Deleveraging and austerity is easy on a theoretical level. Practical aspects are somewhat different. Meantime, Spain just finished it’s roadshow of buying cheap villas in Spain. They forget to mention they will become cheaper. http://www.thetrader.se/2011/05/10/spains-buy-a-villa-roadshow/

Don’t forget important Sunday coming up for Spain. From FT;

The rapid growth of “hidden” public debt in Spain is likely to be revealed by incoming regional and local administrations to be elected on Sunday, damaging Spain’s credibility in the bond markets, according to a report.

“It is clear that in some or even many regional governments the official accounts do not reflect the truth,” says the research by Freemarket Corporate Intelligence, a consulting firm run by Lorenzo Bernaldo de Quirós, an economist critical of Spain’s devolved system of government. (FT)

http://www.ft.com/cms/s/0/6e89358c-7fee-11e0-b018-00144feabdc0.html#ixzz1McXTtOIx

Below is hedge fund giant Paulson’s last disclosures. The fund is swelling further, and now close to 35 bill Usd. One of the new stocks in his holdings is HP that didn’t behave well in after hours trading last night. Let’s see at what point, Alpha becomes impossible from Mr Paulson.

When Alpha goes Beta…..

From top of the world, to Prison in less than 48 hours, but Strauss is still head of the IMF….

International Monetary Fund chief Dominique Strauss-Kahn, accused of sexually assaulting and attempting to rape a hotel housekeeper, is being held without bail at New York’s Rikers Island jail complex while awaiting his next court appearance on May 20. (Bloomberg)

http://www.bloomberg.com/news/2011-05-16/imf-chief-strauss-kahn-ordered-held-without-bail-on-sex-assault-accusation.html

Celente goes “calm” aggressive. Must watch video;

http://www.youtube.com/watch?v=O3nAVN2UhIs&feature=player_detailpage

Stock in Hewlett-Packard Co. dropped Monday evening after the tech company’s chief reportedly warned of a “tough” current quarter. H-P shares slumped 4.8% to $37.90 in heavy volume after Bloomberg News ran a story citing a memo from H-P’s Chief Executive Leo Apotheker that warned of “another tough quarter” for the high-tech firm. A representative for H-P told MarketWatch the company would have no comment on the report. (marketwatch)

Now, predictably, the hostage-takers are back: blackmail worked well last December, so why not try it again? This time House Republicans say they will refuse to raise the debt ceiling — a step that could inflict major economic damage — unless Mr. Obama agrees to large spending cuts, even as they rule out any tax increase whatsoever. And the question becomes what, if anything, will get the president to say no. (NYT)

http://www.nytimes.com/2011/05/16/opinion/16krugman.html?_r=1&hp

Below is a chart where/how Treasury can find some extra money. Everything is possible, but one understands the logic behind PIMCO’s averison to Us treasuries. Source, Morgan Stanley research.

A somewhat old post, but a good reminder, as we are to breach the debt ceiling, once again….

The coming debt ceiling battle is the topic du jour in Washington right now. Republicans argue that simply raising the ceiling over and over again is an unsustainable policy, so they’re demanding budget cuts. Many democrats agree that the U.S. has a deficit problem, but they stress the necessity of raising the ceiling promptly, to prevent default or problems funding other U.S. obligations. When assessing the need for fiscal reform, it helps to look back at the past.

http://www.theatlantic.com/business/archive/2011/04/the-us-debt-ceiling-a-historical-look/238061/

Quick intraday update of the groupthink crowded trades premium.Oil is loosing steam, -2,5% and Silver -3,5%. If we get these two a little lower, we will be facing the same flash crash we experienced not too long ago, although majority have forgotten about it.