B+

The PIIGS will pop! I directly & explicitly compared the plights of Greece vs Spain 2 1/2 yrs ago before anyone even publicly admitted Greece would have to default, not to mention Spain!!!

Market Turbulence As Global Economies Falter: The European debt-crisis, the derailing of Chinese economic growth and an underemployed United States all point toward a “global crunch”. 

The state purports to represent the people when all it does is leech off their labor in order to commit crimes at home and abroad.  Under the auspices of keeping democracy safe around the world, the foreign policy of the U.S. government has been one of bombing, killing, and overall domination.  Meanwhile, anti-American sentiment continues to spread by instances such as the C.I.A. targeting civilian responders to drone strikes who attempt to aid those who were attacked.  In some cases, the C.I.A. even launches drone attacks at the mourners in funerals held for those in earlier strikes. These are the measures under which the American people are told they are being kept safe.  What would be constituted as war by any other nation is not so when carried out by the U.S. government.  But it’s all just another facade through which Washington pretends to serve the people when in reality it puts them in even more danger.

10 Questions ...

And to think it was not even 2 hours ago that a regurgitated and largely impotent news story hit the WSJ (following up on an identical Reuters story yesterday, as ZH noted), sending the EURUSD higher by 50 pips. As we said, expect Germany to come out with a prompt refutation in minutes. The minutes in question were 90. The official denial to Gollum's lie panderings has arrived courtesy of Market News: "Government spokesman Steffen Seibert said at a regular press conference here that the German rejection of the idea of any direct recapitalisation of banks by the ESM "is well known." Summary: B+ for effort, C for execution, C- for market reaction halflife, and F for content, as usual.

The little rating agency (or is that former, now that it is public knowledge that Egan-Jones missed a comma in their NRSRO application?) that just refuses to go away, has done it again, and downgraded Spain from BB- to B (negative outlook of course), and on the edge of the dreaded triple hooks, mere days after it cut it from BB+ to BB-.

A push by the ECB for the euro zone to stand behind banks suffering from bank runs is slowly gaining traction but the bloc has yet to build backstops to prevent, or cope with, a sudden collapse of confidence in banks and mass deposit withdrawals. Last week, European leaders discussed pan European means of supporting banks, measures the ECB hopes will include a bank resolution fund to deal with the fallout from the wind up or restructuring of a failing bank. But a wave of withdrawals by depositors - either for fear that their government is too weak to stand behind its banks or that their country will exit the euro and forcibly convert their savings into a vastly devalued national currency - would represent a crisis of completely new proportions. Greece’s exit and reversion to their national currency, the drachma, could precipitate electronic bank runs in other periphery nations. The risk is that even savers who may trust their bank as being safe, come to the conclusion that there is a risk that their euro deposits may, in the event of a sovereign crisis, be forcibly converted to drachmas, pesetas, liras, punts and escudos.

We all know that the National Defense Authorization Act (NDAA) signed by President Obama on New Year’s Eve contained a now-struck-down provision to authorise the indefinite detention of American citizens on US soil. But did you know that the NDAA also paves the way for war with Iran? From Dennis Kucinich:

Section (6) rejects any United States policy that would rely on efforts to contain a nuclear weapons-capable Iran. Section (7) urges the President to reaffirm the unacceptability of an Iran with nuclear-weapons capability and opposition to any policy that would rely on containment as an option in response to Iranian enrichment. This language represents a significant shift in U.S. policy and would guarantee that talks with Iran, currently scheduled for May 23, would fail. Current U.S. policy is that Iran cannot acquire nuclear weapons. Instead, H. Res. 568 draws the “redline” for military action at Iran achieving a nuclear weapons “capability,” a nebulous and undefined term that could include a civilian nuclear program. Indeed, it is likely that a negotiated deal to prevent a nuclear-armed Iran and to prevent war would provide for Iranian enrichment for peaceful purposes under the framework of the Non-Proliferation of Nuclear Weapons Treaty with strict safeguards and inspections. This language makes such a negotiated solution impossible. At the same time, the language lowers the threshold for attacking Iran. Countries with nuclear weapons “capability” could include many other countries like Japan or Brazil. It is an unrealistic threshold.

The notion of a “nuclear weapons capability” seems like a dangerously low standard. Let us not forget that Mossad, the CIA and the IAEA agree  that Iran does not have a bomb, is not building one, has no plans to build one.

Just after the market close on what will probably go down as the worst day in history for every stock-broker-come-private-wealth-commission-taker's wealth-manager's future business (that would be the Facebook IPO - or as some call it "Blue-Friday"), the head of Morgan Stanley's 'Consulting Services Group' sent what is likely the worst timed, worded, and ironic self-congratulatory email of all time. James Walker, the MD of the group (correction - Andy Saperstein - who later blamed the NASDAQ for all his woes)- which manages $385 billion of client assets and is the nation's largest managed accounts business - was not wrong in his summation that this IPO was "orderly, fair, and well-communicated" and "will have a long-lasting impact on our clients and the organization". We assume he didn't mean "finish it" as one can only imagine the breadth of these clients who ended up stuffed full of the worst large IPO of the decade.

If according to S&P recently nationalized Bankia is junk, what does that imply about Spain?

Yesterday it was a record low 5 Year yield, today it is the 7 Year. Tim Geithner just issued a fresh $29 billion in 7 Year bonds at a new all time low yield of 1.203%, on top of the When Issued 1.200%,and paying a cash interest of 1.125%. Those concerned that the belly of the curve may not enjoy the benefits of Twist can put those fears at rest. The internals were non-eventful, with a 2.80 B/C, just shy of the 12 TTM average of 2.81, Directs taking down 15.70%, Indirects 42.73% and Dealers left with 41.57% of the auction, an improvement from yesterday when they were stuck with over 50% of the takedown. And so, with this final weekly auction, total US debt rises to $15.75 trillion.

We will start with an appetizer of Liquidity Tenders and Securities Market Program Bond Purchases, move on to a plate of Emergency Liquidity Assistance, sample a pre-entre of Pro-Growth measures and ECB Covered Bond purchases, dive into an entre of Fed Swap Lines, medium rare, with a side of Emergency Liquidity Assistance, and finally unwind with a desert plate of Firewalls. To close we will dream of tomorrow' menu which some say may feature the mythical Eurobonds and even the, gasp, legendary Europan Bank Deposit Guarantee... Please charge it all to the taxpayer, of course.

Here's My Argument for Fighting the Good Fight Even Against Seemingly Overwhelming Odds ... The Counter-Argument Is that We Should Unplug from the Martrix, and that Will Suck Away Its Power. What Do You Think, Savvy Reader?

All you need to read.

Only a fool would trust the USA.