Nikkei Slides After BOJ Minutes Released

We are trying to remember when the last time the BOJ minutes were important for global risk assets, and are drawing a blank. That's how messed up the financial markets have become. That said, here are the highlights from the BOJ's May minutes which appear to have spooked the Nikkei some 10 minutes ahead of the open.

• HIGHER VOLATILITY MAY ACCELERATE JGB SELLING - Remember the "VaR shock?" 
• L-T RATE RISES DUE TO WEAK YEN, HIGHER OVERSEAS RATES - And higher overseas rates due to weak yen, also known as a Circular iteration
• FEW MEMBERS: BOJ SHOULD WATCH FED POLICY EFFECT ON JAPAN YIELDS - We have several non-lemmings
• ONE MEMBER:MUST KEEP FISCAL DISCIPLINE TO ENSURE BOND STABILITY - And a dissenter

And perhaps that quotes that spooked the market:

• ONE MEMBER: TIMELINE SEEMED TO BE INCREASING BOND VOLATILITY - i.e., the longer it goes on, the more we lose control
• FEW MEMBERS: BOJ SHOULD WATCH FED POLICY EFFECT ON JAPAN YIELDS - Get to work, Mr. Chairman

Nikkei down 200 in minutes.

An Abundance Of Bad Decisions

For the past five years of suppressed crisis, central states around the world have chosen to create an artificial sense of abundance by printing or borrowing trillions of dollars of fiat money and flooding their economies with this false abundance. This false abundance has led to a continuation of bad decision-making, as it has nurtured a magical-thinking faith that the era of abundance can be conjured up with monetary tricks. This is the essential feature of cargo cults, the magical-thinking belief in the return of abundance without having to chart a new path of authentic reforms. Creating the monetary illusion of abundance is not the same as authentic abundance. Fostering illusions of prosperity only further cripples our ability to make the necessary difficult decisions.

Full White House Statement On Syria's "Red Line" Crossing

What comes after George Bush and George Bush Jr.? Must be George Bush the Third, only this time armed with a Nobel peace prize. Seriously, are they that stupid to think they can rerun the entire Iraq invasion scenario without changing anything? And is the US public really that dumb to let it slide? And how many Syrian citizens and US soldiers have to die in what is the most glaring instance in the past decade of a wag the dog-type distraction from on onslaught of domestic administration scandals?

It's On: US "Finds" Chemical Weapon Use Against Syrian Rebels; Military Proposes Arming Rebels, No-Fly Zone

The "red-line" has been crossed. The New York Times is reporting that:

U.S. CONCLUDES SYRIA USED CHEMICAL WEAPONS AGAINST REBELS: NYT, and
NYT SAYS EUROPEAN OFFICIALS REACH SAME CONCLUSION ON SYRIA
MCCAIN SAYS U.S. TO PROVIDE WEAPONS TO SYRIAN REBELS

And alongside that finding, as part of (or justification for?) the arming of the Syrian rebels, the WSJ reports that the US Military is calling for a limited no-fly zone inside Syria. The seriousness of this escalation must be put in the context of a desperately-needed distraction for the current administration - which makes the decisions being made even more concerning in their potential for extremes.

This Last 30 Minute Hilsenrally Brought To You By Your Favorite Fed Mouthpiece

The last time Hilsenrath tried to be relevant, back on May 22, he essentially said to ignore anyone who tried to time the Taper (but don't call it a Taper) when he said: "when the Fed shuts off bond buying, it won’t be abrupt and it won’t be predictable." So just to make sure market expectations of tapering are actually very predictable, if at least on the short end, moments ago Hilsenrath once again hit the tape with the following: "Fed Likely to Push Back on Market Expectations of Rate Increase: Federal Reserve officials have been trying to convince investors for weeks not to overreact when the central bank starts pulling back on its $85 billion-per-month bond-buying program. An adjustment in the program won’t mean that it will end all at once, officials say, and even more importantly it won’t mean that the Fed is anywhere near raising short-term interest rates. Investors aren’t listening." So here comes the Hilsenrally to save the day by making investors listen, even if not so much for the benefit of stocks this time, as for bonds, which little by little are starting to lose it.

"High-School Dropout Snowden Is Lying" Chairman Of House Intelligence Committee Claims

Emerging from a hearing with NSA Director Keith Alexander, Reps. Mike Rogers (R-Mich.), chairman of the Intelligence Committee, and Dutch Ruppersberger (D-Md.), the senior Democrat on the panel, said Snowden simply wasn't in the position to access the content of the communications gathered under National Security Agency programs, as he's claimed. "He was lying," Rogers said. "He clearly has over-inflated his position, he has over-inflated his access and he's even over-inflated what the actually technology of the programs would allow one to do. It's impossible for him to do what he was saying he could do... I hope that we don't decide that our national security interests are going to be determined by a high-school dropout who had a whole series of both academic troubles and employment troubles," Rogers said.