits a fever pitch, the spirit of friendly thievery may turn sour very, very fast. Also, anyone who has any illusions they can trade fairly in dark pools (or the broader market), you have our condolences. We present a great guide on the dangers to market integrity from Sub-Pennying as presented by Dennis Dick of Bright Trading.

$13 Billion 30 Year Reopening Closes At 4.77%, Directs Take Down Massive 25.48%

• Yield of 4.770% compared with exp. 4.768%
• Bid To Cover of 2.73 vs 2.66 Average, 2.89 previously
• Indirects take down 36.80% vs 37.08% Average, 23.85% previously
• Direct take down 25.48% vs record 29.65% previously, more than double the 11.24% average
• Alotted at high 30.96%
• Primary dealer hit rate: 22.7%

The Greatest Shell Game Ever Continues As The Whole World Is Now Insolvent; Updated Thoughts From Chris Martenson On The Upcoming US Funding Crisis

The shell game has continued this long without the bond market calling the bluff, and I am baffled by the extent to which the other world central banks have both enabled and participated in this game. Part of the explanation behind this unwavering support for the dollar and US deficit spending by other central banks lays in the fact that other Western and Eastern governments are equally insolvent. It's possible that they feel they really have no choice but to play along, because the alternative would be to inflict a vicious and deeply unpopular austerity program on their own country, while everybody else is partying on thin-air money. Who's going to be the first to do that? Nobody, that's who.