Reality

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Greece To Run Out Of Cash In Under One Week





"February 24 is expected to be the first crucial day for state finances, as projections of cash flows see state coffers starting to run dry on that date.  The state of cash reserves – not robust before – has deteriorated further in recent days due to a shortfall in revenues, as a 1-billion-euro hole in January revenues is putting the execution of the state budget in jeopardy and hampering the management of cash reserves. Given these figures, the Finance Ministry estimates that cash reserves will run out next Tuesday.

 
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The Catastrophic Costs Of Extend-And-Pretend Are About To Crush Europe





Extending imprudently massive loans to marginal borrowers always plants the seeds of disaster, and extending and pretending turns a potentially containable disaster into an uncontainable financial calamity. Yet this is the game plan of policymakers everywhere, from Europe to the U.S. to China--extend enormous loans to marginal borrowers and then mask the inevitable defaults with extend-and-pretend policies that vastly increase the size of the debt. By the time extend-and-pretend finally reaches its maximum limits, the resulting implosion is so large that the shock waves topple regimes, banks, currencies and entire nations.
 
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Frontrunning: February 18





  • Greece to submit loan request to euro zone, Germany resists (Reuters)
  • Ukrainian forces start to quit besieged town (Reuters)
  • Bank of Japan maintains policy, no surprises (FT)
  • China Considering Mergers Among Its Big State Oil Companies (WSJ)
  • Soros Shifts to Europe, Asia as Investors Cut U.S. Equities (BBG)
  • Putin tells Kiev to let troops surrender as Ukraine ceasefire unravels (Reuters)
  • Venezuela Squanders Its Oil Wealth (BBG)
  • Swiss prosecutor raids HSBC office, opens criminal inquiry (Reuters)
 
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Stocks In Holding Pattern With All Eyes On Draghi And Whether ECB Will Pull Greek Liquidity





There was much confusion yesterday when algos went into a buying frenzy on news that Greece would submit a request for a 6 month loan extension, believing this means Greece has caved and will agree to a bailout programme extension as well. Nothing could have been further from the truth as we explained first moments after the headline struck, and also as Reuters validated moments ago when it said that "Greece will submit a request to the euro zone on Wednesday to extend a "loan agreement" for up to six months but EU paymaster Germany says no such deal is on offer and Athens must stick to the terms of its existing international bailout." But since the political nuances of diplomacy are lost on the math Ph.Ds who program the market-moving algos, the S&P did manage to roar above 2100 on what was another headfake and then forgot to sell off on the reality.

 
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Obama To Allow "Moderate" Syrian Rebels Call In B-1B Bombers For Air Support





While Obama desperately tries to stick to his now crushed "Nobel peace prize winner" image, by not succumbing to an all-out land war in the one nation where his progressive "pacifism" brought him fame (and according to some, the presidency), namely Iraq, the rest of militant, "interventionist" US foreign policy is rapidly starting to resemble that waged by the most brutally rabid, neo-con Republican leader. Case in point an absolute stunner reported minutes ago by the WSJ, according to which the White House has decided to provide pickup trucks equipped with mounted machine guns and radios for calling in U.S. airstrikes to some moderate Syrian rebels aided by American B-1B bombers!

 
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Retail Sales & The Market's Looming "Gotcha" Moment





The "conundrum" between lower gasoline prices and retail sales is not really one at all. Furthermore, the real story behind the weakness in retail sales also suggest that something is "amiss" within the broader economic backdrop. When combined with the deterioration in earnings, the risk of a "gotcha" moment in the market has risen markedly.

 
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Failed Discipline, Failed Reforms And Grexit: Why The Euro Failed





It's not that difficult to understand why the euro is doomed to fail. Given its structure, there is no other possible outcome but failure. Greece's exit (Grexit) will simply be the first manifestation of the inevitable structural failure of the euro. To understand why this is so, we have to start with two forms of discipline: the market and the state.
 
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Two-Thirds Of Citi Survey Participants Say Central Banks Are Now Fully In Control





From a Citi global credit survey: "...over 65% of respondents said they believed action from central banks in Europe and the US would be the principal force driving credit index spreads [and] surprisingly, in a year with major political catalysts in Europe, and ongoing regional tensions in the Middle East and Russia, only 4% of respondents felt that geopolitical risk would be the major factor driving spreads.”

 
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Futures Rebound On Collapse In Greek Negotiations, After Europe's Largest Derivatives Exchange Breaks





There was a brief period this morning when market prices were almost determined by non-central banks. Almost. Because shortly before the European market open, a technical failure on the Eurex exchange prevented trading in euro-area bond futures the day after Greek debt talks collapsed. And sure enough, after initially seeing significant downward pressure, which nobody could capitalize on of course courtesy of the broken Eurex, risk both in Europe and the US has since rebounded courtesy of the ECB, SNB and BIS, led by the EURUSD (because a Grexit threat which according to Commerzbank has been raised from 25% to 50% is bullish for the artificial currency), which is now at the level last seen just before yesterday's negotiations broke down, and US futures are about to go green.

 
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Cometh The Censor





Washington is stepping up its campaign to censor the internet. It had to come, and will succeed. It will put paid forever to America’s flirtation with freedom. We are hard pressed to think of a society in such internal decline that has turned itself around, and we cannot imagine how America might do so. One sure thing is that, once the internet is gelded, there will be no hope at all. And the assault has begun.

 
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CEO Of Rosneft Compares Oil Market Manipulation Which "Doesn't Reflect Reality" To Gold Price Rigging





"In today’s distorted oil markets, prices do not reflect reality. They are driven instead by financial speculation, which outweighs the real-life factors of supply and demand. Financial markets tend to produce economic bubbles, and those bubbles tend to burst. Remember the dotcom bust and the subprime mortgage crisis? Furthermore, they are prone to manipulation. We have not forgotten the rigging of the Libor interest rate benchmark and the gold price."

- Igor Sechin, CEO of Rosneft

 
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Ron Paul Warns "US Militarism Will End One Way Or Another..."





This militarism will end one way or the other. Either enough Americans will wake up and demand an end to Washington’s foreign adventurism, or we will go broke and be unable to spend another fiat dollar on maintaining the global US empire.

 
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Greek FinMin Varoufakis "It's Plan A, There Is No Plan B" Press Conference - Live Feed





We've heard the Eurogroup's side, now it is Greece's turn... Greek FinMin Varoufakis says Eurogroup talks were "collegial" but

*VAROUFAKIS: GREECE SEEKING 'SUSTAINABLE LONG-TERM CONTRACT', WANTS MORE THAN COSMETIC CHANGES TO RESCUE; ILLOGICAL TO ASK GREECE TO COMPLETE PLAN IT REJECTS, GREECE SHOULDN'T BE TREATED AS DEBT COLONY

And warns "ultimatums" never worked well in the Eurozone. Greece is "ready and willing to do whatever it takes," and "expects Eurogroup to drop its ultimatum."

 
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Why One Citizen Is Not Breaking Up With America This Valentine's Weekend





"So why do I stay? Why do any of us continue to put up with the gut-wrenching, soul-sucking, misery-drenched, demoralizing existence that is America today?"

 
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West Coast Ports Shut Down For Holiday Weekend: Supply Chain Halt Threatens Havoc On Reeling Economy





the latest news out of the West Coast is not good for anyone hoping for a quick resolution to the congestion problem. According to Reuters, after the clogged ports briefly reopened on Friday after a daylong closure, "shippers planned to re-impose a partial shutdown through the holiday weekend barring a settlement in stalled labor talks with the dockworkers union."

 
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