And for another route of some more bizarre news, or maybe not so;

• You Kahn’t get a Bail out, even if you are Mr Bail Out
• EUR: Pimco’s Bill Gross on the wires

  *GREECE DEBT HOLDERS WILL HAVE TO BEAR SOME BURDEN, GROSS SAYS

  *GREECE NO. 1 CANDIDATE FOR DEFAULT IN EUROPE, BILL GROSS SAYS

and finally we get some chatter regarding all those hedged funds….not confirmed;

• BlueGold Capital Management LLP’s
  commodity hedge fund, which managed $2.3 billion at the end of
  last month, lost 26 percent in the first week of May amid a rout
  in commodities, according to two people with direct knowledge.

But it is all fine, bull is back. We suggest, load up on vol, and watch the black swans unfold.

From Reuters;

Shi’ite-ruled Iran sent a flotilla to Bahrain on Monday to show solidarity with mainly Shi’ite Muslim protesters, escalating tensions with the island kingdom that is home to the U.S. Navy’s Fifth Fleet.

It was not clear when the convoy might reach Bahrain, which has a majority Shi’ite population but is ruled by a Sunni king.

Bahrain, which has cracked down on pro-democracy protesters in recent weeks, has criticised the decision to send the flotilla and accused non-Arab Iran of interfering its affairs.

Iran’s English-language Press TV said 120 activists, including professors, students and clerics, were aboard the convoy, sent to condemn the killing of Bahraini protesters.

“The convoy will seek to get permission to get inside Bahraini waters. However, it is very unlikely that at this point in time the Bahraini government would allow this,” it said.

In an interview with Al Arabiya television, the head of Bahrain’s Information Affairs Authority, Sheikh Fawaz bin Mohammed al-Khalifa, said the move was unacceptable.

http://af.reuters.com/article/energyOilNews/idAFHOS65135220110516

BREAKING NEWS: TEPCO plans to book group net loss of over 800 bil. yen for FY 2010

Meltdown may have occurred also at Nos. 2, 3 reactors

Strauss Kahn accused of rape

Debt Ceiling in Us (B)reached today

Thetrader has written extensively on the market liquidity subject over tha past months. Today Reuters has a story worth reading. Below from Reuters;

If the great commodity selloff of 2011 shows nothing else, it is that markets are undergoing serious structural changes that need to be followed closely. Our commodities analyst John Kemp has compared the oil plunge with the May 2010 flash crash in U.S. shares, and rightfully so. Four standard deviation moves in oil futures are not normal, even if Gaussian distributions underestimate the chance of such a move. The rise of high-speed electronic trading appears to be creating imbalances between buyers and sellers in nanoseconds that lead to outsized moves. It would probably be manageable if these problems were tied to smaller markets not so correlated with the rest of the world. But in this age of highly correlated global markets, these changes matter and need to be better understood — both by market participants and regulators.

One curious outcome about the rise of algo-driven trading is the volume is not leading to better liquidity, especially in these flash crashes. Liquidity — defined as the ease with which trades can take place without causing a major price  impact (and not referring here to overall bank liquidity/funding risk) — appears to suddenly vanish in some of these big market moves, leading to massive swings.

More on the subject taht could cause the market big headache going forward.

http://blogs.reuters.com/eric-burroughs/2011/05/15/warning-signs-on-market-liquidity-risks/

The valve is empty as of now.

Today, the United States has reached the statutory debt limit. Secretary Geithner sent the following letter to Congress this morning alerting them to actions that have be taken to create additional headroom under the debt limit so that Treasury can continue funding obligations made by Congresses past and present. The Secretary declared a “debt issuance suspension period” for the Civil Service Retirement and Disability Fund, permitting Treasury to redeem a portion of existing Treasury securities held by that fund as investments and suspend issuance of new Treasury securities to that fund as investments. He also suspended the daily reinvestment of Treasury securities held as investments by the Government Securities Investment Fund of the Federal Employees’ Retirement System Thrift Savings Plan. For more information on these measures, please read this FAQ.

If you forgot about the debt ceiling. It is here……

Was the financial crisis possible due to lack of knowledge? Great article by de Soto.

During the second half of the 19th century, the world’s biggest economies endured a series of brutal recessions. At the time, most forms of reliable economic knowledge were organized within feudal, patrimonial, and tribal relationships. If you wanted to know who owned land or owed a debt, it was a fact recorded locally—and most likely shielded from outsiders. At the same time, the world was expanding. Travel between cities and countries became more common and global trade increased. The result was a huge rift between the old, fragmented social order and the needs of a rising, globalizing market economy.

The importance of economic facts may not be obvious to Americans. “What does the fish know about the water in which it swims?” asked Albert Einstein. But it’s easy to grasp from the perspective of the developing and former communist countries where I live and work. In these countries, most of our assets and relationships are in the informal sector, outside the legal economy. Because they’re not recorded in public memory systems, they cannot be written up as facts and are, in effect, invisible. All we have are shadow markets.

Mainly, though, it’s a political challenge. Politicians must raise the financial crisis to commanding heights, where the entrenched institutional problems of a failing order can be addressed. Markets were never intended to be anarchic: It has always been government’s role to police standards, weights and measures, and records, and not condone legalized sleight of hand in the shadows of the informal economy. To understand and repair one of mankind’s greatest achievements—the creation of economic facts through public memory—is the stuff of nation-builders.

http://www.businessweek.com/magazine/content/11_19/b4227060634112.htm

Just a reminder. As we read about the now multiple sex accusations of Mr Strauss, the economy in Europe is not taking a pause. Athens index is breaking multi year lows. Thanks Strauss.

Socialist party official says her daughter was left traumatised after alleged attack by Strauss-Kahn in 2002

A local official of the Socialist party claimed that Strauss-Kahn had attacked her daughter, who is goddaughter to Strauss-Kahn’s second wife, in 2002.

Tristane Banon was in her 20s and writing a book when she approached Strauss-Kahn for an interview in 2002. In a TV programme in 2007, in which Strauss-Kahn’s name had been bleeped out, Banon allegedly described him as a “rutting chimpanzee” and described how she was forced to fight him off. “It finished badly … very violently … I kicked him,” Banon said. “When we were fighting, I mentioned the word ‘rape’ to make him afraid, but it didn’t have any effect. I managed to get out.”

Banon consulted a lawyer, but did not press charges. “I didn’t want to be known to the end of my days as the girl who had a problem with the politician.” (Guardian)

http://www.guardian.co.uk/world/2011/may/16/dominique-strauss-kahn-tristane-banon

Will more women follow the above? Mr Strauss’ future just got redirected this weekend.

Below the  Mega Bears, inflation adjusted. Sometimes nominal values give us a slightly screwed view of the “truth”. Courtesey dshort.