There are two main events in the coming week: the (second in a row disastrous) Q1 US GDP and the April FOMC.
Nearly two months ago we explained "How Beijing Is Responding To A Soaring Dollar, And Why QE In China Is Now Inevitable" in which we said that "once China, that final quasi-Western nation, proceeds to engage in outright monetization of its debt, then and only then will the terminal phase of the global currency wars start." We may not have long to wait because just hours ago, MarketNews first among the wire services hinted at what we suggested was the endgame: PBOC DISCUSSING DIRECT PURCHASES OF LOCAL GOVT BONDS: MNI
It has been a story of two markets so far, with China's Shanghai Composite up another 3% in today's continuation of the most ridiculous, banana-stand driven move of the New Normal (and there have been many ridiculous moves in the past 6 years) on the previously reported hints that the PBOC is gearing up to start its own QE, while Europe and the Eurostoxx are lagging, if only for the time being until Citadel and Virtu engage in today's preapproved risk-on momentum ignition, on Greek jitters, the same jitters that last week were "fixed"and sent Greek stocks and bonds soaring. Needless to say, neither Greek bonds nor stocks aren't soaring following what has been the worst week for Greece in months.
- Nepal earthquake toll crosses 3700 (Reuters)
- Greeks Add Pressure on Tsipras to Compromise as Talks Resume (BBG)
- With No Deal on Greek Bailout Aid in Sight, Some in Europe Suggest ‘Plan B’ (WSJ)
- BOJ Shouldn’t Ease Further; Yen Fell Enough: Business Lobby Head (BBG)
- Clinton Foundation admits making mistakes on taxes (Reuters)
- Here’s the Old Nemesis Starting to Spook Bond Traders Again (BBG)
- Deutsche Bank to Trim Investment Banking (WSJ)
- China’s Stocks Rise to Seven-Year High on SOE Merger Speculation (BBG)
With the USDJPY's ascent to 125, 150 and higher having seemingly stalled just under 120, with concerns that the BOJ may not monetize more than 100% of its net debt issuance suddenly surfacing, the BOJ and the Nikkei would take any help they could get. They got just that an hour ago when Fitch downgraded Japan's credit rating from A+ to A, citing lack of sufficient structural fiscal measures in FY15 budget to replace deferred consumption tax increase.
In the immediate aftermath of yesterday's destructive Nepal earthquake, which has led to hundreds of aftershocks and a constantly rising death toll, currently exceeding 2000, the most visually stunning, if quite deadly, phenomenon was a massive avalanche on Mt. Everest and leading to at least 17 casualties, including a Google executive, and 61 injured.
"Soft" capital controls arrived in Greece last week with the state decree requiring local governments to transfer reserves to Athens. Now, Kathimerini reports that debtors are seeing their accounts frozen in an indication that "hard" capital controls are set to be instituted amid a deepening cash crunch.
While the USA is busy killing US civilians and terrorists with its drone program, Russia is set to deploy its own Orlan-10 drones in the oil- and gas-rich Arctic region (reportedly to monitor the climate situation). As SputnikNews reports, Colonel Aleksandr Gordeev stated "the drones' task is to maintain impartial control of the situation in the Russian sector of the Arctic." So, passive-agressive? However, Russia also chose this week to release rarely-seen images of a US intelligence satellite which as one analyst notes is provocative (but obscure in its intent other than the growing recognition of US space-based surveillance assets).
The leniency shown former CIA Director (and retired General) David Petraeus by the Justice Department in sparing him prison time for the serious crimes that he has committed puts him in the same preferential, immune-from-incarceration category as those running the financial institutions of Wall Street, where, incidentally, Petraeus now makes millions. By contrast, “lesser” folks – and particularly the brave men and women who disclose government crimes – get to serve time, even decades, in jail. Behold, the virtual immunity enjoyed by the well connected.
"Largely missing from these discussions about the Fed's "exit strategy" is a consideration that perhaps it should retain, not discard, the balance sheet tools," the Boston Fed says, in a new paper advocating the retention of QE as a permanent part of the Fed's tool box. QEfinity may yet become a reality and for the most ironic of reasons: because the Fed is now in charge of promoting "financial stability" something which, as last October's Treasury flash crash proves, is exacerbated by asset purchases not ameliorated.
The lines have been drawn in many police departments: it’s us vs. them. Trust in many departments has been utterly shattered within some communities because the police hold themselves to a different standard than they do the populace. But the recent cases of police brutality are simply a symptom of a much larger problem. Society in the US is breaking down, civility has been lost, and the country is rapidly becoming uncivilized. This extends within and across all of the most important institutions.