It is funny this, anytime things go out of control, somebody is to blame, except for the policymakers. Greece is now blaming speculators. Portugal is opening cases aginst credit agencies. Just like to crisis in 2008 was blamed on short sellers. People with no clue of how markets work put bans on short sellers. That all sounds great, but how is a bank to hedge its risk without being able to short sell? And, what about the recent highs in equity indexes, nobody blaming the longs for destroying the shorts. It is all great, until policymakers make things blow up. Last being Greece blaming everybody, but itself. What’s next, no more freedom of speach?

“There’s a point in almost every financial crisis when pretty much anything anybody says about it can take on a ring of truth, because the leaders responsible for dealing with the disaster have squandered their credibility.

That’s where the Greek financial crisis stands now. What’s remarkable is how clearly this comes across simply from reading the government’s press releases, including one last week from Greece’s Ministry of Finance disputing an online article by the German magazine Der Spiegel.

The May 6 article, which said Greece had threatened to drop the euro, was “not only completely untrue but also written with incomprehensible flippancy,” the ministry said. “Such articles are not only provocative but also highly irresponsible as they undermine Greece’s efforts and those of the Eurozone and serve only the interests of speculators.” (Bloomberg)

http://www.bloomberg.com/news/2011-05-11/greeks-blaming-speculators-a-sure-sign-of-panic-jonathan-weil.html

Remember TEPCO and Fukushima. Yes, it is still alive, and those radioactive particles will be around for a while. We have written extensively over the past months regarding TEPCO and the situation in Japan. With constant false information, here comes the last blow;

“Tokyo Electric Power Co. said fuel rods are fully exposed in the No. 1 reactor at its stricken Fukushima Dai-Ichi nuclear plant, setting back the utility’s plan to resolve the crisis.

The water level is 1 meter (3.3 feet) below the base of the fuel assembly, Junichi Matsumoto, a general manager at the utility known as Tepco, told reporters at a briefing in Tokyo. Melted fuel has dropped to the bottom of the pressure vessel and is still being cooled, Matsumoto said.” (Bloomberg)

http://www.bloomberg.com/news/2011-05-12/japan-suffers-setback-at-fukushima-after-no-1-reactor-s-fuel-rods-exposed.html

Matt Taibbi is back in Grand Style, delivering another huge Goldman piece. We can definitely bet Matt is not going to Goldman Sachs for a summer job interview.

“They weren’t murderers or anything; they had merely stolen more money than most people can rationally conceive of, from their own customers, in a few blinks of an eye. But then they went one step further. They came to Washington, took an oath before Congress, and lied about it.

Thanks to an extraordinary investigative effort by a Senate subcommittee that unilaterally decided to take up the burden the criminal justice system has repeatedly refused to shoulder, we now know exactly what Goldman Sachs executives like Lloyd Blankfein and Daniel Sparks lied about. We know exactly how they and other top Goldman executives, including David Viniar and Thomas Montag, defrauded their clients. America has been waiting for a case to bring against Wall Street. Here it is, and the evidence has been gift-wrapped and left at the doorstep of federal prosecutors, evidence that doesn’t leave much doubt: Goldman Sachs should stand trial.” (Rolling Stones)

Further reading,

http://www.rollingstone.com/politics/news/the-people-vs-goldman-sachs-20110511?page=2

Just as we predicted, Geithner won’t be able to neutralize the issuance of bonds with “emergency” measures, in order not to breach the debt ceiling. As we can see below, the diminishing “slack” is now at only 14 (14294-14279,5) billion Usd, and shrinking. With the last couple of days issuance of bonds, this means debt ceiling is breached sometimes next week, when all these trades settle. The Emperor is naked, but mainstream media won’t report on the subject until next week. Until then, enjoy the fact, the world’s biggest economy is (b)reaching it’s debt ceiling as you read this, and nobody is talking about it, yet.

And here is the awaited POMO schedule. Treasury will issue 93 new fresh billion Usd in bonds over the coming weeks. Full Schedule just released. Full report follow the link;

http://www.newyorkfed.org/markets/tot_operation_schedule.html

Let us remind you of the following Table. There is only 20 billion left, before the debt ceiling is (b)reached, so it will take some rather creative off balance sheet calculations to be inside that debt ceiling.

• CME HALTS TRADING ON GAS, CRUDE OIL, HEATING OIL FUTURES
• CME TRADING HALT IN ENERGY FUTURES WILL LAST 5 MINUTES

As thetrader argued this morning in Europe, markets look rather toppy, to be diplomatic. Our views of how the charts look like (from European midday) http://www.thetrader.se/2011/05/11/chart-update-4/.

We got to projected 40 Usd in Silver, and oil also reversed. These crowded trades, by the Alpha Chasing hedge funds, are getting rather worrysome to us. With the some of the biggest hedge funds showing losses of up to 20% in a few days, we ask ourselves, what about that hedge? We can only conclude, that even smart money is now all in, waiting for Fed to print some more futures. But, what, and only what if, Fed decides to check for the real bids in the market, just like the AIG stake it is trying to sell. Any other than Algobids?

As our Flash Crash thesis develops, we will update some charts on regular basis. Silver now down 7,5% , Euro plunging 1.3%, Gold below 1500 and AudJPY 1,3%. And all those fresh out school quants sold vol on the models measuring close to close movements in SPX……

(From this morning, Lastly, the biggest risk tracker of all, Silver, has bounced back to thetrader’s projected level, 40 Usd. (http://www.thetrader.se/2011/05/08/silver-why-are-forward-rates-negative-again/)

We bounced of 100 day moving average, but have now reached some “disturbing” resistance. Let’s see action if we could get a small reversal around these levels.)

 Euro down….

…and Silver collapse part two

Some nice moves after European markets closed. Silver getting hit further, gold joining, while Usd stronger…..Risk off? Could you imagine a small flash crash here? Problem is, nobody is seeing that possibility. Charts; Oil, Silver, Gold, Euro, audjpy (carry baby) and Spx.

Yes, and let’s not forget SPX, down 10 handles….

RAJARATNAM guilty on all counts. Jail next….100 million bail, for a guy who’s net worth is 2 billion Usd. Next great job opportunity is for compliance officers, a lot of work going forward.

Here we go again, oil, silver, eur, all accelerating down….Another margin hike, and hedge funds will suffer again. Alpha chasers not understanding they all chase Beta. Judging by some of the performance hick ups from some commodities hedge funds last week, positions seem rather healthy. Welcome to som great p/l volatility.

What was that Stealth helicopter about? Stratfor shares some insight;

“Numerous media sources have reported that the stealth helicopter was a modified Blackhawk. Having said that, we have no independent confirmation as to whether or not it was a Blackhawk. Our sources are indicating that the stealth helicopter has been operational for a good four years, predominantly flying special operations missions only at night.

In looking at the design of the helicopter wreckage from the bin Laden safe house, it carries many of the characteristics that you would typically see on the stealth bomber and aircraft that is flying today. The design of the helicopter is one that is masked to reduce its radar signature as well as dampen the noise from the rotors. And it’s our understanding that the aircraft was designed for that specific purpose, meaning special operations missions to be handled at night behind enemy lines for the sole purpose of masking its approach to an attack site. From a person I talked to who has flown in one of these stealth helicopters, the helicopter has been described as amazingly quiet in the air, and the noise is much like an outdoor air conditioner next to your house in the dead of the summer.” (Stratfor)

http://www.stratfor.com/analysis/20110510-above-tearline-us-stealth-helicopter