- World stocks gain along with oil, clock ticks down to ECB (Reuters)
- Draghi Expected to Defend ECB in Face of German Criticism (WSJ)
- Trump, Cruz, Kasich seek to win over Republican leaders at party meeting (Reuters)
- Donald Trump Plans to Adopt More-Traditional Campaign Tactics (WSJ)
- Japan, Not Germany, Leads World in Negative-Yield Bonds (BBG)
Donald Trump 2.0 made his official debut Tuesday night following his sweeping victory in New York reestablishing him as the man to beat in the Republican presidential race. That version of Trump was markedly more disciplined, gentler and more appealing than the version of Trump we've seen for much of the last year. And, that fact should scare the hell out of establishment Republicans who believed that their efforts to keep Trump from the 1,237 delegates he needs to formally capture the GOP nomination was beginning to catch on.
"The major issues that both parties and their candidates agree upon include: the central bank’s monetary policy; welfarism; federal government involvement in education and medicine; the drug war; privacy abuse; preemptive war; foreign interventionism; and the US as the policeman of the world with increased spending for the military. The 2016 election won’t make any difference in any of these areas. The American people continue to be deceived into believing elections are serious affairs that affect our future. The Deep State will remain in charge regardless of the outcome and few will even be aware of the invisible fist that rules over us."
A funny thing happened when US slapped a major tariff on China's steel exports... prices exploded higher. But the almost 50% surge in steel prices since mid-December back to 15-month highs have left traders equally split on what happens next. Will record production levels exaggerate a global glut amid tumbling exports and rising tariffs, or will China's trillion-dollar surge in credit fuel yet more so-called "iron rooster" projects driving domestic demand even higher. For now, it appears the former is more likely as US Trade reps suggested further protectionism looms.
In the first 14 weeks of the New Year, gold rose 16%. The first quarter qualified as its best beginning year performance in 30 years (CNBC, E. Rosenbaum, 4/14/16). The reversal was prompted by stumbling stock markets and a series of sharply dovish turns from central banks around the world. Perhaps the main reason people buy gold is as a hedge against inflation. But uncertainty and fear contributed undoubtedly to gold’s stellar first quarter rise. But will it continue?
The battle boils down to what controls the market: central banks or fundamentals.
Following yesterday's OPEC "production freeze" meeting in Doha which ended in total failure, where in a seemingly last minute change of heart Saudi Arabia and specifically its deputy crown prince bin Salman revised the terms of the agreement demanding Iran participate in the freeze after all knowing well it won't, oil crashed and with it so did the strategy of jawboning for the past 2 months had been exposed for what it was: a desperate attempt to keep oil prices stable and "crush shorts" while global demand slowly picked up. And whether it is central banks, or chronic BTFDers, just 12 hours after oil opened for trading with a loud crash, the commodity has nearly wiped out all losses, and both brent and WTI were down barely 2%, leading to both European stocks and US equity futures virtually unchanged on the session.
In a politician’s mind, the purpose of the existence of the populace is to fill the trough for the leaders. And, of course, the fuller, the better.
Frequently one can tell by the title of an opinion piece whether it is going to consist of quality arguments or just meretricious mudslinging. Professor Charles Postel of San Francisco State University boldly announces the latter in choosing to title his recent tirade against sound money, "Why Conservatives Spin Fairytales About the Gold Standard". As this article is so typical of what we seek to rebut, we publish it here, and now.
The Eccles Building and its Washington/Wall Street acolytes have become a House of Keynesian Denial because the assumption that capitalism is an 80 pound recessionary weakling without the constant ministrations of the state is dead wrong.
Americans are realizing something is wrong with the system.
Human progress has been three steps forward, two steps back. That a non-fringe candidate of a major political party in the United States can call himself a socialist constitutes a leap backward. That it can happen after a century of socialistic horrors: impoverishment, ruination, tyranny, war, and tens of millions dead, bespeaks not just deadly ignorance and delusion, but depravity.
How is it that so many smart people came to believe things that aren’t true? Krugman, Stiglitz, Friedman, Summers, Bernanke, Yellen – all seem to have a simpleton’s view of how the world works. They believe they can manipulate the future and make it better. Not just for themselves… but also for everyone else. Where did such a silly idea come from?
Sunday’s producer meeting is all about nothing no matter what agreement might be forged. At best, the agreement will be, as Russia’s energy minister has stated, a gentlemen’s affair, with no binding commitments, no concrete next steps beyond having a review meeting, and no procedure for moving to production cuts.