Reuters

One of the biggest headlines that floated under the radar late last week was the announcement by Spain that its budget deficit would soar well higher than the expected 6% of economic output and instead be at 8% of GDP, which while ignored by the broader media was certainly noted by the EURUSD which tumbled on the news. Probably the most humorous response came from the neo-feudal viceroy of the PIIGS Olli Rehn who was displeased. From Reuters: "The European Commission regretted missed fiscal targets announced in Spain on Friday, but hailed the government's announcement of an austerity plan intended to slash the Spanish public deficit. "I regret the sizable fiscal slippage" to a deficit of 8.0 percent of GDP instead of 6.0 percent initially targeted, Economic Affairs Commissioner Olli Rehn said, while welcoming the new measures announced from Madrid." We in turn regret that a year after adopting so-called austerity, Spain still has not understood that it means cutting the deficit, not blowing it up. Because just like in Greece, sooner or later the Germans will come knocking and demanding every last shred of sovereign independence from its bevy of debt/bailout slaves. Unfortunately today's news will not help: in another piece of news that many hope slip under the low volume radar, the government just said that the revised number could well be re-revised even worse as soon as a few days later.

With two days left until the GOP primary circus is fully underway, here are, courtesy of Reuters, the key facts to keep in mind as all that endless talk finally shifts to action. From Reuters: "Voters kick off the 2012 nominating process to pick the Republican Party's challenger to Democratic President Barack Obama with the Iowa caucuses on Tuesday, followed by primaries in New Hampshire and South Carolina on Jan. 10 and Jan. 21. The three contests are some of the most watched events in the election process. Here are a few facts about them."

How Jim O'Neill still has a job is beyond us. Not only is he the head of the worst performing vertical at Goldman Sachs, not only is he the creator of the Bloody Ridiculous Investment Concept (BRIC), but now this? Come on...

The political press has been abuzz with over the much anticipated signing of the NDAA by Barack Obama on Saturday: this move was not surprising because Obama had already made it clear he would go ahead and enact the law, even though he added some 'stern' language that is supposed to legitimize what some say is a precursor to the establishment of martial law in the US. To wit: "The fact that I support this bill as a whole does not mean I agree with everything in it. In particular, I have signed this bill despite having serious reservations with certain provisions that regulate the detention, interrogation, and prosecution of suspected terrorists." And yet he signed it (full text of Obama's statement on the NDAA, sent while on vacation in Hawaii, can be found here). Perhaps the reason for that unpopular move were some of the more nuanced contents of the Bill, among which is the decision to fully boycott not only Iran, but any bank, including central bank, and other financial institution found to deal with Iran. Which incidentally means most of Russia and China, and probably half of Europe, as all petrodollars generated by the country's petroleum export industry first have to make their way via the international financial community back into the country. The history buffs out there will realize that this form of couched antagonism is nothing short of the US approach to Japan during World War II, which was essentially provoked into attacking Pearl Harbor - read the details of the October 7, 1940 McCollum Memo here, and especially bullet point 10. And unfortunately, it appears that within 24 hours or so, Iran may have already taken the bait. As Reuters and BBC report, Iran has both test-fired a medium-range SAM during the ongoing wargames exercise previously discussed here, as well as made a formal announcement it has made and tested domestically made nuclear fuel rods: precisely the event that the Israel or US-borne Stuxnet was designed to prevent. So as the tennis match of escalation keeps on growing the ball is now once again in the US' court.

It appears the GOP candidates are dropping like flies: first that one crazy guy, then Cain, and now... Mitt Romney? According to a Boston Globe article, paraphrased by Reuters, the GOP frontrunner (or is that second after Gingrich now: nobody really knows any more), spent $100,000, not of his own money but state funds, to "replace computers in his office at the end of his term as governor of Massachusetts in 2007 as part of an unprecedented effort to keep his records secret. When Romney left the governorship of Massachusetts, 11 of his aides bought the hard drives of their state-issued computers to keep for themselves. Also before he left office, the governor's staff had emails and other electronic communications by Romney's administration wiped from state servers, state officials say. Those actions erased much of the internal documentation of Romney's four-year tenure as governor, which ended in January 2007. Precisely what information was erased is unclear." Odd: almost as if he had something to hide... Yet something tells us the other side of those emailed correspondences will still be there: alive and kicking, somewhere on the archived servers of Bain Capital, and a few prominent health insurance companies (and of course Goldman Sachs, because Goldman Sachs is everywhere). Naturally, one would need a subpoena to get those. And for that one would need a reason to assume something is illegal. Luckily, wiping your hard disks while a servant of the people is perfectly normal in a banana republic. Now just who does Ron Paul have to murder in broad daylight while having sex with Snooki before the general media finally decides he is worthy of a shot at this whole farce?

If anyone needed the proper epitaph for the insane stupidity out of Europe, Reuters may have just provided it. In an exclusive article, Reuters stuns us with the following: "German and French officials have discussed plans for a radical overhaul of the European Union that would involve establishing a more integrated and potentially smaller euro zone, EU sources say. French President Nicolas Sarkozy gave some flavour of his thinking during an address to students in the eastern French city of Strasbourg on Tuesday, when he said a two-speed Europe -- the euro zone moving ahead more rapidly than all 27 countries in the EU -- was the only model for the future." It gets much worse: "The discussions among senior policymakers in Paris, Berlin and Brussels go further, raising the possibility of one or more countries leaving the euro zone, while the remaining core pushes on towards deeper economic integration, including on tax and fiscal policy." Not sure how to further clarify this: Europe is preparing for its own end, and the dissolution of the existing structure of the Eurozone, which likely means an end to the EU in its current format, a reshaping of the customs union, and the overhaul of the zEURq.PK in its current form. Ironically, this may end up being favorable for the Euro... and detrimental for Germany. So the question is: will Germany go for it? At this point, it probably has no choice, unless it wants a mutiny on its hands.

Most of the tainted mortgage documents in question last fall were related to homes in foreclosure. But much of the suspect paperwork that has been filed since then is for refinancing or for new purchases by people who are in good standing in the eyes of the bank.

Good thing the media is in agreement...

Just out from Reuters:

• According to a source, programme will involve new international funding to mid-2014, apportionment yet to be agreed
• According to a source senior Eurozone officials agree in principle on new 3-year adjustment plan for Greece
• According to a source, private sector involvement will be limited to avoid a credit event

Congratulations Europe: you just screwed your taxpayers, but at least bought your insolvent banks 3 more years of bizarro world existence.

A tremendous report by Reuters' Matthew Goldstein, Svea Herbst, Jennifer Ablan, Emma Farge, David Sheppard, Claire Milhench, Zaida Espana, Robert Campbell and Josh Schneyer, identifies that while the shaky macroeconomic conditions and an overbought market were among the key reasons for last week's history crude rout, the match that caused an unseen before plunge in commodities was, you guessed it, "computers." Naturally, this is not unexpected to Zero Hedge readers who have been warned about the massive instability of a market comprised almost entirely of unsupervised algos, since the spring of 2009 (a phenomenon which the CFTC and SEC will not "comprehend" and/or change, until it is too late). Additionally, in addition to the previously identified losses at Clive Capital and Andrew Hall's latest plaything, Reuters also identifies BlueGold, Winton Capital and FTC. Basically, throw out a name that has energy exposure (let's not forget Touradji or Centaurus) and you likely have a winner. Must read.

"One photo shows a computer cable and what looks like a child's plastic green and orange water pistol lying under the right shoulder of one of the dead men." [graphic]

Gold and silver dip modestly from near all time highs and the momentum chasing brigade is screaming it's the end of the world and all ___bugs should take cover. At such a point it is useful to reanalyze the fundamentals that have brought the two key precious metals to such astronomic heights. Attached, we present a 40 pages special report from Reuters, summarizing all the recent developments in the area, for all those who still may be unsure about the alternatives provided by the metal to the traditional fiat-based monetary system.

Even though US companies have yet to step up and indicate just how badly they have been affected by the Japanese quake (which could take a while: one of the benefits of massive inventory stockpiling), Japan is not that lucky. According to a Reuters poll the March 11 catastrophe has negatively affected nearly 60 percent of Japanese companies, disrupting production and supply chains."The special survey of 400 large firms was taken between March 25 and April 11 in tandem with the monthly Reuters Tankan, a poll of corporate sentiment... While Japanese companies are likely to be squeezed by production disruptions in northern Japan, as well as power shortages and supply woes, they may not feel the same pain as after the collapse of Lehman Brothers, when lending markets froze. "The impact of this earthquake will not be on the same scale as the Lehman crisis," said Soichiro Monji, chief strategist at Daiwa SB Investments, a Japanese asset management firm." Considering money markets froze up, stock plunged 40% and the world virtually ended in the months following Lehman, that's probably good news. As for the bad news: "Nearly 70 percent of respondents said difficulty in acquiring materials or parts was the single biggest problem in righting their businesses, a sign that supply chains remained hampered." And considering the bulk of Japanese production is export oriented, it is only a matter of time before these disruptions spread globally.

Pimco's El-Erian is doing his latest daily media tour, this time holding a live chat with Reuters' Chrystia Freeland. The live interview can be watched live here.

According to a recent report from the Nuclear Regulatory Commission the California Diablo Canyon nuclear power plant (built in proximity to the San Andreas fault) which everyone always points to as the biggest earthquake risk in the US, is actually ranked 9th in the US in terms of earthquake risk (we somehow really doubt this). The top one? The same we wrote about yesterday as having had a leaking seal for the past 18 years according to the Union of Concerned Scientists - Indian Point in Buchanan, NY. Of course its proximity to New York City has immediately stirred cries of concern from the world's most banksterous city and demands for a shutdown by Andrew Cuomo. It has also prompted Reuters to release an evacuation map of the surroundings should "something" go wrong with Indian Point, an event which will likely only further instill a sense of soothing calmness and a "tranquility effect" in the New Yorker community.