Either Greece will stop trying to save the failed past and look into the future, treating the crisis and the adjustment program as opportunities to finally implement urgently needed reforms, or the country will be eventually forced to exit the euro, in our view. Economics 101 teaches us that an economy can survive within a monetary union only if it has fiscal policy room and structural flexibility to respond to asymmetric shocks. In our view, Greece had none and has none. We see no solution for Greece within the Eurozone without reforms.
Back in May 2014, Obama shocked much of America when, in stark rejection of long-standing US policy not to negotiate with "terrorists", he agreed to exchange Sgt. Bowe Berghdahl for five Taliban prisoners held at Guantanamo. The prisoner exchange further raised eyebrows when it was suggested that Bergdahl hardly deserved such an executive action because he was captured only because he had deserted his post: a treason-worthy offense. Unfortunately, today was yet another day of humiliation for an administration whose most recent foreign "success" was arming the Yemen rebels with hundreds of millions in weapons when earlier this afternoon. the Army announced it would officially charge Bowe Bergdahl with desertion for leaving his post in 2009, his attorney said Wednesday.
US Hegemony, Dollar Dominance Are Officially Dead As China Scores Overwhelming Victory In Bank BattleSubmitted by Tyler Durden on 03/25/2015 - 17:00
The China-led development bank essentially marks an epochal shift away from traditionally US-dominated multinational institutions like the IMF and the ADB. Meanwhile, it also represents an implicit attempt by the Chinese to usher in a kind of sino-Monroe Doctrine. The more isolated the US becomes as it relates to the new venture, the more transparent its motives seem. This was never about “standards” (the original excuse for Washington’s opposition to the bank), but rather about stifling Chinese ambition. "America seems to be confirming China’s darkest fears: it has adopted a policy of containment that is wrong in principle and has failed in practice," notes The Economist.
The negative divergence of the markets from economic strength and momentum are simply warning signs and do not currently suggest becoming grossly underweight equity exposure. However, warning signs exist for a reason, and much like Wyle E. Coyote chasing the Roadrunner, not paying attention to the signs has tended to have rather severe consequences. When the market eventually cracks, the "disposition" effect will trump all the good intentions of "buying and holding" for the long-term. The eventual "panic to sell" will lead to a significant destruction in investment capital and a reversion in investor psychology to extreme negativity. While the basic premise of investing is to "buy low" and "sell high," repeated studies show that there are precious few who do.
UPDATE: *PRESIDENT OF YEMEN SAID TO HAVE LEFT THE COUNTRY ON BOAT FROM ADEN, AP SAYS
The countdown for yet another proxy war, this time involving Iran and Saudi Arabia, has begun.
Presented with no comment...
Four and a half years after Brazil's FinMin Guido Mantega first re-introduced the world to the term "currency wars," it appears the Brazilians have admitted defeat. Amid what Goldman calls a sharp decline in consumer confidence - to the lowest level in series history - which could also extend the ongoing macroeconomic adjustment processes and therefore delay the recovery of the economy; Brazil's central bank has announced that it will no longer intervene to support the Real via its Dollar-Swap program. In a SNB2.0-esque move, though somewhat anticipated by the market, Brazil enables the devaluation that has occurred to perhaps extend (improving competitiveness) and removing what was becoming a notable fiscal drag. Implicitly, Brazil just followed the Swiss and admitted defeat in the global currency war...
“Government can have no more than two legitimate purposes,” wrote the 18th-century English political philosopher William Godwin, “the suppression of injustice against individuals within the community and the common defense against external invasion.” But the US system of government – nourished by the almost unlimited credit that its money gives it – has swelled to a shape that would have been grotesque and unrecognizable to Godwin. To those who still maintain some romantic attachment to the ideals of the American Revolution, it is merely repulsive.
With The ECB banning Greek banks from continuing the GGB-buying ponzi scheme, the banking system in deposit outflow panic, cash running extremely dry, food shortages building, and bond/loan payments looming, Greek celebrations of Independence Day today are likely tempered by European officials coin-tossing over the nation's future (in or out of the EU). 196 years after winning their sovereignty from The Ottoman Empire, one wonders if The Greeks have the ability to fight their sovereignty back from "The Institutions." Perhaps, in the future, The Greeks will mourn "In Dependence" Day as opposed to celebrating "Independence" Day...
Fifth ramp in 5 days takes WTI crude back above $49 for the first time in 2 weeks... on the heels of record production, record streak of inventory builds, and record inventory at Cushing. The 1Y spread has compressed to 2-month lows...
Does it really take purportedly intelligent people six years to see that the macros are not responding? Better still, isn’t it time for the Fed to explain the exact channel by which its interest rate pegging and forward guidance is supposed to be transmitted to the main street economy? After all, if these channels are blocked or ineffective - then its flood of liquidity never leaves the canyons of Wall Street. In that event, the central bank actually functions as a financial doomsday machine, inflating the next financial bubble until it bursts. Then, apparently, its job is to rinse and repeat.
Greek Finance Minister Praised By FT In 2010 As Europe's "Top Politician" Is Now A Convicted CriminalSubmitted by Tyler Durden on 03/25/2015 - 12:46
Back in 2010, a panel of Financial Times "experts" was asked to rank Europe's finance ministers. Nineteen European finance ministers were judged. Greece's then finance minister George Papaconstantinou was found to have the best political skills among the 19 EU ministers and got an over 8th rank overall. Specifically, as Keep Talking Greece reported then, the FT said Papaconstantinou had "the best political skills after displaying “panache” in his handling of the country’s economic crisis." That was then, this is now: Yesterday a special court found him guilty of fabricating a Swiss bank account document and handed him a one-year suspended prison sentence.