The Central Banks Are Losing Control Of The Financial Markets

Every great con game eventually comes to an end. 

For years, global central banks have been manipulating the financial marketplace with their monetary voodoo.  Somehow, they have convinced investors around the world to invest tens of trillions of dollars into bonds that provide a return that is way under the real rate of inflation.  For quite a long time I have been insisting that this is highly irrational.  Why would any rational investor want to put money into investments that will make them poorer on a purchasing power basis in the long run?  And when any central bank initiates a policy of “quantitative easing”, any rational investor should immediately start demanding a higher rate of return on the bonds of that nation.  Creating money out of thin air and pumping into the financial system devalues all existing money and creates inflation.  Therefore, rational investors should respond by driving interest rates up.  Instead, central banks told everyone that interest rates would be forced down, and that is precisely what happened.  But now things have shifted.  Investors are starting to behave more rationally and the central banks are starting to lose control of the financial markets, and that is a very bad sign for the rest of 2015.

And of course it isn’t just bond yields that are out of control.  No matter how hard they try, financial authorities in Europe can’t seem to fix the problems in Greece, and the problems in Italy, Spain, Portugal and France just continue to escalate as well.  This week, Greece became the very first nation to miss a payment to the IMF since the 1980s.  We’ll discuss that some more in a moment.

Over in Asia, stocks are fluctuating very wildly.  The Shanghai Composite Index plunged by 5.4 percent on Thursday before regaining all of those losses and actually closing with a gain of 0.8 percent.  When we see this kind of extreme volatility, it is a very bad sign.  It is during times of extreme volatility that markets crash.

Remember, stocks generally tend to go up during calm markets, and they generally tend to go down during choppy markets.  So most investors do not want to see lots of volatility.  Unfortunately, that is precisely what we are witnessing all over the world right now.  The following comes from the Wall Street Journal…

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The Real Reason Why There Is No Bond Market Liquidity Left

Back in the summer of 2013, we first commented on what we called "Phantom Markets" - displayed quotes and prices, in not only equities, FX and commodities but increasingly in government bonds, without any underlying liquidity. The problem, which we first addressed in 2012, had gotten so bad, even the all important Treasury Borrowing Advisory Committee to the US Treasury had just sounded an alarm on the topic.

Since then we have sat back and watched as our prediction was borne out, as bond market liquidity slowly devolved then sharply and dramatically collapsed recently to a level that is so unprecedented, not even we though possible, leading first to the October 15 bond flash crash and countless "VaR shock" events ever since.

And while we urge those few carbon-based life forms who still trade for a living to catch up on our numerous posts on market "liquidity" and lack thereof, here is a quick and dirty primer on just why there is virtually no bond market left, courtesy of the man who, weeks ahead of the Lehman collapse when nobody had any idea what is going on, laid out precisely what happens in 2008 and onward in his seminal note "Are the Brokers Broken?", Citigroup's Matt King.

Here is the gist of his recent note on the liquidity paradox which is a must read for everyone who trades anything and certainly bonds, while for the TL/DR crowd here is the 5 word summary: blame central bankers and HFTs.
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The more liquidity central banks add, the less there is in markets

• Water, water, everywhere — On many metrics, liquidity across markets seems abundant. Bid-offers are tight, if not always  back to pre-crisis levels. Notional traded volumes in credit and rates have reached all-time highs. The rise of e-trading is helping to match buyers and sellers of securities more efficiently than ever before.
• Nor any drop to drink — And yet almost every institutional investor, in almost every market, seems worried about liquidity. Even if it’s here today, they fear it will be gone tomorrow. They say that e-trading contributes much volume, but little depth for those who need to trade in size. The growing frequency of “flash crashes” and “air pockets” – often without obvious cause – adds weight to their fears.
• Yes, street regulation has played a role — The most frequently cited explanation is that increased regulation has driven up the cost of balance sheet and reduced the street’s appetite for risk, and hence ability to act as a warehouser between  buyers and sellers.
• But so too have the central banks — And yet this fails to explain why even markets like FX and equities, which do not consume dealers’ balance sheets, have been subject to problems. We argue that in addition to regulations, central banks’ distortion of markets has reduced the heterogeneity of the investor base, forcing them to be the “same way round” over the past four years to a greater extent than ever previously. This creates markets which trend strongly, but are then prone to sudden corrections. It also leaves investors more focused on central banks than ever before – and is liable to make it impossible for the central banks to make a smooth exit.

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Investors Start To Panic As A Global Bond Market Crash Begins

Is the financial collapse that so many are expecting in the second half of 2015 already starting?  Many have believed that we would see bonds crash before the stock market crashes, and that is precisely what is happening right now.  Since mid-April, the yield on 10 year German bonds has shot up from 0.05 percent to 0.89 percent.  But much of that jump has come this week.  Just a couple of days ago, the yield on 10 year German bonds was sitting at just 0.54 percent.  And it isn’t just Germany – bond yields are going crazy all over Europe.  So far, it is being estimated that global investors have lost more than half a trillion dollars, and there is much more room for these bonds to fall.  In the end, the overall losses could be well into the trillions even before the stock market collapses.

I know that for most average Americans, talk about “bond yields” is rather boring.  But it is important to understand these things, because we could very well be looking at the beginning of the next great financial crisis.  The following is an excerpt from an article by Wolf Richter in which he details the unprecedented carnage that we have witnessed over the past few days…

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2 Things That Are Happening Right Now That Have Never Happened Outside Of A Recession

If we are not heading into a recession, why does our economy continue to act as if that is precisely what is happening?  As you will see below, we learned this week that factory orders have declined year over year for six months in a row.  That is something that has never happened outside of a time of recession.  We have also seen new orders for consumer goods fall dramatically.  In fact, the only time we have seen a more dramatic decline in that number was during the last recession.  And when you add these two items to what I have written about previously, the overall economic picture becomes even more disturbing.  Corporate profits have fallen for two quarters in a row, our exports fell by 7.6 percent during the first quarter of 2015, and U.S. GDP contracted by 0.7 percent during Q1.  Even though Barack Obama and the mainstream media are willingly ignoring them, the truth is that these numbers are absolutely screaming that we are going into a new recession.

Sometimes, a picture is worth more than a thousand words, and I believe that is certainly the case with the chart that I have posted below.  It comes from Zero Hedge, and it shows that factory orders have declined year over year for six months in a row.  The only times when this has ever happened before have been when the U.S. economy has been in recession…

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Last Two Times This Happened, Stocks Crashed

Global growth is languishing, corporate revenues too, but CEOs are trying to show they can grow their companies the quick and easy way. Cheap debt is sloshing through the system while yield-hungry investors offer their first-born to earn 5%. And this cheap debt along with vertigo-inducing stock valuations have created the largest M&A boom the US has ever seen, with May setting an all-time record.

There may be a sense of desperation among CEOs as the Fed’s cacophony evokes interest rate increases, the first since July 2006. So companies are issuing all kinds of cheap debt while they still can. Bond issuance has totaled over $100 billion per month in the US for the past four months, the longest such streak ever, according to Bank of America Merrill Lynch.

And that record issuance doesn’t account for the booming “reverse Yankee issuance,” where US corporations take advantage of the negative-yield absurdity Draghi has concocted in Europe and issue euro-denominated bonds into European markets.

“Issuers should realize that the window to lock in low long-term yields for any purpose is closing,” Hans Mikkelsen, a senior strategist at BofA, wrote in a note, according to the Financial Times. And so in May, M&A deals hit an all-time record of $243 billion.

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This Is How Little It Cost Goldman To Bribe America's Senators To Fast Track Obama's TPP Bill

It took just a few days after the stunning defeat of Obama's attempt to fast-track the Trans Pacific Partnership bill in the Senate at the hands of his own Democratic party, before everything returned back to normal and the TPP fast-track was promptly passed. Why? The simple answer: money. Or rather, even more money.

Because while the actual contents of the TPP may be highly confidential, and their public dissemination may lead to prison time for the "perpetrator" of such illegal transparency, we now know just how much it cost corporations to bribe the Senate to do the bidding of the "people." In the Supreme Court sense, of course, in which corporations are "people."

According to an analysis by the Guardian, fast-tracking the TPP, meaning its passage through Congress without having its contents available for debate or amendments, was only possible after lots of corporate money exchanged hands with senators. The US Senate passed Trade Promotion Authority (TPA) – the fast-tracking bill – by a 65-33 margin on 14 May. Last Thursday, the Senate voted 62-38 to bring the debate on TPA to a close.

Those impressive majorities follow months of behind-the-scenes wheeling and dealing by the world’s most well-heeled multinational corporations with just a handful of holdouts.

Using data from the Federal Election Commission, the chart below (based on data from the following spreadsheet) shows all donations that corporate members of the US Business Coalition for TPP made to US Senate campaigns between January and March 2015, when fast-tracking the TPP was being debated in the Senate.

The result: it took a paltry $1.15 million in bribes to get everyone in the Senate on the same page. And the biggest shocker: with a total of $195,550 in "donations", or more than double the second largest donor UPS, was none other than Goldman Sachs.

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The Fed’s Dereliction of Duty and False Capital Flows Morality

As a result of the US’s push over decades to make the world safe for America’s investment bankers, capital flows across borders easily, and some top experts contend, too easily. Carmen Reinhart and Ken Rogoff, in their work on 800 years of financial crises, found that high levels of international capital flows were strongly correlated with more frequent and severe financial crises. In 2011, Claudio Borio and Piti Disyatat published an extremely important analysis of the crisis which shredded the Bernanke “global savings glut” thesis. It instead found that the culprit was excessive financial elasticity, which basically means deregulation and the resulting high level of cross-border capital flows.

Yet the Fed tries to deny the implications of being the steward of the world’s reserve currency in a world of extremely nimble investors who have large pools of funds at their disposal. ZIRP and QE have made the US a major funder of a global carry trade. Remember when global market activity could be summed up by “risk on-risk off” reactions to news? One of the big beneficiaries of “risk on” trades were emerging economies, particularly ones with relatively high domestic interest rates. And when investors got spooked, they’d be the canaries in the coalmine, suffering the most when the tide of money sloshed back to seemingly safer havens.

The Fed’s response to considerable unhappiness of central bankers in the countries that are exposed to the moods of hot capitalists has been to try to deny that the Fed has anything to do with these shifts, or to try to blame the other countries, as in it’s their fault that the money left.

Former IMF Chief economist, now India’s central bank governor Raghuram Rajan took issue with the Fed’s efforts to shift blame in a 2014 Bloomberg interview:

Emerging markets were hurt both by the easy money which flowed into their economies and made it easier to forget about the necessary reforms, the necessary fiscal actions that had to be taken, on top of the fact that emerging markets tried to support global growth by huge fiscal and monetary stimulus across the emerging markets. This easy money, which overlaid already strong fiscal stimulus from these countries. The reason emerging markets were unhappy with this easy money is “This is going to make it difficult for us to do the necessary adjustment.” And the industrial countries at this point said, “What do you want us to do, we have weak economies, we’ll do whatever we need to do. Let the money flow.” 

Now when they are withdrawing that money, they are saying, “You complained when it went in. Why should you complain when it went out?” And we complain for the same reason when it goes out as when it goes in: it distorts our economies, and the money coming in made it more difficult for us to do the adjustment we need for the sustainable growth and to prepare for the money going out.

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Crony Capitalism At Work - Boeing Threatens To Leave US If Ex-Im Subsidy Yanked

When has crony capitalism really gotten out of control? How about when a major U.S. corporation (a huge defense contractor, no less) is publicly threatening government officials to leave the country if the federal government doesn’t continue to boost their profits through government handouts:

Boeing is stepping up pressure on opponents of the US Export-Import Bank with threats to shift manufacturing abroad if the agency that finances purchases by foreign customers is killed off next month.

The threats come as a new push is being made in Congress to find ways of wresting reauthorisation of the bank from a committee controlled by one of the agency’s fiercest opponents.

Scott Scherer, Boeing’s head of regulatory strategy at Boeing Capital, said the aerospace and defense group would “not sit idly by” if the ExIm Bank’s mandate was not renewed by the end of June. “Boeing is not going to let itself be hurt by the lack of an ExIm Bank,” he said in an interview with the Financial Times. “If it means sourcing … to other countries who will support us we may have to look at that. Other countries have more aggressive export policies. We will find an alternative.”

First, let me state the obvious: This basically sounds like blackmail to me, and I don’t think lawmakers should look at this kind of behavior favorably.

Second, it’s time for Boeing executives to understand that it’s not the role of the federal government to guarantee that they can sell as many planes as possible — they’ve benefited from the U.S.’s relatively free-market system; they should have to live with it.

And finally, I don’t think Boeing’s threat is very credible. Will Boeing really pick up its factories and move abroad if Ex-Im isn’t reauthorized? Is the possibility other governments might subsidize it really worth the transition costs and the risks of losing billions in defense contracts?

Thankfully, Jeb Hensarling, chairman of the House committee with jurisdiction over Ex-Im, called Boeing’s bluff:

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"Graccident" Will Trigger The Demise Of The ECB And The World's Toxic Regime Of Keynesian Central Banking

It is not surprising that in a few short months Yanis Varoufakis has proven himself to be a thoroughgoing Keynesian statist. After all, what would you expect from an economics PhD who co-authored books with Jamie Galbraith? The latter never saw an economic malady that could not be cured with bigger deficits, prodigious printing press “stimulus” and ever more intrusive state intervention and redistribution.

In what is apparently a last desperate game theory ploy, however, Varoufakis has done his countrymen, Europe and the world a favor. By informing his Brussels paymasters that they must continue to subsidize his bankrupt Greek state because it is the only way to preserve the European Project and vouchsafe the Euro, the Greek Finance minister blurted out the truth of the matter, albeit perhaps not intentionally:

“It would be a disaster for everyone involved, it would be a disaster primarily for the Greek social economy, but it would also be the beginning of the end for the common currency project in Europe,” he said.

“Whatever some analysts are saying about firewalls, these firewalls won’t last long once you put and infuse into people’s minds, into investors’ minds, that the eurozone is not indivisible,” he added.

He sure got that right. People who believe in democracy and economic liberty anywhere in the world should pray for a Graccident. During the next several weeks, when $1.8 billion in IMF loans come due that Greece cannot possibly pay, there will occur a glorious moment of irony for Syriza.

If it holds firm to its leftwing statist agenda and takes Greek democracy back from the clutches of the EU/IMF apparatchiks, Syriza will strike a blow for democracy and capitalism in one great historic volte-face. That is to say, defiance of the Germans and the troika would amount to a modern monetary Marathon; it would trigger a thundering collapse of the ECB and the cancerous superstate regime built upon it in Frankfurt and Brussels—–and, along with it, cast a mortal blow upon the worldwide Keynesian central banking regime, too.

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Central Bank Caught Lying

Bank of England officials are secretly researching the financial shocks that could hit Britain if there is a vote to leave the European Union in the forthcoming referendum.

The Bank blew its cover on Friday when it accidentally emailed details of the project – including how the bank intended to fend off any inquiries about its work – direct to the Guardian.

According to the confidential email, the press and most staff in Threadneedle Street must be kept in the dark about the work underway, which has been dubbed Project Bookend.

It spells out that if anyone asks about the project, the taskforce must say the investigation has nothing to do with the referendum, saying only that staff are involved in examining "a broad range of European economic issues" that concern the Bank.

The revelation is likely to embarrass the bank governor, Mark Carney, who has overhauled the central bank's operations and promised greater transparency over its decision-making.

MPs are now likely to ask whether the Bank intended to inform parliament that a major review of Britain's prospects outside the EU was being undertaken by the institution that acts as the UK's main financial regulator. – The Guardian, May 22, 2015

We are not at all surprised that the Bank of England or any other central bank would lie about its activities. Having their own documents prove they are lying is unusual, however.

This might have been a major embarrassment for the BOE, but the financial media either missed the point or chose not to highlight it. A Bloomberg report on the same leak didn't even mention BOE's plan to keep media in the dark. The Wall Street Journal  story wasn't much better.

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It Is Mathematically Impossible To Pay Off All Of Our Debt

Did you know that if you took every single penny away from everyone in the United States that it still would not be enough to pay off the national debt?  Today, the debt of the federal government exceeds $145,000 per household, and it is getting worse with each passing year.  Many believe that if we paid it off a little bit at a time that we could eventually pay it all off, but as you will see below that isn’t going to work either.  It has been projected that “mandatory” federal spending on programs such as Social Security, Medicaid and Medicare plus interest on the national debt will exceed total federal revenue by the year 2025.  That is before a single dollar is spent on the U.S. military, homeland security, paying federal workers or building any roads and bridges.  So no, we aren’t going to be “paying down” our debt any time in the foreseeable future.  And of course it isn’t just our 18 trillion dollar national debt that we need to be concerned about.  Overall, Americans are a total of 58 trillion dollars in debt.  35 years ago, that number was sitting at just 4.3 trillion dollars.  There is no way in the world that all of that debt can ever be repaid.  The only thing that we can hope for now is for this debt bubble to last for as long as possible before it finally explodes.

It shocks many people to learn that our debt is far larger than the total amount of money in existence.  So let’s take a few moments and go through some of the numbers.

When most people think of “money”, they think of coins, paper money and checking accounts.  All of those are contained in one of the most basic measures of money known as M1.  The following definition of M1 comes from Investopedia…

A measure of the money supply that includes all physical money, such as coins and currency, as well as demand deposits, checking accounts and Negotiable Order of Withdrawal (NOW) accounts. M1 measures the most liquid components of the money supply, as it contains cash and assets that can quickly be converted to currency.

As you can see from the chart below, M1 has really grown in recent years thanks to rampant quantitative easing by the Federal Reserve.  At the moment it is sitting just shy of 3 trillion dollars…

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Welcome To The Oligarch Recovery: 82% Of US Construction Is Luxury Units

Here is good news for the plutocrat who wants to try out Manhattan’s ritziest neighborhoods before taking the multimillion-dollar plunge. The market for super-high-end rentals is booming, with plenty of enticing options for tenants of every taste.

In all, 82 apartments renting for at least $50,000 a month were listed on StreetEasy during the first three months of the year, more than triple the number listed in the first quarter of 2008. At lower thresholds, luxury listings are also on the rise. Apartments renting for more than $25,000 a month made up 0.95 percent of total inventory in the first quarter of 2015, up from 0.46 percent in the first quarter of 2008…

Of 370,000 multifamily rental units completed from 2012 to 2014 in 54 U.S. metropolitan areas, 82% were in the luxury category, according to CoStar Group Inc., a real-estate research firm. The firm defines luxury buildings as those that command rents in the top 20% of the market. In some places, including Denver, Tampa, Baltimore and Phoenix, virtually all new apartment construction has been targeted to high-end renters. In Atlanta, about 95% of new apartments have been in the luxury category.

The oligarch recovery marches forward with reckless enthusiasm, despite extremely disturbing underlying trends which are all but guaranteed to result in significant societal unrest in the years ahead. The U.S. economy, and indeed the global economy, is much more similar to pre-1789 France than any other historical period I can think of.

You have a handful of super wealthy people, completely disconnected from any sense of reality, running around telling governments what to do. All the same characters who created the global financial crisis remain in charge of the world’s most powerful institutions, and continue to benefit handsomely from its aftermath. While claiming to have “saved the global economy,” the only things they really saved were their own positions of power and wealth. The only thing that was saved, was the very thing that should have been completely discarded, the global status quo. 

The results of the global bailouts and backstops are now clear for everyone to witness. The entire global economy is one gigantic ongoing crime scene. It’s an economy in which fraud is rewarded and never punished. An economy where the rich, powerful and connected concoct unimaginably lucrative crony deals knowing the law doesn’t apply to them. To hedge their corruption, they feed scraps to the poor, not out of altruism, but so that the growing underclasses have just enough not to rebel.

Today, I want to highlight two related articles to clearly demonstrate just how completely screwed up the U.S. economy really is. The first one is courtesy of Bloomberg, and focuses on my hometown of NYC. The best decision I ever made in my life was leaving that place, and it’s gotten much, much more narcissistic and financialized since I left (for the story of why I left, see: The Biggest Trade of My Life). The second article is from the Wall Street Journal, and it highlights the extremely troubling statistic that 82% of multifamily rental units completed from 2012 to 2014 in 54 U.S. metropolitan areas were luxury units.

First, from Bloomberg:

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Greece Says That It Will Default On June 5th, And Moody’s Warns Of A ‘Deposit Freeze’

The Greek government says that a “moment of truth” is coming on June 5th.  Either their lenders agree to give them more money by that date, or Greece will default on a 300 million euro loan payment to the IMF.  Of course it won’t technically be a “default” according to IMF rules for another 30 days after that, but without a doubt news that Greece cannot pay will send shockwaves throughout the financial world.  At that point, those holding Greek bonds will start to panic as they realize that they might not get paid as well.  All over Europe, there are major banks that are holding large amounts of Greek debt and derivatives that are related to the performance of Greek debt.  If something is not done to avert disaster at the last moment, a default by Greece could be the spark that sets off a major European financial crisis this summer.

As I discussed the other day, neither the EU nor the IMF have given any money to Greece since August 2014.  So now the Greek government is just about out of money, and without any new loans they will not be able to pay back the old loans that are coming due.  In fact, things are so bad at this point that the Greek government is openly warning that it will default on June 5th…

Greece cannot make an upcoming payment to the International Monetary Fund on June 5 unless foreign lenders disburse more aid, a senior ruling party lawmaker said on Wednesday, the latest warning from Athens it is on the verge of default. 

Prime Minister Alexis Tsipras’s leftist government says it hopes to reach a cash-for-reforms deal in days, although European Union and IMF lenders are more pessimistic and say talks are moving too slowly for that.

Of course this is all part of a very high stakes chess game.  The Greeks believe that the Germans will back down when faced with the prospect of a full blown European financial crisis, and the Germans believe that the Greeks will eventually be feeling so much pain that they will be forced to give in to their demands.

So with each day we get closer and closer to the edge, and the Greeks are trying to do their best to let everyone know that they are not bluffing.  Just today, a spokesperson for the Greek government came out and declared that unless there is a deal by June 5th, the IMF “won’t get any money”…

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Are They About To Confiscate Money From Bank Accounts In Greece Just Like They Did In Cyprus?

Do you remember what happened when Cyprus decided to defy the EU?  In the end, the entire banking system of the nation collapsed and money was confiscated from private bank accounts.  Well, the nation of Greece is now approaching a similar endgame.  At this point, the Greek government has not received any money from the EU or the IMF since August 2014.  As you can imagine, that means that Greek government accounts are just about bone dry.  The new Greek government continues to insist that it will never “violate its anti-austerity mandate”, but the screws are tightening.  Right now the unemployment rate in Greece is over 25 percent and the banking system is on the verge of collapse.  It isn’t going to take much to set off a panic, and when it does happen there are already rumors that the EU plans to confiscate money from private bank accounts just like they did in Cyprus.

Throughout this entire multi-year crisis, things have never been this dire for the Greek government.  In fact, Greece came thisclose to defaulting on a loan payment to the IMF back on May 12th.  And with essentially no money remaining at all, the Greek government is supposed to make several large payments in the weeks ahead…

Athens barely made its latest payment (May 12) to the International Monetary Fund (IMF), and it managed to do so only when the government discovered that it could use a reserve account it wasn’t aware of, according to the Greek media. 

Kathimerini, a Greek daily newspaper, reports that Prime Minister Alexis Tsipras wrote to the IMF’s Christine Lagarde warning that Greece would not be able to make that May payment, worth €762 million ($871 million, £554.2 million). 

Pension and civil-servant pay packets are due at the end of the month, and based on this news Athens may struggle to pay them. Even if it does manage that, on June 5 the country owes another €305 million to the IMF. 

In the two weeks following June 5 there are another three payments, bringing the June total to the IMF to over €1.5 billion.

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Greece Cornered as IMF and ECB Refuse to Relent

Even though Greece has looked to be on the verge running out of cash since late March, the government has managed to extend its own sell-by date by deferring payments to government suppliers, finding and emptying every pocket of funds it could fund, and most recently, using a special drawing rights account to pay the IMF. This is tantamount to the sort of behavior that Yanis Varoufakis decried early in the negotiations, of the creditors’ extend and pretend behavior being tantamount to using one’s credit card to pay the mortgage.

But it increasingly looks like a default is nigh. Varoufakis, who in the past has been reassuring or at least non-commital about Greece’s financial condition, said the government had only about two weeks of funding left as of the IMF payment finesse last week. The IMF was less precise as to timing, but a leaked bureaucratically measured memo dated May 14 stated the obvious: that there is no way Greece can meet its obligations coming due between June and August unless they come to a deal with the creditors.

Even as Greece is becoming visibly more desperate, so far, its “partners” are not acting as if they are alarmed by the prospect of default, as in scrambling to find ways to finesse Syriza’s red line or extend the negotiation timetable. Ekathimerini stated on Sunday that Alex Tsipras sent a letter to IMF managing director Christine Lagarde on May 8 stating that Greece would not be able to make its May 12 IMF payment, and also sent the letter to the EU’s Jean-Claude Juncker and the Mario Draghi of the ECb. Tsipras also reportedly called US Treasury Secretary Jack Lew with the same information. Yet the threat of an imminent default did not lead to a breakthrough (as in a concession) from the creditors in the technical-leval talks over the weekend, to the Eurogroup relenting on its existing plan to make no decision (as in not authorize) regardling a release of funds at its May 11 meeting. or to the ECB letting up on its government funding choke chain. As the Telegraph pointed out:

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