B+

Behavioral economics suggests that a little QE can change human behavior at the margins, but no amount of QE is enough to change human nature at its core. The High Priests of the IMF, the Fed, and the ECB are blind to this because all of modern economic theory – ALL of it – is based on a single bedrock assumption: humans are economic maximizers. Yes, we are maximizers of reward. But we are also minimizers of regret. We seem destined to learn the hard way... once again...  that you can’t change human nature by government fiat. But individual investors and allocators can listen and learn from these old good ideas, and that’s how you survive the Golden Age of the Central Banker.

Despite endless proclamations that the world has 'escaped' the financial crisis, the data (and actions) simply do not back that up. The constant propagandizing of either a) US is economically strong and will drive the world's growth engine (factually incorrect), or b) the rest of the world is about to revert to higher growth seems entirely anathema to the fact that in 2015, we have seen a wave of monetary easing - most recently today by Israel. That makes it 20 central banks that have cut rates (or eased policy) in the last few weeks - covering over 50% of the world's population.

CIA vs. Greek Democracy, the Magna Carta, the Constitution, the Father of Free Market Capitalism and the U.S. Judicial System

When the German/Eurogroup decision came to throw either their own biggest banks, or the grandmas of a co-member nation of the currency union under the bus, they didn't even hesitate since they have control over the perfect vehicle for such tasks: the ECB (an allegedly neutral institution that in reality peddles political influence in a way that guarantees the poorer countries will always wind up footing the bill). For those of you who don’t want to wake up one day to find their own grandmas crushed under the same bus the Greek yiayia’s are under as we speak, it would be beneficial to ponder how perverse this all is, not just the isolated events but the entire underlying system that produces them. Banks are more important than people, certainly grandmas.

We may all be witnessing the beginning of the end of the European Union. For years, experts have stated that it is unsustainable for Greece to stay in the European Union. For years, those experts have been proven wrong.

• Tsipras Tamed as Economists Declare Greece Loses Austerity Fight (BBG)
• Greece readies reform plans to first sign of leftist unrest (Reuters)
• Yellen Faces Congress Amid Direst Threat to Fed Since Dodd-Frank (BBG)
• The war must go on: Kiev says cannot withdraw heavy weapons as attacks persist (Reuters)
• Ukraine fears spread of war after blast in eastern city (Reuters)
• Denmark Dismisses Report It Could Consider Capital Controls (BBG)
• Deadline Nears on Homeland Security Funding Impasse (WSJ)
• Gross Fund Hurt by Oil’s Plunge Amid Bets on Energy Bonds (BBG)

"Our media is not run by the government, and nor does it engage in widespread censorship. Instead, the media is run by a tiny group of politically motivated moguls, themselves in league with other private interests through advertising or personal networks....Rather than being a means to hold the powerful to account and fairly report issues, the media is the ultimate political lobbyist for our elite.  We desperately need more opponents of the status quo in the mainstream media. The reason we don’t have any is because – in our deeply compromised democracy – the media is so often there to serve the interests of the rich."
And if for some reason the "elite" don't get their way with media propaganda, there is always plan B. What is Plan B? For the answer see "German Journalist Blows Whistle On How The CIA Controls The Media."

Former Florida Gov. Jeb Bush, who is seriously considering a run for the White House in 2016, said Wednesday that the National Security Agency’s program that collects bulk telephone records was “hugely important,” throwing his support behind the practice as Congress debates whether to reauthorize or limit it. At an event on foreign policy hosted by the Chicago Council on Global Affairs, Mr. Bush, a Republican, said, “For the life of me, I don’t understand the debate” over the metadata program.

• Greece Should Not Give In to Germany’s Bullying (FP)
• Greece Can Pay Its Debts in Full, but It Won’t (WSJ)
• Early Friday humor: Euro Region Economy Strengthens Amid Wrangling on Greece  (BBG)
• Euro zone may need extra summit to clinch Greek deal (Reuters)
• Oil-Drop Pain Spreads to Saudi Arabia’s Energy Behemoth (WSJ)
• Yellen Confronts Economists’ Ignorance (BBG) - where does one even start with this one
• ECB Plans to Push Greek Banks to Shed State Debt If Talks Fail (BBG)

The global financial system desperately needs a big, bloody sovereign default - a profoundly disruptive financial event capable of shattering the current rotten regime of bank bailouts and central bank financial repression. Needless to say, Greece is just the ticket: A default on its crushing debt and exit from the Euro would stick a fork in it like no other. But don’t count on the Greeks.

Meet Guan Tao. He oversees the foreign exchange of China’s $4 trillion stockpile of reserves (so he has an incredibly unique view of capital flows and currency movements in and out of the country), and he just admitted that capital flight from China is accelerating suggesting that outflows could be considerably higher than official channels show.

Between European uncertainty and last night's massive API inventory build (14.3mm barrels), Brent and WTI crude was sliding into today's inventory data - well off the kneejerk highs at the US equity open (and back under $50). Market participants expected a US crude inventory build of around 3 million barrels but the number more than doubled that at 7.72 million barrels and production soared to new record highs. Idiot algos kneejerked higher (because 7.72 is lower than 14.3?) but that insanity is fading fast...

• Greece requests euro zone loan extension, offers big concessions (Reuters)
• Germany Rejects Loan Request Saying Greece Must Meet Conditions (BBG)
• Did the Fed Just Enter the Currency Wars (BBG)
• French consumer prices fall for first time since 2009 (Reuters)
• Oil falls sharply after U.S. crude inventories rise (Reuters)
• High-Speed Firm Virtu Revives IPO Plans (WSJ)
• Fed Tiptoes Into Rate-Hike Debate (Hilsenrath)
• Rajoy’s Nemesis Is Back: Anti-Graft Editor Targets Vote (BBG)

"The staff report noted valuation pressures in some asset markets. Such pressures were most notable in corporate debt markets, despite some easing in recent months. In addition, valuation pressures appear to be building in the CRE sector, as indicated by rising prices and the easing in lending standards on CRE loans. Finally, the increased role of bond and loan mutual funds, in conjunction with other factors, may have increased the risk that liquidity pressures could emerge in related markets if investor appetite for such assets wanes. The effects on the largest banking firms of the sharp decline in oil prices and developments in foreign exchange markets appeared limited, although other institutions with more concentrated exposures could face strains if oil prices remain at current levels for a prolonged period."