SUPER-SIZED PARADOX

Paradoxes never end.

Former New York City Mayor Michael Bloomberg delivered the commencement speech at the University of Michigan recently where he singled out the importance of having an open mind.

So when is the billionaire going to get one? How about starting with super-sized soft drinks and peoples' right to choose? That might be an interesting place for you to start, Mr. Former Mayor. He then went on to talk about micro spaces, those little dens popping up on college campuses now like wild spring flowers.

They are exclusionary, a lot like high, thick walls that separate countries many young college-aged youth so much loathe today. As we said: paradoxes never end. Mind are just find; it's yours that are screwed up.

The fact that some university boards and administrations now bow to pressure and shield students from these ideas through ‘safe spaces,’ ‘code words,’ and ‘trigger warnings’ is, in my view, a terrible mistake,” he said, to some applause.

But it was his point about the above issue, micro spaces, that bought out some boos. “The whole purpose of college is to learn how to deal with difficult situations — not run away from them. A micro aggression is exactly that: micro,” he said amid a chorus of boos.

According to reports, some of the students hurled epithets are the former mayor as he continued:

“One of the most dangerous places on a college campus is a safe space because it creates the false impression that we can insulate ourselves from those who hold different views,” he said. “In the global economy, and in a democratic society, an open mind is the most valuable asset you can possess.”

We wonder if the good former mayor shared that thinking with all the columnists and reporters who worked for his news organization and have spent that last few months ripping and ranting about and hurling nasty epithets at all those Trump supporters?

As we said, paradoxes never end. Mine are just fine; it's yours that are really all screwed up.

ONLY ONE WAY

Gold for immediate delivery broke above $1,300 an ounce Monday as low interest rates and rumors floated through the market that the G3 agreed to take the dollar down. The last time gold traded there was 18 months ago.

That the Japanese yen crossed most investors and the BOJ officials up by rallying strongly against the dollar after bank officials decided to sit tight was a warning sign. The news is out. Not only is the dollar falling, so is central bank credibility. But that just goes to show the real surprise here is that they ever had any credibility if it weren't falsely hawked  by the Street and their lackeys in MSM.

As we noted before central bankers are caught in their own binary quandary, especially the Fed. Most of them are quivering in their frayed dot-plot suits, afraid at this point to do anything. In their idiotic, senseless chase for the illusive fantasy number, 2% inflation, these economic lemmings have done what central bankers with their data-driven madness do best--create messes.

A weaker dollar, artificially held down interest rates and higher gold prices equate with future inflation, otherwise known as further loss of buying power. They're the standard three legs of buy-on-the-rumor-not-the-fact stools. While the Fed dithers with data to be sure the jobs numbers confirm a demand for higher wages, higher wages won't wait.

The mood of the electorate in the upcoming election has been telling anyone who bothers to listen that for months. It ain't about Bernie or Hilary or Trump. They're just media created symbols for what's rumbling beneath the surface. Forcing down interest rates and holding them down is a form of global rent control. They'll be hell to pay when those controls get lifted. And that spells the fear investors globally are starting to smell emanating from the economic cellars of global bank bureaucrats and their comrades at the World Bank and the IMF.

Fear is to volatility as bureaucrats are to incompetence. Things now are such that just about anything these geniuses do can end up only one way--wrong.

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%