Prudential

Back in September 2010, following David Tepper's first "balls to the wall" appearance on CNBC, we were not very surprised to learn that the seemingly permabullish hedge fund manager had taken the opportunity to follow up on the brief euphoria his speech generated then to cut 20% of his positions in assorted financial stocks - just the stocks he was praising loud and clear to the financial station with the plunging viewership.  Moments ago, Tepper's Appaloosa filed its 13F for the quarter ended March 31, so yes, before his most recent appearance yesterday. Yet we were somewhat confused by why the manager, once again so bullish he could see no scenario that could send stocks lower, and who estimated a war in the middle east could lead to a mindblowing 5% drop in the market, decided to trim his core holdings.

The Chairman is about to take the lectern to discuss bank structure and competition at the SIFI conference at the Chicago Fed. His prepared remarks are likely to be a little less exciting than the Q&A where the world will be watching for the words "buy, buy, buy", "mission accomplished", or "taper". Charles Evans will be his lead out man. Finally, since Bernanke will be discussing shadow banking, or the source of some $30 trillion in shadow money always ignored by Keynesians, Monetarists and Magic Money Tree (MMT) growers, a topic we have discussed over the past three years, here is the TBAC's own summary on how Modern Money really works.

• The number of bond funds that own stocks has surged to its highest point in at least 18 years (WSJ)
• Clubby London Trading Scene Fostered Libor Rate-Fixing Scandal (WSJ)
• Cheap money bankrolls Wall Street's bet on housing (Reuters)
• Bank of Japan reveals concerns over easing policy (FT)
• iPads and low-end rivals propel higher tablet shipments  (Reuters)
• China Cyberspies Outwit U.S. Stealing Military Secrets (BBG)
• Draghi Fuels Bets on Rate Cut With Risk of Limited Impact (BBG)
• China guides renminbi to fresh high against US dollar (FT)
• Japan is preparing to start up a massive nuclear-fuel reprocessing plant (WSJ)
• Apple’s Ive Seen Risking iOS 7 Delay on Software Overhaul (BBG)
• UBS faces calls for break-up at investor meeting (Reuters)

The "Excel Spreadsheet Error" In Context

Let's get down to the facts of the recent banker gold & silver paper price smash and the lies about the banker gold & silver paper price smash being propagated by the mass media and banking shills like Paul Krugman so everyone can understand why this smash will blow up in the face of the very bankers that executed it at some point down the road. Retail individuals AND global institutions all around the world are finally beginning to understand that physical ownership of gold and silver is how to counter banker fraud & intervention into the gold and silver markets and this realization is going to produce massive blowback.

We all know that markets don’t always reflect the health of the economy. It is not unusual to experience stellar market returns in an otherwise mediocre economic backdrop – something that investors are currently experiencing. But future success in this investing climate is a greater challenge and requires a good hard look at how realistic earnings expectations are. The bottom line is that actual earnings growth will be substantially lower than what is currently built into stock prices. This view is contrary to current consensus expectations and could potentially serve as a major headwind for the market once investors begin to share it in coming months.

When it comes to global currency warfare, one can read countless books (all of which professing to be the definitive reference guide for a process that started in the... 1930s), or one can fast forward, save lots of time, skip all the repetitive verbiage and simply observe the following charts which summarize the key things "one needs to know" about the dead-end that the globalized monetary system has found itself in since 2008, when the entire world decided that the only way to "fix" all of the world's problems is simply to print a countless amount of paper money.

In the upcoming week the key focus on the data side will be the US February retail sales figures on Wednesday, which should provide clearer evidence on how the tax increases that took place on January 1 have affected the consumer. In Europe, industrial production and inflation data will be the releases to watch. On the policy side, the focus will be on the BoJ appointments in an otherwise relatively quiet week for G7 central banks. Italy’s newly elected lawmakers convene for the first time on Friday 15 March and the expectation remains that President Napolitano will formally invite Mr Bersani to try and form a new government. He may also opt for a technocrat government. Although clearly preferred by markets, winning political backing may prove challenging.

• As ZH has been saying for months... Draghi Will Need to Push the Euro Down Some More (WSJ) ... but careful with "redenomination risk"
• Senate Report Said to Fault JPMorgan (NYT)
• EU Opens Way for Easier Budgets After Backlash (BBG)
• China Moves to Temper Growth - Property Bubble Is a Key Concern (WSJ)
• China bets on consumer-led growth to cure social ills (Reuters)
• Italian president mulls new technocrat government (Reuters)
• Grillo says MPS won't back technocrats (ANSA)
• The Russians will be angry: Euro Chiefs Won’t Rule Out Cyprus Depositor Losses (BBG)
• China Bankers Earn Less Than New York Peers as Pay Dives (BBG)
• Investors click out of Apple into Google (FT)
• Community colleges' cash crunch threatens Obama's retraining plan (Reuters)
• Alwaleed challenges Forbes over his billions - Calculation of $20bn net worth is flawed, says Saudi prince (FT)
• Guy Hands Dips Into Own Pockets to Fund Bonuses at Terra Firma (BBG)
• North Korea to scrap armistice if South and U.S. continue drills (Reuters)

Obama’s nominee to head the SEC, Mary Jo White, is just another gatekeeper appointed to make sure no one ever goes after the Wall Street crime syndicate.  As I have written about many times in the past, Obama does not nominate anyone to a high position of power in government who will not behave like a good little lapdog for Wall Street. Despite Obama’s propagandist statement about how “you don’t want to mess with Mary Jo,” her background implies she will function as a useful servant to the financial oligarchs.  Forget for a second about that fact at her recent firm Debevoise & Plimpton LLP her clients included the usual suspects such as such as JPMorgan Chase & Co. (JPM), Morgan Stanley (MS), and UBS AG, but she is actually known as the prosecutor who popularized the “slap Wall Street on the wrist” approach.

Waste and Fraud Are the Real Causes of the Deficit

• Bersani's lead over Berlusconi continues to erode, now just 3.6 Pts, or inside error margin, in Tecne Poll
• Spain gears up for U.S. debt investor meetings (Reuters)
• PBOC Set for Record Weekly Liquidity Injection (WSJ)
• RBS Trader Helped UBS’s Hayes With Libor Bribes, Regulators Say (BBG)
• ECB, Ireland reach bank debt deal (Reuters)
• AMR-US Airways Near Merger Agreement (WSJ)
• Monte Paschi says no more derivatives losses (Reuters) ... remember this
• Harvard’s Gopinath Helps France Beat Euro Straitjacket (BBG) - by sliding into recession?
• Obama Relents on Secret Drone Memo (WSJ)
• Brennan to face questions on interrogations, drones and leaks (Reuters)
• Wall Street Success With Germans Boomerangs (BBG)
• Khamenei rebuffs U.S. offer of direct talks (Reuters)
• Boeing Preps Redesign to Get 787 Flying  (WSJ)

It’s Not a Tax or Spending Problem … It’s a Devolution Into Lawlessness

Bloomberg's William Cohan released a provocative piece last night, headlined by the even more provocative "UBS Libor Manipulation Deserves the Death Penalty." We can only assume that Cohan is being metaphorical - after all, despite the rare occasional recent criminal charge no one has still gone to prison for the biggest coordinated manipulation of a benchmark fixed income market for years: something previously relegated to the fringes of crackpot conspiracy theories - after all, so many people were in on it, how can they possibly all keep their mouths shut - you know, the usual excuse against massive conspiracy theories, at least until they become conspiracy fact. Yet one wonders: will current and future ongoing market manipulations ever cease when there is no real deterrent: after all spending a few years in jail is certainly worth a few million in ill-gotten proceeds, even assuming the termination of a career in finance. Is Cohan being rhetorical? Or has the time for some true vigilante justice finally come? Because in a world increasingly best portrayed by the 2009 movie "The International" where one has to "go outside" a captured legal system to get real justice, is vigilantism eventually coming to every town near you, once the money illusion ends? And a bigger question - is this the main preemptive reason for the gun control push seen so vividly in recent days and months?

The Eurozone was once again engaged in burning the midnight oil, in yet another futile endeavor, this time setting the stage for a common bank supervisor in the face of the ECB, which is somehow supposed to "regulate" Europe's thousands of banks. That this was a total practical dud can be seen in the response of the EURUSD to the news. However, for those interested in the theoretical nuances, whose actual implementation has once again been kicked into the future, here is a quick and dirty primer from SocGen.