RANDOM READS

Resources
http://www.rationaloptimist.com/blog/why-most-resources-don't-run-out.aspx

Wages Up, Down Or? http://www.marketwatch.com/story/green-shoots-of-wage-growth-dont-believe-it-2014-05-01?pagenumber=2

Manufacturing On The Mend
http://news.investors.com/economy/050114-699243-ism-manufacturing-rose-in-cheery-sign-for-economy.htm

Passive Fed
http://www.bloomberg.com/news/2014-05-02/yellen-s-fed-resigned-to-diminished-growth-expectations.html

Go Or Stay?
http://www.businessinsider.com/states-where-people-want-to-move-2014-5

SANCTION COMPLICATIONS

 

The Ukraine situation is much more complicated than most realize. While the West pushes for more sanctions against Russia not everyone sees clearly through that window, especially Germany.

Germany is Russia's third largest trading partner. Gazprom, the half state-owned Russian gas conglomerate, is the largest gas company in the world and does big business with German businesses lining their coffers with huge profits. 

BASF, the giant international German chemical firm, does billions of euros in business in Russia. And that's just the tip of the business deals the two countries share. Read this for more.
http://www.spiegel.de/international/

FORGET PESSIMISM TRADE ARROGANCE

Don't fire until you see the whites of their eyes is another way of saying let's wait and watch and maybe be too  late.

Given the Fed's past record, timing is not one of their better strengths. Following is. A business associate, a pretty darn solid commodities trader we'll call Harry, refers to the Fed as one of the better lagging indicators out there. 

The thing about Harry is you never know when he's going to hit town. It's usually a surprise phone call, an abrupt arrangement for a brief lunch and a few good glasses of some decent wine.  

We've known Harry for a while and to say he's a bit eccentric is like saying it don't snow in Minneapolis in the winter time. Last time we met with Harry it was at one of those little Italian joints with the red and white checkered tablecloths and tiny white vases with a red rose sticking out in a strip mall near LAX.

Harry's always on his way somewhere. He's one of those investors who likes to visit companies and countries not just read about them. It was dark inside especially coming in from the warn spring Southern California sunshine.

Harry was sitting in the back booth with his laptop ablaze. I slid into the seat across from him and before I could exchange more than a short hello a waitress appeared and took our order. I don't like to drink wine in the middle of the day because it makes me feel fuzzy. Harry informed me he had a plane in catch to Latin America a few hours later so the wine was more welcome than the food.

Harry's got a lot of Hollywood in him, a couple of sips of the red stuff and he's already cut to the chase.

"So what's your take on Yellin?" I asked.  

 

"A good fence straddler; she's swinging for the consensus ball. 
It makes being wrong easier to swallow. There's a crazy bird that lays its eggs in other bird's nests. Substitute mess for eggs and other people's laps for other bird's nests and you gotta good idea what these folks do."

How could so many so-called experts around the same table be so wrong so often?" I probed.

"It's a function of dynamics based on the false assumption that we humans can get our arms around something so big and so nebulous with a bunch of quack econometric models....Arrogance, plain human arrogance."

After some more market talk and a decent lunch, the waitress came, the check got paid and we walked out into the bright sunlit parking lot. 

I stood there for a moment watching Harry stroll to his rental car when he suddenly turned around and hollered: "Forget pessimism! Trade arrogance. It's human nature."

With  that he hopped into his car, pulled the door tight and faded into the heavy mid-afternoon Century Boulevard traffic. 
http://www.minyanville.com/business-news/politics-and-regulation/articles/Pimco-The-Whites-of-Their-Eyes/5/1/2014/id/54816

READ ''EM AND WEEP

A front page story in today's Wall Street Journal, "Can Italy Find Its Way?" opens with the following:

Bernardo Caprotti was a 45-year-old entrepreneur when he agreed to buy a suburban plot of land for a new supermarket.

Building permits recently came through. He's now 88. His Milan-based retail chain, Esselunga SpA, had grappled since 1971 with local bureaucrats who raised shifting concerns about traffic volumes, architectural suitability and proximity to a medieval monastery. 

http://online.wsj.com/news/articles/SB10001424052702303987004579479973324993200?KEYWORDS=can+italy+find+its+way&mg=reno64-wsj 

Now read the paragraph below. It's not about Italy, but the good old USA right here and now.

It takes 40 permits to open restaurants in big cities today...how many small people can afford the time for lawyers or for the money involved and the waiting time to get all those permits, which used to be 4 in number? 85,000 pages of new regulations under the Obama administration in the Federal Register...if you want jobs and growth and young people hired, if you want productivity growth that comes from investment spending, then you want proper fiscal policy, which we have not used at all...you want monetary policy in moderation, and then you want deregulatory policy whereby you make it rational for people to start businesses and get out there and hussle.”
 http://www.financialsense.com/contributors/cris-sheridan/broken-lever-monetary-policy

IT"S ABOUT TAXES, JAKE

In our recent post, "Wonder Why?"we mentioned the tax savings these companies get when moving off shore. In many cases it's bigger than big.

Congress in its infinite wisdom is constantly after China to strengthen it currency, the yuan, to help close the trade gap between the two nations. In economic parlance it's known as beggar thy neighbor. In a broader sense it very similar to countries that have lower corporate tax basis.

Attracting businesses is what its all about whether its the state of Texas or a country like Ireland or Canada. 

The Pfizer-AstraZeneca deal is much in the news now and rumors about such a mega deal were afloat on the street for a while before it hit MSM.  Here's more on the subject from Reuters.
http://www.reuters.com/article/2014/05/01/us-usa-tax-mergers-idUSBREA4003G20140501

WWP MODE

 
Watch, wait and plan mode is how the Wall Street Journal described today's Fed announcement about what investors have come to know and fear as the Fed's tapering program.

Once upon a time in the Land of Monetary Policy there was QE, otherwise known as Fed speak for quantitative easing or let the ink on the printers fly. And fly it did. There are many kinds of highs in life. But for politicians and Wall Street denizens it's liquidity and easy money.

Any threat to that dynamic duo and it 's turn off the fans before you know what starts to fly. So the Fed played a little good cop bad cop announcing earlier in the day growth in the economy barely budged in the first quarter and following it up saying it will continue to pare back its bond and mortgage-back securities purchases in May.

http://online.wsj.com/news/articles/SB10001424052702304178104579533861135944336?mod=WSJ_hp_LEFTWhatsNewsCollection&mg=reno64-wsj 

BOGUS

We've been harping about the bogus inflation crap coming from the Fed and its cronies in MSM for a long time now.

We don't want to confuse anyone with basic simple stuff like utilities, trash collection and a whole host of everyday stuff like food and energy; that would be too pedestrian. And, oh yea, property and sales and professional fee taxes, they're not part of one's increased costs of existing either.

Here in California the Freeway electric bulletin board signs now warn about a recently increased cell phone fine of $161-plus, a 30-percent-plus, to borrow the idiom of bureaucrats who cook this stuff up, hike for the infraction.

Maybe we're being a bit un-child like here for not appreciating more the now-you-see-it-now-you don't legerdemain. It's so magical.

http://davidstockmanscontracorner.com/memo-to-dr-yellen-on-the-low-flation-myth-inflation-seen-and-not-seen/?utm_source=wysija&utm_medium=email&utm_campaign=Mailing+List+AM+Wednesday

GLOOM DOOM PUSHBACK

Some gloom, some doom and some pushback.

Normally, we'd post this under voices where we usually put market strategists and their economic meanderings. But Faber is fun to hear and to read.

And the guy from the Times makes a valid point. His comment implies the gloom and doomsters manipulate the market for personal gain. That's interesting and raises an interesting question: What does Wall Street with its horde of bankers like Goldman Sachs do, sell lollipops?

http://blogs.marketwatch.com/thetell/2014/04/30/crashy-marc-faber-its-too-late-to-buy-u-s-stocks-now/

THE MAGICAL WORD

This is a four-letter word we've alluded to before and, in our humble opinion, at least one reason the Fed is behind the curve.

Jobs. Yes, they're out there and this is not the first sign. Again, if Fed Chair Yellen, as she recently did, questions the accuracy of the Fed's models to adequately track prices is correct why would jobs be any better. The truth is they ain't.

The truth is the Fed is trying to muddle its way through a situation they muddled up to begin with. From Japan to the EU to the US as more and more of these economic soothsayers keep worrying about more deflation the less likely that's what's in store. As even Keynes pointed out: nine times out of 10 the most feared never happens. 

http://www.businessweek.com/articles/2014-04-24/labor-shortages-pop-up-in-many-u-dot-s-dot-cities

WHAT HAPPENED?

We'll call this for want of a better term an interesting discussion that took place earlier today from a panel of three prominent American economists. Make of it what you you want. Our take, again for want of a better term, is a big yawn. Furthermore, it's just one more example, prominent economists or no, of "your guess is as good as mine."

http://blogs.marketwatch.com/thetell/2014/04/29/roubini-rogoff-taylor-debate-the-global-economy-live-blog/