OVERNIGHT

The Fed spoke today in the week of central banks.

What the Fed said wasn't lost on Asian currencies as many of them rallied to multi-month highs, the WSJ reported.

Several Asian currencies moved to multimonth highs and the Chinese yuan jumped in early trading Thursday, after the U.S. Federal Reserve lowered its expectations for the pace of interest-rate increases during the rest of 2016.

The Australian dollar and the Singapore dollar rose to eight-month highs against their U.S. counterpart, with the Aussie strengthening 1.8% to 0.7592 compared with yesterday’s close in London.

The Singapore dollar moved 1.3% firmer to 1.3635 against its U.S. counterpart versus the London close and the Korean won hit its strongest level all year, last gaining 1.6% to 1,173.0. The Thai baht and Malaysian ringgit also hit their strongest levels in more than seven months.

After the Fed’s decision to keep rates on hold, the People’s Bank of China set its daily yuan reference rate against the U.S. dollar at 6.4961, a level 0.3% firmer than the previous day. The offshore yuan trading in Hong Kong strengthened 0.1% to 6.4920 in response.

A weaker dollar could put further pressure on Asian countries that are already experiencing a slowdown in growth. As the value of their currencies rises, it makes it harder for some of the region’s export-dependent economies to grow.

Over in the equities markets Asian shares rallied as the dollar took a hit owing to Fed's suppose decision to invoke  on two rate hikes this year. Emerging markets and oil gained too in light of less competition from a once-expected stronger dollar and higher interest rates.

The Nikkei rallied 1.4% in spite of the stronger yen. Australian shares eged 0.8% higher, the KOSPI was up 1.2%. In China, the Shanghai Composite Index SHCOMP, +1.07%  was up 0.4%. Hong Kong’s Hang Seng Index HSI, +1.19% rose 1.6%.

Oil and iron ore longtime orphans both rose on the Fed comments. Gold fell 0.2% to $1,259.61  after it's jump Wednesday. Copper jumped 1.5%..

THE SCENT OF CONFUSION

Well, now the investing world has it.

The Fed concluded it's two-day meeting Wednesday holding steady as she goes. Using the guise of what many consider phony "strong job numbers" and moderate economic growth, they dangled the bait of possibly hiking rates later this year. In the parlance, that means tightening monetary policy.

That was the on-the-one-hand message. Here is the on-the-other-hand one economists are infamous for spewing at the drop of an aggregate indicator. Any aggregate indicator. Risks are loitering out there from an uncertain global scene even as these monetary geniuses consider two quarter-point rate hikes before 2016 rolls around.

We don't want to digress, but in our brief visit to this dimension the global scene seems to have been something less than certain most of the time. It appears for all their searching and praying they turned up the scent of inflation in recent months. So we have a "range of recent indicators" that include strong job gains, the scent of inflation and any other phantasmagoria they can use to cover their you know what after they hike rates.

What makes the Fed so pathetic is these economic-soothsayers' pretensions that they know something about the unknowable, the future. So their way of telling the rest of us is they lowered their estimate of where the targeted lending rate would be in the long run. Somewhere between 3.30 and 3.50 percent. In case you want to unriddle that riddle, it's the econo-speak way of spelling tepid.

Back in December, a distant three months ago, they were projecting four rate jumps this year after a 0.25% rate increase then. That was the first rate hike in 10 years. Though they've got whiff of inflation, they also lowered their prediction of inflation for this year to 1.2% from 1.6%.

About now you ought to as confused as they are. But there's more. There always is. They also see a decline in unemployment, falling to 4.7 percent by year end and even dropping more in 2017 and 2018.

Oh yea, one voting FOMC member dissented.

MEASURED CLARITY

Trump detractors in the media will no doubt attempt to play up his loss to John Kasich.

The Wall Street Journal, true to its colors, described the three-out-of-four Trump triumph as:
A big and tumultuous primary-election day Tueday provided some clarity in each party's race toward the presidential nomination--but also an equal measure of clarity on the weaknesses of the two front runners.

That the writer chose to hyphenate that last point tells you what you need to know about its importance to those who seek to derail the Trump machine. This is clutching-at-straws-journalism disguised as significant or important news. Last time we measured, to borrow one of the writer's own terms, three out of four was 75%. The author, Gerald F. Seib, is a Wall Street Journal Washington insider who speaks the WSJ's editorial party line

But it's hardly as important as they'd like to make it. And here's why. Though originally from the east, Kasich is an Ohio State alum, a former Ohio Congressman and the current Ohio governor. Trump's lost, according to the numbers, 47% to 36%, is not surprising given Kasich's background in the home of the Wright brothers.

Trump's average margin of victory for the three states he won was 10%. In Ohio he lost by only 11% to one of the most recognized faces and names in the state, a former political television celebrity. That's hardly a sign of Trumps weaknesses. It's a sign of, if anything--and you can bet those MSM pundits hate it--his strength.

Measured clarity depends on who's doing the measuring, Mr. Seib.

OVERNIGHT

It's been about central banks mostly this week,the BOJ earlier, and now the Federal Reserve as overnight trading in Asia was mixed as the Nikkei was down 0.4% and Australia's S&P/ASX off 0.1%. While the a hang Send was flat with the KOSPI up 0.2%.

China finished its annual legislative meeting with the comment that China would meet its economic targets. The Shanghai Campsite was up 0.3%. Reuters reported: Shares in China have gained roughly 4% since the beginning of the National People’s Congress meeting, and at times, analysts have said that state-backed funds may have been supporting it by buying blue-chip stocks.

Meanwhile, investors will try to glean from the Fed today whether more rate hikes are in the immediate future or the Fed will stand pat. There are two sides to this growing concer: those want the market to free itself from it's addiction to the Fed's economic punch bowl and those who fret over prospects of still slow growth and a possible global recession at which China could be the epicenter.

According to a WSJ report, A vast majority of fund managers are expecting no more than two hikes in the next 12 months, according to a fund manager survey published Wednesday by Bank of America Merrill Lynch.

LOFTY PRICES

Here's a blurb about Canadian real estate prices especially in Toronto and Vancouver. The presence of Chinese buyers in Vancouver is not new.

The west coast city has been the focus of debate over whether such lofty price increases are sustainable or whether costs are being boosted by overseas buyers.

Indeed, it was referenced among the litany of risks laid out by Fairfax Financial CEO Prem Watsa is his annual letter to shareholders.

"Canadian housing prices, particularly in Toronto and Vancouver, have gone up significantly, driven by lax policies at CMHC, " he wrote, in reference to the country's top housing watchdog.

"Canadians have accessed their increasing real estate wealth through lines of credit easily available from the banks. Sounds familiar? This is exactly what happened in the United States before the financial crisis in 2008/2009."

Canada's housing market growth has been robust in the years since the global financial crisis, partly boosted by cheap borrowing costs. But a more varied market has emerged recently, with price gains continuing in the hot markets of Toronto and Vancouver, with the energy-sensitive regions slowing, and the rest of the country plodding along.

Indeed, in Calgary, prices fell 0.9 percent in February and were 3.3 percent lower than a year ago. Home prices in the city are down 5.4 percent from their peak in October 2014.

=Canadian-home-prices-rise-in-February-boosted-by-Vancouver

YOU DON'T HAVE TO BE

You don't have to be Chinese to overpay.

But in this case it helps. Especially if one is talking real estate, expensive cars for your kids and bloated-over-valued American college tuitions.

Check home prices around SoCal. The sellers? Who knows? The buyers, in many cases Chinese. The deals, nearly always all cash.
  
The bigger the price, the better.

Starwood Hotels, which owns 11 brands including Sheraton, W Hotels, and St. Regis, spread over nearly 1,300 hotels & resorts in 100 countries, announced today that an unnamed “Consortium” has made an all-cash offer to acquire the hotel group for $76 a share, or $12.8 billion.

That consortium is trying to spoil Marriott’s party. Last November, Marriott agreed to acquire Starwood to form the world’s largest hotel behemoth with over 1 million rooms.

Marriott in turn came out today and announced that the consortium was in fact led by Anbang Insurance Group in China. On March 11, Starwood had approached Marriott with the news of the unsolicited offer and obtained a waiver to pursue the new deal. The breakup fee is $400 million. So if Anbang gets Starwood, it would pay a total of $13.2 billion.

Anbang has been busy recently. It acquired the Waldorf Astoria in Manhattan in late 2014 for a record $1.95 billion from Hilton, at the time majority-owned by Blackstone, after having acquired office buildings in New York and Canada. It also acquired South Korea’s Tongyang Life for $1 billion.

 Not all deals worked out. Its €3.5 billion bid for Novo Banco, a teetering Portuguese “systemically important” bank, sank into the quicksand of politics. But Anbang keeps slugging. Over the weekend, word leaked out that it had agreed to acquire Strategic Hotels & Resorts from Blackstone for $6.5 billion. According to Bloomberg’s sources, Anbang paid $450 million more than Blackstone had paid for it three months ago!

Let's see if memory serves, we recall Blackstone back at the early part of the 2008-9 downturn buying up 35,000 individual, single family homes in the U.S.that they recently bundled up--it's packaging not perception--and unloaded. Probably to some big institutional fund managers like your
your state run retirement fund.

They like to invest at market tops too.

But don't fret for those Chinese buyers. Maybe their kids can participate in the huge student class action suit that our government just cleared the way for students to file.

wolfstreet.com/2016/03/14/chinese-money-in-record-us-deals-starwood-strategic-hotels-peak-7-year-boom/

www.wsj.com/video/posh-cars-for-wealthy-chinese-students-in-the-us/0F07D213-FCE6-4173-905B-81296DD1A9FB.html?mod=trending_now_video_1

www.marketwatch.com/story/the-government-paves-the-way-for-students-to-file-class-action-lawsuits-2016-03-14

TIME WILL TELL

 So far so good. But that like a lot of things depends on what side one is standing.

In the case of the Chinese yuan, the government's apparent determination to keep the currency from falling lower is paying off. So far, so good for them. If, however, you're a hedge fund manager short the yuan, as many of the bigger boys supposedly are, it's so far, not so good.

A lot depends on whether China's troubles have bottomed. Seemingly conflicting reports surface almost daily.

China’s push to dispel concerns about the strength of its currency appears to be bearing fruit.
The yuan has ratcheted up strong gains in the past two weeks, hitting its strongest level against the dollar in less than a month in the domestic market and surging to a high unseen since early December in the more freely traded offshore market Friday.

The rally started on March 2, the eve of a two-week-long annual session of China’s legislative body and reached its climax Friday, the day before the country’s central banker took pains to fend off worries about yuan depreciation at a news conference.

“The currency’s recent strength is to a large extent due to the government’s intention to preserve an image of financial stability during the legislative meetings,” said Chaoping Zhu, economist at UOB Kay Hian Holdings, a Singapore-based brokerage.

The dollar fell to 6.4943 yuan on Monday morning Asia time, down from 6.4985 yuan at Friday’s close. The yuan hit as high as 6.4866 during intraday trading Friday, its strongest showing against the U.S. currency since Feb. 15.

If history is any guide--and the UK to cite one example--it favors the the hedge fund guys in the long run. But only time will tell.

wsj.com/articles/yuans-jump-is-sign-chinas-policy-succeeds-1457925578

OVERNIGHT

It looks as if the stocks down under did just that overnight and went down under as the Bank of Japan held steady on its current monetary policy.

The Australian market closed lower.

• S&P ASX 200: 5,111.40 -74.06 -1.43%
• All Ordinaries: 5,168.60 -73.77 -1.41%
• AUD/USD: 0.7490 -0.0025 -0.33%

The gains of Monday were wiped out, with nine out of ten sectors losing ground. Energy stocks and big miners drove the slide. The major banks followed, creating more drag on the market.

The ASX 200 is sill up 4.7% since the start of the month but is 3.4% weaker than at the start of 2016.

Today all four major banks went backwards with the NAB closing at $27.79, down 1.8%. BHP dropped 3.4% to $17.13, Woodside Petroleum 3.9% to 425.72 and Santos 3.6% to $3.86.

Investors continue to remain chary facing the Federal Reserve meeting this week and Australian markets were not the only ones selling off, according to Reuters.

Regional stock markets maintained a weak bias with MSCI's broadest index of Asia-Pacific shares outside Japan .MIAPJ0000PUS down 0.7 percent, near the day's lows and backing off a 2-1/2-month high on Monday.
 
It was dragged lower by more than a one percent drop each in China, Australia and Taiwan. Japanese stocks .N225 extended losses to be down 1.0 percent after the decision.
With the global economy slowing and many countries facing deflationary pressures, investors' focus remained squarely on policy decisions from the world's major central banks.
Up next on the central bank roster is the U.S. Federal Reserve on Wednesday and the Bank of England and the Swiss National Bank on Thursday.

Notwithstanding the BOJ's decision, Steven Englander, global head of G10 FX strategy at Citibank, reckons investors are more interested in the Fed statement on Wednesday to gauge how important global vulnerabilities stack up against an upswing in domestic activity for U.S. policymakers.

The Fed is unlikely to raise rates this week but it will likely make clear that as long as U.S. inflation and jobs continue to strengthen, economic weakness overseas won't stop rates from rising fairly soon.

A consensus in the market is that fresh forecasts from the Fed's 17 officials released after the meeting will signal perhaps two or three rate hikes this year, a retreat from their projection in December for four or more increases in 2016. 

Financial markets are much more cautious with Fed fund futures <0#FF:> are pricing in a 50 percent probability of a rate increase by June and one full rate hike by December.
The mood in credit markets also was noticeably more subdued, with investors happy to stay in high quality government debt such as U.S. Treasuries and German Bunds rather than venturing into higher-yielding corporate paper.

In its statement, according to the WSJ, "...the BOJ devoted more attention than usual to overseas conditions. It said risks to its optimistic outlook in Japan included the “European debt problem” and “developments in the U.S. economy and the influences of its monetary policy response to them on the global financial markets.”

THE FOURTH ESTATE

Those WSJ editorial folks love to spread the mayonnaise, thick and often.

There at it again. Today's opinion piece went after their favorite target of late, Trump.

Again, the subject was his so-called inflammatory use of the English language: Using uncivil speech to tell to truth. Here's a quote from them: What’s as disturbing, however, is Mr. Trump’s apparent instinct to respond to the protesters in kind. This includes his denunciations of free political speech. A few weeks ago he said he would rewrite the libel laws to sue the press to muzzle his critics. He has threatened this newspaper with a defamation suit merely because we noted his evident lack of knowledge about the Pacific trade deal. In Kansas City on Saturday he assailed “lying, thieving reporters.”

Now let's just take a look at those three words that apparently so upset these bright editorial boys and girls, "...lying, thieving reporters." Either these so-called take-the-moral-high-ground members of the Fourth Estate are ignorant of their own profession's history or just flat out ashamed of it.

So let's just remind them a bit. Not so long ago the prestigious Washington Post had an intern,  though supposedly under direct guidance of  a Pulitzer Prize winning writer for his Watergate reporting, who wrote a completely phony story about a minority kid that didn't exist. Not only did she write it, but the story itself was up for an award.

And again not too long ago a foreign correspondent for USA Today routinely turned in bogus stories. We used the plural case here. One only need exhume the name Hearst and the famous yellow journalism days of the 1920s. But let's press that fast forward button to more current times. 

During the tragedy that became Katrina, a well-known television anchor man claimed from the comfort of his Ritz Carlton hotel window he espied dead bodies floating past. There was only one problem, his hotel and the actual flooding were miles apart. This same upstanding journalist had a helicopter incident, no he's not a former central banker, that turned out to reportedly cost him his job.

We're only citing you here a few of the lessors offenses of journalists and their journalism. The WSJ's Heard on the Street popular column itself once had to relieve the journalist penning the column for his improprieties. Some might deem that lying and thieving since he was profiting from the inside information. 

There's an old saying: Never go to a gun fight with only a knife. But that's exactly how MSM views you and the rest of us. They think they're the only people who ever read and lived history.

wsj.com/articles/trump-and-the-protesters-1457909062
 

SMART PEOPLE

There are some smart people out there. We don't claim to be one of them.

Where is out there?  As one drives around the Internet, it's amazing just how many people are paying attention. We know, it's the worst nightmare of bureaucrats and politicians. But, Oh,Well! Here's just one example from dailyspeculations.com/wordpress/?p=10950
In the last four weeks U.S. equities have risen nicely. Some were lucky or good enough to forecast what happened (check their records). And there are some who are apprehensive about where the market is now. I cannot guess everyone's motive, but I believe more than a few of the hesitant are so because they fear a further bursting of the Chinese Bubble. However I present to you a brief phantasmagorical tour showing that the Chinese Bubble has already deflated.

In terms of three usable commodities (copper, wheat and cotton) the Shanghai Stock Exchange has mean-reverted to its price in mid-2014. If you are betting on a further Chinese decline, be cautious.