THE WATCH FOR THE PERFECT SET OF DATA

See no evil, hear no evil, speak no evil is an old saying. And  it's one that can easily be applied to the three big central banking hitters, the Fed, the Bank of Japan and the European Central Bank.

With the U.S. central bank hitting cleanup these are some scared central bankers who spend much of their time now whistling past the economic global boneyard. Otherwise called jawboning. In eight years the Fed hiked interest rates once, a measly 25 basis points, and the market immediately went all jelly-legged. So what did these fearless economists, who love to tell anyone foolish enough to listen how all things economic are, do? They backed off.

All three of these central banks are in a quandary. They showed up at a gun battle with a handful of paring knives thinking they'd seen this scrum before and knew exactly what to do. But after a just few hard punches and a couple of mean elbows got thrown, they decided to pack it in, paralyzed inmates trapped in their self-inflicted cells.

We have discussed the downfalls of data driven decision making in the past. One of the central characteristics of this Fed is not just being data-driven but being driven by just the right data. In the wrongs hands it leads to analysis and paralysis. Or gelling with Yellen.  Here are two quotes to make the point.

"The start of the new month does not mean a new trend.  The technical tone of the dollar is weak," Marc Chandler, global head of currency strategy at Brown Brothers Harriman in New York, said in a note to clients. 

"The Federal Reserve acknowledges the continued improvement in the labor market. The problem is that it has not translated to stronger consumption, and business investment remains soft," Chandler said. "Fed officials need more confidence that the six-month economic soft patch has ended." 

On Friday this week, non-farm payrolls for April are expected to show a rise of 200,000.

On a recent CNBC's "Futures Now," Lindsey Group chief market analyst Peter Boockvar made the case that the Fed will never get the "perfect" conditions they seek before increasing short-term rates once again.

The Fed's mandate "isn't to have a perfect world. That only exists in fairy tales, dreams and in your econometric models," Boockvar said in a recent note to clients. He believes that the Fed's monetary has been far too accommodative under Yellen as well as under Ben Bernanke.

Boockvar argued that the Fed has been taking cues from shaky international banks, and that doing so will always offer a reason to keep interest rates low.

In Wednesday's statement, the strategist noted new suggestions that the Fed is shifting its focus to concerns over international development. In its March statement, the Fed said that "global economic and financial developments continue to post risks," a line that does not appear in the more recent language.

"It's been excuse, after excuse, after excuse," Boockvar said. "This is why, eight years into an expansion, they've only raised interest rates once. They're afraid of their own shadow. They're in a terrible hole that they're not going to be able to get out of." 

Whether looking at the Fed, the Bank of Japan, or the European Central Bank, Boockvar sees a landscape littered with policy errors.

"They all believe that, by making money cheaper, you can somehow generate faster growth," Boockvar said. 

Based on this, Boockvar said that central bankers are losing their credibility and their ability to generate higher asset prices, putting the stock market in a precarious position.

"In a world that's already choking on too much debt, the cost of money really isn't an important variable and it is not a binding constraint on anybody's decision making." 

OVERNIGHT

What do you do when your credibility is already in question? Most likely what China did Sunday when it released information that its manufacturing industry sector expanded in April for the second straight month. That was the so-called good news. The bad news for anyone willing to read between the lines was, as reported by Reuters, it grew "only marginally, raising doubts about the sustainability of a recent pick-up in the economy."

In truth the term marginally itself is most likely a hedge to soften just how lousy things really are. Either way, other Asian markets digested the news by selling off with the Nikkei sliding 3.6%, the MSCI ASIA-Pacific index fading 0.4%, Australian shrares falling 0.6% while Hong Kong and Chinese  market are closed Monday. Shares in New Zealand were off 0.2% and Korea's Kospi  was down 0.5%.

The dollar rallied to 106.51 against the yen after falling to 106.20, a low last in October 2014. Central bank officials in Australia are set to meet Tuesday with its cash rate at 2% where many believe it will remain though some economists are expecting a cut. Meanwhile, the Wall Street Journal reported:
Over the weekend, the U.S. Treasury Department, in its semiannual currency report to Congress, called out China, Japan, South Korea, Taiwan and Germany for relying on policies it says threaten to damage the U.S. and the global economy. The move, meant to pave the way for a new pan-Pacific trade deal, may discourage Japanese authorities to directly intervene in the currency market, analysts say.

WE'D LOVE TO SEE

More things than one can shake a stick at have been blamed for the ongoing sour global economy. In case you've forgotten it's same one that began nearly a decade ago.

The latest piece of quasi-Keynesian nonsense is not new: if somehow we just stick more money in consumer pockets they're so dumb they'll traipse right out and spend it, rescuing the world from the tenuous economic precipice it teeters on today.

Now this gem comes after nearly a decade of the wildest foray into monetary policy this semi-civilized world has ever witnessed including the latest insanity appropriately named NIRP. It might be a double negative, but it strains one's gray matter to calculate a positive from two negatives.

That real wages have been flatter than a clip board for longer than one can remember is not debatable even in that rarified air of MSM editorial board meetings. You know who those folks are, the ones who spread the authorized word.

Now, according to a recent WSJ piece, "Anemic Wage Growth Restraining Economy," begins with this white tale: "Years of solid job gains are failing to produce a breakout in wages, suppressing the spark needed for a sustained pickup in economic growth."

The author then quotes the bogus job numbers created over the past four years we've all heard and caps it with how low the unemployment rate now is. Next he cites the obvious, "The U.S. economy, like much of the globe, is stuck in a slow-growth rut. Turmoil overseas and still-weak commodity prices are preventing the manufacturing, trade and energy sectors from supporting growth. That leaves U.S. consumers to boost the expansion."

This is all part of the MSM ploy to distort the facts, things are not good but they're getting better and if employers would just hike wages consumers will ride to the rescue. It's that simple. No mention that many of the banks in Europe are bankrupt, none of the massive global debt and over-spending sprees that were simply for years kick down the highway changed let alone solved, let's just consume some more and get a whole new cycle underway. We will worry about the next nightmare when it gets here.

Then comes the piece de resistance for this crowd, comparing wage growth today with that of previous expansions. It's a popular economic metric. If we just elevate to the same average as then, the words of the noted tune: "It's summer time and the livin' easy. Your daddy's rich and your momma good looking" will start playing again.

Next comes one of the favorite  bamboozles of economists, productivity growth. Just get the boys and girls to produce more per unit of work time. Then all those fortunate ones can genuflect on Mondays for their pittance of increase in salary. No mention of during recessions that those lucky enough to stay employed are forced to double and triple up on their daily workloads. It's common as human nature.

What never gets blamed is bad government management by bad government bureaucrats and politicians and government agencies laced with give-away and con artists. Now that's a productivity index we'd love to see. Unlike what many in the mind of these people believe the buyer of last resort isn't the Fed as we've all been told. It's you and me, if we choose to participate.

A few years ago a business associate told me his hairline started to recede at 12 and by 25 he was completely bald. He said he used to spend 15 to 20 minutes everyday just running his fingers slowly through his hair. And when I asked him why, he said: 'It was leaving me so fast I wanted to appreciate it as much as I could while it was still around."

With a cashless society just over the horizon, you might want to do the same with your cash.

ANYTHING BUT NEW

The way of the Whigs.

If you're not familiar with your history, you might want to read up on them. They discombobulated, disappeared, a once powerful American political party.

Whigs are symbolic for what's disappeared beneath them, too. The concern currently amongst all the turmoil in the Grand Old Party is whether it will pull a self-inflicted Whig and disappear. The replica is old to be sure and it's questionable if it was ever grand. It is also exclusionary.

But any idea that it is alone as if the other party is any less safe from self-destructing is delusional. We've said before and we'll say it again, these are old, tired, boring parties that together for decades have served less than 20% of the population.They've taken us into huge debt, numerous unnecessary wars, created a worthless currency, massive strangling regulations and a tax code that if it were any denser it would be an element on the periodic table.

Both are peopled with bureaucratic leeches that hang around instead of working real jobs to retire on the taxpayers' dime with retirement benefits that equal or in some cases exceed a king's ransom while Wall Street billionaires flap their gums about the Social Security implosion that awaits a few years hence. They voted themselves and their aides a far better, far different and far more inclusive medical plan than other common government workers get.

And they saddled the proletarians with a costly, pitifully inefficient health care plan that anyone with a trace of morality would be ashamed to claim ownership.The only thing bipartisan about these parties and their elected officials is they both patiently steal away their lucre and run when their time comes.

The idea that people are so upset only because of the recession and America's demographic transformation, as historian David Greenberg in his "The Last Great Republican Rupture" in this weekend's Wall Street Journal claims, shows just how out of touch with reality the good academician and so-called political pundits are.

The more you read drivel like this the more one wonders why waste one's breath. These people either don't have a clue or, much more likely, they don't care. And that's the ying and yang of it. Once the majority of the masses fully comprehend that principle, these two bankrupt parties will go the way of spats. The upcoming election might well be the prelude and that's why the entrenched are so pale and wan as the season approaches.

As for the Whigs, it had roots that go back to the American Revolution and though many historians might try to deny it, much of the party's history symbolizes that today's deeply troubled and divided nation, contrary to what media talking heads and others would have one believe, is anything but new. And just for that matter alone it's likewise nothing to be either ashamed of or made to cower over.

HELD RESPONSIBLE

Central bankers have been much in the news of late, given the meetings of two global heavy hitters last week, the Federal Reserve and the Bank of Japan. The risk on-again-off-again has been one of the popular themes of the market for some time now. Sort of like one of my old girlfriends, is she staying or going? Confusing to be sure, especially two years after her initial announced departure.

And that brings us to the Fed and it's current strategy when one doesn't have a clue any longer. Will they hike interest rates this year or won't they? And if so, how many times and when does it all start?

One time when it doesn't for sure start is just before what could be one of the most volatile, contentious presidential elections in the nation's history.

Just look at the market's reactions to the recent Bank of Japan's do nothing stance at it last meeting, it wasn't what those central bankers hoped for. And the same can be said for the ECB. Factor in this little riddle, too: The Fed's abrupt on-again-off-again recent concern about the global economy. We all know that the Yellen-led Fed claims to be data driven. But when that data are not driven in the direction you want or hoped for, what do you do then? Obfuscate.

The lesson here for investors and all those linear-thinking central bankers is not all markets are groupies. Recall too in the last few months how many Fed emissaries have been sent forward to give conflicting are-they-or-aren't-they messages about interest rates in the media. The shelves in the Global Monetary Policy store are empty. What's left is what's going on now.

When you can't find any inflation because your inflation-doctored data is now returning to bite you in the butt, when you no longer have a clue, confuse and obfuscate, and with a little luck somehow the problem just might disappear. But then as economists are so fond of saying: On the other hand.....!

As for that old girlfriend, that strategy didn't work. But a court ordered eviction notice did. And that's why in the future, the Fed, if there is one, ought to be held responsible for its actions. Around the globe these bureaucrats hold in their tiny linear and often pathetic econometric-laden minds the financial future of too many lives for a group of non-elected bureaucrats to escape responsibility.

OVERNIGHT

Doing nothing like every other strategy can have its shortcomings, too, as the Bank of Japan found out Friday when many Asian markets turned down just one day after the BOJ's decision to stand pat for now on any further easing of monetary policy.

While Hong Kong's Hang Send fell 1.2%, Korea's Kospi shed 0.6% and the Australian S&P/ASX 200 eked out a 0.3% gain. The Japanese market was closed for a holiday. Asian investors continue to show concern about prospects for global economic growth.

Market activity Thursday in the U.S. didn't do Asian shares any favors as the Dow Jones Industrial Average declined to its largest percentage loss since early February. And the yen hit an 18 month high against the dollar at 107.13, its strongest level since last 2014.  Another financial shoe that hit the floor Thursday was the first quarter slowdown the U.S. economy when GDP grew at a miserly 0.5% annual rate, lower than analysts were expecting.

It was the third time in a row that the GDP declined compared to the previous quarter and fits into the pattern of slow GDP growth in the U.S. for nearly a year. In fact, as one observer noted this slow economic growth during this administration's tenure will likely be the fourth worst in recorded history. Keep in mind this indicator has been changed many times recenlty and the changes favor the government not you and me.

But don't expect this to get accurately reported by MSM or central bankers. You also should realize just how desperate these people are to scavenger up some inflation. People who get so upset with Trump for saying anything apparently don't realize he's just doing what MSM and central bankers do every day. Say anything to keep this puppet show going.

And that  brings us back to our opening: Doing nothing like every other strategy has its shortcomings, too.

"THE SON OF A BITCH COULD PLAY FOR ME!"

Love or hate Bobby Knight, he says what's on his mind.

Campaigning for the Donald earlier today in Evansville, Indiana, Knight pointed out he was quite selective when he coached at IU in picking his players. Well, there's another guy, no less controversial than Knight, who speaks his mind. He's running for president. Here's what Knight had to say about him: "The son of a bitch could play for me."

Pancakes for breakfast anyone?

businessinsider.com/bobby-knight-donald-trump-2016-4?

OVERNIGHT

First there was the Fed's statement Wednesday that drove the yen lower and then when the BOJ decided to stand pat on any further monetary easing for now the yen rose sharply against the dollar, rallying 2.4% to 108.8770 chalking up its biggest one-day increase, according to the WSJ, since late August 2015.

The BOJ announcement came during lunch time Thursday, but when the market reopened the Nikkei headed south surrendering earlier gains of 1.6% that turned to losses of 3.2%. For many the announcement caught investors by surprise since there was a feeling the BOJ would take some action to further weaken the yen. The yen has been rising much of the year against the dollar, hurting Japanese exporters.

Others speculated that the market's negative reaction to the bank's previous easing could have affected their decision to hold off until they have more data. The strength of the yen against the dollar also caught many off guard, but the Fed's decision to hold off on what was earlier projected to be four interest rates hikes this year to possibly only two no doubt gave the yen a boost.

According to the report, consumer prices in Japan were down lending further confusion since any sign of inflation appears to be harder to find than a four leaf clover. Apparently, deflation still rules the day after massive and unprecedented monetary easing policies by the BOJ, leaving officials there to ponder their next move.

What's next is anyone's guess, but a confidence crisis might be a good guess as it appears not just Japanese central bankers have no clue. In the U.S. many believe there is a concerted ploy to keep the market afloat until after the November election. Meanwhile, other markets faded as the news spread with the Shanghai Composite off 0.7%, the Hang Seng down briefly before rallying 0.3% and the Kospi shedding 0.6%

OVERNIGHT

Not much was expected ahead of some central bank releases today and Thursday as Asian markets mostly traded lower, but crude oil owing to a supply draw down report held strong,  settling near 2016 highs.

MSCI's broadest index of Asia-Pacific shares outside Japan .MIAPJ0000PUS retreated 0.5 percent while Australian shares remained flat owing to weak inflation data as the Reserve Bank of Australia kept its rates unchanged though some investors feel a further cut could be in the works soon. One of the big questions is what will the Bank of Japan do Thursday. Some are expecting officials to further ramp up its monetary stimulus package.

 U.S. crude traded at $44.50 a barrel, not far from $44.83, the highest since early November. Tuesday, Brent crude was at $46.30 a barrel after rising to a five-month peak of $46.49 overnight. Energy shares are up 14% over the past three months, not necessarily what investors were anticipating, a move that outperformed most other sectors. In other Asian markets, the Shanghai Composite Index was flat, while Hong Kong’s Hang Seng Index fell 0.3% and South Korea’s Kospi was down 0.2%.

The WSJ reported: Stocks in Japan fell Wednesday amid disappointing corporate earnings ahead of decisions by central banks in the U.S. and Japan, while elsewhere in the region, energy shares rallied as oil prices reached new highs.

The Nikkei Stock Average fell 0.5% as traders were reluctant to put on big trades. Among individual stocks, bicycle parts maker Shimano dropped 4.4% after the company cut its net-profit projection for 2016, citing a weaker U.S. dollar against the yen.

IT HELPS TO HAVE FRIENDS

If there's a Wall Street firm more worthy of your contempt than Goldman Sachs, we have yet to see it.

This is a firm in the back pocket of the Federal Reserve, an advisor to billionaires and some of the world's largest corporations. It is an investment bank that loves to throw its political clout around. Just ask one of the major candidates in the current presidential circus. And see it's position on Brexit where it stands to take a big hit if the yes voters carry the day.

You know, despite their shilling for the fantasy global economic recovery meme, things are tough when GS goes after "cash-cushion" money. This is an haughty 150 year old, stuffy outfit so full of itself that they most likely wouldn't let the common guy step indoors during a downpour. Such rabble would sully the lobby.

Now this arrogant, elitist firm comes sniveling after what can only be called quasi-deposit monies. A recent purchaser of GE Capital Bank's online deposit platform, GS is going after the retail trade. Sort of. And that's what one has to be chary of. These folks aren't your friends by any stretch. Revenue from their investment banking and trading business hit the wall recently. In other words, bad economic times in the long run catch up with all of us.

The excuse floated by their MSM friends is recent tougher regulations. To attract business--see The Art of Coney Catching 18th Century UK literature--their offering high rates, 1.5% on savings accounts, a whopping 1% on CDs and, hold on to your passbook, 2% on five-year CDs, according to the WSJ.

What's the catch? There's only one way to get your money out and at that only six allowed withdrawals per billing cycle is by electronic transfer to another financial institution. No mention as far as one can tell whether these transfers like most things in the investment banking world come with a fee. It's near impossible to imagine two banks involved in a transaction without any fees.

Goldman is trying to catch up with other large Wall Street firms with fairly large deposit bases. Consumers in the eyes of big investment bankers are hardly the smartest people on the planet. Deposit funds are known for being really sticky. Given that and some stringent withdrawal rules and you got yourself a steady flow of low-cost, long-term funds to toy with.

It's a great gig if you can get it. But first you have to get approval from your friends in Congress and at the Fed. But after all, that's what friends are for, isn't it?