SWIFT

• Canada Aims to Sell Its Oil Beyond U.S (WSJ)
• ECB Unanimity May Prove Fleeting (WSJ)
• Chinese military spending exceeds $145 billion, drones advanced: U.S. (Reuters)
• France to sell 10 warships to Russia next? BNP Executive Firings Sought by Top New York Bank Regulator Amid Probe (BBG)
• Vodafone says governments have direct access to eavesdrop in some countries (Reuters)
• Home Price Gains of 20% Vanish as Hottest Markets Cool (BBG)
• G-7 Heads Warn Moscow Before Facing Putin (WSJ)
• Barclays Fine Spurs U.K. Scrutiny of Derivatives Conflict (BBG)
• "Or Costs" - Obama Says Putin Running Out of Time Over Ukraine (BBG)
• Banca Monte Paschi Falls After Offering New Stock at 35.5% Discount (BBG)

Denying someone an opportunity based on anything other than their skills is immoral. And equally immoral is actively seeking out and hiring the "disadvantaged" or "under-represented" simply to meet some kind of quota or corporate goal. It's an injustice to any other candidates that are better-qualified for the task at hand.

"Traditionally we’ve been a financially conservative company," explains one fracking company, warning that "we’ve become more leveraged than we historically have been and we’ve become uncomfortable with that." This is the growing message from a shale boom that, as Bloomberg reports, is facing a shakeout as drillers struggle to keep pace with the relentless spending needed to get oil and gas out of the ground. As everyone chases the dream, well counts have soared and production per well has tumbled. "The list of companies that are financially stressed is considerable," warns one analyst as shale debt has almost doubled over the last four years while revenue has gained just 5.6% "not everyone is going to survive. We’ve seen it before."

It appears the tit-for-tat cyber-spying debacle between China and the US is escalating (unless it's all curious coincidence). Having blasted the US as a "mincing rascal" and "high-level hooligan" in the Chinese (state-run) media, The FT reports that authorities have ordered state-owned enterprises to cut ties with US consulting companies such as McKinsey and Boston Consulting Group because of fears they are spying on behalf of the US government. Furthermore, the crackdown is worse as, in the face of the "US hacker empire," China’s leaders announced on Thursday that all foreign IT products and services sold in China would be subject to a new security screening process. So it seems China has entered both the currency war (CNY weakness) and protectionism racket... now how has that ended for the world in the past?

Following the only major overnight econ event, which was the May German IFO Business Climate Index which dropped from 111.2 to 110.4 missing expectations of 110.9, the USDJPY has been on a soaring rampage higher hoping to push equities along with it (because now that gold manipulation is a proven fact, it is only a matter of time before the link between manipulating the USDJPY on thin volume with massive leverage and rigging the equity market is uncovered too), and at last check was just shy of 102.000. For now equity futures have failed to be dragged along although with the S&P all time high just around the horizon, the psychological level of 1900 staring the rigged market in the face, and the weekend just around the corner, it is virtually assured that the S&P will close at an all time high today - after all the people need to be confident when they go shopping at malls with money they don't have (but delighted by paper profits they haven't booked) so they boost the US non-GAAP GDP (at least before like Italy, the BEA too changes the definition of GDP to include cocaine and hookers). Finally, assuring a (record?) low-volume levitation today is the early closure of the bond pit ahead of Memorial Day holiday which also means only a skeleton crew of algos will be frontrunning each other to push the S&P over 1,900.

A specter is haunting Washington, an unnerving vision of a Sino-Russian alliance wedded to an expansive symbiosis of trade and commerce across much of the Eurasian land mass - at the expense of the United States.

• Both sides bury dead as Ukraine slides towards war (Reuters)
• Dollar wilts to 6 1/2-month low; shares drift (Reuters)
• Draghi Grapples With Money Markets Signaling Recovery Too Early (BBG)
• Foreign wristslaps: Credit Suisse Nears Record Tax Plea: Credit Suisse Settlement Expected to Exceed $1 Billion (WSJ)
• OECD joins IMF in cutting global growth forecast, demanding moar QE from ECB  (WSJ)
• Three Bankers Bolster Blankfein as Goldman Trading Sinks (BBG)
• Strong performance from eurozone services sector (FT)
• OECD Cuts Forecast for 2014 Global Growth; Urges ECB Action (WSJ)
• Elite Colleges Don't Buy Happiness for Graduates (WSJ)
• How Russia Inc. Moves Billions Offshore -- and a Handful of Tax Havens May Hold Key to Sanctions (BBG)

• Fed’s Fisher Says Economy Strengthening as Payrolls Rise (BBG)
• Russia Knows Europe Sanctions Ineffective With Tax Havens (BBG)
• EU Cuts Euro-Area Growth Outlook as Inflation Seen Slower (BBG)
• U.S. Firms With Irish Addresses Get Tax Breaks Derided as ‘Blarney’ (BBG)
• Portugal exits bailout without safety net of credit line (Euronews)
• Puzzled Malaysian Air Searchers Ponder What to Try Now (BBG)
• Barclays, Credit Suisse Battle Banker Exodus, Legal Woes (BBG)
• Germany says euro level not an issue for politicians (Reuters)
• Alibaba-Sized Hole Blown in Nasdaq 100 Amid New Stock (BBG)
• Obamacare to save large corporations hundreds of billions (The Hill)

• Two-Thirds of Insurance Exchange Enrollees Paid Premiums (WSJ)
• Panic: Criminal Charges Against Banks Risk Sparking Crisis (BBG)
• Did the junk bubble pop: Junk Loans Pulled as Investors Say No After Fed Raises Concerns (BBG)
• CME mulls price fluctuation limits for gold, silver futures (Reuters)
• AT&T Has Approached DirecTV About Possible Acquisition (WSJ)
• NBA sets wheels turning for Clippers sale; Oprah in wings (Reuters)
• One way to fix prison overcrowding: Florida Jail Hit by Deadly Blast (WSJ)
• New Boeing jets hold key to more than half of future sales (Reuters)
• Sony slashes profit estimate by 70% (Guardian)

Yesterday we reported that among today's expanded sanctioned individuals would be the heads of Rosneft and Gazprom. Moments ago, we got confirmation that at least one of those two will indeed be "sanctioned" - that someone is Igor Sechin, head of Rosneft which also happens to be Russia's largest oil extractor and refiner:

U.S. SANCTIONS LIST INCLUDES OAO ROSNEFT'S CEO SECHIN

However, it appears we were only half right - Gazprom CEO Alexey Miller appears to have been spared for now. And now, as usual, the ball is in Putin's court.

In a rhetorical self-QE released by its strategist Peter Oppenheimer, discussing recent changes to long-running market trends, among which the crash in momo stocks, and the EM to DM inversion, the punchline was the most important. To wit: "We see less scope for this peripheral index... Peripheral spreads may narrow further, but more now via higher bund yields. After all, 5-year Spanish and Italian bond yields have converged to the same levels as the US. We still like selected parts of the peripheral markets, particularly the banks, but would prefer to express this via single names than via index overweights...  the drivers of returns may have shifted away from some areas such as US growth and European periphery towards more of a cyclical bias across markets, with a particular focus on exposure to a DM macro recovery." In other words, while the momentum bubble may have popped (if still has a loooooong way to go before it deflates) the European peripheral bubble is about to go pop as well. For all those who just bought Spanish 10 Years at a record low yield (yes, record low) yesterday, our condolences. Then again, it's only other people's money.

• Russia raises interest rates to 7.5% (FT)
• Shanghai to Allow Raw Material Exchanges in Trade Zone (BBG)
• US, Japan Fail to Clinch Trade Deal (WSJ)
• 'We don't have a magic wand', says ECB's Constancio (Reuters)
• Tokyo Inflation Quickens to Fastest Since 1992 (BBG)
• Demand for Home Loans Plunges (WSJ)
• EU banks urged to grasp chance to raise capital (FT)

This doesn't happen very often. Marketwatch reports that Jim Bianco points out in a recent market comment that the 67 economists taking part in a regular Bloomberg survey have a unanimous forecast regarding treasury bond yields: they will be higher 6 months from now... and a separate poll of economists recently showed that exactly zero expect the economy to contract. This is an astonishing degree of consensus thinking, but it perfectly mirrors the complacency we see in stock market sentiment and positioning data. The probability that such a unanimous view will turn out to be correct is traditionally extremely low. The economy is likely resting on a much weaker foundation than is generally believed. This is not least the result of massive monetary pumping and deficit spending, both of which tend to severely weaken the economy on a structural level, even though they can create a temporary illusion of 'growth'.

A few days ago, in an attempt to regain the Krematorsk air base in the "separatist" eastern region, as part of the "counter-terrorist" offensive launched against the pro-Russians, Kiev also started what according to reports was an airborne press by Ukraine Mig fight jets. The condemnation by Russia to such an escalation against the country's own people was swift, and curiously, so was that by Ukraine's own troops which deserted the country's army to join eastern forces, taking with them an unknown number of tanks and APCs. So in what perhaps is a follow on attempt to preempt further escalation, Ukraine's air force has adopted a maneuver taken straight out of Top Gun's "Buzzing the Tower" approach, only this one involves "Buzzing the Tress." Watch as a Ukraine pilot does a fly by and narrowly misses hitting a tree.

Read Seymour Hersh’s devastating account of Obama’s Red Lines and Rat Lines and weep for the Republic. It is no more.