Tuesday in Banana Land - will the Dow extend it's 2013 streak to 19 consecutive Tuesday advances ? Will Jamie Dimon keep his crown and throne at JP Morgan ? Will there be a POMO today ? Will the Japan Econ Minister admit he previously was the Iraq Information Minister ( 'We have destroyed 2 tanks, fighter planes, 2 helicopters and their shovels - We have driven them back." - as US Tanks rolled passed in the background ... )

http://hat4uk.wordpress.com/2013/05/21/greece-still-searching-for-glimmers-of-hope-in-a-hopeless-situation/

GREECE: Still searching for glimmers of hope in a hopeless situation.

The good news is, some people think the bad news is good news

“We may be drowning, but the water’s lovely and warm”

Greek Prime Minister Antonis Samaras is now so deluded on the subject of a Greek recovery, there is a kind of developing sangfroid humour in the media coverage of his descent into what is either madness or carefully choreographed, slow-motion can-kicking. In this sort of atmosphere, it is truly astonishing just how much awful news can look good as things go from bad to worse than even the biggest Job expected. Greece has reached the stage in May 2013 where even Job has no comfort to offer: but somehow, the EC and its allies in the Athens government can spot a Phoenix rising from the coldest cinder.

Good news, the recovery will begin in 2014, and by 2016 unemployment will be only 21%.

Good news, inflation has been conquered: the March official figures show that deflation has arrived.

Good news – in the same month taxes fell….by a shortfall in government income of 25%.

Good news, Samaras is attracting new investment….by selling the family silver to China.

Good news, the Alpha Bank is Greece’s safest, it only lost 12% in value last Friday.

Good news, Greece’s borrowing costs have fallen – because nobody noticed a 5.3% gdp contraction in Q1.

Good news, investors are betting that Greece is on-track for recovery….its gdp is now back where it was in 2005.

A combination of surreal spin, lazy analysts and market brain death hyper-optimism is conspiring to make it look as if the Hellenic Republic is back from the brink. Well I’m sorry, the country’s fingers may be back up to the cliff-edge, but a large truck is about to drive right over them. 1.3 million Greeks are out of work, 400,000 families have no income, 300,000 workers haven’t been paid for months, and hundreds of
thousands more have work, but can’t make ends meet on the salaries they’re getting. If those numbers don’t sound that big, try to remember that the total population of Greece is only 11 million.

Later this year, the government must deliver a 2014 budget. The EC says it is on track for this year (I don’t see how it can be with tax income down by a quarter) but it will probably need to raise an additional 8 billion euros to achieve the for 2015. If the Troika sticks to its insane insistence on the Greek government implementing more austerity to fill the gap, the relatively stable political situation will, assuming my sources are right, go very badly downhill.

The thing about Greece is that the bollocks is so ubiquitous now, it’s more ducks in a barrel than deconstruction shooting it down. But what far too many Northern and Western Europeans don’t get is that – just as there is no such thing as a gradual panic in the markets – as the Soviet Union discovered, there is no such thing as a successful rebellion on one country. Once somebody in ClubMed – and my money’s still on Italy – holds up their hands and says “Go forth and multiply” to the Troika, the fire-wave will travel faster than that following a large nuclear detonation.

and.......







http://www.zerohedge.com/news/2013-05-21/its-tuesday-will-it-be-19-out-19

It's Tuesday: Will It Be 19 Out Of 19?

Submitted by Tyler Durden on 05/21/2013 07:10 -0400

• Australia
 
• Bank of America
 
• Bank of America
 
• Bank of England
 
• Ben Bernanke
 
• BOE
 
• Bond
 
• British Pound
 
• CDS
• Copper
 
• CPI
 
• Crude
 
• Fisher
 
• High Yield
 
• Iran
 
• Israel
• Jamie Dimon
 
• Japan
 
• Jim Reid
 
• Joint Economic Committee
• Markit
 
• Monetary Policy
 
• Nikkei
 
• None
 
• POMO
 
• POMO
• Real estate
 
• recovery
 
• Testimony
 
• United Kingdom
 
• Yen
• Yuan

Another event-free day in which the only major economic data point was the release of UK CPI, which joined the rest of the world in telegraphing price deflation, despite bubbles in the real estate and stock markets, printing 2.0% Y/Y on expectations of a 2.3% increase, the lowest since November 2009 and giving Mark Carney carte blanche to print as soon as he arrives on deck. In an amusing twist of European deja-vuness, last night Japan's economy minister who made waves over the weekend when he said that the Yen has dropped low enough to where people's lives may be getting complicated (i.e., inflation), refuted everything he said as having been lost in translation, and the result was a prompt move higher in the USDJPY, quickly filling the entire Sunday night gap. That said, and as has been made very clear in recent years, data is irrelevant, and the only thing that matters, at least so far in 2013, is whether it is Tuesday: the day that has seen 18 out of 18 consecutive rises in the DJIA so far in 2013, and whether there is a POMO scheduled. We are happy to answer yes to both, so sit back, and wait for the no-volume levitation to wash over ever. The US docket is empty except for Dudley and Bullard speaking, but more importantly, the fate of Jamie Dimon may be determined today when the vote on the Chairman/CEO title is due, while Tim Cook will testify in D.C. on the company's tax strategy and overseas profits.

Perhaps the only chart that matters: the Dow with and without the impact of Tuesdays:

Key overnight highlights summarized in bulletin form courtesy of Bloomberg

• Treasuries steady, 10Y yields holding near highest since March as markets wait for Bernanke testimony and Fed minutes tomorrow amid speculation on QE tapering. JPY resumes decline vs USD while EUR/USD falls.
• Japan economy minister Amari, speaking to reporters in Tokyo, said he couldn’t say when correction from strong JPY will end, hopes exchange rate settles at level suited to Japan’s economic fundamentals
• China’s trade surplus is one-tenth the official $61b reported so far this year after accounting for fake transactions used to disguise hot-money inflows, Bank of America Corp. says
• Spain sold EU3.51b of bills vs. 3.5b target; 3M bills drew 0.331% vs 0.12% in April, 9M bills 0.789% vs 0.787%
• U.K. inflation slowed more than economists forecast in April to a seven-month low and producer prices rose the least since 2009 as fuel costs fell
• The Reserve Bank of Australia cut its benchmark interest rate to a record low this month to boost businesses weakened by AUD’s sustained strength, even  as households reacted to earlier reductions, according to the minutes of its May 7 meeting
• New Zealand’s 2Y inflation expectations fell to an 11-year low in 2Q, according to the central bank’s survey of business expectations
• Deutsche Bank AG was cut to neutral from overweight by JPMorgan, which said tighter regulation threatens capital levels
• The Chinese government is considering a tax on ultra-luxury vehicles that cost more 1.7m yuan ($277,000), according to a report in Nanfang Daily, citing an unnamed official from a German luxury automaker
• BofAML Corporate Master Index OAS narrows to 141bps, new tight for the year, from 142bp as $2.925b priced. Markit IG at 71bps from 70bps, YTD low 69bps. High Yield Master II OAS narrows to 434bps from 437bps; $1.85b priced yesterday. CDX High Yield falls to 106.99 from 107.13
• Sovereign yields mostly higher. Asian stocks mixed, with Nikkei +0.1%, Shanghai Composite +0.2%. European stocks fall,  U.S. stock-index futures mostly lower. WTI crude, copper, gold fall

WHAT TO WATCH:

• Economic Data: None scheduled
• Central Banks
• 11:30am: Fed’s Bullard speaks on monetary policy in Frankfurt
• 1:00pm: Fed’s Dudley speaks in New York Supply
• 11:00am: Fed to purchase $2.75b-$3.5b notes in 2020-2023 sector
• 11:30am: U.S. to sell 4W bills

SocGen recaps the key macro highlights:

Flows should pick up across FX and rates today, but the advent of Fed chairman Bernanke's speech tomorrow and the FOMC minutes probably stand in the way of participants taking on meaningful positions. The stabilisation late yesterday in metals (a sense of normality returning to silver prices after trading was halted four times) suggests recent losses may have been exaggerated. The resulting recovery in core bond yields bears close scrutiny as US 10y swaps approach 2.17%, the March high.

The only notable highlight of a sparse data calendar today is the monthly UK inflation data. Consensus expects a slight drop to 2.6% in April vs 2.8% in March (SG forecast 2.5%) but that does not make GBP offered nor should it spur receiving interest in swaps. The MPC minutes of the May meeting will be published tomorrow and are likely to put GBP in a more positive light if, as we suspect, governor King (and Fisher) pulled his vote for an immediate £25bn increase in QE. Inflation is subsequently forecast to pick up May. With economic recovery in sight, this argues for no change in BoE policy in the foreseeable future. With a minority on the MPC favouring more QE, this will make it difficult for incoming governor Carney to deliver on the dovish premise which was baked into GBP and rates the minute he was appointed last year. This does give GBP a tiny chance of carrying over its quite impressive performance so far in Q2 to Q3, though the short-term prospects of a further erosion in real yields (see chart) argues against a strong bid. Having lost only 0.2% vs the EUR, sterling is up vs every other G10 currency since 1 April, including the USD. GBP trades closest to fair value in our G10 currency sample followed by JPY and CAD.

DB's Jim Reid completes the overnight summary recap:

Markets are certainly calmer than the HK weather at the moment. Indeed it’s been a quiet 24 hours as we await “Fed Wednesday” when Bernanke will be delivering a testimony before the Joint Economic committee, and the latest FOMC meeting minutes will be published. In advance of that, we had the Chicago Fed’s Charles Evans speaking yesterday, and judging by the S&P500’s reaction, perhaps markets thought he sounded a little less dovish than usual. Indeed, the S&P500 was trading about 0.25% higher on the day at the midpoint of the US session, but gave up most of those gains as Evans’ speech hit the newswires to finish at -0.07%. Evans said that the US economy had improved substantially and that he expects to see “self-sustaining (US) growth” at “escape velocity” in 2014. Evans added however, that the Fed is missing on both inflation and employment targets and he wants to see further asset purchases until the job market improves. We get further Fedspeak today with speeches from the St Louis Fed's Bullard and the NY Fed’s Dudley. Both are FOMC voters.

Despite public holidays in parts of continental Europe, there were some notable price moves worth highlighting from yesterday. In credit markets, the European subordinated financials credit index continued to gap tighter (-16bp) after the recent changes to financial CDS contracts proposed by ISDA. The index has firmed more than 40bp in the last four sessions, bringing the financials subordinated/senior multiple to 1.4x, its lowest level since 2010.

In commodities, silver and gold markets rallied an impressive 14% and 4.6% from the intraday lows, after silver was down by as much as 8.6% during the Asian session yesterday. Short covering and the earthquake in Chile were reportedly behind the intraday rally. A Bloomberg headline warning that Moody’s could downgrade the US’ credit rating this year probably helped as well, as did a 0.6% drop in the USD index. In equities, we noted the underperformance in Italian equities yesterday (MIB -0.6%) - perhaps after a poll published by the SWG (released on Friday) suggested that the Italian government's approval rating had fallen from 43% at the start of the month to just 34% currently.

Elsewhere, the Yen remains in focus in overnight markets after further commentary from Japan’s Economy Minister. Mr Amari said that he is uncertain on when the correction from a strong Yen will end. This marks a surprise change in tone from his comments on Sunday when he was quoted as saying that the “correction of the strong Yen is largely complete” and that a further weakening in the yen would negatively impact people’s living costs. As it currently stands, USDJPY is up 0.2% in overnight trading, helping pare yesterday’s losses of 0.9%.

Elsewhere in Asia, equities are trading lower overnight led by losses on the Hang Seng (-0.4%) and KOSPI (-0.23%). S&P500 futures are 0.1% weaker as we type. In a reminder of some of the geopolitical risks facing markets this year, the NY Times wrote that the civil war in Syria is in danger of escalating as Syrian government forces, backed by fighters from the Lebanese militant group Hezbollah, unleashed airstrikes against rebels in parts of the strategic region of Qusayr,  close to the Lebanese border. Israel, which earlier this month launched air strikes near Damascus, is said to be concerned at the growing strategic cooperation between Iran, Hezbollah and the Syrian regime (Financial Times). A potential widening of the conflict beyond Syria’s borders is something worth keeping an eye on.

With the relatively light data docket today, the focus will probably be on the Fedspeak. Bullard will be speaking at 4:30pm today London time in Frankfurt on the topic of “Monetary Policy in a Low-Rate Environment” while Dudley will be speaking at 6pm London time on the “Lessons at the Zero Bound”. The BoJ’s two-day policy meeting begins today. In the UK, inflation and retail sales data are scheduled. On the corporate reporting front, Vodafone, Burberry and Marks & Spencer will be announcing earnings.