Obama Administration

Nobody on the Buy Side wants to sue JPM, Goldman Sachs, Morgan Stanley et al for securities fraud on the more problematic deals of the past decade.

On our current course, there is no other choice for the average American but to say no, regardless of the law, or the threat of its violent enforcement.  Rebellion, in all its forms, is as natural as the cycles of the Earth.  It reoccurs time and again, sometimes suppressed, but not for long.  The horrors of governments gone rogue are no secret.  We have so many examples in history to draw from it is hard to imagine any crime despots have NOT visited upon innocents.  Frankly, if control thirsty elites can refine tyranny down to a science by examining the mistakes of the past, there is nothing stopping us from refining defiance down to an art form as well.  Again, what other choice do we have, but to take heart in the knowledge that though there is no assurance of victory, there is also no assurance of defeat.

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.

Stripped of acronyms and pseudo-economics, Central banks have one lever: monetary easing. Whatever the name offered for creating money electronically and suppressing interest rates, it boils down to making money abundant and cheap to borrow, at least for banks and other favored players, such as buyers of homes using 3% down-payment FHA mortgages. The problem is that easy money doesn't fix what's broken. Incentivizing debt and leverage does nothing to reduce leverage or debt, and incentivizing speculation does not reduce household debt loads or increase household incomes. And without improving household incomes, you have a recessionary economy held aloft by unsustainably profligate Federal borrowing and spending.

Is this a "solution"? No. Is this sustainable? No.

All Military-Age Men Are Labeled “Militants” In Areas of Conflict ... Including Inside the U.S.?

• Finally, even the NYT gets it: Most Aid to Athens Circles Back to Europe (NYT)... compare to ZH from February
• It took less than 2 weeks: Zuckerberg Drops Off Billionaires Index as Facebook Falls (Bloomberg)
• Morgan Stanley derivatives switch hits hold-up (FT)... MS prevented from having non-existant deposits backsto $52 trillion in derivatives
• Solyndra goes global: Spain Ejects Clean-Power Industry With Europe Precedent (Bloomberg)
• Investors may be stoking the volatility they fear (Reuters)... Zombie Catch 22
• Facebook shares plumb new depths, valuation questioned (Reuters) shouldnt this have been questioned before?
• Italian auction reinforces eurozone woes (FT)
• Visa Beats JPMorgan as Cards Wage War on Cash (Bloomberg)
• Sweden Escapes Recession as Growth Returned in First Quarter (Bloomberg)

All you need to read

By now everyone is well aware what the main tension involving this year's presidential campaign as far as Mitt Romney is concerned, will be his professional past, namely his experience at, and exposure to, Bain Capital. By now most have also gotten a sense of the angle of attack that the incumbent will rely on in order to discredit his GOP challenger, and if they haven't, they will soon enough: after all in Obama's own words "Mitt Romney's record at Bain Capital is what this campaign is going to be about." In other words, Romney's history with managing private (emphasis added) equity. Yet at Marc Thiessen at the WaPo points out, the logical retort from the Romney camp would be to shift attention to something potentially more embarrassing: Obama's record with public equity. Because, frankly, it is deplorable. And while one may debate the number of job losses at the companies that Bain took private, the driving prerogative for Romney was to generate value for his investors and shareholders. This in itself will hardly be debated by Obama. In other words, for any and all of his other failings, Romney succeeded at his primary task. The question then is: did Obama do the same? Did he succeed in investing public equity, i.e., the taxpayer capital that the US financial mechanism has afforded him. Sadly, the answer appears to be a resounding no.

All you need to read.

The “austerity” and “growth” to which EU leaders refer are simply two sides of the same coin: that of assuming that massive problems can be dealt with superficially. It’s akin to polishing the brass on the Titanic as it sinks: in the short term, you’re making a small difference, but in the big picture, you’re ignoring the very real, enormous problem you need to tackle.

• Hilsenrath: Fed Pondering Why Inflation and Deflation Threats Ebbed (WSJ)
• The Naivete: France to push for eurozone bonds (FT)
• The rebuke: Merkel Says She Won’t Shy From Clash With Hollande at EU Summit (Bloomberg)
• The Euro-love: Hollande's euro arguments "nonsense": Austria's Fekter (Reuters)
• Obama Campaign Does Damage Control After Dems Question Anti-Bain Strategy (ABC)
• Greece: four major banks recapitalized by Friday (L'Echo)... and if they aren't?
• China to fast-track infrastructure investments (Reuters)... because China needs more cement
• Jeeps Sell for $189,750 as China Demand Offsets Tariffs (Bloomberg)
• As Facebook’s Stock Struggles, Fingers Start Pointing (NYT)
• Facebook 11% Drop Means Morgan Stanley Gets Blame (Bloomberg)

Michael Hudson argues that Mr. Krugman is a conservative in disguise.

Sometimes, the greatest deeds are done by those who are just doing their jobs, like Judge Katherine Forrest who last week struck down the indefinite detention provision (§1021) of the National Defense Authorization Act (NDAA). It would be all too easy in this age of ever-encroaching authoritarianism in America for a judge ruling on a matter like this to just go with the government line and throw water over the plaintiffs. After all, telling truth to power has consequences. Forrest was appointed by Obama, but after this ruling one wonders whether she is about to meet a career dead-end. Power — especially narcissistic power — does not like being told uncomfortable truths. Everything about this case is shameful; it should be obvious to anyone who can read the Constitution that indefinite detention without trial (just like assassination without trial — something else that Obama and his goons have no problem practicing and defending) is hideously and cruelly unconstitutional. It defecates upon both the words and the spirit of the document.

European cash equities are in the red across the board at the midway point, as the bourses fail to reverse the trend of the past few sessions. With data points very light today, participants continue to focus on the macroeconomic themes as speculation regarding a Greek exit maintains focus. A medium-term maturity Spanish bond auction slightly eased fears, selling to the top of the indicative range, however the appearance of solid demand was countered somewhat by limited supply and sharply higher yields across all three lines. Following the auction results, EUR/USD saw some modest support and the Bund exhibited slight weakness, but this was short-lived as the macroeconomic concerns took over once more. Unexpectedly, the 3-month Euribor rate fixing came in with its first increase since December last year, prompting some selling pressure on the Euribor strip. This move was retraced as it was rumoured that one bank had not submitted a rate due to the Ascension Day market holiday across certain European markets, prompting the incline.

European equities are seen lower across the board with the exception of the CAC-40 index as markets remain nervous towards the prospect of a second wave of Greek general elections. The outperformance of the CAC-40 follows the news from oil major Total, who have stemmed the gas leak from their Elgin well successfully after conducting intervention. As such, Total are seen higher by over 2%, strongly above the Oil & Gas sector. The Bank of England have released their latest projections for the UK economy, revising lower their growth forecasts and higher their near-term inflation expectations, alongside analyst forecasts. The BoE have stuck to their long-term predictions that there will be a slow but steady return to recovery, but reiterated that major downside risks exist from Europe. Governor King’s subsequent press conference has shown him to remain somewhat dovish, commenting that an increase in downside risks would prompt the bank to commit to further actions, leaving the door to a boost in asset purchases open. The forecast revisions prompted a sharp move lower in GBP/USD, falling around 75 pips and Gilt futures moving 55 ticks to the upside after the opening comments. At the midpoint of the session, GBP/USD remains in negative territory despite seeing support before the inflation report after better than expected UK jobless claims data.