- Greece to submit loan request to euro zone, Germany resists (Reuters)
- Ukrainian forces start to quit besieged town (Reuters)
- Bank of Japan maintains policy, no surprises (FT)
- China Considering Mergers Among Its Big State Oil Companies (WSJ)
- Soros Shifts to Europe, Asia as Investors Cut U.S. Equities (BBG)
- Putin tells Kiev to let troops surrender as Ukraine ceasefire unravels (Reuters)
- Venezuela Squanders Its Oil Wealth (BBG)
- Swiss prosecutor raids HSBC office, opens criminal inquiry (Reuters)
There was much confusion yesterday when algos went into a buying frenzy on news that Greece would submit a request for a 6 month loan extension, believing this means Greece has caved and will agree to a bailout programme extension as well. Nothing could have been further from the truth as we explained first moments after the headline struck, and also as Reuters validated moments ago when it said that "Greece will submit a request to the euro zone on Wednesday to extend a "loan agreement" for up to six months but EU paymaster Germany says no such deal is on offer and Athens must stick to the terms of its existing international bailout." But since the political nuances of diplomacy are lost on the math Ph.Ds who program the market-moving algos, the S&P did manage to roar above 2100 on what was another headfake and then forgot to sell off on the reality.
Back in 1940, the US plan was to "entrap" Japan to declare war on the US - a declaration which the US would have long anticipated - which would then allow America to engage Europe and Hitler as part of its broader entry into World War II from which it had been previously separated. The plan worked out when just over a year later, Japan bombed Pearl Harbor. Today, some 75 years later, is that same plan being redrawn?
The final and ultimate round of the Crisis that begin in 2008 will occur when faith is lost in the Central Banks.
Two months ago we showed, and explained in great detail, how in the new normal the role of gold is nothing more than a funding "currency" to allow the BOJ to sell Yen against it (on a borrowed basis, which is also why the LBMA halted reporting its GOFO data as of the end of February, as it would not be pleasant for the central bank cartel to demonstrate just how much institutional gold shortfall there developed following major BOJ interventions). So for all those who are curious what it looks like when the BOJ "enters the house", here it is...
The chances of Greece being forced out of the euro zone have risen but a compromise agreement between Athens and its European partners is still possible, Greek media and investment banks said on Tuesday.
The attacks demonstrate a shocking vulnerability in the highly interconnected global banking system. The Kaspersky Lab report gives a fascinating insight into the hackers operation.
All the gimmicks lenders press on borrowers to maintain the artifice that the loan is being serviced are financial frauds. They are simply new frauds piled on the initial fraud of issuing a visibly imprudent loan. The borrower was not creditworthy and the lender should never have offered him loans of that magnitude and at that low interest rate. The losses belong to the lenders, period.
It has been a quiet start to the week, with US equity futures and European stocks mostly unchanged with all eyes on what progress (if any) will be made between Greece and the Eurogroup, where the press conference is scheduled for 7:00 pm GMT (expect significant delays) in what is otherwise expected to be a relatively subdued day with the US away from market and a light macroeconomic calendar.
Few people understand the global economy and its (mis)management better than David Stockman -- former director of the OMB under President Reagan - and he is now loudly warning that events have entered the crack-up phase, which he predicts will be defined by four key developments. As the crack-up phase gains momentum, he predicts an increasing number of "financial breaks" that will add to the unpredictability and instability of the environment for investors. Even 'dancing close to the door' sounds excessively risky at this point.
"I constantly feel inadequate, which may be what drives me," Kyle Bass tells Raoul Pal in this excellent discussion between two of the world's foremost (non-status-quo-hugging everything-will-be-fine) market practitioners. The interview with Bass, from the newly launched Real Vision TV, covers everything from how he got started in his career, what drives him, his process "it's an art - there is no science to it", and not only how we got here, but where we are going (inevitably)...
Looking at a map of current American military engagements overseas, one cannot help but notice their wide geographical spread and their seemingly interminable nature. Battles have raged in Europe (Yugoslavia and Ukraine), in Africa, in the Middle East, and in central Asia. The American Empire has launched this country into a series of battles that have no end in sight and no location that may not become a focal point of military force. Upon close inspection, however, all of their rationales fall apart. None is satisfactory. The interventions are too widespread, too long-lasting and too unsuccessful at what they supposedly accomplish to lend support to any of the common justifications.
Since late 2013, The NY Times reports that an unknown group of hackers has reportedly stolen $300 million - possibly as much as triple that amount - from banks across the world, with the majority of the victims in Russia. The attacks continue, all using roughly the same modus operandi...
It appears "hope" is a strategy in Japan. Abe's nation emerged from recession in Q4 but with business spending (capex grew at a mere 0.1%) and private consumption (+0.3% - which Amari defined as "solid private demand supporting economic recovery") both coming in considerably below estimates, Japanese GDP QoQ SAAR grew at+2.2% (missing expectations of 3.7%) but real GDP growth was negative for the 3rd quarter in a row. Of course the GDP deflator grew at 2.3%, beating expectations, is desperately clung to by Japan's economy minster Amari as evidence of the end of deflation in Japan.
A couple of days ago a Café member sent me some of the latest commentary by Martin Armstrong of Armstrong Economics, formally of Princeton Economics International. As you will read, he continues his rant against "the gold promoters," a rant that seemed more than vaguely familiar.
What an understatement!