"No Deal" - Greek Bondholders Do Not Think Agreement Can Be Reached Before "Crunch Date"

Five minutes before market close yesterday, Bloomberg came out with an "exclusive" interview with Marathon CEO Bruce Richards, who may or may not be in the Greek bondholder committee any longer, in which the hedge fund CEO said that the Greek creditor group had come to an agreement and that the thorniest issue that stands between Greece and a coercive default (and major fallout for Europe) was in the bag, so to say. To which we had one rhetorical comment: "Well as long as Marathon is talking for all the possible hold outs..." As it turns out, he wasn't. As it further turns out, Mr. Richards, was just a little bit in over his head about pretty much everything else too, expect for talking up the remainder of his book of course (unsuccessfully, as we demonstrated earlier - although it does beg the question: did Marathon trade today on the rumor it itself spread, based on information that was material and thus only afforded to a privileged few creditors, especially if as it turns, the information was false - we are positive the SEC will be delighted to know the answer). Because as the supposed restructurng expert should know, once you have a disparate group of ad hoc creditors, which is precisely what we have in the Greek circus now, there is nothing even remotely close to a sure deal, especially when one needs a virtually unanimous decision for no CDS trigger event to occur (yes, ISDA, for some ungodly reason, you are still relevant in this bizarro world). Which also happens to be the fascination for all the hedge funds, whom we first and then subsequently repeatedly noted, are holding Europe hostage, to buy ever greater stakes of Greek bonds at 20 cents on the dollar. Because, finally, as the FT reports, the deal is nowhere in sight: "Several hedge fund managers that hold Greek debt have said they have not been involved in the talks and will not be agreeing with the “private sector involvement” (PSI) deal – which centres on a 50 per cent loss on bondholders’ capital and a reduction in the interest they receive... Even members of the committee concede the process is unlikely to succeed in time for the crunch date: a €14.5bn bond repayment falling due on March 20." But, wait, that's not what Bloomberg and Bruce Richards told us yesterday, setting off a 100 point DJIA rally. Time to pull up the Einhorn idiot market diagram once again.

Goldman Confirms Smart Money Is Now Offloading To Retail; Sees 1.2880 As A EURUSD Short Covering Threshold

Earlier today we got our first clue that the smart money has stopped "distribution" and is now offloading to retail after we saw the first equity fund inflow, however tiny, in months, and only the second one out of 37 outflows since April, as reported by ICI. The second and far more important one comes from today's Goldman sales roundup, which confirmed that following today's latest borderline ridiculous meltup, retail investors looking for the sucker at the poker table, wouldn't be able to find one. Here's why. Quote Goldman: "As has been the recent trend, our cash flow remains better to sell, both from long-only and hedge funds." And there you have it: smart money (well, relatively so) has "recently" been using every melt up chance it gets to dump the bags with the E*Trade baby. Third and final proof: "ETF flow however skewed toward better buying." At this point retail investors may want to ask themselves: what do they know that the others, who are actively selling to them, don't.

“Mitt Romney Won’t Rule Out a VAT Tax”

Numbers Cited By SOPA Supporters May Be Fictitious

Ignoring, momentarily, that the U.S. has already adopted international law which seeks to curtail online piracy (see, e.g., DMCA), and that these new bills seek to do little more than enact what amounts to police powers over foreign companies, it looks like the studies cited in support of piracy-gone-rampant may have never have existed. Julian Sanchez, a researcher at the Cato Institute, did his level best at tracking down the research behind the near-absurd numbers (the industry claims nearly $250B lost in revenues a year, and 750,000 lost jobs), but instead found only circular references.

IMF in need for one trillion dollars/The Private Greek Bond fiasco/Goldman Sachs earnings abysmal/

Harvey Organ at Harvey Organ's - The Daily Gold and Silver Report - 1 hour ago

Good evening Ladies and Gentlemen: Gold closed up $4.30 to 1659.00.  Silver however was the star of the day rising by 41 cents to close at 30.52.  The bankers tried to suppress the metals in the wee hours of the morning but failed somewhat as the metals rallied.  After the London fix they tried again as they knocked gold down by 6 dollars.  That failed miserably as demand is too great for

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JP Morgan Chase Accused of 'Brazen Bankruptcy Fraud'

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The Ultimate Inflation Casualty

Trader Dan at Trader Dan's Market Views - 3 hours ago

We've all seen the tricks being played by food manufacturers in shrinking the size of their products but charging the same price as the former size. The old 5 pound bags of sugar some to my mind. Whether it is cereal or bar-b-sauce, or whatever, the consumer ends up paying the same amount as they once did but they come home with a smaller quantity for their money spent. All of this is to hide or disguise the impact of inflation. One goes to the store, buys a bag of sugar for the price they paid for it a few years ago and thinks little if anything about it until they realize that th... more » 

Gold Daily and Silver Weekly Charts

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SP 500 and NDX Futures Daily Charts

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Markets Already Discounting

Eric De Groot at Eric De Groot - 4 hours ago

The number of risk-on signals continues to grow as capital anticipates more liquidity in 2012. Small cap stocks lead during periods of aggressive currency devaluation. Chart 1: Russell 2000 to S&P 500 Ratio Chart 2: U.S. Large Cap Stocks Total Return Index (LCSTRI) to U.S. Small Cap Total Return Index (SCSTRI) Ratio [[ This is a content summary only. Visit my website for full links, other content, and more! ]]

Gingrich Hypocrisy Full Frontal

If anyone feels like voting for Newt Gingrich after watching this interview, we only have one question: do whips, chains, and a skin-tight leather outfit await the return from the voting station?

In Puppet Move Full Of Sound And Fury, Congress Denies Debt Ceiling Hike

A short time ago, the House of Representatives rejected (by 239-176 though not enough to avoid Obama's veto) the $1.3tn increase in the federal debt limit. As Reuters notes, this vote seems like 'a largely symbolic vote aimed at staking out election-year positions on government spending' as we know by now that Timmy G will underfund yet another pension plan (on the promise to transfer-pay it all back very soon) if it ever came to that. The Hill also adds Democratic comments that this was clearly 'a political stunt' as the House Minority Whip Steny Hoyer says "This is a game that will say, see, I voted against debt." Where the sound-and-fury is laughable of course is that both the House and Senate need to 'disapprove' of the debt ceiling hike that is already 'pre-approved' in last year's Budget Control Act (and the Senate is widely expected not to disapprove). As politician after politician sought media-time, Ron Paul echoed his sensibilities (though not really helpful in this situation) that "we're in denial", and "you can't solve the problem of debt by accumulating more debt."

Volume Only Underperformer As Euphoria Catches On

The slippery slope of lower volume continued today in the NYSE (cash/stock trading markets) despite ES (the e-mini S&P futures market) seeing its 2nd highest volume since 12/16 as that futures market has only seen 1 day of the last 11 with a negative close-to-close change. Driven seemingly by yet another rumor that the Greek PSI deal is close (yet GGBs are lower?), risk assets broadly went into overdrive and while ES held 1300 (on very large average trade size and volume as broke that stop-heavy level), the shifts in commodities, FX, and Treasuiries all helped sustain the euphoria into the close where we stabilized at yesterday's pre-market highs. Copper, Silver, Gold, EURUSD (and all FX majors aside from JPY), Treasury yields (and 2s10s30s) all closed at their highs of the day and while oil dropped early (around the Keytsone news?) it also limped back higher to $101 by the close. Equity markets were slight leaders on the day but credit caught up into the close. We do note that while the high-yield credit index has rallied dramatically but worry that the optical compression of spreads (bullish) is hiding the bear flattener in 3s5s that is seemingly dominating flow for now (relative to underlying credit).

Obama Blames Republicans For Keystone XL Decision

The big news of the day, aside from the idiot rally finally being back on full bore, is that the Obama administration finally pushed Canada's hand in telling it to sell its crude to China instead of the US, which we are confident it will gladly do. Much of this was largely priced on, as was the fact that opportunity for significant job creation was just kicked to the curb. What was not however expected, is that in keeping up with the fine tradition of taking responsibility for his decisions and actions, kinda sorta, America's president said that it was really the republicans whose fault it is that Keystone XL is now and will remain in its blueprint stages. From The Hill: "Obama said he was not acting on the merits of TransCanada Corp.’s plan, but instead was forced to make the decision based on the “arbitrary” deadline mandated by GOP provisions in December’s payroll tax cut extension deal. "As the State Department made clear last month, the rushed and arbitrary deadline insisted on by Congressional Republicans prevented a full assessment of the pipeline’s impact, especially the health and safety of the American people, as well as our environment," Obama said in a prepared statement. “As a result, the Secretary of State has recommended that the application be denied. And after reviewing the State Department’s report, I agree,” Obama added. In other words, do you remember where you were when the republicans blocked the Keystone Pipeline?

Bloomberg On The Worst Start In Years For Earnings

Presented with little comment except to note that Bloomberg's Chart-of-the-Day highlights specifically what we have been discussing for weeks as in this earnings season, only 47% of companies in the S&P 500 have so far exceeded analyst expectations - the lowest since before the credit crisis. S&P 1300 FTW.

The Final Countdown

One reason for the severity of the financial crisis, and the losses incurred by banks, is that bankers and financial analysts were using linear tools in a non-linear, highly complex environment otherwise known as the financial markets.The models didn’t work. The problem we face now as investors will end up being existential for some banking institutions and sovereigns. Our (uncontentious) core thesis is that throughout the west, more debt has been accumulated over the past four decades than can ever be paid back. The question, effectively to be determined on a case-by-case basis, is whether bondholders are handed outright default (which looks increasingly like the case to come in Greece) or whether the authorities, in their understandable but misguided attempts to keep the show on the road, resort to a policy of inflation that could at some point easily spiral out of control. As Rothbard wrote, “The longer the inflationary boom continues, the more painful and severe will be the necessary adjustment process… the boom cannot continue indefinitely, because eventually the public awakens to the governmental policy of permanent inflation, and flees from money into goods, making its purchases while [the currency] is worth more than it will be in future.” “The result will be a ‘runaway’ or hyperinflation, so familiar to history, and particularly to the modern world. Hyperinflation, on any count, is far worse than any depression: it destroys the currency – the lifeblood of the economy; it ruins and shatters the middle class and all ‘fixed income groups;’ it wreaks havoc unbounded… To avoid such a calamity, then, credit expansion must stop sometime, and this will bring a depression into being.”

Ron Paul Moves To Repeal NDAA Police State Provisions

Ron Paul: We Must STOP Raising the Debt Ceiling!

The Euro is Pushing Italy Into Depression

by Ambrose Evans-Pritchard, Telegraph.co.uk:

Here is the latest money supply chart from the Banca d’Italia. Just look at M3. Horrendous. See page 7 of this report.
This speaks for itself. There is no clearer indictment of the dysfunctional nature of monetary union. Italy is being pushed into depression. Criminal.
Obviously, Italy and Germany can no longer share the same monetary policy. Ergo, Germany should leave EMU, pronto.
The Banca said Italy’s economy contracted by 0.5pc in the last quarter of 2011. It will shrink by a further 1.5pc this year, with no growth in 2013.
Read More @ Telegraph.co.uk

Gold Rebounds, Returns to Highest in Five Weeks

SAN FRANCISCO (MarketWatch) — Gold futures ended at a five-week best Wednesday, staging a comeback as traders looked at wholesale prices and saw potential for inflation, and as the dollar extended losses.
by Claudia Assis and Virginia Harrison, MarketWatch.com:
Gold futures for February delivery rose $4.30, or 0.3%, to $1,659.90 an ounce on the Comex division of the New York Mercantile Exchange. That was gold’s highest settlement since Dec. 13.
U.S. wholesale prices declined in December, but stripped of energy and food costs, the measure of inflation rose more than expected.
“There was a hint of inflation” in the Labor Department figures, said Bill O’Neill, a principal at Logic Advisors in New Jersey. More broadly supportive of gold, there was a “strong run” for gold from London dealers and Asian demand continues to be strong, he said.
“The rebound today is quite impressive,” with the market showing so much resilience despite weakness late last year that “we are seeing some new buying coming to the market,” O’Neill added.
Read More @ MarketWatch.com

Massive Romney Opposition Research File Leaked

by David Martosko, DailyCaller.com:

If you think you’ve already heard everything there is to know about Mitt Romney, think again. A 200-page document that appears to be Sen. John McCain’s entire 2008 election-year opposition research file on the former Massachusetts governor hit the Internet with a vengeance Tuesday evening. And it’s an eye-opener.
The file explores everything from the assessed value of Romney’s house (“$3.162 million”) to his views on the Boy Scouts’ ban of homosexuals (“publicly opposed … in 1994 and 2002 campaigns”). It was made public Tuesday on the social media website Buzzfeed, although it appears to have been accessible online for two months.
The document, given the name “The Romney Book,” was viewed less than 100 times on the page where it was originally uploaded by its anonymous leaker on November 11.
Read More @ DailyCaller.com

World Bank Offers Grim Global Outlook

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