Most markets are closed today.
For some reason, the US takes Good Friday off and not Monday, which is better, because then you get to come back to a short week, which feels like another vacation. Anyway, this is going to be a wild week as we have 5 scheduled Fed speakers and the Fed Minutes on Wednesday.
Not too much happened over the weekend, other than Microsoft unleashing an Artificially Intelligent ChatBot on Twitter that quickly turned into a racist Trump supporter before having its plug pulled after just 15 hours of freedom. The other big news of the weekend was Bernie Sanders crushing Hillary in Washington, Alaska and Hawaii, taking over 70% of the vote in each state. Meanwhile, the GOP candidates continued to slander each others' wives.
Don't forget, we're heading into the end of the month/quarter, so we're expecting great efforts to be made propping up the markets into our Q1 earnings reports in April. It's a pretty busy data week and, this morning, we got a good report on Chinese Industrial Profits which, unfortunately, makes no sense given the other data we've seen but, as I said, all the stops will be pulled out this week to give us a positive quarter to start the year.
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In addition to what you can see on the calendar, Charlie Evans speaks on Thursday afternoon but Lacker has the last word on Friday and he's all about raising the rates , so we'll be sticking with our hedges regardless this week. On the whole, we are not expecting great things from earnings and the Central Banksters have Already played the stimulus card to save March – what's left to save April? Perhaps the Fed Minutes will offer a clue.
California moved to make the minimum wage $15 over the weekend and that is fantastic news for workers – in 2022, when they finally take effect. Well, if workers are lucky, we will have deflation over the next 6 years and it will seem like real money. That deflation is far more likely if we continue to delay paying our workers living wages.
HSBC's Stephen Major notes that "either debt has to come down or income has to rise, otherwise deleveraging is likely to persist and the air will continue to escape from the global economy." I agree with Major but I also don't see that reducing debt is a realistic option – not in any meaningful way. As Major notes:
The economic slow puncture was once associated with Japan alone. Persistent undershoots in nominal economic activity since the onset of the global financial crisis suggest that the problem has spread. As more and more countries succumb, so the ability to escape declines – as, indeed, Japan itself has discovered in the light of disappointments associated with Abenomics.
Devaluations simply pass deflationary pressures from one part of the world to another. What was once seen as monetary stimulus is now more typically described as the latest salvo in a protracted currency war. Central banks have seemingly lost the ability to bring inflation back to target.
To illustrate my point, that GREAT Personal Spending Report that added fuel to the Fed rally last month has been revised down from 0.5% to a pathetic 0.1% but you'll only hear about how 0.1% was in-line from your Corporate Media outlet because they are owned by Top 1%'ers who have lots of money in the markets and advertisers who want you out there spending, not worrying about the economy or your future.
I mean, come on – is this some kind of joke? If so, it's on us!
