Submitted by Simon Black via SovereignMan.com,
My grandfather was something of a Renaissance Man.
He was a farmer, schoolteacher, fisherman, collector, real estate investor… and one of those guys who always seemed to know how to do everything.
He could take apart an engine, build a house with his bare hands, tame wild horses, treat life-threatening wounds, play the guitar… and he was extremely well respected in his community.
Tensions are rapidly escalating between the US and Russia following last week two fly-bys when first a Russian Su-24 "buzzed" the US missile destroyer USS Donald Cook in the Baltic Sea, and just days later flew within 50 feet of a US recon plane also flying over the Baltic Sea, which some interpreted as a Russian warning to Poland. The U.S. quickly responded and complained vocally to Russia (even if Obama did not mention the incident during his phone call with Putin immediately following the incident).
In the aftermath of China's gargantuan, record new loan injection in Q1, which saw a whopping $1 trillion in new bank and shadow loans created in the first three months of the year, many were wondering where much of this newly created cash was ending up.
We now know where most of it went: soaring imports of crude oil.
We know this because as the chart below shows, Chinese crude imports via Qingdao port in Shandong province surged to record 9.86 million metric tons last month based on data from General Administration of Customs.
Now that everyone has finally figured out that the only way to not get steamrolled in this "market" is to frontrun central banks - something we have been pounding the table on since mid-2009 when we said that the only two financial statements that matter are the Fed's H.4.1 and H.3 - and not just central banks, but central banks who are now so intimately intertwined in capital markets that the moments they adjust one variable, they unleash a torrent of "reflexive" actions which promptly leads to a cascading effect across the markets and promptly undoes whatever it is that they want
On Friday we wrote our latest take on how the ECB's CSPP, or corporate bond buying program, in which we explained how this ECB's latest market manipulating adventure is about to crush the fundamentals of the European (and soon, courtesy of the ECB's "SPV" loophole, global) bond market. We showed how the ECB, in its latest attempt to become an even more market-moving hedge fund, is set to buy billions in corporate bonds and not just European but also international, as long as they have a European-domiciled (read Ireland or Netherland) SPV holdco.