The Big Camel's Spine

Why anyone was surprised at the recent outburst by Supreme Court Justice Ruth Bader Ginsberg is beyond us. Most people knew what they were getting when she was nominated, a left-wing ideologue who would bring her ideology to the court. And she has.

That she was ever confirmed reveals the lack courage of the Republicans who did what they always do, compromised away any principles they are famous for pretending to have. Republicans wonder why Trump gained such traction. Ruth Bader Ginsberg is one reason. And her outrage brings up another Trump point, judges are hardly impartial. Her ranting only buttresses his early point about a certain judge recusing himself. It's has everything to do with politics and nothing to to do with race.

The comment of another current Supreme Court Justice a few years ago at Berkeley is further proof judges and their decisions are affected by their ethnicity. This is yet another deep divisive issue in this nation. But not just here, around the globe. People get it. Right now in this country and elsewhere in Europe there are Muslims who want only to be judged by Shea law. We presume that means no blacks, whites or Hispanics. Sounds like there's some ethnicity in there. One could postulate that when she was appointed there were Americans who wanted to take her husband's advice and move to New Zealand. But we doubt if that thought ever crossed her mind.

Ruth Bader Ginsberg should be ashamed of herself. Her obvious prejudicial outburst did more to sully peoples' respect for the law than 100 unjustified cop shootings of citizens. And we all know over the years there's been many more than that. And the victims were hardly all black.

This is just another thorn in the sides of the elites running this country. One more blatant straw placed on the the big camel's already sagging spine. That's our view. We hope you know yours, though we most likely will be censored for it by Google, as we have in the past. It's a small world after all, but hardly one, you need to be aware of, with genuine free speech.

Overnight

Overnight

This chart from WSJ tells the story as the  DJIA pushed to a record Tuesday, surpassing their May 2015 milestone and ending the longest stretch without a record since the period from October 2007 to March 2013. The Dow was up 120.74 points, or 0.7%, to 18347.67 to climb past its previous closing record of 18312.39 set May 19, 2015.

Overseas, the Nikkei hit a one month high Wednesday as investors continue to look for more monetary stimulus from the BoJ. The Nikkei edged 1.0% higher to 16,444.25, highlighting its gain since the election Sunday to 7.5%, with today's rally to a one month high. Tuesday Prime Minister Abe met with form Federal Reserve Chairman Ben "Helicopter" Bernanke amid speculation that they would discuss that topic in an attempt to put an end to the deflation that's been troubling the Japanese economy for longer than most can recall.Further easing would increase liquidity that would be expected to find its way into the equity markets.

Elsewhere, the WSJ reported: Australia’s S&P/ASX 200 was up 0.3%, Korea’s Kospi gained 0.6% and Hong Kong’s Hang Seng Index added 0.4%. China’s Shanghai Composite Index rose 0.4%. The gains follow strong performance on Wall Street overnight, with the Dow Jones Industrial Average closing 0.7% higher to a fresh record high. 

Chinese shares were also up, despite a ruling from an international court against the country’s claims over the South China Sea. Though China rejected the ruling, it struck a conciliatory tone to say that it was open to talks with its neighbors. That, along with investors exiting positions, led to declines in defense-related stocks on Wednesday.

Meanwhile, China’s yuan was trading slightly weaker against the U.S. dollar ahead of data this week, ranging from second-quarter economic and credit growth figures, to June property and industrial-production numbers. 

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Tossing Some Crums

If you want to know how scared the elites are here's a story from Business Insider about Jamie Dimon, the big guy at Chase Bank, wanting to make America great again businessinsider.com/jpmorgan-raising-wages-for-hourly-workers-2016-7?

What you know about this is Dimon and his kind wouldn't be making any concessions, nada, unless they felt pushed to the mat. You can also bet Brexit had something to do with these-tossing-a-few-crumbs to the rabble decisions.

JPMorgan CEO Jamie Dimon wants to make America great again.

In an op-ed article published in The New York Times on Tuesday, Dimon outlined a plan for the firm to raise wages for overtime-eligible employees over the next three years. The firm's minimum wage for its 18,000 hourly employees in the US will move from $10.15 an hour to a range of $12 to $16.50 depending on market and location. It's a move similar to that announced by Starbucks on Monday. 

In his article, Dimon wrote that a pay increase was "the right thing to do."
"Wages for many Americans have gone nowhere for too long," he continued. "Many employees who will receive this increase work as bank tellers and customer service representatives. Above all, it enables more people to begin to share in the rewards of economic growth." 

Banks, especially big ones like Mr. Dimon's, have been printing a lot of money for a long time and their industry is noted for low balling their employees when it comes to wages.  And for those who suggest at least he's doing something, this is an industry that charges you in many ways for trying to withdraw your own money. This is an industry that wrote the manual on ways to skim money from their customers via so-called fees.

A business associate recently related this story. He had to go into his bank, one of the largest and where he's had his account for years. He wanted to order more checks while he was there for his business, thinking it was efficient and convenient. He was surprised when the teller told him he would have to go the loan side of the branch and order them,but there would be a fee. If he just went home and did it online there would not be a fee for ordering them. This was a fee for just ordering them, on top the.normal fee he gets charged for his checks.

The French philosopher Voltaire noted: "If you see a banker jump out the window, it's probably a good idea to follow because there's most likely a profit in it." Dimon's sudden burst of largess and concern for his workers is like those crocodile tears  kids cry when they get caught doing something they know they shouldn't. It's has little to do with making America great again. It has everything to do with taking the heat of Dimon and his fellow elites. There's something called timing. Just ask Hilary. She knows a lot about it.

 JPMorgan CEO Jamie Dimon wants to make America great again.

In an op-ed article published in The New York Times on Tuesday, Dimon outlined a plan for the firm to raise wages for overtime-eligible employees over the next three years.

The firm's minimum wage for its 18,000 hourly employees in the US will move from $10.15 an hour to a range of $12 to $16.50 depending on market and location. It's a move similar to that announced by Starbucks on Monday.

In his article, Dimon wrote that a pay increase was "the right thing to do."

"Wages for many Americans have gone nowhere for too long," he continued. "Many employees who will receive this increase work as bank tellers and customer service representatives. Above all, it enables more people to begin to share in the rewards of economic growth."Voltaire noted: "If you see a banker jump out the window, it's probably a good idea to follow becasue there's most likely a profit in it." 

It's a wonder they didn't have in that picture of Dimon a shot of mom and a slice of apple pie.

And They Have

This is one of those who's correct and who's wrong scenarios. What the article really shows is the panic among central banks and their taking a short-term outlook for obvious reasons, their credibility is nearly gone. Storming the gates could be just over the horizon.

It reminds of that old poem from the dying mother."Don't let my boy grow up to be a central banker, the dying mother said. Don't let my boy grow up to be a central banker, I'd rather see him dead."

After the Abe election victory Japanese investors expect more monetary oomph. The BOE head honcho, Mark Carney, is on record for saying he will provide stock market fuel. Magic Mario Draghi is still on the loose, sort-sellers worst nightmare. In the short run. For the entire article zerohedge.com/news/2016-07-12/mystery-who-pushing-stocks-all-time-highs-has-been-solved.
The long term short-the-market theme is still alive and well, yet one must be alert as to when and how one positions his or her play. These are scared people who fully understand now if this thing unravels and gets really ugly, a lamp post with their name on it might being waiting somewhere. These are tough times and tough times require tough people. Uncertainty is the rule of the day now, a lot more so than when that Berlin Wall crumbled and global bureaucrats got the opportunity of a millennium to screw it up. And the have.

One conundrum stumping investors in recent months has been how, with investors pulling money out of equity funds (at last check for 17 consecutive weeks) at a pace that suggests a full-on flight to safety, as can be seen in the chart below which shows record fund outflows in the first half of the year - the fastest pace of withdrawals for any first half on record...
... are these same markets trading at all time highs?  We now have the answer.

Recall at the end of January when global markets were keeling over, that Citi's Matt King showed that despite aggressive attempts by the ECB and BOJ to inject constant central bank liquidity into the gunfible global markets, it was the EM drain via reserve liquidations, that was causing a shock to the system, as net liquidity was being withdrawn, and in the process stocks were sliding.

Overnight

This is more a story about Wall Street where the S&P 500 index crossed over into new ground Monday than it is about Asian markets.  Last week the index bumped up against the new high but didn't right close there. The shift comes as the S&P 500 SPX, +0.34% hit an intraday record of 2,141.30 and closed at a record 2,137.16, surpassing its previous all-time high of 2,130.82 set May 21, 2015.

 Taking their lead apparently from the U.S., Asian markets across the board were up, continuing a bull move that started on Monday with the Nikkei 225 leading the pack, up 2.65%. The index is now up 6.7% in two days, this in anticipation of further stimulus from the Bank of Japan after Prime Minister Abe's election win on Sunday.

Reuters reported: Those gains are being replicated across the region, albeit on a smaller scale.
Like stocks, higher-yielding currencies are all up for the session, mirroring similar moves in commodity markets.
Government bonds yields, despite still remaining near all-time record lows, are also modestly higher.
The world is suddenly good again, just two week's after looking like it was all going to come to an end.
The only question now is what will happen when the expected stimulus splurge arrives, presuming that it will. A lot is being priced in, suggesting that there's scope for disappointment.
 
Anyway, that's for another day.

• ASX 200 5385.40 , 48.30 , 0.90%
• Nikkei 225 16124.36 , 415.54 , 2.65%
• Shanghai Composite 3010.55 , 15.63 , 0.52%
• Hang Seng 21025.34 , 144.84 , 0.69%
• KOSPI 1988.86 , 0.32 , 0.02%
• Straits Times 2890.66 , 14.52 , 0.50%
• S&P 500 Futures 2131.50 , 1.25 , 0.06%

Here's what action overnight looked like in other markets, again according to Reuters.
Currencies

• USD/JPY 102.98 , 0.19 , 0.18%
• USD/CNY 6.6997 , -0.0053 , -0.08%
• AUD/USD 0.7590 , 0.0061 , 0.81%
• NZD/USD 0.7266 , 0.0048 , 0.67%
• AUD/JPY 78.16 , 0.77 , 0.99%
• EUR/USD 1.1086 , 0.0030 , 0.27%
• GBP/USD 1.3085 , 0.0092 , 0.71%
• USD INDEX 96.336 , -0.2350 , -0.24%

Commodities

• Gold $1,355.20 , $0.35 , 0.03%
• Silver $20.38 , $0.12 , 0.57%
• WTI Futures $44.97 , $0.21 , 0.47%
• Copper Futures ¥37,080 , ¥260 0.71%
• Iron Ore Futures ¥443.50 , ¥16.00 , 3.74%

10-Year Bond Yields

• Australia 1.958%
• New Zealand 2.320%
• Japan -0.260%
• Germany -0.159%
• UK 0.761%
• US 1.437%

Britain Will Survive

Most have heard those words to the song about "Don't cry for me, Argentina." Well, the tears coming from the crybabies who can't get themselves to accept the Brexit results make those Argentina tears look like a mere cloudburst.

In today's WSJ Simon Nixon writes: " Britain's exit from the European Union promises to be one of the most complex divorce negotiations in history: Untangling this 43-year relationship will require painful decisions that touch upon almost every aspect of national life."

As for the record setting history and complexity of the divorce, it's obvious Mr. Nixon didn't go through ours. There are plenty of longer standing relationships than 43-year ones that bridge this gap. One needs to remind Mr. Nixon that Brits are quite adapted at minding the gap.

He goes on to talk about the types of debates taking place in the UK and the continent over the process and timing since, a popular crybaby stall, nobody has a credible (There's hedge term, if you've ever heard one!) exit plan, the government should hold off invoking Article 50 for two years. Maybe by then, crybabies like Mr. Nixon hope, these rubes who voted to leave will have discovered the error of their ways.

Here's a guy who has the nerve to mention complexity and the EU in the same breath. The EU, my man, coined the original term complexity. You can wager your last beloved sterling it wouldn't take Margaret Thatcher long to make that decision. Even before the vote was announced many EU bureaucrats were quoted that if Brexit passed," leave means now." There's no two year holding period to that. Jean-Claude Juncker, the pathetic EU Commission President, seconded that motion in more ways than one.

Mr. Nixon than bewails the possibility that discussions might become acrimonious. Really. The idea that unless the UK strikes some trade deal with the EU, the island will pull an economic Houdini and disappear from the planet is pure scaremongering. There's probably more souls around the globe willing to purchase UK products now than ever for one simple reason: they had the courage to stand up and strike a blow for liberty for damn near everyone who actually cherishes it.

As for concerns about acrimony, wasn't that what stay people and their Brussels cohorts did nearly the entire pre-election time, bringing in all those scaremongering, name-calling heavyweights. The next UK PM, whoever she is, needs to find her mark on the floor, look the EU bureaucrats dead center in the eyes and: tell them: "We are the proud British people. We played your bureaucratic games for 43years. It's over." And then let the chips fall whichever direction they take. Britain will survive. It's extremely doubtful the EU will.

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CB Caused Mania

As negative interest rates spread around the globe anyone with even a little common sense should realize this can't end well. Manias hardly ever do.

But if you're looking for people with a bit of that common sense trait, you need to look elsewhere than the confines of central bank edifices. Investor quest for yield is now at mania proportions and only going to get worse as global central bankers in the main continue to pursue what has been and clearly is failed policy.

Last week the yield on 10-year U.S. Treasury notes hit 1.366%, a record close. According to one report, there is currently $13 trillion negative yielding debt floating around the globe and spreading faster than the Zika virus. There was supposedly $11 trillion before UK voters voted to thumb their noses at the EU and as late as mid-2014 none.

Italy, a country hardly known for it economic forthrightness, reportedly has $1.6 trillion negative sovereign debt. A cynic might ask where is the sovereignty in  that? Here's some more sovereignty for you. Fifty year Switzerland bonds, the nation's longest maturity holding, now offer negative yields. We know what's going on in Japan and Germany isn't much different where nearly 80% of government bonds offer negative yields.

Is there anyone left who thought corporate debt was immune to such madness. If so we have a good tax-payer secure job with plush  benefits. Just apply at your local branch of the Federal Reserve Bank. What central bankers have done and are doing us a crime against humanity. Let's start at the beginning nearly a decade now ago when the Fed essentially kicked off this economic chararade.

To assume that these so-called economic experts didn't realize cutting rates would end up ultimately benefitting the few and hurting the many leaves only one of two possible conclusions: either they are not economic experts and haven't a clue or they knew precisely what they where doing: screwing older poeople dependent on fixed income and the like or purposely widening the economic gap between the haves and the with outs to bailout their rich banker and Wall Street friends.

It matters little now because these policies are an outrage and can easily be classed as a crime against humanity. And like anyone else they should be held accountable for their actions. We think is comes under the heading more of gross negligence that the latest MSM buzz "excessive carelessness."

Either way, for those enamored with the idea of a global court, let's see how much these closet globalists like the concept.

 cafe4now.blogspot.com

Overnight

It was called "a referendum on Abernomics" and that's what it turned out to be as Japanese Prime Minister Shinzo Abe's coalition victory "is expected to bolster his grip over the conservative party that he led back to power in 2012 promising to revive the economy with hyper-easy monetary policy, fiscal spending and reforms," Reuters reported.

Some voters apparently saw it as an either or with the economy and it's longstanding problems as the more important of the two, revive economic growth or revise the nation's post-war pacifist constitution. The Nikkei jumped 3.6 percent to 15,654.82 points by mid-morning trade, the highest since July 5. The MSCI's broadest index of Asia-Pacific shares outside Japan .MIAPJ0000PUS jumped 1.9 percent to a one-month top. Australia added 1.8 percent and Shanghai .SSEC 1 percent.

Some of the god news came after U.S. equities on Friday on the nonfarm payroll jobs report that reveled the nation has added 287,000 jobs in June, a report that surprised, exceeding most economists' projections, n the coat tail of May's surprisingly weak report. Both reports were explained by a word economists used often when they have no real explanation for the numbers, aberrations. The S&P 500 index Friday brushed against its all-time high mostly on the jobs news.

 Abe might be smiling for now, but here's a story from the WSJ that noted the structural problems his nation faces, not the least of which is guaranteed employment.

Prime Minister Shinzo Abe’s Liberal Democratic Party and its Komeito allies won a stronger majority in Japan’s Upper House election on Sunday. The victory was more a reflection of weak opposition, but perhaps he’ll use this third national victory in a row to salvage Abenomics. 

Instead of the economic reforms he promised, Mr. Abe continues to push the same government spending and monetary loosening Japan has tried since the 1990s. The economy continues to dip into and out of recession, and deflation has returned since March with consumer prices falling 0.4% year on year in May. The election gives Mr. Abe another chance to arrest Japan’s economic slide, whether or not he deserves it, and his best bet is to tackle the labor market.

In 2014 Mr. Abe seemed poised to amend laws that make it difficult for companies to lay off full-time employees. But he backed off amid opposition from labor unions. Instead the Prime Minister focused on reinterpreting Japan’s constitution to allow closer military cooperation with the U.S. That was a worthy initiative, but it was so unpopular that Mr. Abe has lacked the political capital to pass economic reforms.

It’s time to try again. Japan’s labor laws allow even clearly incompetent employees to file wrongful dismissal cases that drag on for years. The Nikkei newspaper cites an estimate that six million full-time workers have nothing to do.

Japan’s lifetime-employment system worked tolerably well during the high-growth postwar years. But as the economy slowed and the population aged, companies shifted their hiring to part-time employees who can be laid off easily. That has created a two-tier system that hurts the young in particular.

The rise of part-time contracts explains why Japan’s low 3.2% unemployment rate hasn’t led to wage increases. Instead of laying off workers, companies reduce the number of hours they employ part-timers. Japan suffers from massive underemployment rather than unemployment.
The government also uses regulation to shelter nonmanufacturing industries from competition. This explains why Japan’s labor-productivity growth has remained below 2% for the past two decades, according to McKinsey. The problem is acute in services, where Japan’s productivity is about half that of the U.S.

University of Tokyo economist Hiroaki Miyamoto suggests Mr. Abe should also target Japan’s seniority-based wage system. Performance-based pay would give workers more flexibility to change jobs or leave to start new companies. Companies should be free to raise their retirement age and keep experienced workers in different capacities.

Resistance to labor reform from the opposition Democratic Party and even within Mr. Abe’s coalition will be intense. But the voters have given him his third successive mandate. This may be his last chance to use an election victory to push through the most critical reform for rejuvenating Japan’s economy.

Before Not After.

The scaremongering never ends. The pundits said the unexpected Brexit outcome would unleash an unprecedented reign of negative economic chaos.

Now all the turmoil from that event might not be in, to be sure. But the longer it goes, the chances increase the weaker it gets. There were a few who claimed Brexit if it won would be another big Y2K event , a big yawn, if you recall all the disaster many expected at the beginning of the new millennium and the world's then rising computer dependence.

Meanwhile, some questionable so-called recent nonfarm payroll jobs numbers have the bull songbirds singing again. It's a known fact people find what they're looking for. There are two sides to it. If you ever spent anytime sitting in a boring college class you might recognize it as the positive and negative halo effects.

Athlete's get hung with it all the time. Just lose a big game and see what happens. Boxing is a classic example. A really good fighter loses a tough fight and he or she and their trainers and everyone else associated with him fall off the globe. A few sports let some also-ran participants into the final match-ups. And occasionally, to be sure, one of them wins it all.

The stock market, even if it makes a new closing high, has gone nowhere for a longtime. Some refer to that as distribution. Valuations are like the bar in the high jump, six feet ain't high for some folks. But the high jump is only one event in the whole meet. What's going on around the stock market?

We'll spare you the litany of negatives and won't insult your intelligence with the MSM cliches like walls of worry. Taking some profits off the table is like having a fully inflated spare tire in your trunk. That presupposed checking it occasionally to see if it's still full. The stock market--if you want to label it such--is about the only shred of credibility the Fed has left. Ironically, however, it's own creation might turn out to be the cause of the Fed's final denouement.

For most of a decade central banks have been spinning their so-called economic magic--if you're Japanese it's been almost forever--and people see the results. You'll have more luck today marrying a California virgin than finding a member of the once sought-after, widely-available middle class. The middle class was once what an associate, without any condescension or contempt because he like the rest of us was a card carrying member, labeled keeping-the-lid-on-segment of our society. Central banks in any global explosion will prove what they are, about as useful as a set of teats on a bull.

Change is afoot in the globe today. Like it or lump it. Change is what all those climate change converts are screaming about, now criticizing absence any tact or remorse the numerous anti-converts for resisting it. And that's what all the revulsion against Brexit is about. How dare you ingrates vote to leave our perfectly structured-elitist-conceived-status quo-interventionist paradise.

Markets reportedly discount the future. Take the hint and structure your portfolio, if you still have one left, before not after it gets here. And sprinkle in some of that glittering stuff along the way just for safe keeping.

Overnight

Friday comes early in Asia ahead of the Friday U.S. jobs report.

That's reasson for investor caution as Asian share eased  lower overnight joining lower oil prices. The  Nikkei 225 dropped0.4%, the Kospi was off 0.6%, the Hong Kong Hang Send fell 0.9% and the Shanghai Composite Index shed 0.9%. The Australian ASX 200 remained flat.

The WSJ reported: Chinese stocks fell amid worries of rising risks in the country’s banking sector. Nonperforming loans surpassed $299.2 billion at the end of May, which increased banks’ bad-loan ratio to 2.15%, said Yu Xuejun, a senior Chinese banking regulator. The loans data swamped the good news that came Thursday after market close about China’s foreign-exchange reserves. The reserves in June rose $14 billion to $3.205 trillion, according to the People’s Bank of China, a surprise increase that suggests currency pressure is easing.

Anxiety in the market seems to be mobile, shifting one session from the Brexit fallout to other concerns another day with  the U.S. jobs report for June's nonfarm payroll numbers coming after the Asian markets close. Gold slid lower overnight to $1,335.85.