Second Verse Same as the First

The European financial market action is getting quite predictable every morning, as we have seen the last several days and actually weeks with only a few exceptions, the ECB's (European Central Bank) deposit facility has ramped up to a new record at $486 billion on deposit, since December 21st when the LTRO was carried out, all of the LTRO money and then some has made its way right back to the ECB as the banks seek safe harbor.

Q3 Euro growth has been reduced to .1% and it is likely that recession started in the Euro-zone during Q4 2011.

After a slight recovery in Hungarian metrics as they agreed to conditions which could re-start the IMF deal process, their currency the forint, dropped again overnight as the EU made clear that funding could be withheld if they don't make the legislative reforms the EU is seeking (in the broadest stroke, this essentially is Hungary trying to hold on to the last shred of sovereignty while the EU is seemingly using monetary policy to do what bullets and bombs couldn't do in 2 world wars).

The Euro is trading back under $1.27 and on the slow march toward sub $1.20 levels. The Euro did pop slightly this morning as Merkel announced she was willing to pay more upfront money in to the ESM (new bail out mechanism set to come on line this year to replace or run in tandem with the EFSF) in order to give the ESM more credibility. We've been over the ESM, it' Euro-zone members paying money into a fund to save other euro-zone members, but some who will pay in are the ones in need of the bailouts in the first place-i.e. Italy.

In Iran (I don't know if this is the work of the US -I don't know if it could work that quickly), yesterday there were rumors of products doubling and tripling in price overnight, we see now there is truth to the Iranian hyper-inflaton story. Iran has hiked interest rates to 20%!!!! n other news out of Iran, a nuclear scientist was killed by a bomb in the street earlier today. Details are sketchy, but the US is officially being blamed. There have been an unusual amount of explosions at key military/nuclear facilities over the last month and a half that have gone unexplained as well as the apparent downing of a US drone in Iran. I'm sure all will be made clear in a Hollywood movie in about 5 years from now.

Yesterday we had an unexplained commodity rush, I said it all smelled fishy, today oil and most commodities including silver have opened down. Only Gold has opened marginally higher.






 There is an ECB meeting tomorrow, there's a split as to whether they will cut rates again. Goldman, remember Draghi is a GS alumni, seems to think he will stay his hand for the time being.