Europe Blinks: Troika Willing To Change Terms Of Greek Bailout Deal

And so it all begins anew: "The so-called troika of the European Union, the International Monetary Fund and the European Central Bank is willing to make six important changes to Greece’s financial aid agreement if a pro-European government is formed in the country, Real News said.  The Troika is willing to extend by one year to end 2015 the time for Greece to cut its budget deficit as well as to proceed with a restructuring of loans, the Athens-based newspaper reported in its Sunday edition preleased today, citing “well informed” sources at the European Commission."

Be of Good Cheer: the Keynesian Welfare State Is Doomed

The Case for Austerity
by Gary North, Lew Rockwell.com:
Keynesianism is in a death spiral. So is populist socialism. So is fiat money fascism. They are all in death spirals because they all reject this premise: “Lower taxes increase liberty.”
Liberty will prevail. This is an eschatological affirmation. One of the ways that it will prevail is through the bankruptcy of the Keynesian social order: high taxation, high regulation, high deficit spending, and high inflation.
Let’s put government on a diet. Let’s have austerity where it belongs: government spending.
Read More @ LewRockwell.com

Double or Nothing: How Wall Street is Destroying Itself

As Nassim Taleb described in The Black Swan these kinds of trades — betting large amounts for small frequent profits — is extremely fragile because eventually (and probably sooner in the real world than in a model) losses will happen (and of course if you are betting big, losses will be big). If you are running your business on the basis of leverage, this is especially dangerous, because facing a margin call or a downgrade you may be left in a fire sale to raise collateral. This fragile business model is in fact descended from the Martingale roulette betting system. Martingale is the perfect example of the failure of theory, because in theory, Martingale is a system of guaranteed profit, which I think is probably what makes these kinds of practices so attractive to the arbitrageurs of Wall Street (and of course Wall Street often selects for this by recruiting and promoting the most wild-eyed and risk-hungry). Martingale works by betting, and then doubling your bet until you win. This — in theory, and given enough capital — delivers a profit of your initial stake every time. Historically, the problem has been that bettors run out of capital eventually, simply because they don’t have an infinite stock (of course, thanks to Ben Bernanke, that is no longer a problem). The key feature of this system— and the attribute which many institutions have copied — is that it delivers frequent small-to-moderate profits, and occasional huge losses (when the bettor runs out of money).

JP Morgan Used Political Influence With the Fed and Treasury to Create London Loss Loophole In the Volcker Rule

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Trader Dan on King World News Metals Wrap

Trader Dan at Trader Dan's Market Views - 1 hour ago

Please click on the following link to listen in to my regular weekly radio interview with Eric King on the KWN Weekly Metals Wrap. *http://tinyurl.com/7jvm3mu* 

Germany Begins Quantifying The Cost Of A Greek Exit (And Discovers Contingent Liabilities Are All Too Real)

First came the rhetorical jawboning, where following announcements by Fitch, European politicians, and finally Germany's finance minister, the scene was set to prepare the general public that despite protests to the contrary, a Greek exit from the euro would not really be quite the apocalypse imagined. Now comes the actual quantification part, whereby in addition to adding numbers and determining what the further sunk costs to a Greek bailout will be (hint: much, much greater than anyone can conceive), Germany has finally understood what we have been warning for over a year: that contingent liabilities become very real liabilities when a threshold event forces the transition from "off balance sheet" to on, and the piper has to be paid. According to an analysis released hours ago in Wirtschafts Woche, Germany "would only absorb losses of 76.6 billion euros in Germany. This amount results from bilateral aid loans, the liability of Germany's share in credit rescue fund EFSF, Germany's share of losses of the European Central Bank (ECB) and the German share of liability to the credit support of the International Monetary Fund (IMF)."

Housing Subsidies - Capitalism’s Smoke And Mirrors

Many, if not most, people would agree with the general use of subsidies in a vertical equity fashion, or the efficient redistribution of wealth for a common social purpose: social justice to provide shelter for those who need it. It is subsidies in housing designed to support a political and not a socioeconomic purpose that bother me. Subsidies as they continue to exist in the US in housing follow in this category – much in exclusivity these days to the subsidies in other developed nations the world over, at least in quantifiable terms.

In Much-Anticipated Move, China Cuts Reserve Requirement Ratio, Joins Reflation Race

After sell-side analysts had been begging for it, pardon, predicting it for months, the PBOC finally succumbed and joined every other bank in an attempt to reflate, even as pockets of inflation are still prevalent across the country, although the recent disappointing economic data was just too much. Overnight, the Chinese central bank announced it was cutting the Reserve Requirement Ratio by 50 bps, from 20.5% to 20.0%, effective May 18. The move is expected to free up "an estimated 400 billion yuan ($63.5 billion) for lending to head-off the risk of a sudden slowdown in the world's second-largest economy" as estimated by Reuters. "The central bank should have cut RRR after Q1 data. It has missed the best timing," Dong Xian'an, chief economist at Peking First Advisory in Beijing, told Reuters. "A cut today will have a much discounted impact. So the Chinese economy will become more vulnerable to global weakness and the slowing Chinese economy will in turn have a bigger negative impact on global recovery. Uncertainties in the global and Chinese economy are rising," he said. The irony, of course, is that the cut, by being long overdue, will simply accentuate the perception that China is on one hand seeing a crash in its housing market and a rapid contraction int he economy, while still having to scramble with high food prices (recall the near record spike in Sooy prices two weeks ago). In the end, the PBOC had hoped that it would be the Fed that would cut first and China could enjoy the "benefits" of global "growth", and the adverse effects of second hand inflation. Instead, Bernanke has delayed far too long. When he does rejoin the race to ease, that is when China will realize just how short-sighted its easing decision was. In the meantime, the world's soon to be largest source of gold demand just got a rude reminder that even more inflation is coming.

‘The aviation equivalent of Tutankhamun’s Tomb’: World War II RAF fighter plane discovered in the Sahara… 70 years after it crashed

Daily Mail:
He was hundreds of miles from civilization, lost in the burning heat of the desert. Second World War Flight Sergeant Dennis Copping took what little he could from the RAF Kittyhawk he had just crash-landed, then wandered into the emptiness.
From that day in June 1942 the mystery of what happened to the dentist’s son from Southend was lost, in every sense, in the sands of time.
But 70 years later, the ghostly remains of his battered but almost perfectly preserved plane has been discovered.
Like a time capsule that could provide the key to his disappearance, it had lain intact alongside a makeshift shelter Dennis appears to have made as he waited, hopelessly, for rescue.
Now a search is to begin for the airman’s remains – as aviation experts and historians begin an operation to recover and display the P-40 aircraft in his memory.
The chance find was made by an oil worker exploring a remote region of the Western Desert in Egypt. It is more than 200 miles from the nearest town in a vast expanse of largely featureless terrain.
Read More @ DailyMail.co.uk

The NSA and its Google Ties – None of Your Business!

from AFP:
The top-secret US National Security Agency is not required to reveal any deal it may have with Google to help protect against cyber attacks, an appeals court ruled Friday.
The US Court of Appeals in Washington upheld a lower court decision that said the NSA need not confirm or deny any relationship with Google, because its governing statutes allow it keep such information secret.
The ruling came in response to a Freedom of Information Act request from a public interest group, which said the public has a right to know about any spying on citizens.
The appeals court agreed that the NSA can reject the request, and does not even have to confirm whether it has any arrangement with the Internet giant.
Read More @ ca.news.yahoo.com




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