OUT OF THE CLEAR BLUE

 It's usually something totally unexpected, in popular terms often described "as out of the blue."

However small or seemingly unexpected and insignificant, it frequently has bone rattling consequences. Those bone rattling consequences often spell changes. Sometimes big, well needed changes. The Panama Papers, what now appears to be a botched Internet hacking job, could be the latest version.

The widespread evidence of corruption and, to use a play on the words one of this year's presidential hopefuls, gaming the system, could be the blow that chops down the cherry tree no one can no longer deny is rotten to its roots.

One sure sign of this truth is the trouble the entrenched are waging to stop a couple of what can be  described only as real outliers, Sanders and Trump, underdogs. It's almost enough to make one wish the two would form their own ticket and fire a significant shot of real change to be heard around the globe.

It's over. Two senseless, meaningless, corrupt political parties are done. Finis. Let the sluggards, the elitists and the money-lenders know: That was then, but this is now. Such a union might sound weird at first, but could hardly be worse than what we've had. At least early on they might be too much in the spotlight to attempt anything shady.

It takes a while to build arrogance, conceit and contempt. And with these two parties we're way past the ninth inning. These two candidates, like them or otherwise, appear to be what the population wants, as different as they seem. That's why we hold shameful gatherings every four years called elections, isn't it? But these two parties care less what the population wants. What they care about is self-propagation and control.

What we have here is what one writer called "the mythology of democracy." You can vote all right and you can saunter out of your local polling place wearing the little paper tag that you have, but that's as far as it goes. Those trying feverishly to derail Sanders and Trump are proof positive just how little importance your vote carries with them.

And the longer you play this charade the sooner you will forfeit any remaining vestige of hope for freedom and liberty you may have. We recently wrote about Goldman Sachs and their almost hysteria about Brexit. Most of us know who David Cameron is. If you don't, he is part of the Western mythology of democracy.

ODD IS AS ODD DOES

We've talked about the Fed's sudden turn around about raising interest rates after the February G20 meeting. We called it odd.

We talked about how just a few months earlier the Fed was projecting four or five rates hikes in 2016, an abrupt change is probably an understatement, but so it is.Yesterday we had Fed Chair Yellen meeting with Obama and Biden is what certainly was an unusual meeting given the timing and that just a week before she had given a speech in New York.

We've covered the pathetic shape European banks are in in general and Italian banks in particular and the recently announced 5 billion euro rescue plan. We know China's projected GDP numbers are questionable at best. We mentioned it seemed odd that JP Morgan came out yesterday changing it China view from neutral to overweight.

Now today, just one day later, we get this reassurance from Mother Hen Yellen that the Fed is following its mandate of taking care of America and Americans. It's her Main Street meme.

We know negative zero interest rates are having some unintended effects in the world and confidence in its exponents is sinking faster than you can spell incompetent bureaucrat. We know under the guise of losing their independence, the Fed deplores any and all talk about an open, objective audit of their balance sheet. We looked up the term transparency in Webster's. And just this morning we did the same for odd.

That might seem odd. Here's more. Read it for yourself.

In an oddly-timed-release, just a day after her 'unusual' meeting with President Obama (and sandwiched between two "emergency Fed meetings"), Janet Yellen's seemingly legacy-protecting narrative-confirming interview with TIME magazine proclaiming once again that "we are focused on Main Street, on supporting economic conditions - plentiful jobs and stable prices - that help all Americans." So now you know - it's all for you America - the bank bailouts, the deflationary-glut-creating ZIRP, the money-printing, and the "confusing and confounding" messaging. Now stop your complaining and Vote Hillary!

As TIME reports, you don’t often hear central bankers say, “I don’t know.” That’s because monetary wizards, like brain surgeons and rocket scientists, tend to cultivate an aura of omniscience. Their vast underground computers crank out supposedly precise answers to complex questions about where the global economy will be in the next five minutes or the next five years. But Federal Reserve Board Chair Janet Yellen has never been allergic to uncertainty.

zerohedge.com/news/2016-04-13/day-after-obama-meeting-yellen-confirms-fed-focused-main-street-helping-all-american

OVERNIGHT

It was a good day for Asian stocks Thursday with the exception of China as most markets edged higher.

The Nikkei rose 2.6% After a string of positive days, the benchmark is on track to mark its first weekly gain in three weeks, according to a WSJ report.The yen was last trading at 109 per U.S. dollar, after touching as strong as 107 this week. A strong yen pressures profits of Japanese companies by making their exports more expensive. Australia’s S&P/ASX 200 climbed 1%, Korea’s Kospi rose 1.3%, and Hong Kong’s Hang Seng Index was up 0.9%. 
 
Much of the action centered on the Singapore central bank that surprised traders by lowering its policy band on the Singapore dollar to zero after a round of slower growth in the first quarter. The local dollar fell 0.6% that apparently spilled over into other Asain currencies wiht the Krean wndonw a full percent against the U.S. dollar

In other markets MSCI's broadest index of Asia-Pacific shares outside Japan rose 0.3 percent, reaching its highest level since Dec. 2. The index has risen 4.7 percent since Friday, breaking above several resistance levels to signal further gains, Reuters noted.In the overnight U.S. market  JP Morgan's first quarter earnings fell but less than expected. And a plan in Europe to bail out Italian banks aided Italian bank shares with a 5 billion euro fund that was in the news earlier.

The WSJ also reported this: J.P. Morgan upgraded its stance on China to overweight from neutral, citing the slower pace of foreign exchange reserves declines, receding fears about yuan devaluation and improving China economic data.With the all the recent happenings surrounding the Fed and it's reversal and Yellen's powwow with Obama and Biden, that makes one wonder if the fix is in when it comes to China, especially until after the election in November.

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DATA JUNKIES II

Earlier we posted Data Junkies, we should probably call it Data Junkies I, a piece about the new newsletters the New York and Atlanta Feds are now springing on the scene with boring, unimaginative monikers.

Part of our point is we've for years been questioning much of the authenticity of the Fed's numbers. Job numbers and the old NROU, natural rate of unemployment a case in point. Questioning is the kind term, deliberate doctoring another.

Part of our skepticism stems for our own personal experience with big, centralized government, cases where you know the data is inaccurate. We won't bore you with examples other than to say if someone has been dead and officially witnessed and buried for years but keeps popping up in quarterly government reports as being alive, that might be an indication.

We could cite numerous others like the number of man hours lost by government employees owing to work injuries. Regular reports get sent to Washington. If those numbers got any more doctored they'd be a patented medicine. You might find it hard to believe that an injured worker is forced to come into work and lay on a cot in his or her supervisor's office for eight hours so that month's report can be sent in with zero lost man hours.

Yea, we're discussing the good old USA. So despite what you might think, it's hardly a stretch to suspect economic data goes undoctored. The surprise would be if it didn't go undoctored. So here's another point on the same subject. Like a lot of people you feel a little lonely out there, maybe from time to time even a little guilty thinking such suspicious thoughts.

But as it's been noted a long time ago, facts are stubborn things. Here's a piece by someone else we don't even know.
dailyspeculations.com/wordpress/?p=11000

Bill Rafter and I have discussed for years the steadily growing discontinuity in the BLS's employment data versus that implied by payroll tax receipts.

A few years ago the staff economists at the Atlanta Fed got so fed up with the nonsensical BEA GDP reports that they started issuing their own report anticipating the GDP release with their GDPNow report.

Although the media has since glommed onto the report it is treated in similar fashion to the ADP employment release.

The differences between the two is important however.

The ADP report is distinct from the BLS data and uses inputs chosen by ADP.

The GDPNow report is designed to mirror the BEA's data inputs to anticipate not what what GDP is but what the BEA will report that it is.

The Atlanta Fed staff are putting the manipulators on notice, and those in the media and at the FOMC willing to go along with it, that there are consequences.

The actions by the Atlanta Fed staff have also helped to embolden other Fed staff members to do similar work and make it public.

The Richmond Fed staff economists have now produced a model of unemployment called the non-employment index that challenges the accuracy of the BLS data.

The importance of this is that it challenges the usefulness of the U3 unemployment rate and the FOMC natural rate of unemployment (NROU) predicated on it.

The point is that data is being willfully corrupted by providers and this has engendered, finally, a push back by others.

Being aware of the totality of this, especially for a group focused on clean data is important.

DATA JUNKIES

Its first day of confusion started way back in 1913 and not much has changed since.

The Federal Reserve Bank of New York just sprung on the American populous a new so-called gee-whiz indicator that will give them and supposedly the rest of us peons a real insight into "real time" economic data. Translation: What the hell's really going on.

The new report supposedly will track U.S. growth in the nation's GDP. We can tell by the reaction of the throngs just how thrilled everyone is. This new report will supposedly stick it economic head out of the nation's birth canal this week.

There's just a couple of bumps in that road. New indicators to better foresee are not new and their history for inaccuracy or really revealing anything significant is hardly new either. But a more intriguing problem is the rivalry that seems to be set up between the New York bank and it's sibling in Atlanta.

It appears, too, to be a battle for catchy named newsletters. Since 2014 the Atlanta Federal Reserve Bank has been spitting out its GDPNow letter. The New York Fed, the new kid on the block at least in this area, calls it's gem, FRBNY Staff Nowcast. You can see these bureaucrats have been burning much of their midnight creative powers on brilliant names.

As for another problem, as the WSJ reports today, quoting from the website's of both banks: "The New York Fed's Staff Nowcast is estimating tepid first-quarter growth of at 1.1% and the Atlanta Fed's measure is showing a near stall of 0.1%."  It's just a small one percent difference.

GDP reports are not limited to government ones. Private firms and some corporations issue their own to serve clients and others who want to know. One of those want-to-know groups is investors and traders. Conflicting reports like these two are hardly helpful.

So what's one to do? Well, one executive at a private firm in what was most likely a burst of pragmatic thinking says: He told his clients to take an average of the two until further notice. But whatever you do, we hardly thinks he'll want you to call him in the morning.

Are you surprised? Nor should you be surprised how these data-hounded bureaucrats can waste tax payer dollars. In some circles this used to known as a circle jerk. In academia it's called peer-based reviews. Our data junkies are better than yours.

OVERNIGHT

Energy was the story of the day and apparently overnight as U.S. crude oil prices shot up 4.5%  moving above it's 200 day moving average, a sign many are suggesting indicates that the bottom is in and higher prices loom ahead in 2016.

The Japanese market rallied as the yen softened after making a 17-month high at the start of the week against the U.S. dollar. The Australian dollar also rose against the greenback, reaching above 77 U.S. cents. The Australian S&P/ASX 200 was up 1.2%, the Hong Kong Hang Send Index railled 2% and
South Korean Kospi was closed for a holiday.

 Based on some upbeat export numbers, Shanghai stocks were up nearly 2% while the Nikkei jumped 2.4%, it's highest level in eight sessions, the WSJ reported. Officials in China reported stronger export numbers compared to a year ago with a meager drop in imports. Also, MSCI, the broadest index of Asian-Pacific shares outside Japan tack on 1.4% gains in early trading. The upbeat mood in China lent some support to other area markets.
 
Bloomberg reported: Production dropped to 9.01 million barrels a day in the week ended April 1, the lowest since Nov. 2014, according to the EIA. In another story, Bloomberg also reported the following:

The down market is behind us,” Torbjorn Tornqvist, chief executive officer of Gunvor Group Ltd., said on Tuesday at the FT Global Commodities Summit in Lausanne. “It is the beginning of the end of that for sure.”

Oil has rebounded after falling to the lowest level in more than 12 years amid signs a global glut will ease as U.S. output declines. The world’s largest oil traders were meeting in Switzerland as members of OPEC and other major producers prepare to assemble in Doha on April 17 to discuss an output freeze. Oil traders benefited from a surge in volatility last year and that should continue, according to Tornqvist.

“We are going to have lots of volatility going forward,” Tornqvist said. “From here on the trend is up.”

A “rebalancing” of global crude oil supply and demand could take place by the end of the third quarter as production cuts by cash-strapped producers start to curb the current glut, according to Trafigura Group Pte CEO Jeremy Weir.

“I believe we’ve seen the bottom unless there is some sort of catastrophic situation, political or otherwise,” Weir said.

BREXIT AND GOLDMAN SACHS

 
If you want to know how much elitist, big money is bankrolling the anti-Brexit vote coming up this June in the UK, look no further than Goldman Sachs.

If you want to better understand the threat a Trump presidency poses to the elitist establishment, look no further than Goldman Sachs.

If you're tired of having Goldman Sachs via their long and incestuous relationships with global central bankers toy with your life, look no further than Goldman Sachs.

If you want to know why the Donald received so much push back over his recent "rigged system" comment, look no further than Goldman Sachs.

Though Goldman isn't alone among big bankers who want to defeat Brexit, they're big time players, symbolic at its core of a stacked system.

According to a recent WSJ article, Goldman's net 2015 "revenue from Europe, Middle East and Africa" totaled $8.9 billion.  Goldman is among one of the largest contributors, $700,000, to a firm lobbying against Brexit. It's executives have, the Journal reports, sent "warning letters" to major media.

It's president, Gary Cohn, last January lobbed  a scaremonger theme at that elitist of elite annuals in Davos: "It is imperative for the UK to keep the financial services industry in the UK. I don't know what would replace that industry," he urged. What he apparently conveniently left out is what would replace Goldman's lucrative booty. "The European trading block has been," the Journal notes, "a boon to Goldman Sachs. In 1970, the U.S. investment firm arrived in London with five people."

A rapid expansion followed UK deregulation in the 1980s and Goldman profited greatly expanding across the continent opening several offices in places like Frankfurt and Milan and Paris. With the advent of a single currency, however, the Euro, branches became unnecessary, centralizing its operation in London, helping to cut overhead in the process.

Since then it's been pretty much Katy bar the door with Goldman holding the key. Ninety percent of Goldman's reported 6,000 workers in Europe are London-based. The threat to Goldman is great, but that hardly means the threat to ordinary Brits is. That's the big lie; there won't a meaningful financial industry without Goldman and it's Wall Street brethren if Brexit passes and Goldman is forced to change.

Bernie Sanders, the good Vermont socialist, if you noticed, took a lot of flack from the elitists in the Donkey Party for telling the truth--that Hilary took a lot more Wall Street money than he did. The real truth is: She took a lot more money from Wall Street that he and Trump put together.

The scare tactics unfortunately on worked the Scots. If the people of the UK truly love their sovereignty, their currency and their liberty, they won't be fooled this time around by this elitist ploy.

NEGATIVE INTEREST RATE DANGERS

On Monday Larry Fink, CEO BlackRock the world's largest asset manager, reportedly told investors in a recent letter that "negative interest rates are lining up savers and the economy for 'potentially dangerous financial and economic consequences.'"

According to Fink, lower rates force people to save more for their retirements and other needs, cutting into discretionary income and translating to less spending to aid economic growth. In other words, something has got to give if these people are going to reach their goals, the economy or the people and their retirement goals.

The point is in such low interest rate environment one has to put more money aside each year to reach a certain dollar amount goal for annual living expenses. But that's not the only drag on the situation, insurance companies and state retirement funds face a similar problem since their projects usually are based  on what were higher rates in the past.

Here's a chart from BlackRock. We don't know for sure, but just maybe it's what Fink is referring to and the dangers that await.

POINTING IT OUT

This is one of those superfluous debates that actually makes an important point. Though the author supports his position quite well, whether he intended to or otherwise, he shows just how big a bubble this thing is.

We think it's a candidate for most maligned market, deservedly so in our view owing to an out of control money printing Fed now aided by many of their global comrades. The need to keep this charade going and the built-in danger grows daily.

Take this chart, for example.


Why would you want to have any cash in money markets when some now even before inflation and taxes are yielding less than zero? And that's not the only reason MMFs have lost some of their appeal. Safety is another.



This next chart we think the author strokes one of those high fastballs over the edge of the plate out of the park. Deep center field. Higher interest  rates when they arrive--and they will arrive-- will catch more than a few looking for something off speed and soft like the Fed's been serving up regularly.



The above chart speaks for itself. There's a lot of leverage out there.



 This is what we call the fear of missing out chart. To us it helps explain the low cash levels in these funds. Mutual fund money runners are known for their lemming-like characteristics. It's hardly new.

businessinsider.com/stop-calling-this-the-most-hated-bull-market-in-history-2016

We hope you enjoy reading this author's article. We enjoyed pointing it out.

OVERNIGHT

What was once all the rage, Abernomics, now finds itself embroiled in growing investor skepticism as the Nikkei though up slightly in trading Tuesday morning is down 16% so far in 2016 and on course some believe to retrace its 40% gain from 2012 at the start of Abernomics.

Prospects of a weaker U.S. dollar and interest rate hikes at least for now on hold pushed gold higher in New York trading for June delivery at $1258 an ounce. The yellow stuff is up 18% on the year despite the MSM's constant jawboning for yielding nothing to hold it. With negative zero interest rates in Japan, the EU, Sweden and Switzerland, investors in gold seem to be saying such cheap talk is just that.

Meanwhile, oil settled back above $40 a barrel helped out by the weaker dollar. A weaker dollar bodes trouble for Japanese officials as some inflection point might be hit soon, calling for more intervention. Earnings season both in Japan and the U.S. loom over markets also.

Here's an overnight look from Reuters.

TOKYO, April 12 Japan's Nikkei share average rose on Tuesday morning as the dollar gained versus the yen in early morning trade, lifting cyclical stocks such as exporters as well as recently battered banking shares.

Weakness in the dollar kept the market worried after it slumped to a 17-month low of 107.63 yen on Monday but by 0146 GMT on Tuesday, the dollar stood at 108.14 yen.

The Nikkei gained 1.0 percent to 15,903.30 in midmorning trade. The benchmark index has fallen 16 percent this year, while it is retracing about 40 percent of gains since the start of 'Abenomics' in 2012.

Traders said that Japanese equities are swayed by foreign exchange rates, with Japan Inc's last fiscal years' earnings announcements scheduled within a few weeks. Investors will likely start taking positions after companies release their forecasts for this fiscal year, they said.

They added that the Nikkei may stay sluggish until then, as many investors remain sceptical of 'Abenomics."

"Investors are frustrated about the lack of effective measures against the strong yen," said Hikaru Sato, senior technical analyst at Daiwa Securities. "Confidence in Japanese stocks has waned since the end of last year and it still hasn't recovered."

Banking stocks were leading the gains on Tuesday, with Mitsubishi UFJ Financial Group rising 4.8 percent and Mizuho Financial Group gaining 4.2 percent.