WEEK UPCOMING

Here's a breakdown of what's up next week from Minyanville, one of the better market websites. Now they hardly need our approbation, but honest attribution--despite what many think--still has a place in today's world.

And by way of full disclosure we own ConAgra.

Monday, June 23

US Economics (Time Zone: EST)

08:30 Chicago Fed Nat Activity Index, May, exp. 0.2, prior -0.32
09:45 Markit US Manufacturing PMI, June prelim., exp. 56.0, prior, 56.4
10:00 Existing Home Sales, May, exp. 4.74m, prior 4.65m
11:00 Fed to purchase $1.5b-$2b notes in 6-7 year range
11:30 Treasury to sell $25b 3-month bills and $23b 6-month bills

Global Economics (Time Zone: GMT)

01:35 JPY Manufacturing PMI (JUN P)
01:45 CNY HSBC Manufacturing PMI
07:00 EUR France Manufacturing & Services PMI (JUN P)
07:30 EUR Germany Manufacturing & Services PMI (JUN P)
08:00 EUR Euro-zone Manufacturing & Services PMI (JUN P)

Earnings

After:
Micron Technology (MU)

Tuesday, June 24

US Economics (Time Zone: EST)

09:00 FHFA House Price Index, Apr., exp. 0.6%, prior 0.7%
09:00 S&P/Case-Shiller 20 City Composite MoM, Apr., exp. 0.8%, prior 1.24%
09:00 S&P/CS YoY, Apr, exp 11.50%, prior 12.37%
10:00 Consumer Confidence Index, June, exp. 83.5, prior 83
10:00 New Home Sales, May, exp. 440k, prior 433k
10:00 Richmond Fed, Jun, exp 6, prior 7
11:00 Fed to purchase $850m-$1.1b bonds in 22-30 year range
11:30 Treasury to sell $25b 52-week bills, 4-week bills
1:00 Treasury to sell $30b 2-year notes

Fedspeak:

08:05 Plosser to speak in New York
18:30 Williams to speak in Stanford, CA

Global Economics (Time Zone: GMT)

08:00 EUR Germany IFO Business Climate (JUN)
08:00 EUR Germany IFO Current Assessment (JUN)
08:00 EUR Germany IFO Expectations (JUN)

Earnings

Before:
Walgreen (WAG)

Carnival (CCL)

Wednesday, June 25

US Economics (Time Zone: EST)

07:00 MBA Mortgage Apps
08:30 Durable Goods Orders, May, exp. -0.2%, prior 0.8%
08:30 Durable Goods ex-Transports, May, exp 0.3%, prior 0.1%
08:30 GDP Annualized, 1Q, exp. -1.8%, prior -1%
08:30 Personal Consumption, exp 2.5%, prior 3.1%
08:30 GDP Price Index, exp 1.3%, prior 1.3%
08:30 Core PCE QoQ, exp 1.2%, prior 1.2%
11:00 Fed to purchase $2.25b-$2.75b notes in 7-10 year range
11:30 Treasury to sell $13b 2-year floating-rate notes
13:00 Treasury to sell $35b 5-year notes

Global Economics (Time Zone: GMT)

No major reports

Earnings

Before:
General Mills (GIS)
Barnes & Noble (BKS)
Apollo Education (APO)
Monsanto (MON)

After:
Bed Bath & Beyond (BBBY)

Thursday, June 26

US Economics (Time Zone: EST)

08:30 Initial Jobless Claims, June 21, exp. 311k, prior 312k
08:30 Personal Income, May, exp. 0.4%, prior 0.3%
08:30 Personal Spending, May, exp 0.4%, prior -0.1%
08:30 PCE Deflator YoY, May, exp 1.8%, prior 1.6%
08:30 PCE Core YoY, May, exp 1.5%, prior 1.4%
11:00 Kansas City Fed Manufacturing Activity, June, exp. 9, prior 10
11:00 Fed to purchase $850m-$1.1b bonds in 22 to 30 year range
13:00 Treasury to sell $29b 7-year notes

Fedspeak:

08:30 Lacker speaks in Lynchburg, VA
13:05 Bullard speaks in New York

Global Economics (Time Zone: GMT)

12:30 CAD Average Weekly Earnings (APR)
16:00 EUR France Total Jobseekers (MAY)
22:45 NZD Trade Balance (MAY)

Earnings

Before:
Lennar (LEN)
ConAgra Foods (CAG)

After:
Nike (NKE)

Friday, June 27

US Economics (Time Zone: EST)

07:55 UofMich Consumer Sentiment, June F, exp. 82, prior 81.2

Global Economics (Time Zone: GMT)

JPY Jobless Rate (MAY)
JPY Household Spending (MAY)
JPY National CPI (MAY)
JPY Tokyo CPI (JUN)
JPY Retail Trade (MAY)
01:30 CNY Industrial Profits (MAY)
06:45 EUR France GDP (1Q F)
08:30 GBP Lloyds Business Barometer (JUN)
08:30 GBP Current Account (1Q)
08:30 GBP GDP (1Q F)
08:30 GBP Index of Services (APR)
08:30 GBP Total Business Investment (1Q F)
09:00 EUR Euro-zone Economic Confidence (JUN)
12:00 EUR Germany CPI (JUN P)

Earnings

No major reports

Twitter: @MichaelSedacca

Read more: http://www.minyanville.com/business-news/markets/articles/economic-data-earnings-reports-earnings-economics/6/20/2014/id/55358#ixzz35JjAXPNr

BAGS AND CARTONS OF AIR

                                                                                                                                                                                                                                                                          
Now we realize that everyone does not through the glass see clearly. That's a polite way of saying we're never all going to agree about anything.

We just posted a piece about flat wages and the costs of energy and food. Buy a bag of, say, potato chips today and compare the contents with one you bought a few years ago.

Forget the price you pay at the counter. That's only one way inflation impacts you. Just compare the contents, in this case how much air was in the old bags versus how much is in there today. Try the same with a carton of orange juice.

Now back to everyone not agreeing. We've stated many times before we seek out information from those who may have a completely different opinion from ours. We like to call that being objective with the faint possibility of learning something sprinkled in for fun.

And about those flat wages for the middle class, here's a rather long article. If you take the time to burrow through it, you most likely will come to your decision on the subject. It might differ from ours or it could agree. Either way you'll come away more informed. And that's worth more than even the value you got in those old bags of chips and cartons of OJ.

Now we realize it's not going to be as exciting as who wins the World Cup or, even more important, who's the lucky guy who's going to be Kim Kardashian's next hubby.

But as they say: "Ain't love grand!"
                                                                                                                  
http://globaleconomicanalysis.blogspot.com/2014/06/real-and-unreal-wages-five-decades-of.html

PROFITS AND GROWTH

"Where's the beef?" was a catchy line in a long-ago burger commercial.

Today, a similar question investors ought to asking after all this QE is where's the growth?  Follow that up with have you seen any lately other than in asset prices?

In that respect, QE has been a miserable failure when you measure the return over five years on all the money created. Most money runners turning in a similar record would lose their jobs. What are we getting for the buck is also a legitimate, fair question, like it or otherwise.

That very growth is being questioned by some Wall Street analysts when it comes to U.S. companies faster revenue growth for 2014 and beyond. According to Factset, analysts cut second quarter growth estimates for S & P 500 firms to 2.8% from 3.5% on a year-over-year basis. That 0.7% decline is well beyond the last four years quarterly average of 0.3%, per Factset.

So have higher earnings reports been buoyed more by cost-cutting and buy-backs rather than reality, since the second quarter of 2011 revenue growth for any three month period has not gone up? Revenue mirrors the economy.

Bureaucrats and other economic apologists can talk measures of inflation all they want, but flat wages, higher food and energy prices spell trouble as in the big T. And that rhymes with capital PG as in profits and growth.

Not an especially a good recipe to paraphrase an old Wall Street bromide for a stock market that may be running more on promises than facts.

CENTRAL BANKING VOODO

One of the sleeping time bombs that just recently is being discussed in the financial world is central banks getting into the equity-buying game.

Yea, we know, you most likely believe they only purchase bonds, so-called less risky assets. According to one recent report that is now coming to light, China's central bank apparently has been buying European equities with both hands. But they are hardly alone.
                                    
Some savvy investors might suggest that's like putting a put option under the market, lending support to keep equities from falling further. It could also be noted as a form of providing liquidity for sickly or flat markets, a kind of  let's-restore-the-public's-confidence ploy so they'll open their wallets more.

All well and good you say. But wasn't one of the central bankers main reasons for criticizing big banks the amount of risks the big boys and girls took on that could, so the story goes, have upset the entire global financial market? 

That's certainly one of the excuses we heard over and over for keeping interest rates this low for this long. They were preventing disaster.

Equity prices as most of us realize change. Now there's a revelation for you. One of the age-old Wall Street caveats is don't try to time the market. Only a few of the many reportedly do it successfully with any consistency. But even if one doesn't buy that rubric, there is another question here, a basic one about risk taking: Why would these bankers be any better at it than professionals who as it turns out in many years are not very good at it either?

Central bankers are known for being conservative, just ask the Dragster ECB President Mario Draghi. For a long time it looked like his vocabulary was devoid of  the word alacrity. Now the story, like many involving bureaucrats, gets even juicier.

A few years ago you may recall central bankers were unloading gold, most likely to keep a lid on the price. The excuse floated then is the old one, it doesn't yield anything. Well, today neither does any major currency. But they were selling into a scenario where the price was setting up to go much higher. And it did.

So here's the next question. Are those who brought a yield-starve feature to theaters near all of us now scrambling for yield? We'd bring up the word irony here, but that would be too obvious.

Central banks dabbling in stocks is not new. What might be new, however, is the magnitude. Among others, the problem is one of mixed messages and transparency. Are they going to ring a bell to let us all know they're selling on the second Tuesday of next week?

Oh yea, one more thing. We thought central bankers were suppose to be objective. Purchasing equities in itself is a form of favoritism. Which stocks don't you like?

AROUND THE WEB

Intrusive? It's Only Going To Get Worse
http://www.usatoday.com/story/news/nation/2014/06/18/businesses-health-workforce-vitality-institute/104

About Time
http://abcnews.go.com/US/wireStory/murray-energy-sues-carbon-emissions-rules-24203377

History Of  Oil Prices
http://www.businessinsider.com/history-of-oil-prices-2014-6

Glut Coming?
http://money.cnn.com/2014/06/17/news/economy/gas-glut-iea/index.html?iid=HP_LN

Trust
http://www.spiegel.de/international/germany/interview-with-german-defense-minister-on-russia-and-global-conflicts-a-974569.html

 Say You Want Price Controls
http://www.ibtimes.com/venezuela-colombia-smuggling-trade-thrives-1596379

The High Net Worth Crowd: Some Myths
http://www.cnbc.com/id/101744929

THE SEARCH GOES ON

U.S.Dollar Exchange

“If Washington can’t lead, it should at least get out of the way.”
                                                 
That's a quote from economist Benn Stiel, director of international economics at the Council Foreign Relations in New York. Stiel's comment came today in http://blogs.marketwatch.com/capitolreport/2014/06/19/how-the-fed-helped-cause-ukraine-crisis/, just one of several sources about how the Fed screws things up here and, what many fail to suspect, abroad.

The role the U.S. dollar plays since Bretton Woods in international markets is and has been way out of whack. Yet it's a role that allowed for, perhaps even encourages, gross financial mismanagement. Two things in that quote standout. Both are facts.

Washington can't led and it doesn't, owing to its massive arrogance, know how to get out of the way. Meanwhile, the search for an alternative international currency for trade grows, a fact few Americans even know about let alone understand..

IRAQI OIL SITUATION

For another view on the Iraqi oil situation, read this.
http://www.marketwatch.com/story/iraqs-unraveling-would-be-good-for-oil-2014-06-18 
It's a view you won't hear often. Usually when things like this get started, predictions for the worse are first to hit the news. It's inbred the MSM's DNA.

EARTH ROCKING NEWS

In the Fed's chicken, bond tapering, or egg, interest rates, question, Yellen left reporters with the idea it would unwind the stimulus program, famously known all these long months as QE, and deal with interest rates later.

Here's a quote from one source.

At the same time, the Fed lowered its forecast for “longer run” interest rates to 3.75% from closer to 4%. This last change is important because it signals the central bank won’t push up interest rates all that high during this recovery phase.

The central bank’s policy statement that was nearly identical to the previous one issued in April. Only its description of the economy was changed — and in a way to make it more upbeat.

What we like about this quote is it's faith that the Fed "won't push up rates all that high during the recovery phase." Not unless the market does it for them.

In English grammar one learns about so-called declarative sentences, subject, verb, object. Few could put it better summarizing the fledgling Fed chief than Business Insider's Joe Weisenthal when he wrote: "Janet Yellen is a dove."

You can judge the market's reaction to this earth-rocking news. It rallied.

RANDOM NOTES

With nearly all eyes set on Fed Chair Janet Yellen's press conference, we thought we'd just spin off some random notes to entertain ourselves until the uproar about what the Fed might do next settles.

Alone those lines, however, we'll just make the following point to reinforce another point about central bankers that we made earlier. In today's FT James Mackintosh discusses in his The Short View column the possible threat of rising inflation and the jump, 0.4%, in month-to-month prices, double what most economists were expecting.

Though as he correctly points out officials should not base their decisions on month-to-month data, he notes there are other signs of rising inflation, ones the doves apparently choose to ignore.

Ms Yellen only has to point to the slowing housing market or stagnant-after-inflation pay to justify keeping money easy. Usually for doves, the Fed prefers an alternative inflation measure which is usually lower than consumer prices.  

So here's the point put in a question: Which do you care most about, what you're paying or some trumped up cockeyed, economic measure central bankers cite?  Let us know what you decide....

--Massive buybacks lent support to stocks and corporate earnings, may be waning

--Surplus of MBAs. What do they do again?
--Technology creates lots of jobs. Hooray!
--Technology kills tons of jobs. Huh?
--Professionals pressured to perform that can create thundering herd
--Retail investors twice burned in a decade remain shy.

--Identify who the cheerleaders are, can be dangerous.
--Market breadth sucks.
--No structural support beneath EU periphery bonds.
--After more than five years of cheapest money world has ever seen and inflated home and paper asset
prices nobody suspects anything.
--New villain in town, shadow banks...check your wallet.

--Cheap money buoys big M&A deals.
--Total U.S. Student loan debt $1.2 trillion.
--U.S govt. spending 42% of GDP.
--Gold doesn't yield anything and neither does euro, dollar, yen.
-Too optimistic about earnings and growth most in general?

--Unemployment in Spain high double digits and Spanish sovereign debt safer than U.S's?
--Entire scheme about avoiding any pain at all cost oath of  global central bankers and politicians and banker friends.
--Utilities and gold sector leaders?
--Greek bank now attractive investments?
--IRS loses two years of e-mails....guess whose?

--U. S. Department of Justice bully runs amok. Will Citigroup grow a pair?
--Oil bulls say $140 possible, bears say $70
--Exit fees benefit whom? Look at who's pushing for them for answer.
--Obama presidency is DOA.
--Italian PM Matteo on next EU commissioner steals a page from Obama.

--NYT columnists Paul Krugman's credibility, attacking UK's austerity program, accusing it of false stimulus, joins Obama's presidency.
--Ecuador's previously noted bond offering may yield 8%, jump on board, Citigroup and Credit Swisse will love you.
--Forget the Russians. The robots are coming. Expand your vocabulary. Hold tip of tongue between thumb and index finger and say out loud as fast as you can:, Cobots, Cobots, Cobots! You are now a certified high tech helper.
--Home prices in China falling as government plans to grow more food. Does that mean food prices will be dropping in few years?
--Shades of Marine Le Pen, Thailand tightens restrictions on migrant labor.

OUR VIEW

They're at it again.

They create a problem and then they want to penalize people for trying to take cover when the time comes.

Shadow banking is the new villain in town. Just ask your aloof, incompetent central banker in the region where you live and toil.

"Officials fear that bond funds are becoming 'shadow banks,' because investors can withdraw their money on demand, even though the assets held by the funds can be hard to sell in a crisis," the FT says.

Quoting ex-Fed governor Jeremy Stein, the Times continues, "So much activity in open-end corporate bond and loan funds is a little bit bank-like. It may be the essence of shadow banking is giving people a liquid claim on illiquid assets."

After the financial crisis the Fed hit big U.S. banks with tougher sanctions causing the big boys, among other things, to reel in their bond trading. In the meantime investors, starved for yield, have pumped since 2009 more than $1 trillion into bond funds. Bond funds, to put it simply, are bulging at the seams with money and that raises the big question these bureaucrats never ask ahead of time: What happens when things change?

Here is their answer; it's the same one they always get around to one way or another--exit fees. And their excuse is always the same, just couched in different terms. This time it's fear about market fragility. But that raises still a bigger, better question: Who caused the market fragility in the first place? Don't expect a straight answer anytime soon..

All of this is just another reason for doing away with the pathetic creatures who hang around these unhallowed halls whose main function is screwing around with peoples' lives. It's just one more reason for decentralizing..

That's our view. We hope you know yours.