John Hussman - The Optimist...

The Results and Words of a Meeting of Finance Ministers and Central Bank Governors

As German Stocks Make Big New Lows…German bonds are NOT making new highs...

In a sign of what seems to also be a similar pattern in the US bond market but to a less extreme…bonds appear to be being liquiditated to raise cash.

Cyprus NOT fixed and NOT gone...

Exiting the EURO, focusing on their own currency, raising cash and focusing on the shambles that is left of their economy is what is required now.

Plan for new Cyprus vote casts uncertainty on bailout 

THE €10 billion aid deal to save Cyprus from bankruptcy has been thrown into fresh uncertainty with news that the island’s fractious parliament will vote on the final package. 

The surprise vote has only just been scheduled, and early signs are that nearly half the members of the 56-seat parliament may oppose the bailout, seen as vital to keep Cyprus in the euro zone. 

The Greens Party said yesterday its sole parliamentarian would vote to reject the deal, becoming the first party to announce its intentions. 

However, the Communist AKEL and Socialist EDEK parties, which together have 24 seats, have been vocal in their opposition to the bailout, and are seen as likely to vote against, although there is some chance they may abstain instead 

"We've fought for freedom, we've fought to maintain the Cypriot Republic," Greens MP George Perdikis said in statement. 

"It is, in my opinion, a crime and wrong to deliver Cyprus into the hands of the troika and allow it to become a colony," he said, referring to the country's European Union, European Central Bank and International Monetary Fund lenders. 

The parliament shocked Europe by voting unanimously in March against an initial bailout plan which featured controversial demands that bank depositors including small savers should have funds seized to pay towards the cost. 

The final version of the bailout agreed with the European Union and International Monetary Fund, forced massive losses on big depositors in the island's two major commercial banks, triggering economic turmoil likely to sink the country deeper into recession. 

The deal, which still requires ratification by parliaments in some EU member states, must also be put to Cyprus's parliament for a vote - a previously unscheduled plan - according to Attorney general, Petros Clerides. 

"Whoever is prepared to vote against the loan agreement should at the same time propose where this €10 billion will be found," government spokesman Christos Stylianides told state radio yesterday. 

“They should also propose how we would deal with issues such as paying wages and pensions, and how we would deal with the international uproar caused by a possible rejection of the loan agreement," he said. 

The bailout agreement was expected to be put to the assembly at the end of the month, once it has been approved by the cabinet, parliament's acting permanent secretary, Socrates Socratous, told Reuters yesterday. 

Ruling DISY, and coalition partner DIKO, even if their parliamentary votes are combined, will fall short of a majority. 

"It's time to face this critical situation for the salvation of our country and everyone needs to take responsibility," said DISY’s Lefteris Christoforou.

On the charts from last night…if its playing out “We are Here”...

Waterfall could be about to start spreading...

For comparison let look at what recently happened during trading hours for gold:

As a symbol of the power of this move and it NOT being close to over…the below kind of remarks are most definately not the kind that end a horrendous 20+% decline…

Farage vs BaRUFFO...

BURNanke has tried to do this with a Boeing 747 EL Super Cargo loader...

US 10 Year up only .13% - a HUGE underperformance…BURNanke forced exit coming?

I will post charts later, but it appears that the only thing BURNnake feared the most may be occuring…the unwind of public trading and banking leverage is so great that even the lowest risk assets, namely US treasuries are being liquidated to cover obligations…its even worse in Germany as the 10 years over there is under performing even more. This makes it clear, that at some point soon, whether BURNank and DRUGhi like it, liquidations will necessitate higher interest rates which will facilitate more liquidations...

Why were margins increased on Equity futures? hmmm...

Are debit balance margin calls coming for Equity futures traders now too?

Let me take a stab at it. First, consider that the activity in Gold, Silver and Commodities has put many futures accounts in debit balances. That means that the accounts now owe the broker money and the broker is responsible for the loss and must proceed with collection efforts. This is what happens when a market is so fast that margin calls can not keep up with margin calls. We currently have a state in the equities futures where people are more leveraged than normal to put it lightly and brokers have taken losses on accounts which now have debit balances. It is usual for the exchanges to lower margin requirements at times like these for equities allowing the maximum number of people to trade the maximum number of contracts generally to the long side. It is indeed curious that ICE and CME are making adjustments to margin before there has really not been much equity volatility, This is in direct contrast to what they have done nearly every time equity futures are making new highs. In fact, it has been a pretty reliable indicator that when equities are making substantial new highs over the last years and margin rates are reduced that markets will take a significant fall. It happened before flashcrash, before the 2011 27% drop and nearly every other time…but now in total reversal of pattern the exchanges have raised margin requirements…and something smells in Denmark... Spain,Italy,Portugal,Greece, Ireland, Cyprus, Slovania, Hungary, Lithuania and France…too

Russell 2000 Futures…at an inflection point...

Long term Gold versus the DOW

I included the DOW for perspective only and to demonstrate that during the current reflation/deflation era, shaded in blue, risk assets more or less traded together. Prior to that Gold was more of a fear instrument and traded counter to the dow. Thanks to GreenSPIN and BURNanke and company there are no hedges anymore unless they rely on unsound counterparty risks ultimately at JPM or GS.

For the highest resolution click here

ICE Increases Margin Requirements effective 4/18

Many Currency Pairs Change significantly
Russell 2000 goes to $4,800
Russell 1000 goes to $2,100

https://www.theice.com/publicdocs/futures_us/exchange_notices/04162013NewMarginRequirements.pdf

Its starting to feel like 2008 all over again...

Will there ever be a time that we see BURNanke, DRUGhi and GreenSPIN in front of a tribunal...

I doubt it…but its good to hear that some people are thinking about it…

Gold, Currencies and Equities...

BarRUFFO state of the reunion rebuttal...