Meanwhile, In Baltimore

The Baltimore riots may have calmed down but their aftermath remains, and nowhere is it more tangible than what is taking place in Orioles Park right now.

The Real Financial Crisis That Is Looming

There is a financial crisis on the horizon. It is a crisis that all the Central Bank interventions in the world cannot cure. It is a financial crisis that will continue to change the economic landscape of America for decades to come. No, we are not talking about the next Lehman event or the next financial market meltdown. Although something akin to both will happen in the not-so-distant future. It is the lack of financial stability of the current, and next, generation that will shape the American landscape in the future.

When Exactly Will The Fed Launch QE4?

No one earned it. No one saved it. But here’s our prediction: Someone will miss it when it is gone! If the US money supply were a deck of cards, Uncle Sam has been slipping in extra aces for the last 44 years. In the third quarter, net liquidity is likely to turn negative. And the stock market is likely to correct. What then? The Fed will panic and announce QE4… and other measures.

'Hawkish' Hilsenrath Confirms Fed Not Worried About Q1 Growth, Rate Hikes Coming

At a stunning pace of 608 words in just 4 minutes, The Wall Street Journal's Fed-Whisperer, Jon Hilsenrath, has proclaimed his "common knowledge" meme for today's FOMC statement. Confirming that officials "aren’t at this point alarmed about the first quarter slowdown," and in fact stating they are confident of spending picking up due to consumer sentiment (which just fell)... which leaves them signalling no shift in policy stance - i.e. rate hikes are coming whether the economy can handle it or not...

"Not Patient" Fed Blames Snow For Weakness, Removes Calendar Guidance

With everyone hoping that The Fed says something dovish (because after all stocks are 1% off their highs) there was some disappointment as the weakness was shrugged off as transitory:

  • *FED SAYS WINTER SLOWDOWN PARTLY REFLECTS `TRANSITORY FACTORS'
  • *FED SEES MODERATE GROWTH, JOB GAINS EVEN AFTER 1Q SLOWDOWN

In the end, once again, the dovish Fed provides just enough wealth-creating hope to keep stock dreams alive but knows it has to move sooner rather than later (keeping the "but we think the economy will strengthen" meme alive).

Pre-FOMC: S&P Futs 2099.50, 10Y 2.04%, EUR 1.1175, Gold $1210, Oil $58.85

Greek Deposits Now Lowest Since 2005; One Third Of Bank Assets Now ECB-Funded

Greek deposits fall €2.5 billion in March to the lowest level since 2005 as the cash crunch intensifies ahead of looming payments to government employees and the IMF. Meanwhile, Deutsche Bank sees a referendum on a "reluctant" reform agreement as the most likely "solution" (although most Greeks reportedly oppose such a step) but says the chances of a less favorable outcome are still at least 30%.

Flash Crash Scapegoat Can't Afford Bail, Will Remain In Prison

The news of Navinder Sarao's arrest, the scapegoat for all that is broken with the world's equity markets, may have come, gone and be largely forgotten, but while the CFTC is happy to have washed the corruption and incompetence off its hands by destroying the career of one insignificant trader (whatever happens, redirect public attention from the HFT firm that just came public and boasted of one trading loss day in 6 years) Sarao is facing decades in prison. And, what is worse for the alleged mastermind of the May 2010 flash crash, he won't even be able to enjoy a few weeks in quasi-freedom. Why? Because this lonely 36 year old, who "crashed" the entire market 5 years ago from his parents' basement (literally), can't even afford bail.

Even Wall Street's Biggest Permabulls Are Throwing In The "Recovery" Towel

Unlike last year when every single weatherman, pardon "economissed", quickly declared the collapse in Q1 GDP from an initial consensus of 3% to an abysmal -2.5% was due to the weather, and not due to a dramatic tightening in Chinese end demand, this time there is suddenly no silver lining, and one after another, the economisseds are lining up to say that, ooops, they were all wrong.

To Commerzbank, German Bunds Are "Flash Crashing"

As first Bill Gross and then Jeff Gundlach suggest shorting German bonds, so it appears the message has sunk in that at 4.9bps 10 days ago, 10Y Bund yields were the short of a lifetime. Since then they have soared, with a dramatic doubling today from 14bps to over 29bps - the highest yield in 7 weeks. As Commerzbank warns, "a cascade of small events is creating a large splash in a structurally ever-thinner market," which has led to a plunge "similar to US Treasury flash crash of Oct. 15."

The Great Unwind Begins: US Dollar Plunges To 2-Month Lows

Just when you thought it was safe to pile all your money (at maximum leverage) into USD-denominated assets, the greenback plunges... The last 4 days have seen the 2nd biggest drop in 6 years. This has very significant consequences for a world that has become entirely consensus-based across at least 5 major themes... This poses a problem for talking-heads: if USD strength as indicative of US economic strength... what does a plunging USD imply?