Spend It Your Way

In case you haven't been paying attention there's a big split going on globally between the elites, the so-called experts, and the rest of us. Brexit is just one branch of that growing tree that's getting bigger by the day. There are plenty more examples. The Trump-Clinton tussle is another, though many will try to deny it.

The meme is a simple one, the rabble should just trust the experts. There are some real problems with that: For one, there are no real experts. Politicians, bureaucrats and economists are all examples of the popular classic case. An expert can be be someone who knows a little more than you, however infinitesimal that little is. Another issue, knows more of what? At some point useful has to enter into the picture.

Text books are written by those so-called experts. When it comes to cutting interest rates, as noted in the WSJ today, it's suppose to lower currency values. But don't tell that to central bankers in Japan and Australia, to name a couple. There are many more, Russia, Indonesia, South Korea, Taiwan and Hungary.

 Asking why is a fair question, but it's not relevant at this point. As T.S. Eliot said in The Love Song of J. Alfred Prufrock:  "Don't ask why, let us go and make a visit." The yen is nearly 16% higher after the BOJ implemented negative interest rates earlier this year. Australia cut rates last week, it's second this year, and it's currency rallied promptly to its highest level  in three months.

In our Overnight blurb this week we noted New Zealand's currency, the kiwi, suffered a similar fate after bankers there lopped off 25 basis points Thursday, cutting its rate to 2%, a move that sent the kiwi to its highest levels in a month.Conventional wisdom is not always wrong. And that's problem. It's right just enough to give it a patina of credibility.

But this push back against the so-called experts and elites is the healthiest thing we've witnessed in years. The PC pendulum has swung too far for too long. Questioning authority is a salubrious exercise highly recommended. Those who worship even at the shrine of science forget just how often science has been wrong throughout its history. In fact, it's only when we often discover it errant precepts promoted by its errant zealots that we finally label those former beliefs nostrums.

Climate change fears will turn out to be one of these cases, as will the current gluten nonsense. As for believing what we read today in MSM, it requires not a grain but slug of salt, Monsanto just canceled  a GMO deal in Argentina. You have enormous power as a consumer. Shop local. Economic boycotting is a peaceful way to express your opinion. The current Olympics are a well-worn example. These monster corporations use their huge economic clout to make political statements, supporting metal winners who represent politically acceptable sports. All else notwithstanding your achievements, need not apply.

These giant corporations are the Siamese twins of big centralized government, intrusive, monopolistic, pushy and overbearing. Use whatever legitimate power you have to express your opinion. And the most powerful one you have, until they attempt to take it away, is not the ballot box, but the power of purchase. In this weekend's edition of Barron's, the business magazine owned by the Wall Street Journal that is but a shadow of what it once was, noted: "Consumer spending is the lifeblood of the U.S. economy, which made last Friday's weak retail-sales report all the more disappointing....So despite the weak data don't give up on consumer spending just yet."

That should give you a hint as to how much power you have as a consumer. Exercise it. Don't be afraid. The coward dies many deaths, the brave person only one. Use your clout to support local vendors, small business owners; these are the people who deserve your loyalty and these are the people who create most of the jobs. Don't be afraid to name names, Coca Cola, Proctor & Gamble, JP  Morgan. These and many others have used their political and economic clout to push you around for a long time.

Push back time starts with your purse. You earned it. Don't let them tell you how you have to spend it.

What Goes Around

Most people are familiar with the what goes around comes around theme.

What they might not realize it holds true in places like Wall Street. A story headline, "A Very Bad Year for Sot k Pickers," in the weekend edition of the Wall  Street Journal proves the case. It's no secret now investors have been pulling big chunks of money out of managed mutual funds, much of it headed to ETF's that try to take the personal, human element out of the investing equation.

The legendary Bill Miller of Legg Mason fame who picked his way to a phenomenal record for years by picking stocks is leaving the firm he helped make famous after 30 years. Miller is a name that rivals other stock picking legends of the past like John Neff and Peter Lynch. And there have been many others.

Index funds have come to the fore, pushed by academics and insurance companies trying to guarantee a painless, riskless way to invest, sucking in more and more innocents. Index funds have been the weapon of choice for big time selling annuity products for years. The Journal article twists the petard a bit deeper, but does fairly point out some of the changes that make stock pickers' job more tenuous.

One of the reasons is correlation. In a shrinking environment contagion has a better chance of flourishing. Part of it's owing to what Wall Street is famous for, marketing, and a host of other reasons that include poor corporate earnings, a low or almost no yield environment and that always dirty five letter word, money. In today's topsy-turvey setting people just want to get their money back rather than go for penthouse.

As for signs this will change a Journal sidebar to the above story says it all. In Palo Alto, California, according to one source, the average home in the cheapest neighborhood is $1.3 million, pricing nearly all middle class buyers out of the market. So the local planning commission sought to address the problem only to discover one of their commissioners reigned owing to the high cost of living. She and her husband reportedly moved to Santa Cruz,California. And here another tidbit from the what goes around comes around past. At the top of the Japanese stock market frenzy, the Emperor's Palace in Tokyo was priced at a value greater than all the real estate in California.

Tokyo's Surging Stock Prices Top Record Set Before October Crash

By SUSAN CHIRA, Special to the New York Times

Published: April 8, 1988

TOKYO, Friday, April 8— Prices on the Tokyo stock market continued today to rise above the peak reached before last fall's global market collapse. No other major stock market has returned to its pre-crash levels.

Yesterday, the Nikkei average of 225 stocks closed at 26,769.22 yen, well above the previous record of 26,646.43 yen reached on Oct. 14, five days before share prices around the world collapsed. That increase was 258.05 yen, or 97-hundredths of 1 percent. In trading today the Nikkei had risen another 141.68 yen, to 26,910.90, by the close of the morning session.

The surge in prices demonstrates the underlying strength in the Tokyo Stock Exchange, the world's largest in terms of money invested. While the Tokyo market has now exceeded pre-crash levels, the New York and London markets have posted comparatively modest advances and are well below their record levels. [ In a move to bolster investor confidence in the market, the New York Stock Exchange proposed a sharp increase in the level of capital required for specialist brokers to buy or sell stocks. Page D1. ] High corporate profits, low interest rates, continuing economic growth, and Government actions to prevent any drastic fall in stock prices have driven the Tokyo market's rebound, analysts here said. Fears of Overheating.

Some Japanese officials, notably Satoshi Sumita, governor of the Bank of Japan, have expressed fears that the Tokyo market could be overheating. Mr. Sumita told reporters yesterday that share prices were rising too fast in relation to the rate of economic growth. Other analysts point out that any panic in other stock markets might spread to Tokyo, given the degree to which markets are interconnected. But most analysts here said they saw no signs of imminent danger. Indeed, they said, the stock market's recent strength rests on a firmer foundation than the surge that ended last October, prompting most to predict that the market will continue to do well. 

The market's rise reflects a recognition by the Japanese of their nation's financial and industrial power, most analysts agree. Pressed by trading partners to export less, Japanese companies endured nearly two years of falling profits caused by the rise of the yen against the dollar. But now demand from within Japan, not exports, is driving Japanese economic growth.

''There is a feeling of great confidence that Japan is now a master of its own fate economically,'' said Ron Napier, an economist for Salomon Brothers Inc. here. ''Where people used to think that they had to wait to ride the next export wave, now Japan can create its own growth.''

Japanese stock prices have been recovering steadily since the beginning of this year, and the breaking of the record had been widely anticipated. Security analysts here said that Wednesday's strong showing on Wall Street, when the Dow Jones industrial average rose 64 points, or 3.2 percent, helped create yesterday's surge in Tokyo. The Dow gained only a half-point yesterday. In Tokyo institutional investors, who have remained cautious recently, bought heavily yesterday, and trading volume soared. But analysts said there are other, more fundamental reasons for the market's strength. 

Corporate profits have rebounded sharply, by about 15 percent, since October. Japan's economy has continued to expand, with domestic demand stimulating the growth. Interest rates have remained low, making the potential for profit in the stock market seem more appealing than keeping money in bank accounts. Last week, the Government imposed a 20 percent tax on certain savings accounts that had been allowed to accumulate interest tax free. Depositors are expected to shop around for better investments, and some analysts have predicted their money would bolster the stock markets. But such activity was not credited with any of this week's advance. The market has benefited from the strong yen, which has made imports of raw materials less expensive, helping to hold down inflation despite rapid economic growth. Finally, the exchange rate between the dollar and the yen, despite some recent fluctuations, seems to be relatively stable.

''Japan is in a virtuous circle,'' said Peter Tasker, general manager of research for Kleinwort Benson International, a British securities firm. ''It's very difficult for things to go wrong now, it seems.''

Mr. Tasker pointed out that share prices had climbed gradually and steadily, in contrast to the sharp rises of last spring and fall, when prices often jumped by 700 or 800 points. Still another factor is that success breeds success. Susumu Kato, chief economist here for County Natwest, a British financial institution, said that because the Tokyo market outperformed other markets, fund managers around the world felt they could not afford to stay out of Tokyo. Since mid-January, foreigners have returned to the Tokyo market in force. 

For months before the October collapse, some analysts had speculated that any global crash might start in Tokyo. They distrusted what appeared to be excessively high price-earnings ratios, a common way to assess a stock's underlying value. But accounting rules in Japan differ from those elsewhere, and Japanese investors tend to use other measures, such as the worth of a company's land holdings, to evaluate a stock. Foreigners may also have underestimated the Government's commitment to keeping share prices high. Since the crash in October, the Ministry of Finance has repeatedly moved to reassure investors

Melting: Up Or Down?

Forget Miller Time, a beer commercial that use to haunt the airways of sporting events. It's now melt-up or melt-down time. And you won't find a shortage of gurus pushing one or the other, each with his or her historical data backed arguments.

Should this surprise you? No. You can always tell experts by their vocabulary. Take economists. We wish someone would. When their expectations or predictions go awry, it's a conundrum. But when it happens to rest of us, it simply known as the feces hitting the big fan. Conundrums only happen to experts. You know what the name of what happens to the rest of us is.

So let's look at what the experts are touting. First, there's cyclicals versus the safe and steady. The latter consists of utilities, telecom and staples with decent dividends. These have been holding serve for at least the past three years, surprising many with their total returns. Cyclicals, on the other hand, have been sick, under the weather of poor economic growth despite global monetary madness in the eyes of many. That this ratio seems to have slightly changed, the melt-up gang quotes to buttress their view.

Then there's the government bond markets, not just in the U.S. but elsewhere like the UK after Brexit. The UK has a long-dated bond maturing in 2068. Its yield has been cut nearly in half, falling from 2% to a bit over 1.5%, pushing up the bond's price 53% so far this year. To say this is not normal, as one wag who manages UK bonds for a well-known firm, noted is classic British understatement. Our bet is it will in the end turn out to be ludicrous.

Is the bond market and investors discounting a future recession? Or are panicking central bankers proving their clueless? Forget cream. In the bureaucratic world incompetence rises to the top. Back in the late 1960s it was known as the Peter principle after it's late originator of the term, Lawrence J. Peter

The principle is really quite simple, just the opposite of the power structure crowd, people rise not to their level of maximum competence but to one or three levels above it. Forget the hallelujahs. Can someone shout central bankers? What happening is known on the Street as correlation. The Bank of England lowers rates, it matters not to the market by hook or crook at this stage, sending demand higher for bonds in other countries, suppressing yields further there.

Monkey see, monkey do. You jump out the window we will too. That's what central bankers in their lack of  a clue are foisting on the scene and it's more than dangerous. It could turn out to be actionable as an economic war crime. There are people at the ends of these actions.

Meanwhile, back to the melt-up, melt-down issue, another positive melt-uppers cite is 52-week new highs and lows. It recently hit levels not seen in years. They also cite vacation time. August is notoriously a slow month for stocks. So when all the unwashed return to their normal drudgery they will dump some money into a rally at a new high that many have sat out for years.

Recent data, however, show insider buying by corporate executives hit an all time low. There are also concerns about corporate earnings. So we'll see.

Trust Not In Twigs

In case you haven't been paying attention there a big split going on globally between the elites, the so-called experts, and the rest of us. Brexit is just one branch of that growing tree that's getting bigger by the day. There are plenty more examples. The Trump-Clinton tussle is another, though many will try to deny it.

The meme is a simple one, the rabble should just trust the experts. There are some real problems with that: For one, there are no real experts. Politicians, bureaucrats and economists are all examples of the popular classic case. An expert can be be someone who knows a little more than you, however infinitesimal that little. Another issue is, knows more of what? At some point useful has to enter into the picture. Academics ought to come up here.

Text books are written by those so-called experts. When it comes to cutting interest rates, as noted in the WSJ today, it's suppose to lower currency values. But don't tell that to central bankers in Japan and Australia, to name a couple. There are many more, Russia, Indonesia, South Korea, Taiwan and Hungary.

 Asking why is a fair question, but it's not relevant at this point. As T.S. Eliot said in The Love Song of J. Alfred Prufrock:"Oh do not ask what is it? Let us go and make a visit." The yen is nearly 16% higher after the BOJ implemented negative interest rates earlier this year. Australia cut rates last week, it's second this year, and it's currency rallied promptly to its highest level in three months.

In our Overnight blurb this week we noted New Zealand's currency, the kiwi, suffered a similar fate after bankers there lopped off 25 basis points Thursday, cutting its rate to 2%, a move that sent the kiwi to its highest levels in a month.

And this brings us to theory, a province where most experts dwell. "In theory," as the Journal notes, "loosening monetary policy should lower a currency's value." But if memory serves, we believe it was Popper whose pointed out there are only two kinds of theories, those that have been disproved and those waiting to be disproved.

As we pointed out previously, financialspuds.blogspot.com/2016/08/credibilty-on-line, negative yielding government bonds as a percentage of outstanding government debt are growing, now about one third of all outstanding government bonds, at $8.8 trillion. It used to be a billion here a billion there and pretty soon we're talking serous money. Now it's a trillion here, a trillion there.

So what's the common factor here? The  Journal claims: interest rates "remain positive in most of those countries, despite the rate cuts. That makes their debt more attractive for return-hungry investors faced with a growing pool of negative-yielding government bonds...."

The moral of the story should be clear. To a drowning person even the smallest twig looks attractive.

Overnight

Taking its cue from Wall Street overnight Asian shares rallied on Friday, after a surge in oil prices helped propel Wall Street to record highs Thursday following the three main stock-market indexes ringing up record highs as better-than-expected economic data and a rebound in oil prices boosted Wall Street sentiment.

The S&P 500 .SPX, the Dow .DJI and Nasdaq .IXIC all closed at historic highs on Thursday for the first time since 1999 on higher crude oil and upbeat corporate results. Others also noted that oil prices were driving the gains in equity markets.  "Oil has been at the heart of the move, helping high yield credit spreads to narrow relative to U.S. treasuries and put real backbone behind the feel good factor," one analyst reported.

In Asia trade, oil prices extended their overnight rebound, with U.S. crude futures up 0.4 percent at $43.89 a barrel after jumping 4.3 percent overnight. Global benchmark Brent added 0.63 percent to $46.33 after climbing 4.5 percent overnight. Hong Kong shares .HSI rose 0.7 percent and were at their highest in more than eight months. South Korea's Kospi .KS11, which touched the highest level since July 2015, was little changed. Australian stocks gained 0.3 percent. Japan's Nikkei .N225 rose 0.7 percent on a slightly weaker yen, and is poised to end the week 3.7 percent higher. 

Some analysts referred to the moves as risk on again trades as investors try to figure out what's next for these markets. Reuters noted: “In the short-term, there is elevated risk downside due to high valuations, especially if earnings in the second half of the year do not rebound. But there is still some momentum chasing among investors that has driven markets to records recently,” one observer said.

The gains were supported by weekly jobless claims, which pointed to continued low levels of layoffs, while both import and export prices inched up despite a decline in fuel costs, suggesting a possible pick up in inflation. The Federal Reserve has been looking at a return of healthy levels of inflation—but low crude-oil costs have stymied that—to determine when to raise interest rates.

Still one caveat is the paucity of insider buying which fell 44% from a year ago, the lowest level on record, with directors and CEOs in July buying their own shares fell to just 316.

 

Overnight

Oil once again was the story overnight Thursday as Asian shares reversed recent gains following news of a surprise increase in U.S. government  oil stockpiles. That coupled with news that Singapore, Asia's leader for trade, cut its economic outlook for the year. Reuters reported.

With Japanese markets closed for a holiday,the Singapore economic outlook centered n  concerns over Brexit and what many see as weakening global demand. The previous forecast called of 1-3% growth and that was lowered to 1-2%  growth going forward.
 Meanwhile, Hong Kong and Indonesia led local gainers. In oil both Brent and WTI suffered sharp overnight losses with WTI off 0.7% at $41.41 and Brent down0.65 at $43.77. Gold gained overnight trading at $1,343.26.

A smaller than expect rate cut by the New Zealand central bank pushed the kiwi higher 1.1% against the U.S. dollar as the New Zealnad currency has gained 6% so far this year against the buck.
New Zealand’s central bank on Thursday cut the official interest rate by a quarter of a percentage point to a record low of 2.00%, indicating further reductions are likely to push consumer-price inflation higher and tame a strong New Zealand dollar, the WSJ noted. Elsewhere, the Bank of Korea kept its base rate unchanged for a second straight month, as widely expected. The South Korean central bank held the benchmark seven-day repurchase rate steady at a record low 1.25% on Thursday.

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Don't Worry

Right after the attempted assassination of President Reagan a government bureaucrat jumped up on the Washington stage and on national television assured viewers not to worry, he was in charge. That was before the Internet exploded.

Today, it's not a person but a government institution, the Bureau of Labor Statistics. But don't worry it's a small change. And we got this covered. Covered up would be a more appropriate term. From what we understand Fed Chair Yellen and the head of the BLS are good friends and both data freaks.

Knowing that we will rest more comfortably tonight.
zerohedge.com/news/2016-08-10/inconvenient-jobs-revisions-obama

Back February 2016, Obama took to the stage at a press conference to boast about job growth and "most importantly" how the stronger job market was "finally starting to translate into bigger paychecks."  He also took the opportunity to jab at Republicans saying the strong jobs data was "inconvenient for Republican stump speeches" as they continued their "doom and despair tour."  Obama's specific comments were:

Most importantly, this progress is finally starting to translate into bigger paychecks.  Over the past six months, wages have grown at their fastest rate since the crisis.  And the policies that I’ll push this year are designed to give workers even more leverage to earn raises and promotions.

So, as I said at my State of the Union address, the United States of America, right now, has the strongest, most durable economy in the world.  I know that’s still inconvenient for Republican stump speeches as their doom and despair tour plays in New Hampshire.  I guess you cannot please everybody.

Turns out that revisions to historical real wage growth figures issued by the Bureau of Labor Statistics yesterday are actually fairly "inconvenient" for Obama.  Time to get the band back together for a reunion of that "doom and despair" tour. 

In yet another stunning tribute to the "accuracy" and "consistency" of economic propagandadata being reported by our government agencies, the Bureau of Labor Statistics yesterday reported a massive downward revision of the 1Q 2016 YoY real wage growth from +4.2% to -0.4% (a 4.6% swing). 

But we wouldn't worry much about it because the revisions resulted in only "small" changes in the underlying data according to the BLS:

Indexes of all hours-related measures in the business, nonfarm business, and nonfinancial corporate sectors show historical revisions because hours in the base year of 2009 were revised; resulting revisions to percent changes are small.

We guess "small" would be one way to describe a 4.6% swing in YoY real wage growth...we would probably choose something more like "abysmal" or "disastrous" but we're not ones to split hairs.  Revisions to manufacturing wages and durable manufacturing wages were even worse.  Real manufacturing YoY wage growth was revised from +2.8% to -4.3% (a 7.1% swing) while real durable manufacturing YoY wage growth was revised from +1.9% to -5.6% (a 7.5% swing).

See arduous recovery, Joe Biden and Malarkey. financialspuds.blogspot.com/2016/08/malarkey.


 

Right To Know

We had to laugh the other day when much of MSM, including the WSJ, ran with this story about these 50 distinguished elitists signing a letter about how dangerous a Trump presidency would be. Trump for all of his craziness appears to be crazy like a fox because he came back with the perfect response to this list of nobodies. We won't even bother to go into the specifics of this group's arrogance other than to suggest this.

If Trump lacks the temperament to be president, what does that say for Clinton with the growing lists of incidences involving her temper and contempt for underlings? We continue to contend that her medical records should be made public.There could easily be something there to explain her flare-ups. If she's having seizures the public needs to know how many before not after the election. If  she's having TIAs, the public needs to know how frequently before not after the election.

She will be occupying one of the most powerful positions in the world that could easily impact not millions but billions of lives. The public deserves and has a right to know. In fact, all those globalists who so love to worship at the globalist shrine ought to saying the globe has a right to know.

Perhaps one of the most hysterical – as in both overwrought and hilarious – moments in America’s crazy-train journey to November happened on Monday.
Fifty self-important so-called stewards of national security, Republicans all, released a letter full of fervor and fatalism warning that the nominee of their party “From a foreign policy perspective … is not qualified to be President and Commander-in-Chief.”

They went on to say that Donald Trump lacks the temperament to be president, has difficulty distinguishing between truth and falsehood, has no self control, acts impetuously, can’t take criticism, doesn’t listen to views other than his own, is ignorant of basic facts of contemporary international politics and has no interest in educating himself, and “has alarmed our closest allies with his erratic behavior.”

To read Trump's response click here. thefiscaltimes.com/Columns/2016/08/09/Would-Trump-Really-Be-Most-Reckless-American-President

Malarkey

How do you recognize malarkey, to use Joe Biden's term, when you see it? It smells. And this excerpt from Foreign Policy sent out to draw in subscribers stinks.

The next administration will take the reins of American foreign policy in a world that is more complex than at any point in our modern history, including the twilight of the Cold War and the years that followed the 9/11 attacks. But it is also the case that despite the proliferation of threats and challenges—some old, some new—by almost any measure, we are stronger and more secure today than when President Barack Obama and I took office in January 2009. Because of our investments at home and engagement overseas, the United States is primed to remain the world’s preeminent power for decades to come. In more than 40 years of public service, I have never been more optimistic about America’s future—if only we continue to lead.

THE FOUNDATIONS OF POWER

From the outset, our administration has been guided by the belief that the foundations of U.S. global leadership reside first and foremost in our dynamic economy, peerless military, and universal values. We have built on these core strengths by expanding and modernizing the United States’ unrivaled network of alliances and partnerships and embedding them within a wider international order of rules and institutions.

Having inherited a deep economic recession, our administration first sought to steer an economy in collapse through an arduous recovery. In doing so, we have reestablished our standing as the world’s strongest and most innovative major economy, undergirded by the rule of law, the finest research universities, and an unparalleled culture of entrepreneur­ship. Smart investments coupled with American ingenuity have also made the United States the epicenter of a global energy revolution, both in renewables and in fossil fuels.

Starting with "...we are stronger and more secure today than when President Barack Obama and I took office...." there are so many lies in here stinks is too soft a term. If we're so much safer and more secure, sir, why have retail guns sales in America sky rocketed? 

Poor Joe Biden. He loves fossil fuels but only when they serve his purpose. The rule of law has been a joke in this administration. In fact, they've done as much as they could to undermine it. The international rules and institutions he mentions are blatant misrepresentations. Poor Joe, he should be ashamed of himself. The United States, sir, is less well thought of around the world today than anytime in modern history. That's just one of this administration's legacies. Poor Joe. It's a peerless military his administration promised to bring home before they took office eight years ago.

If only we continue to lead, are you, sir, talking foreign policy?  There is an old saying: Never try to out malarkey an old malarkier. 

Overnight

Asian shared were mixed  Wednesday while the dollar slid on weaker productivity numbers and the sterling pound moved up from a one-month low. the Nikkei 225 was up 0.3% later in the day brushing off earlier losses s the yen rallied against the dollar 0.6% putting further pressure on Japanese exporters.

Reuters reported the stronger yen wiped out significant earning at the sever Japanese major auto  makers. Among Japan’s biggest auto makers, Mazda Motor Corp. was down 2.0%, Honda Motor Co. fell 0.9% and Toyota Motor Corp. lost 0.7%. The Hang Seng index gained 0.6%, the MSCI's broadest index of Asia-Pacific shares excluding Japan edged up 0.35% to it highest level in one year. Australia’s S&P/ASX 200 was down 0.3% and the FTSE Bursa Malaysia Index fell 0.1%. South Korea's Kospi was up 0.18 percent.

Looking further ahead, the market is expecting a 25-basis-point cut in interest rates from the Reserve Bank of New Zealand Thursday, which should stimulate some markets. Elsewhere, the WSJ reported the Bank of England failed to buy as many government bonds as it wanted for its quantitative easing scheme on Tuesday, just two days after rebooting a multi-billion-pound bond-buying effort to stimulate the U.K. economy. Investors refused to sell gilts to the central bank, as they seek a better price for the bonds. 

Reuters noted that oil prices softened Tuesday after advancing nearly 3 percent on Monday amid news of a September meeting among OPEC members. The drop in prices reflected a surprise build-up in U.S. crude stockpiles last week. Reuters reported that preliminary data from the American Petroleum Institute showed U.S. crude stockpiles rose by 2.1 million barrels during the week to August 5, when analysts had expected a 1 million-barrel drawdown. 
U.S. crude futures were trading at $42.74 a barrel in the Asian trading session, while global benchmark Brent was trading at $44.9