WILL THEY OR WON'T THEY?

Recently, we overheard one wag saying: "A consensus is the most assured way to get whatever is being consented to wrong."

Now we don't know if anyone at the ECB is listening, but waiting for a consensus is just another other form of CYA. Politicians and bureaucrats love CYA. It's the old "misery loves company" couched in alphabetic slang. Here is a decent read http://www.marctomarket.com. Will they or won't they?

HEDGING AT ITS BEST

This article is essentially about the PPI, the producer price index. But then there's the CPI, core inflation, unprocessed goods, whole goods prices, a new index just invented that tracks the price of goods and services meant to be sold to consumers and a whole host of other indicators economists like to play with to try to get a handle on real (Sorry, we didn't mean to confuse by using an economic term!) inflation.

Bottom line: this is just so much economic masturbation. Sad to say, it will be around as long as economists are around. Most of it is grounded in two not so secret secrets: they haven't got a clue and the need to keep the natives from getting restless.

This economic mumble-jumble shares a commonality with the psychiatry fraternity. If you loaded both groups on a huge barge, floated it out in to the deep blue sea and blew it up, nothing would be any different. So much for two of society's best hedgers.

So here's the link. Read it and decide for yourself.  Just know there's much more inflation lurking in the shadows than they want you  to realize.

http://www.marketwatch.com/story/us-wholesale-prices-rise-sharply-in-march-2014-04-11?dist=countdown

UPDATE
 Last year we had a hard drought. Farmers took their stock to market early owing to unaffordable corn or feed prices. A similar situation happened in the hog market. One can rotate crops and plant more of one thing much easier than rotating pigs and cows. 

If you like sausages and deli meats, here's an update about how your consumption pocket is now being picked. We live in an age of government spying nonpareil, the biggest, latest satellites, drones and computers, but food and energy prices are too volatile to track accurately courtesy of your Federal Reserve and government bureaucrats.

http://blogs.wsj.com/economics/2014/04/11/no-baloney-sausage-deli-meat-prices-surge/?mod=WSJ_hpp_MIDDLE_Video_second

THE CHESS MATCH

Most who paid attention last year to the Cyprus mess knew it was really about energy, natural gas. Europe in its zeal for global cleanliness has played its hand poorly becoming dependent on Russia's abundant natural gas.

The eastern Mediterranean is loaded with natural gas according to some reports. Russia is hardly alone in wanting to get its hands on it. That would be the other half of the pincher movement. And every movement needs a pawn. Enter the Ukraine.

http://www.bbc.com/news/world-europe-26978356

AN UNLIKELY CHOICE

French President Francois Hollande's recent approval rating dropped to 25%, a number the recent mid-term local elections highlighted. Now it's a matter of what if any changes Hollande will be able to engineer given the divisiveness afoot in the country.

One of the pitfalls Hollande and his newly chosen prime minister face is hardly unique or new: perception. Despite the calls for necessary change, what with all the checks and balances, the chances of any real change appear unlikely.

http://www.spiegel.de/international/europe/french-prime-minister-manuel-valls-faces-tough-job-in-shadow-of-president-a-963271.html

SAY GOODBYE TO BUYBACKS

For the past few years buyback have been much in the news, often cited as providing a boost for equities. Well, could that trend be ending? Here's an interesting read from Business insider on the subject.

Buybacks May Be Coming To An End (Business Insider)

"The financing gap for the non-financial corporate sector has remained open since Q4 2008; i.e., capital expenditures have been running below the level of internal cash flow generation," Societe Generale's Aneta Markowska told Business Insider. "Rather than investing in new equipment and structures, businesses have used their cash positions to buy back stock or to grow through acquisitions."

"This process, however, may be coming to an end. The ratio of the market value of equities to the replacement value of tangible assets (or the so-called Tobin Q ratio) has increased significantly in the past year and now stands at its highest levels since 2000. With equity values currently estimated at 25% above replacement value, expanding organically to make a lot more economic sense than expanding through acquisitions or stock buybacks."

Read more: http://www.businessinsider.com/financial-advisor-insights-april-10-2014-4#ixzz2yXBBcn6e

FORGET BUTTER SPREAD THE ANGST

The angst spreads.

Call it deflation angst. See Draghi's drag may be coming to an end.

Today's WSJ has caught the virus, saying the Fed hopes to "push very low inflation from 1% toward 2% level that officials associate with healthy business activity."

All this central bank hand wringing backed up by data that, at best, can only be defined as amorphous is probably the best contrarian sign central bank seers will prove when all is said and figured they are in their usual spot--behind the curve.

So e might call all this central banker concern pessimism. We call it over enthusiasm to the down side. Look around you'll find plenty of inflation starting wages that have been petrified for years. The proof isn't in the pudding; it's in the measuring.

http://online.wsj.com/news/articles/SB10001424052702304058204579491661272647786?mg=reno64-wsj

CONTRARIAN INDICATOR

Chart from Business Insider may tell the real tale about economic recovery. The chart represents revenue at discount store Family Dollar FDO. When things get mean and nasty consumers go slum shopping, as it's called in the retail industry. And when the economy picks up, well, you get the idea.

THE DRAG MAY BE OVER

Some observers seem to believe Mario Draghi, the would-be EU's answer to the U.S.'s Ben Bernanke, looks as if he's about to quit dragging his monetary-policy feet and cause if he can a little inflation in the EU zone.

EU area inflation is the weakest its been in four years increasing year-over-year in March just 0.5%, hardly enough to ward off all the concerns there about more deflation. So when is when, this June some are saying, the head of the ECB will ply his hoped-for monetary magic. 

The longer this drags on, however, the more heat Draghi and his merry band of central bankers can expect. 

http://www.bloomberg.com/news/2014-04-09/draghi-seen-easing-policy-by-june-as-ecb-readies-rate-cut.html

COMING UP ALUMINUM

It's spring and besides the expected flowers aluminum demand may be soon be spouting if one can believe the earnings report today from Alcoa (AA).

Earnings for Alcoa rose 3.5% to nearly $13/share, $12.97 to be exact, the company reported. The news carried some significance since Alcoa is the first in the S&P 500 to report.

The company also forecast rising demand for the light metal that's used in a variety of manufacturing, saying demand will outstrip production in 2014. On the one hand that might not be saying much since there's been a drastic cutback in production. On the other hand, time will tell.

Alcoa's news boosted other raw materials as they joined health care  companies to rally more than 1.4% to push other equities higher. Biotech was another winner as the Nasdaq Biotech Index spurted 3.6%.

Two big money center banks, JP Morgan and Wells Fargo, are up next when they report this Friday.

REACH FOR YIELD

"Reach for the sky," use to be a popular term in the days all of those old black and white westerns whenever the bad guys were robbing the innocent or unwary.

Today, there's a new term, Reach for the yield, thanks to wayward politicians and bumbling central bankers. But one thing hasn't changed. It's still a holdup.

http://blogs.marketwatch.com/thetell/2014/04/09/greece-returns-to-bond-markets-but-buyer-beware/