OVERNIGHT

It was all about goals it seems as investors viewed the stock market Monday in China by pushing it higher after officials over the weekend announced their economic goals, the WSJ reported, setting a lower target for this year than that of 2015. The lower number apparently didn't bother investors.

During the NPC, China’s annual legislative session, officials set goals for the economy to grow 6.5% to 7% this year, lower than the “around 7%” target set in 2015. Investors’ expectations of greater government spending on public projects helped send shares of industrial goods producers—growth drivers of the “old economy”—in China and Hong Kong higher Monday. Beijing is trying at the same time to support companies catering to the middle class as it moves from an investment-led economy to one more driven by consumption. These so-called “new economy” firms include those in the technology, pharmaceuticals and clean energy sectors.

China is expected Monday to report the level of foreign-currency reserves it held in February. The figure illustrates how quickly China burned through its reserves to curb the amount of money leaving the country amid recent worries of yuan depreciation.

The Shanghai Composite Index was last up 0.8%, led by gains in shares of basic materials producers. The smaller Shenzhen Composite Index climbed 2.3%. Markets elsewhere in Asia were mixed. Hong Kong’s Hang Seng Index turned up 0.2%, Korea’s Kospi was up 0.3% and Australia’s S&P/ASX 200 was up 1.1%. Japan’s Nikkei Stock Average was down 0.5%.

Gold was at $1260.40 an ounce and Brent trading just above $39 a barrel.

DIETARY FLATULENCE

There is no end to what the climate change freaks will go to push their end point--you and me are the problem. So some day soon you and me won't be the problem.

The staunch, cunning villains of the past, oil and gas, also known in the underground world of science as hydrocarbons, have apparently lost their number one ranking on the most hated list.

It's now what you and I eat, our diets. The first thought is you wonder how long and how much energy it took for this crowd to think this up. The second thing is villains are necessary for any agenda. Time does that. Like bakery items, issues and certain villains become stale. So new ones must be conjured up to keep agendas alive.

It 's sorta like the recent news report by one of Trump's ex-wife who claimed that he kept a copy of Hitler's speeches on his nightstand. Well, another guy also reportedly kept a copy of the Furor's speeches close at hand went by the name General George S. Patten. Huh! Wonder what the common thread was there?

But let's return to dietary problems and their effect on the environment. Here's a piece from a known left-of-center news outlet, Business Insider. No surprises here. We like to read as many sides as possible. And somewhere in the middle we might hopefully find what Diogenes was looking for with his lantern--not an honest man but an honest report.

We will keep looking. Meanwhile, here's a link. Decide for yourself. Look for beef to soon join the $100 bill. It's most likely why money laundering and terrorism is currently such a problem. It's not flatulence anymore. Or is it?

businessinsider.com/ways-your-diet-could-be-harming-the-environment-2016-2

THE CHINA PLOY

If you follow what's going on in China you might think it, like other heavily centralized control states, is alone in clamping down on those who criticize government. You'd be wrong.

It's a growing concern for governments wide and narrow. Just last week at the G20 meeting Chinese officials pledged not to let their currency, the yuan, fall. In street jargon, devaluation. If wide spread enough it goes by another name, beggar thy neighbor or currency war. Lowering interest rates, especially if you sup at the export trough for you economic sustenance as China has for years, is just one way to do it. There are plenty of others, including the once unusual but now widely accepted ploy of creating negative interest rates. Lowering bank reserve requirements is another.

Governments always at these away-from-home meetings claim they're going to line up with such and such cause only to the local thing when their return home.They also claim they're not going to devaluate their currency just before they do. See Soros and the British pound. Or more recently Kyle Bass and others and the yuan

As shares sank, the government pulled out all the stops from closing trading to allowing traders to auction their homes for collateral to making leverage easier. But here's the most troubling one, cracking down on negative news and it purveyors to, as a Barron's article recently noted, "...media re-education edicts, censoring negative views on the growth outlook, and demonizing those who dare to go off-script."

To those of us in the semi-free country called The Land of the Free and The Home of the Brave, this might seem unconscionable. But have no fear; it here just in a more subtle form for now. The on-going gouge called a presidential primary is just one example. The upcoming confiscation of the $100 is another. The constant MSM drumbeat against gold is another.

This government largess in Street jargon is called the China put. We've for years had our own from Greenspan to Bernanke to Yellen. Truth is we're famous for exporting financial ploys and products. And as Barron's obliquely notes, here's another one we set the bar for: the Chinese government just gave domestic banks the green light to issue $8 billion of securities "backed by proceeds from non performing loans."

A more recent form here rolled out by big banks is lowering lending standards for home buyers with spottier credit histories or none at all to circumvent certain recent regulations on such loans.

It's all in the packaging.

HIGH NOON FOR NOONAN

We love editorial writers as much as the next guy.

Peggy Noonan, the Republican party apologia spokesperson the WSJ likes to roll out regularly, has her tenses badly mixed up. The Republican Party isn't "shattering." It's shattered and has been for so long it should, as is popular in Europe, adopt an acronym. LSRP as in Long Shattered Republican Party might be a decent choice.

In fact, the Journal could possibly attract more readers by running a contest to come up with the best acronym for what once was called The Grand Old Party. We seriously doubt if that was ever true or, for that matter, if there's ever been a grand party to ride heard on its subjects.

In her recent lament, "The Republican Party Is Shattering," she warns "...we are seeing a great political party shatter before our eyes." And that's what this upcoming presidential election, as they all are, is about: Who gets to sit in the saddle. For the incentivized to keep the status quo, Trump isn't the guy. For those who despise smothering governments, neither is Clinton nor Sanders. That leaves most caught in the famous place from Greek mythology, stuck between a political Charybdis and Scalla.

It could also be called pick your poison between two bankrupt purveyors of  more government engorgement and control in your lives. Yes, we're talking those pitiful Democrats and Republicans here  Taking oblique but no less cheap shots at those who may vote for him, she piles on the dangers of a Trump nomination and possible presidency.

Ms Noonan writes, speaking of the demise of  the Grand Old Party,"For me the Republican Party was
always the vehicle of a philosophy, conservative political thought--no more, no less." She then twists her petard of contempt for Trump supporters a little deeper with: "But it should concern his supporters that his brain seems to be a grab bag of impulses, and although he has many views and opinions he doesn't seem to know anything about public policy or the way the White House or the government works."

The problem, dear soul, is just the opposite. He knows exactly how public policy and government works. That's a major part of his appeal.

One of the few things Ms Noonan gets correct is if the party finagled Trump from a nomination he fairly won, Trump supporters, as they should, will bolt. They have in a way been more vilified than the veterans returning from the Vietnam War, maybe not spit upon in public but severely spat upon in the editorial and front pages across this nation. That's a wound that won't be healed with a quick smear of glib rhetoric once this public assassination ends.

She states she's been thinking a lot lately about the establishment and the elites. That's curious. This might come as a surprise to you, Ms Noonan, but you're one of them, hollering down at the masses from the top of your editorial mountain, telling them how thoughtless and ill-informed they are. The political sky will cave if you knaves and dolts put Trump in office.

Well, it's high noon, baby, for you and your Grand Old Party. But it's also high noon for this trumped up facade they call a government for, by and of; and we, like numerous others, say this as someone who has no skin in the outcome and no ponies in the run.

If this election with its pathetic cast of characters, as many claim, is symbolic of anything, it's all the political rot beneath the surface.

SOMETHING'S GOING TO GO BUMP IN THE NIGHT

As the opening paragraph of this article notes, the Chief Editor of Interest Rate Observer needs no introduction. He is James Grant.

Grant has been over his career named many things like perma-bear and goldbug, terms often used to describe anyone who has a different take from the incentivized protectors of the status quo and their MSM cheerleaders.

Like some others noted for taking the less traveled path, Grant is never uninteresting or reluctant in giving his opinions. As we always say, read it and decide for yourself.  Whatever you decide, we hardly think you'll find it uninteresting or ill-informed.

You'll pick up on a few things like central banks being run by academic economists.The major thing academic economists are noted for is not living in the real world. You'll also note, if you don't already understand, what a flying-by-the-seat-if their Ph'd degrees zero interest rates are. As Grant notes it's a tax on savings.

And then there's the upcoming confiscation of the $100 bill and the 500 euro note, attacks not on money launders and terrorists but your personal freedom of choice and sovereignty. It's a good read.

.theepochtimes.com/n3/1975151-james-grant-something-is-going-to-go-wrong

OVERNIGHT

Swollen Chinese industries, that's what seems to be on investors minds going into a series of meeting by Chinese officials in Beijing starting Saturday.

What's on their minds is how, if anything, Chinese officials will try to solve their big overcapacity problem. That means plans, just what are they, when will they start and so forth. Embedded therein is another question on investor minds, do these official even have any plans. 

China's declining economic growth is a problem many failed to see as obvious as it was. Now investors seek to know what if anything are officials going to do about it. Meanwhile, the Nikkei and the Kospi were flat; the Shanghai Conposite Index was close to being flat and the Hang Seng was up slightly at 0.6%.

Brent crude oil dropped slightly, 0.3%, to $36.97 a barrel, but looks set to end the week up nearly 6% in what has turned out to be a more positive couple of weeks since the rocky start to 2016. There's a lot of caution around, however, since many feel these gains, particularly in commodities, are short lived owing to short-covering. 

Gold was up a little at $1272 an ounce while the dollar remained strong after some weakness Thursday..

WHEN IS HALF MOST?

Japan may be the Land of the Rising Sun, but the makeup of its economy is similar to that of other
developed nations. The service sector is the big domestic boy on the block. And after years of monetary stimulus from their central bank, the latest of which includes controversial negative interest rates, a more accurate moniker might be the Land of the Flat Sun.

Manufacturing represents a little over 20 percent of the country's GDP while services account for nearly 65 percent. With that more than 3:1.ratio the service sector plays an important role and the latest numbers for February, though still slightly positive, show a declining trend

According to Reuters, Activity in Japan's services sector expanded in February at the slowest pace in seven months as new business weakened in a worrying sign that the economy is losing momentum, a survey showed on Thursday.

The Markit/Nikkei Japan Services Purchasing Managers Index (PMI) fell to 51.2 from 52.4 in January on a seasonally adjusted basis.

The index remained above the 50 threshold that separates expansion from contraction for the 11th consecutive month but fell to the lowest since July last year.

The index for new business fell to 51.7 from 52.2 in the previous month, with the rate of expansion slower than the average seen over the current 11-month spell of growth, the survey showed.

Overnight Japanese and other Asian shares rallied on the so-called good news about U.S. jobs and higher energy prices. As is MSM's wont the headlines focused on the alleged health of the U.S. economy and rising oil prices warming the hearts of harried investors.

Here is a bit of economic news past over by most.  
Just half of the Fed’s 12 districts reported modest or moderate growth since early January, according to the central bank’s “beige book” summary of regional economic conditions released Wednesday. The prior report showed nine districts expanding at that pace.
Three Fed districts cited the financial-market turmoil that kicked off 2016 as one factor behind consumers’ reluctance to spend, along with economic uncertainty and a reluctance to add to existing debt.

You'd have to look for this WSJ story. wsj.com/articles/fed-beige-book-economic-activity-expanded-in-most-districts.

Note the deception on the headline link. The actual blurb headline reads, "Fewer Fed Districts Report Expansion." When did half become most? To be sure, six is fewer than nine. But there is still a confusing deception here whether intentional or otherwise. You decide, knowing what you know about MSM.
  

OVERNIGHT

It's all about perception and at the moment perception by many investors after the favorable U.S. report on jobs and an upswing in some commodities, namely oil, copper and iron ore, seems to have bolstered investor confidence.

At least that was part of the sentiment in Australia where the market rose 0.8% to the highest level in two months and the Australian dollar continued its strength against the U.S. dollar in light of news that the economy grew last quarter on an annual pace of 3%.

In other markets the Nikkei rose 0.8% adding to the 4% jump just a day ago. The Hang Send was 0.4 higher, the Korean KOSPI was flat, the Shanghai Composite Index was up 0.3% and the Chinese yuan relatively unchanged.

As one market pundit observed: "Things are calm for now, but risk is being repriced and central banks face limited stimulus options." Another added: "China has huge potential to roil markets as the nation navigates a difficult structural transition," he said. "Asian trade, traditionally a bellwether for global growth, is in recession."

What nearly everyone would like to know is this: Have we seen the bottom in commodity and energy markets or is this just another fools's market rally? Cruising around the web, you'll see there are plenty of opinions on both sides of that debate.

So for now perception reins.

WHAT WE FOUND

We had lunch the other day with three fellows who follow the markets pretty closely.
It was one of those little Italian places with red and white check tablecloths, a single white vase with a single artificial rose in the center, cubby holed in a strip shopping mall not far from LAX.

All three it turns out shared with us a recent common thing that happened to them. Bizarre you might even say.The first one who actually started the subject said he looked up the word parse in the dictionary owing to some peculiar urge he said just came over him one afternoon at the office. He said the definition of what he found surprised him:  "Just below 2%."

The second fellow chuckled and said he had a peculiar incident too. But his happened early one morning after he came out of the shower and flicked on the television noting the market was in one of its ugly moods. He said he looked up the term hedge and there it was:"Just below 2%."

We almost hesitate to tell you what the third guy told us when he looked up the word prayer. He denied having any weird urges, just saying he's a dictionary freak.The funny thing is he's not even religious. Life is not always random, you know. But here's what he told us with a straight face only a high stakes Las Vegas poker player would appreciate:  "Prayer: ECB, just below 2%."

This might also surprise you. That started off a rousing discussion of what is "just below 2%?" So all three of us decided to check the dictionary one more once. And this is what we found.

HELLO CHLOE

Just how long did you think it would be?

First, it was robots asking you over your cell phone if the choice you just made was a yes or no and then robot guided checkouts at the supermarket. How long did you think--should you ever trouble your gray matter to consider such things--before Chloe showed up?

While most of you were still waiting for Godot, like a skillful pitcher, they slipped another inside fastball by you, just nicking the strike zone part of the plate. The count's now 0 and 2 with two down and you have nobody on base.

Notice also that it's always those lowering paying jobs that suffer the latest juggernaut move, the same people our esteemed politicos claim to care so much about. It's one of those long distance love affairs: you keep your distance and they'll keep their love.

You can forget Dolly. Say hello to Chloe on your way out of a job.

businessinsider.com/companies-that-use-robots-instead-of-humans-2016.