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Not many websites, analysts or authors have both the balls/temerity & the analytical honesty to take Goldman on. Well, I say.... Let's dance! This isn't a collection of soundbites from the MSM. This is truly meaty, hard hitting analysis for the big boys and girls. If you're easily offended or need the 6 second preview I suggest you move on.

Swiss money manager and long term bear Marc Faber, aka "Dr Doom", says political risk in the Middle East has increased significantly with war between Iran and Israel “almost inevitable”, and precious metals and equities investments offer some safety. "Political risk was high six months ago and is higher now. I think sooner or later, the U.S. or Israel will strike Iran - it's almost inevitable," Faber, who publishes the widely read Gloom Boom and Doom Report, told Reuters on the sidelines of an investment conference. Brent crude traded near $123 per barrel in volatile trade on Tuesday on fears of a disruption in Iranian supplies. Israeli Prime Minister Benjamin Netanyahu showed no signs of backing away from possible military action against Iran following a Monday meeting with U.S. President Barack Obama. "Say war breaks out in the Middle East or anywhere else, (U.S. Federal Reserve chairman) Mr Bernanke will just print even more money -- they have no option...they haven't got the money to finance a war," said Faber. "You have to be in precious metals and equities ... most wars and most social unrest haven't destroyed corporations - they usually survive," he said. He said that Middle East markets had largely bottomed out, though regime changes from the Arab Spring revolutions were unlikely to be investor-friendly.

In what was likely the most ominous news from last week (and a near certain top for the stock) we reported that now none other than the Israel Central Bank was going long shares of AAPL. While the implications for stocks in general are extensive and were previously discussed, it is worth noting that the Israel Monetary Authority now has a big MTM loss on its Apple investment (although as Greece and the ECB have taught us, a central bank can book a "profit" even when a given security is trading at an all time low, and completely irrelevant of what one's cost basis is). And where Israel is, it is quite certain that other central banks have boldly ventured as well. So how long until the Fed has to open an FX swap line with Tel Aviv to bailout Stanley Fischer in this latest of hare brained schemes to keep the Ponzi system going? And how long until it has to be extended to the nearly 250 hedge funds who are now also long the stock, with the universe of incremental buyers disappearing by the day? What is most stunning is that Apple dipped a modest 3% intraday... Which just happened to be the biggest decline since November 2010.

Analysts are questioning the "double-down effect" the ECB's LTRO exercises are creating in eurozone sovereign spreads. Citi notes a spike in the purchase of government securities since the initial take-up in December.

The situation in Greece should create some big headlines this week. The bond exchange “invitation” is set to expire at 3pm EST on Thursday March 8th. This is the so-called Private Sector Involvement or PSI. Greece has other steps to take during the week, and ultimately the Troika will determine how to proceed with the bailout, but not until the results of the PSI are known. It could be a week of confusing, misleading, and market moving headlines. Figuring out the “proper” reaction to each bit of news will require understanding the terms, and hoping the headlines are accurate – which given how confusing the situation is, cannot be fully counted on. Remember, the original “invitation” from the Greek government was for an amortizing bond, which was then changed to a series of 20 “bullet” bonds, so the level of confusion remains high.

There’s a lot of talk right now, for example, about rising oil prices which have created uncomfortably high gasoline prices. In gold terms, however, gasoline prices are in a deflationary spiral. The chart below shows unleaded gasoline prices in grams of gold since January 1976. Priced in grams of gold, gasoline is near an all-time low. Buffett (and others) argue strongly that investors should be in stocks… that a company like Coca Cola or productive farmland is a better long-term investment than a useless hunk of metal.He’s probably right. Except that the useless hunk of metal isn’t really an investment. It’s an anti-currency… appropriate for those who want to sit out of the market and be in cash without having to be in cash.

A rather uneventful initial claims report which came in line with the election year expectations, beating consensus of +355K modestly, at 351K, which is where it was last week, except for the traditional 100% of the time, upward revision to last week's data, which was pushed higher from 351K to 353K, and in turn which will force algos to read the news as a decline in claims. Today's number gets some additional scrutiny as it comes in the NFP survey week. Continuing claims same deal: the number came a little better than expectations of 3418K at 3402K, was a deterioration compared to the unrevised last week number of 3392K but an improvement to the revised # which was 3404K. On the other hand, people at the trailing end of the cliff declined, as those on EUCs and Extended benefits dropped by 16K in the week ended February 11. As a result, people collecting extended benefits are now 1.13 million less than a year ago, and no longer collect direct BLS benefits. As for disability that's a different matter. Finally, none of this impacts America's young workers, who as noted yesterday, have an employment rate of 54%.

The positive PMI data would ordinarily result in some price weakness as would the testimony from Bernanke which suggested that the Federal Reserve's ultra loose monetary policies may not continue much longer. However, the scale of the selling and size of the price falls was unusual. Respected analysts such as legendary Jim Sinclair, John Embry and Jean-Marie Eveillard suggested that the sell off was due to manipulation by bullion banks. Sinclair said it was an “intervention” and was “window dressing” that long term bullion investors should not be concerned about as inflation was coming due to “QE to Infinity.” Embry said that it was a “smash down” and a “paper fiasco.” Jean-Marie Eveillard suggested that central banks may have intervened, as they are doing in fx and bond markets, and sold gold in volume into the market. It is of course very difficult to ascertain what caused the sharp falls in the precious metals yesterday however it would be naive to completely discount what Sinclair, Embry and Eveillard believe may have happened.

Somehow, following three years of defaults, the world has only now figured out that the ISDA CDS trigger determination committee is made up of the same bankers, who stand to lose everything in the case of global out of control contagion, such as that which may occur if an unwelcome CDS trigger sends the house of cards collapsing, and force mark to market losses on all those institutions which hold impaired debt at par (all of them). As a result, the ISDA meeting which is currently in process is expect to find absolutely nothing, and we agree, however not for that particular 'conspiratorial' reason, but because ISDA is waiting for the PSI outcome for a realistic finding on a credit event. Because after all ISDA is not stupid: they don't want to appear like a pushover - remember how vehemently ISDA had opposed a Greek CDS trigger in the days when Europe still was not prepared for this outcome -  but on the other hand wants to preserve some CDS market credibility, which would disappear if none of the recent events in Greece were to trigger CDS. Yet more Greek creditors are getting impatient. Even as the first ISDA meeting has to find (that there has been no CDS trigger), the association's determination committee has just released that it has gotten a second question whether a "Restructuring Credit Event occurred with respect to The Hellenic Republic?" We find it rather odd (or not really) how suddenly quite a few requests are springing out of the woodwork by creditors who obviously are interest in a Greek default. As such the PSI gets quite interesting, because if the pre-PSI action is any indication, quite a few creditors are rather interested in triggering just the event they now consistently badger ISDA with.

Everybody has their own "on the ground" recession indicators: the mall parking lot, the tony restaurant that used to be packed every weekend, and so on. I have two favorites: freight trains rumbling south down the main line of the West Coast and "sell your own car" used car lots. The freight trains are self-explanatory: at the top of the housing bubble, they were loaded with flatcars of lumber. Now? A lot of empty flatcars and container flats. A lot. Yes, the official statistics indicate rising rail traffic, but they must mean one more car has a load in a 100-car train and there's only 20 empties. The freight trains I see are still running with beaucoup empty cars. There may be some explanation of why this is so, but I can report that these trains pulled no empties in 2007. "Sell your own car" lots reflect the "private market" for used cars. If you want to know what people are trading in for new cars, then go look at new car dealers' used lots. At the local Honda dealer, I saw a number of Lexus SUVs on their used lot; people trading down to save on gasoline?

While reading Advanced Trading today we stumbled across the following curious excerpt:

Advanced Trading: You mentioned regulators and politicians are ignorant ...

[ITG's Jamie] Selway: I would say that their knowledge is incomplete.

Advanced Trading: Is this causing HFT to be scape-goated?

[ITG'S Jamie] Selway: Yes, there's a mixture of that. I am fond of saying I am not a huge regulations guy but I am a fan of regulations at an appropriate level that boosts confidence. I for one would prefer to be regulated by the SEC and not by ZeroHedge. So we have a team of experts and multiple agencies that are expert in regulations and know the markets and have the resources.

Here is our response.

But coincidentally, the ECB’s next Long Term Refinancing Operation (LTRO) is set for February 29...

It was only logical that following this weekend's quote unquote surprise announcement by Juncker that a third Greek bailout is likely in the cards, that Angela Merkel would follow up during her much anticipated Bundestag speech today and tell fellow politicians that there is no guarantee that a Greek bailout will work. That was to be expected. That this announcement is somehow responsible for the market selling off, and the EURUSD being at the lows of the day, once again proves that the market is no longer a discounting mechanism, and merely reacts to headlines that could be anticipated by anyone who steps back from the blaring noise and flashing headlines for even just one minute.

That the German vote to pass the second Greek bailout package would be problematic is an understatement. Even as German parliamentarians are expected to pass the latest (but certainly not last as the G-20 meeting over the weekend demonstrated) hurdle to fund the Greek rescue, new revelations out of Greece have come to light exposing the true degree of capital flight out of the country, spearheaded by none other than the country's own corrupt politicians. Kathimerini reports: "As a political outcry grew on Friday over the revelation that an MP had transferred 1 million euros out of the country in May when authorities were struggling to appease Greek citizens’ fears of the repercussions of a possible default on their savings, Finance Minister Evangelos Venizelos told Parliament that a significant number of lawmakers had moved sums in excess of 100,000 euros out of the country. Earlier, addressing a cabinet meeting, Venizelos had told fellow ministers that there are several public figures among the Greeks who transferred a total of 16 billion euros abroad over the last two years. According to research conducted by the Finance Ministry’s information systems department, 9 percent of this money ended up in Swiss bank accounts." As such, it is obvious why German popular tabloid Bild has called for German lawmakers to reject the Greek bailout: at this point the farce is arguably too much for everyone, and the situation is playing out just as predicted here back in July. Merkel is due to address the Bundestag at 3 pm local time, or in just over an hour. Those curious about the blow by blow, can follow the developments out of Germany at the following live blog by Bild.

Paging Paul Krugman ... Paging Professor Krugman to the White Courtesy Telephone ...