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• Pentagon Plans for the Worst in Syria (WSJ)
• Russia and US agree to Syria conference after Moscow talks (FT)
• Hedge Funds Rush Into Debt Trading With $108 Billion (BBG)
• Detroit is the new "deep value" - Hedge funds in search of distress take a look at Detroit (Reuters)
• Commodities hedge funds suffer weak first quarter (FT)
• But... but... Abenomics - Toshiba posts 62% decline in Q1 net profit (WSJ)
• Americans Are Borrowing Again but Still Less Than Before Freeze (WSJ)
• Man Utd announce Alex Ferguson to retire (FT)
• Asmussen Says ECB Discussed ABS Purchases to Spur SME Lending (BBG)
• Benghazi Attack Set for New Review (WSJ)
• Belgium Says 31 People Arrested Over $50 Million Diamond Theft (BBG)
• Brazilian diplomat Roberto Azevêdo wins WTO leadership battle (FT)
• Bangladesh Garment Factory Building Collapse Toll Reaches 782 (BBG)

The overnight economic data dump started in China, where both exports and imports rose more than expected, at 14.7% and 16.8% respectively, on expectations of a 9.2% and 13% rise. The result was a trade surplus of $18.16 billion versus expectations of $16.15 billion. The only problem with the data is that as always, but especially in the past few months, it continued to be completely made up as SocGen analysts, and others, pointed out. The good data continued into the European trading session, where moments ago German Industrial Production rose 1.2% despite expectations of a -0.1% drop, up from 0.6% and the best print since March 2012. The followed yesterday's better than expected factory orders data, which also came at the best level since October. Whether this data too was made up, remains unknown, but it is clear that Germany will do everything it can to telegraph its economic contraction is not accelerating. It also means that any concerns of an imminent ECB rate cut, or a negative deposit rate, are likely overblown for the time being, as reflected in the kneejerk jump in the EURUSD higher.

As the IMF delivers its first 'health check' on Greece since 2009, the beleaguered nation's finance minister proudly proclaims, "the worst is over," and the country had reached its economic trough. However, while the finance minister appears unaware of the people living in caves, the record youth unemployment (that is rising still), and the accelerating non-performing loans (no green shoots there), the IMF remains a little less confident, "Greece's debt remains much too high". As the Sydney Morning Herald reports, Stournaras added that ''in May 2014, the loan installments will come to an end and the country has to be in a position where it can go on its own to the markets.'' We can't wait (with GGBs under 10% yield to see which greater fool snaps up those beauties). The IMF is a little less sanguine warning Greece of its "insufficient structural reforms," and worries of the "socially painful recession." The last jab, in line with the new normal 'template' (that is not a template but really is), "very little progress has been made in tackling Greece’s notorious tax evasion," as the IMF demands, "the rich and self-employed are simply not paying their fair share."

• Lesson From Buffett: Doubt Yourself (WSJ)
• Gold Bulls Split With Buffett as Traders Say Sell (BBG)
• Apple Misses IPhone Customers as Global Carriers Balk (BBG)
• Russia extends Cypriot loan by 2 years, cuts interest: troika document (Reuters)
• Tax Rewrite in Play in Capitol (WSJ)
• No early warning for U.S. on Israeli strikes in Syria (Reuters)
• Germany riveted at start of neo-Nazi murder trial (Reuters)
• JPMorgan Investors Urged to Split Chairman Role, Oust Directors (BBG)
• Leniency for Offshore Cheats (WSJ)
• Brussels steps up efforts over tax avoidance (FT)
• Ambulance chasing: Mesothelioma Doctors, Lawyers Join Hunt for Valuable Asbestos Cases (WSJ)
• Web Sales-Tax Bill Set to Face Bumps (WSJ)
• Colleges Cut Prices by Providing More Financial Aid (WSJ)

The middle class is being absolutely eviscerated, and poverty is soaring to unprecedented heights.  The fact that 90 percent of the population is constantly sliding downhill is not good for our society.  The United States is supposed to be a land of opportunity with a vibrant free market system that enables average people to make better lives for themselves. Unfortunately, free enterprise is being strangled to death in the United States today.  Entrepreneurs and small business are being pounded into oblivion by rules, regulations, red tape and oppressive levels of taxation. Our founding fathers warned that we should not allow such large concentrations of wealth and power, because they tend to funnel the rewards of society into the hands of a select few. The following are 22 facts that prove that the bottom 90 percent of America is systematically getting poorer...

Whether this is just a 'misunderstanding' or a land-grab to make up for Japan's Senkaku actions, the Indians are claiming that a platoon of Chinese soldiers have crossed the so-called 'Line of Actual Control' in the Indian-held Ladakh region. They have remained there for two weeks and even as India complains, the Chinese deny, saying that they are "firmly opposed to any acts that involve crossing the Line of Actual Control and sabotaging the status quo." Indian officials fear that if they react with force, the face-off could escalate into a battle. But doing nothing would leave a Chinese outpost deep in territory India has ruled since independence. "If they have come 19 kilometers into India, it is not a minor LAC violation. It is a deliberate military operation. And even as India protests, more tents have come up," said one analyst but the Indians are rattling other sabres. China is India's biggest trading partner, with bilateral trade heavily skewed in China's favor, crossing $75 billion in 2011. Politicians are demanding Chinese imports are banned, "the Chinese have to learn that such aggression cannot be delinked from trade." Most are baffled by Beijing's motives, since its actions could force India to move closer to Beijing's biggest rival, the United States; though perhaps bringing that closer is just the point.

After reading the Spiegel article below, which reveals so much about German thinking, it becomes very clear that not only is Cyprus the "benchmark", but that the second some other PIIG country runs into trouble again, and its soaring non-performing loans inevitably demand a liability "resolution" a la Cyprus, it will be Germany once again at the helm, demanding more of the same equity, unsecured debt and ultimately depositor impairment. As the following punchline from Spiegel summarizes, "It would be more sensible -- and fairer -- for the crisis-ridden countries to exercise their own power to reduce their debts, namely by reaching for the assets of their citizens more than they have so far. As the most recent ECB study shows, there is certainly enough money available to do this." And that is the crux of the wealth-disparity demand of the European Disunion.

Two days ago we first posted a Youtube clip in which a Greek reporter asked Argentina's Economy Minister Hernan Lorenzino a simple question: "what is inflation in Argentina" - a sensitive topic to a country with price and capital controls, and where inflation ranges between 0 and 20% depending on whether one uses official, or unofficial but based on reality, data. The result was a why we dubbed the clip "Thursday humor" as after several minutes of meandering gibberish, Lorenzino concluded by telling his aided that "he wants to leave", which in turn promptly became a twitter hashtag meme #mequieroir, in which the minister's response to a simple request for the truth was promptly lampooned around the world. However, that may have been just the beginning of Hernan's problems. As Bloomberg reports, citing Clarin, Argentina's president CFK, was also quite taken aback by the bumbling economist that she met with him subsequent to the interview going viral, and told him he has lost credibility and the most likely next step is his resignation.

• The Inland Empire bubble is back: BMW to Amazon Space Demand Spurs Rush to Inland Empire (BBG)
• Tamerlan Tsarnaev was on classified government watch lists (Reuters)
• Brothers in Boston Bombing Case Said Drawn to Radicalism (BBG)
• Germany Spurns Calls to Loosen Austerity Stance (WSJ)
• Spain poised to ease austerity push (FT)
• What ever happened to France's voice in Europe? (Reuters)
• U.S., South Korea Reach Nuclear Deal (WSJ)
• U.S. Sees No Hard Evidence of Syrian Chemical Weapons Use (BBG)
• RBA Set to Invest Foreign Currency Reserves in China, Lowe Says (BBG)
• FedEx Wins $10.5 Billion Postal Contract as UPS Shut Out (BBG)

• Police Searching for 19-Year-Old Boston Bombing Suspect (BBG)
• Mayhem Erupts in Boston After MIT Campus Officer Slain (BBG)
• Elvis Impersonator Accused of Ricin Letters Sowing Fear (BBG)
• Blackstone Pulls Out of Dell Bid on Rapidly Falling PC Sales (BBG)
• Before Texas plant exploded: What did regulators know? (Reuters)
• Aso Says Japan Policy Unopposed at G-20 Meeting as Yen Falls (BBG)
• Bipartisan pair target $2.5tn US savings (FT)
• Plan for new Cyprus vote casts uncertainty on bailout (Cyprus Mail)
• Ireland picks through debtors’ lifestyles (FT)

As we have been warning for a while now, Japan wanted inflation and is certainly getting it, just in all the wrong places. While Abe has been desperate to transfer the collapse in the yen and the (transitory) surge in the Nikkei to the all important increase in wages, and the much sought-after wealth effect, the reality is that corporate input costs are rising far faster than revenues, and wages will be the last thing profit and earnings-conscious companies raise. As for the Japanese consumer, trained by 30 years of deflation, any profits in the stock market will be promptly converted to cold hard cash and bank deposits which represents that vast majority of Japanese financial assets, which means a double whammy for companies who will also see a drop in sales volumes, crushing margins even more as a result. One company which could no longer tolerate soaring energy and food costs (both of which we described previously here and here), is McDonalds, and as the FT reports, the fast-food chain announced today that the price of its entry-level hamburger would increase by 20% from ¥100 to ¥120, while a cheeseburger would now cost ¥150 instead of ¥120.

• Apple reportedly stops placing Mac component orders (DigiTimes)
• Apple Ordered to Remove Obscene Content From China Store (BBG)
• Texas Ammonia-Plant Blast Kills as Many as 15 People (Reuters)
• Boston Probe Said Focused on Person Dropping Bag at Site (BBG)
• The Chinese cold trade war comes come to roost: US becomes Japan’s top export market (FT)
• Berlusconi, Bersani back Marini in presidential vote (Ansa)
• German parliament backs Cyprus bailout (Reuters)
• China Vows Wider Yuan Movement (WSJ)
• Morgan Stanley Sees Core Earnings Weaken (WSJ)
• Gold Miners Lose $169 Billion as Price Slump Adds ETF Pain (BBG)
• G-20 Draft Affirms Pledge to Avoid Competitive Devaluations (BBG)
• IMF warns on risks of excessive easing (FT)
• The battle for the Swiss soul (Reuters)

Gold and silver crashed. Here is a sometimes-humorous and often-irreverent and hard-hitting discussion. This is a different perspective and we hope to expand your thinking about gold and silver.

A month ago we discussed the rising anti-Euro sentiment in the core of Europe and the "Alternative for Germany" party appears to be growing in strength. As the NYTimes reports, this is a party driven a collection of elites (not a groundswell from the streets) tired of Merkel's "flagrant breach of democratic, legal, and economic principles." While we warned that the forthcoming 'wealth tax' will raise the ire of the southern-European elites (and thus increase the likelihood of a euro breakup), it appears this small-but-growing party in Germany is pushing in the same direction, as one member noted, "we keep giving out more and more money when we have so many problems at home." Polls show as many as 1-in-4 would consider voting for the new party, and "they don't need more than 5% to make things very tight for [Merkel]." The increasing tension in Europe (and rising anti-Germany sentiment) is helping raise membership as "every swastika on the streets of Athens" reduces Merkel's support, and, as members note, "if the euro fails, Europe will not fail," amid nostalgia for the former German Mark.

The lesson from the events of 2007-2008 should have been clear: Boosting GDP with loose money can only lead to short term booms followed by severe busts. A policy of artificially cheapened credit cannot but cause mispricing of risk, misallocation of capital and a deeply dislocated financial infrastructure, all of which will ultimately conspire to bring the fake boom to a screeching halt. The ‘good times’ of the cheap money expansion, largely characterized by windfall profits for the financial industry and the faux prosperity of propped-up financial assets and real estate (largely to be enjoyed by the ‘1 percent’), necessarily end in an almighty hangover. The crisis that commenced in 2007 was therefore a massive opportunity: An opportunity to allow the market to liquidate the accumulated dislocations and to bring the economy back into balance. That opportunity was not taken and is now lost – maybe until the next crisis comes along, which won’t be long. It has become clear in recent years – and even more so in recent months and weeks – that we are moving with increasing speed in the opposite direction: ever more money, cheaper credit, and manipulated markets (there is one notable exception to which I come later). Policy makers have learned nothing. The same mistakes are being repeated and the consequences are going to make 2007/8 look like a picnic.