Greece

For a few days, the rest of the world looked on awaiting the riots and social unrest in Cyprus that we have become accustomed to from their fellow unter-sufferers Greece and Spain; but it never came. However, as Reuters reports, the public shock (and numbness) over the tough terms of the so-called bailout is now turning to anger as million of Euros remain locked inside the country's banks. The people are "disappointed and angry," that the politicians are out of touch, and, "the big guys, who had the information, managed to take their money abroad." No one has answers for them, "I wrote to the central bank and they came back saying that it was not their competence, so whose competence is it?" as frustration boils over, "absolutely nothing adds up." But perhaps the saddest truth is that the Cypriots are resigned to years of hardship, "I am going to find myself on the street with no future, only debts. But we will fight to the end. We have nothing left to lose." It seems when a people has nothing to lose that anything is possible...

Witches Brew: Part 4 - Reality Bites

• The Specter of Things to Come

The road to ruin is on plain display and the playbook is easily seen at this juncture. Let’s take a look at how that playbook will unfold. Contrary to popular outrage of the SOLUTION being IMPOSED it is the correct one once the insured depositors where PROTECTED.  In this edition the elites suffered FIRST followed by the private sector depositors who foolishly believed false BALANCE sheets which were POLITICALLY CORRECT but PRACTICALLY incorrect fictions approved by fiduciarily (regulations and regulators allowed ONGOING insolvent operations rather than protect the public by ending and prohibiting them) challenged governments (work for the banks and crony capitalists not for the public at large).

Scott Solano, DPA: Mr Draghi, I've got a couple of question from the viewers at Zero Hedge...

Mario Draghi, ECB: Well you really are asking questions that are so hypothetical that I don't have an answer to them. Well, I may have a partial answer. These questions are formulated by people who vastly underestimate what the Euro means for the Europeans, for the Euro area. They vastly underestimate the amount of political capital that has been invested in the Euro. And so they keep on asking questions like: "If the Euro breaks down, and if a country leaves the Euro, it's not like a sliding door. It's a very important thing. It's a project in the European Union. That's why you have a very hard time asking people like me "what would happened if." No Plan B.

“If there is a risk in a bank, our first question should be: ‘Ok, what are you the bank going to do about that? What can you do to recapitalise yourself?’ If the bank can’t do it, then we’ll talk to the shareholders and the bondholders. We’ll ask them to contribute in recapitalising the bank. And if necessary the uninsured deposit holders: ‘What can you do in order to save your own banks?’” – Jeroen Dijsselbloem, March 26, 2013 ¹

Why has the Euro-zone fallen back into recession, and why can't it shake of its seemingly never-ending crisis? Is there light at the end of the tunnel - or is that an approaching train? A walk through the Euro-zone with charts of macro-economic data reveals the crisis is far from over. Instead, most trends are pointing towards further deterioration - facts as opposed to the hope and anecdote that we are bombarded with on a daily basis. While perusing these charts, consider EU President Barroso's comments just today that, "the worst of the crisis is over." You decide.

The term “Story stock” used to mean a company with little more than a sheaf of press releases and a glitzy narrative about its future prospects.  Now, ConvergEx's Nick Colas notes that pretty much any stock with a fighting chance of outperforming needs to have a “Story” to cut through the clutter of a noisy macro-driven market.  Story-less equities where the valuation is cheap simply dawdle, while theoretically expensive story stocks sizzle loudly.  So what makes a good story?  The answer is not only “Blowin’ in the wind,” it is as old as the hills.  CEOs matter intensely – they tell the story, and in the best cases they are the “Hero” at the center of it.  Other types of narratives: “New Blood”, “Resurrection”, and “Conan the Barbarian.”  And even with all these categories, Colas reminds us that we can’t forget that the U.S. equity market is essentially one large story stock, driven by a “Hero” figure – even if you don’t consider Chairman Bernanke is the same league as Moses or Ironman. Of course, we don’t know how this particular “Story” will end.  We don’t call someone a “Hero” until they finish the cycle and return with their gifts and teachings. After all, if creating +$2 trillion out of thin air isn’t some powerful magic to fight off the forces of evil, we don’t know what is.

Everyone learned a lesson from Cyprus, painful ones. German politicians learned a lesson too: that it worked!

I asked the question: is Bitcoin money? (It's price sure is rising parabolically like silver in 2011) In brief, I said no it’s an irredeemable currency.  This generated some controversy in the Bitcoin community.  I took it for granted that everyone would agree that money had to be a tangible good, but it turns out that requirement is not obvious.  This prompted me to write further about these concepts.

We now know that when it comes time to STEAL, the STEALING will only hit those who are not well connected with the corrupt elite. It will be the people.

It appears like the New Normal is merely a phrase used to describe daily records in virtually everything: the Dow Jones, the S&P, US foodstamps, sovereign bailouts, US total debt, and, today, Euro Area unemployment, which just rose to a fresh all time high 12%. From Bloomberg brief: "Euro-area unemployment rose to a record 12 percent in February and January’s figure was revised up to the same level from 11.9 percent estimated earlier, the European Union’s statistics office said. Jobless rates in January ranged between 4.9 percent in Austria and 27 percent in Greece. While rates in the euro area have risen by 1.1 percent point in the past year, unemployment has fallen by 0.6 percentage point to 7.7 percent during the same period in the U.S." Or said otherwise, European unemployment has now been rising constantly for 22 consecutive months - the longest period for deteriorating unemployment since the early 1990s, which, however, is to be expected for a continent which as we showed yesterday, has now reverted to 19th century growth rates.

The key point here is that European Crisis is now accelerating right as Germany becomes increasingly uninterested in funding additional bailouts.

The $13 billion bailout in Cyprus is small (in 2011, France and Germany made $80 billion of loans and grants to developing countries) and as JPMorgan's CIO, Michael Cembalest, notes the situation is in many ways unique. However, he warns, the latest melodrama reinforces the inconsistent and chaotic nature of EU policy-making. Bondholders, equity investors, bank depositors and citizens of Europe are at risk of unpredictable outcomes as they play Eurozone Roulette. Here’s where they might land on any given spin...

We showed this chart over the weekend, but it bears repeating simply because in this case, one chart does indeed speak a thousand words. Presenting: unemployment in Iceland and Greece - pick the "just say no to the status quo" winner out.

It begins here: Introduction of cold, hard evidence of bank shenanigans (with complete documentation) that A) should be prosecuted & B) cause enough concern to make you worry about your bank's integrity. 

Overview of the major central bank meetings and data preview as well as the latest from Cyprus and Italy.