NYT’s Jill Abramson Makes First Public Remarks Since Termination- Live Feed

The New York Times’ ousted top editor Jill Abramson will have a chance on Monday to address the unusually scathing criticisms of her management style leveled by publisher Arthur Sulzberger Jr. when she makes her first public remarks since she was fired. But, as Reuters notes, it is unclear whether Abramson, who was the first woman to lead the Times newsroom, will mention the controversy over her firing when she delivers a commencement speech to students graduating from Wake Forest University in North Carolina.

 




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Higher-Education Crackup: “Colleges are hotbeds of racism and rape that everyone should be able to attend.”

Glenn Reynolds, the Instapundit, has a sharp
USA Today column
about the declining popularity of
college. Snippets:

Even fancy schools such as Harvard and Dartmouth have
seen applications
decline
, with Dartmouth’s dropping 14% last year, a truly
staggering number.

It’s no picnic for public institutions either. “There have been
21 downgrades of public colleges and universities this year but no
upgrades,” reported Inside
Higher Ed
It’s gotten so bad that schools are
even closing their
gender studies centers, a once-sacrosanct kind of spending.

The decline in enrollment seems
to be slowing
, but the long-term problem remains: With costs
growing, and post-graduation incomes stagnant or worse, students
(and parents) are growing more reluctant to take on the extensive
debt that is required to attend many private, and some public,
institutions.

That is only made worse by the decline in higher education’s
image, damage that is mostly self-inflicted. As Twitter wag
IowaHawk japes:
“If I understand college administrators correctly, colleges are
hotbeds of racism and rape that everyone should be able to
attend.”…

From the economics to the politics, colleges and universities
are looking less like serious places to improve one’s mind and
one’s prospects, and more like expensive islands of frivolity and,
sometimes, viciousness. And that is likely to have
consequences.

Industries with bad reputations face declining markets and more
regulation. At this rate, that’s where higher education is headed.
It’s not clear at all that its leaders appreciate the depth of the
problem.


Read the whole thing
.

Reynolds teaches law at University of
Tennessee, so he understands the problem from within the asylum’s
walls.

The April 2013 issue of Reason featured
a symposium
with Reynolds, me, and many others discussing
“Where Higher Education Went Wrong” and how it might get its groove
back. My two cents:

You should be going to college to have your mind blown by new
ideas (read: whole fields of knowledge that you didn’t know existed
until you got to college), to discover your intellectual passions,
and to figure out what sorts of experiences you might want to
pursue over the next 70 or so years….

None of [even the best colleges] will survive the notion that
they exist mostly to serve 18- to 21-year-olds kids who need
high-paying jobs rather than limn the outer edges of intellectual
possibilities.


Read the whole symposium.

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ECB: Gold “Important” And No Plan To Sell Significant Quantity Of

Today’s AM fix was USD 1,301.00, EUR 948.67 and GBP 773.85 per ounce.

Friday’s AM fix was USD 1,293.75, EUR 943.17 and GBP 769.72 per ounce.


Gold fell $2.50 or 0.19% Friday to $1,293.10/oz. Silver slipped $0.12 or 0.62% to $19.36/oz. Gold and silver both finished up for the week at 0.34% and 1.10% respectively.

Gold moved higher today in euros, pounds and dollars after the ECB and 21 other central banks announced a new gold agreement. The new agreement was expected but the timing was unexpected as the last agreement was not due to expire until September 27.



Gold in Euros – 5 Minutes, 1 Day (Thomson Reuters)

The crisis in Ukraine and risk of increased tensions between Russia and the west continues to provide

support for gold. A further deterioration in relations seems likely and should push gold higher.

Also supporting gold is the likelihood that the incoming government in India will relax import restrictions and duties, in the world’s second largest buyer.

Over the weekend, incoming Indian leader Modi told thousands of supporters that he represents a break from past governments after winning the nation’s biggest electoral mandate in 30 years. Last week,  Reserve Bank of India Governor Raghuram Rajan said that the new Indian finance minister will decide on easing gold import curbs.




Gold in Euros -Monthy, 1999 to May 19, 2014 (Thomson Reuters)

Gold “Important” And ECB No Plan To Sell Significant Quantity Of Gold
The ECB, the Swiss National Bank (SNB) and the Riksbank of Sweden announced a new gold agreement this morning. They announced they have no plans to sell significant quantities of gold and reaffirmed the importance of gold bullion as a monetary reserve.

Twenty one central banks including the ECB, the central banks of the  euro area (Austria, Belgium, Cyprus, Estonia, Finland, France, Germany, Greece, Ireland, Italy, Latvia, Luxembourg, Malta, the Netherlands, Portugal, Slovakia, Slovenia, Spain), the SNB and the Riksbank announced the fourth gold agreement between the central banks for the next 5 years.

In a joint statement, the central banks confirmed their intentions with regard to their gold holdings and the participants in the gold agreement made the following declaration:

– Gold remains an important element of global monetary reserves.

– The participants in the gold agreement will continue to coordinate their gold transactions so

as to avoid market disturbances.

– The participants currently have no plans to sell any substantial quantities of gold.

The press release from the SNB can be read here.

The agreement, which applies as of 27 September 2014, following the expiry of the current

agreement, will be reviewed in five years’ time. The first gold agreement was concluded in

1999 in order to coordinate planned gold sales by the different central banks. The

agreement was extended in 2004 and 2009.



Official Gold Reserves in Tonnes – Developed Countries vs Emerging Countries

The timing of the announcement was unexpected as the current agreement does not expire until September.

It is understandable that the central banks value their gold as “important element of global monetary reserves,” given the still lingering economic problems in Greece, Italy, Spain, Portugal, Ireland and Cyprus and continuing ultra loose monetary policies in the Eurozone – with the possibility of negative interest rates.

Thus, European central banks are likely to continue to be reluctant to sell their substantial gold reserves which total of 10,779.3 tonnes or 8,972.6 tonnes ( EU G6).

There is also the fact that while Eurozone banks balance sheets have recovered somewhat, many are far from robust and remain vulnerable. Should there be a ‘Black Swan’ event or economies slow down again, central banks may require their gold reserves in order to maintain confidence in the single currency and other fiat currencies.


It is believed that there is little appetite for a new gold agreement among the rest of the world and among the emerging market central banks such as China. Most of the central banks that were signatories to the Washington Agreement, clearly do not want to sell their gold reserves.


The World Gold Council released data showing that global official gold reserves totalled 31,890.7 tons as of February, 2014. Of this total figure, the euro area held a total of 10,779.3 tons making it the largest holder of gold reserves in the world with 36.6% of the total global gold reserves.

The second largest holder of gold reserves is the U.S. with 8,133.5 tonnes.  

China’s central bank gold reserves data has remained at 1,054 tons since the beginning of 2009. No change has occurred in 4 and a half years, despite most market participants believing that China is quietly accumulating gold reserves. China is likely to announce a sharp increase in their reserves to over 3,000 or 4,000 tonnes in the coming months.

The previous European gold agreement, agreed in August 2009, committed the central banks to sell no more than 400 tonnes per year and no more than 2,000 tonnes in the five-year period.

Sales under the current pact have only totalled around 200 tonnes, 10 times less than was permissible. The global and Eurozone debt crisis created a new found awareness of gold as a safe haven monetary asset.

This reluctance to sell gold is likely to continue. Indeed, many central banks are already under pressure to repatriate their gold reserves from the UK and the U.S.



Official Gold Reserves as a Percentage of Total Foreign Currency Reserves

Gold reserves and the price of gold are closely watched on financial and foreign exchange markets – as a barometer of inflation expectations, of systemic risk and of confidence in fiat currencies.

The central banks at the time of the first agreement, the Washington agreement, affirmed that gold remained an important part of the global monetary system, setting the basis for a long and upward trend for the gold price.

The initial statement does not mention the sales ceiling for the pact and some market participants are surprised they did not reaffirm the sales ceiling. The European Central Bank has told Reuters that there is indeed no formal ceiling included in the new CBGA.

There was no mention of gold leasing and the use of futures and options by central banks in the agreement. There was in 1999 and 2004 but not in 2009 and again now.

The Bank of England did not sign the agreement. The Bank of England signed the first Washington Agreement in 1999 but opted out in 2004 and 2009.

The opt out may be because the UK gold reserves are now insubstantial. By signing the agreement, the BOE might again draw attention to Gordon Brown’s controversial decision to sell gold.

Follow GoldCore and GoldCore’s Head of Research Mark O’Byrne on Twitter

 




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4.2%-4.6% Second Half Growth? Good Luck

It was only in March when the Fed revealed its latest downward revision to 2014 GDP growth, when it announced (in the same report as the infamous “dots”) that its GDP forecast “central tendency” was reduced from 2.8-3.2% to 2.8-3.0%. This was when the world was still expecting a Q1 GDP somewhere around 1.5%-2.0% (when the full severity of snow in the winter wasn’t yet apparent), instead of the current consensus forecast around -0.6%. Which, when combined with the current Q2 GDP tracking forecast somewhere around 3.5%, means that for the Fed’s projection to be accurate, second half growth will have to average between 4.2% and 4.6%! Said otherwise, at its June 18 meeting expect the Fed – whose forecasting record is absolutely abysmal – to “significantly” lower its GDP forecast. Because what bonds really needed was another buying catalyst…

From Bank of America:

Forecasting change

 

When the Fed says policy is “data dependent,” what they really mean is “outlook dependent.” Only data that measurably change the Fed’s view on how the economy is evolving will elicit a change in their policy stance. The March economic projections look increasingly stale, with much lower growth, somewhat lower unemployment, and slightly lower inflation than forecasted. At the June meeting, we expect net dovish revisions in the FOMC forecasts.

 

Growth: goin’ down again

 

The unexpectedly soft 1Q GDP report has been followed by a fairly steady stream of further downward revisions to our 1Q tracking estimate. That estimate now stands at -0.7%. The first revision from the BEA will be released on May 29. If our estimate stands, real GDP must grow between 4.0% and 4.2% in each of the  next three quarters to reach the FOMC’s central tendency. If 2Q ends up at 3.4%, as we are currently tracking, then growth in the second half of 2014 will have to average between 4.2% and 4.6% to hit the FOMC’s current projection range. That is a very high hurdle indeed. Growth expectations for the rest of this year have rarely exceeded 3% among Fed officials who have recently expressed an opinion. In other words, the FOMC is quite likely to slice their growth expectations in June. Similar revisions occurred in each of the past five years.

 

* * *

 

All told, the FOMC may need to significantly revise down growth, perhaps modestly cut unemployment and leave inflation unchanged if they are to mark-to-market their forecasts at the June FOMC meeting. On net, this would be a modestly dovish shift, and not one to drive rates meaningfully higher.

Considering rates continue to dip and moments ago once again took out 2.50% to the downside (with the latest catalyst being frontrunning the Japanese GPIF Pension fund which appears set to buy US paper next in its scramble for yield), perhaps BofA may answer if the shift will drive rates meaningfully lower.




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Net Neutrality: Don’t Let the Nipplegate People (FCC) Regulate the Internet!

When the Federal Communications Commission
released its proposal last week about net neutrality, the
conversation was largely between people defending the right of the
agency that brought us Nipplegate to increase its regulation of the
Internet and people calling for the FCC to totally regulate the
business operations of Internet service providers (ISPs). That’s
not a debate: It’s a clusterfuck that in the name of preserving all
that is good and holy about the Internet would give federal
bureaucrats a huge amount of say-so in the one place it hasn’t been
able to totally screw up.

My latest
Daily Beast column
argues to keep the FCC as far away
from the Internet as possible. Snippets:

Reports of the imminent death of the Internet’s freewheeling
ways and utopian possibilities are more wildly exaggerated and full
of spam than those emails from Mrs. Mobotu Sese-Seko.

In fact, the real problem isn’t that the FCC hasn’t shown the
cyber-cojones to regulate ISPs like an old-school
telephone company or “common carrier,” but that it’s trying to
increase its regulatory control of the Internet in the first
place.

Under the proposal currently in
play, the FCC assumes an increased ability to review ISP offerings
on a “case-by-case basis” and kill any plan it doesn’t believe is
“commercially reasonable.” Goodbye fast-moving innovation and
adjustment to changing technology on the part of companies, hello
regulatory morass and long, drawn-out bureaucratic hassles….

I don’t trust the good intentions or dedication to high
principle of my local cable company any more than I trust my local
congressman with the same. But I trust the FCC even less,
especially given the
proposed rules
’ reliance on vague terms such
as commercially reasonable and the promise to
adjudicate interventions on a case-by-case basis. At best, it’s a
slow-moving government agency with a proven record of clamping down
on free expression, attempting to expand its power, and trying to
stymie technological innovation. The less power it has to cover the
Internet like it tried to cover Janet Jackson’s right breast, the
better off we will all be.


Read the whole thing.

Reason
on Net Neutrality
.

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A.M. Links: President Obama Mad About the VA, Deval Patrick Wants to See a 2016 Primary, Switzerland Rejects $25/Hour Minimum Wage

  • not so highPresident Obama is mad about something happening
    in his administration again. This time it’s about mismanagement
    within
    Veteran’s Affairs
    . An undersecretary for health has
    resigned.
  • Governor
    Deval Patrick
    (D-Mass.) says he’d like to see a Democratic
    presidential primary campaign, which is apparently not something
    all Democrats are willing to support publicly.
  • The Justice Department announced it was filing charges against
    government officials in
    China
    accused of cyber-espionage.
  • Russian President
    Vladimir Putin
    has reportedly ordered troops stationed near the
    border with Ukraine to return to their home bases.
  • Rebel forces in Libya loyal to retired General
    Khalifa Haftar
    stormed the Parliament, saying they had
    “suspended” the legislative body. The
    Libyan government
    maintained it was still in control.
  • Voters in
    Switzerland
     rejected a proposal to set the minimum wage at
    $25 an hour. 

Follow Reason and Reason 24/7 on
Twitter, and like us on Facebook. You
can also get the top stories mailed to you—sign up
here
.

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Asset Managers Hold Most Cash In 2 Years In “Least Believed Bull Market” Ever

It seems David Tepper's "frigging" "dangerous" market is hitting home as asset managers have greatly rotated their portfolios to hold the most cash in 2 years. Of course, as BAML is quick to point out – this is great "wall of worry" climbing news, "it’s people taking money off the table and playing defensive. There is some inherent buying power." We have now seen almost 6 months of institutional selling and retail investor buying and Bloomberg does a great job rounding up the best market mantras for why it's different this time, and everything is fine.

 

BofA survey shows that asset manager cash levels are at 2 year highs… (the grey bars) – which of course they see as awesomely bullish

 

even though that has dipped BAML's risk and liquidity indicator negative for the first time in 2 years…

 

But there's no need to worry… (via Bloomberg)

Firstly – it's the weather…

Today’s bearish investors are tomorrow’s bulls, according to Chris Bouffard, chief investment officer at the Mutual Fund Store in Overland Park, Kansas. Sentiment will improve once the economy rebounds from a weather-related slowdown, he said.

 

“There is a solid foundation for an advancing market,” Bouffard said by phone on May 15. His firm oversees $9 billion. “We certainly see that cautious stance among pockets of our clients. It’s not because there is any impending sense of doom.

Then there's Bob Doll's Wall of Worry…

Walls of worry are everywhere,” Robert Doll, who helps oversee $118 billion as chief equity strategist at Nuveen Asset Management in Chicago, told Tom Keene and Michael McKee on Bloomberg Radio’s “Surveillance” on May 14. “This is the least believed bull market that I’ve ever seen. From here it’s earnings, it’s fundamentals, it’s can the economy grow? And my guess is the answer to that question is yes.”

Though some are a little skeptical…

People are a little bit concerned that something could be on the horizon,” Eric Schoenstein, co-manager of the $5.3 billion Jensen Quality Growth Fund in Portland, Oregon, said by phone on May 15, referring to a potential market crash similar to those that began in 2000 and 2007. “Investors are skittish and that probably makes sense because it lengthens the bull market.

But there is always the fact that

When you see this type of downdraft in very visible names, people’s risk averse attitude tends to take over,” Margie Patel, who oversees about $1.4 billion at Wells Capital Management in Boston, said by phone on May 15. “After the economic crisis, a lot of investors were traumatized. People are more looking at preserving their assets.”

So BTFD… just like institutional managers are not… because we need to keep the dream alive

We know where the flows have been…




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Key Events In This Rather Quiet Week

Next week, markets are likely to focus on key data/policy actions in DMs, including flash PMIs in the Euro area (expect a slight decline), BoE Minutes (look for signs of disagreement), and BoJ meeting (expect no change in policy).

In DMs, the highlights of the week include [on Monday] Euro area construction output, Japan Machine Orders; [on Tuesday] UK CPI inflation (expect 1.70%, same as consensus), Japan Industry Activity Index, and Australia MPC minutes; [on Wednesday] FOMC minutes, Euro area consumer confidence, and BoE minutes (disagreements could have arisen on the degree of spare capacity; our UK economists remain more dovish than consensus and expect the first hike in 3Q 2015), and BoJ meeting (expect no change in policy; we still think it could take further action in July, but given time lag in price data releases, we see growing possibility that it may wait until October [link]; and we have stressed the need to not just focus on incremental easing [link]); [on Thursday] US Markit Manuf. PMI, existing home sales, and Leading Index, Euro area PMIs (we expect composite at 53.8 vs. consensus at 54.2), Japan PMI; and [on Friday] US New Home sales, Canada CPI, Germany IFO Business Climate.

In EMs, attention will focus on the continuation of market moves following India’s election (we think the outcome is bullish for markets), GDP prints in LatAm and Asia, China’s HSCB Flash PMI (expect trend to lag slightly), and MP Decisions in Turkey, South Africa, and Nigeria (expect rates on hold). Among other releases, markets will likely focus [on Monday] Thailand GDP (expect 1.8% yoy), Chile (expect 2.4%); [on Tuesday] Singapore GDP, Nigeria MP Decision (rates on hold; relatively uneventful); [on Wednesday] South Korea 20-day exports, CPI in Malaysia, South Africa and Brazil; [on Thursday] China HSBC Manufacturing PMI (expect 48, similar to consensus, vs. previous 48.1); [on Friday] activity prints in Argentina, Mexico, and Taiwan.

CALENDAR

Monday, May 19

  • Events: Speeches by Germany’s Merkel and Schaeuble, ECB’s Coeure, Mersch, Nowotny and Weidmann, IMF’s Lagarde; Panel with Carstens, Hubbard, Warsh, Okadaon on Monetary Policy; Panel Discussion by Fed’s Fisher and Williams; BoE Publishes Feedback on Stress Test Discussion Paper; NATO’s Rasmussen Press Conference.
  • Euro area | Construction Output MoM (Mar): Previous (r) 0.10%, (6.70% yoy)
  • Japan | Machine Orders MoM (Mar): Consensus 6.80% (5.00% yoy), previous (r) -8.80% (10.80% yoy)
  • Hong Kong | Composite Interest Rate (Apr): Previous (r) 0.41%
  • Ukraine | Industrial Production MoM (Apr): Consensus 0.20% (5.80% yoy), previous (r) 7.40% (-6.80% yoy)
  • Poland | Average Gross Wages MoM (Apr): Consensus -0.80% (4.00% yoy), previous (r) 4.20% (4.80%)
  • Also interesting: [DM] Spain Trade Balance; Sweden Unemployment; UK Rightmove House Prices; New Zealand PSI, PPI; Hong Kong Unemployment [EM] Chile CA; Philippines BoP; Czech Republic PPI and Export/Import Prices; Poland Employment; Argentina Unemployment.

Tuesday, May 20

  • Events: Speeches by Fed’s Plosser and Dudley, BoE’s Bean, RBA’s Dabelle, SNB’s Jordan, ECB’s Nowotny; Russia’s Putin visits China.
  • Norway | GDP Mainland QoQ (1Q): previous (r) 0.60%
  • United Kingdom | CPI YoY (Apr): consensus 1.70%, previous (r) 1.60%
  • United Kingdom | CPI Core YoY (Apr): consensus 1.70%, previous (r) 1.60%
  • United Kingdom | Retail Price Index (Apr): previous (r) 2.50%
  • Japan | All Industry Activity Index MoM (Mar): Consensus 1.60%, previous (r) -1.10%
  • Australia | MP Decision Minutes
  • Singapore | GDP SAAR QoQ (1Q F): Consensus 1.20% (5.40% yoy), previous (r) 0.10% (5.10% yoy)
  • Taiwan | Export Orders YoY (Apr): Consensus 5.20%, previous (r) 5.90%
  • Poland | Sold Industrial Output YoY (Apr): Consensus 5.10%, previous (r) 5.40%
  • Also interesting: [DM] Germany PPI; Italy Industrial Orders; Norway Consumer Confidence; UK PPI, ONS House Prices; Australia Conf. Board Leading Index; Japan Leading Index, Machine Tool Orders; South Korea PPI [EM] Taiwan CA; Poland PPI; Colombia Trade Balance.

Wednesday, May 21

  • Events: BoJ’s Kuroda Press Conference; Speeches by Fed’s Yellen (NYU Commencement), Dudley, George, Kocherlakota, EU’s Van Rompuy and Barroso, Bank of Spain’s Duran, BoE’s Haldane.
  • United States | FOMC Minutes
  • Euro area | Consumer Confidence (May A): Consensus -7.9, previous (r) -8.6
  • United Kingdom | MP Decision Minutes
  • Japan | Monetary Policy Decision: Goldman does not expect any change in policy (base target at ¥270T, same as consensus and previous). Given the time lag in price data releases, there is a growing possibility that the BOJ will wait until the October Outlook Report to take additional easing action, but it could take further action at its July meeting. First, the BOJ is starting to put in place a framework for monitoring prices more or less in real time, alleviating the effects of time lags in data releases. Second, it is likely the BOJ, the Abe administration, which is due to unveil its second wave of growth strategies in June, and the Ministry of Finance, which is targeting a second hike in the consumption tax, will unite to mitigate risks.
  • Japan | Trade Balance Adjusted (Apr): Consensus -¥568.4B, previous (r) – ¥1714.2B
  • Australia | Wage Cost Index QoQ (1Q): consensus 0.70%, previous (r) 0.70%
  • South Korea | 20-day Exports YoY (May): Previous 4.0%
  • Malaysia | CPI YoY (Apr): Previous (r) 3.50%
  • South Africa | CPI YoY (Apr): consensus 6.20%, previous (r) 6.00%
  • Brazil | IBGE Inflation IPCA-15 MoM (May): previous (r) 0.78% (6.19%)
  • Also interesting: [DM] Euro area CA; Denmark Consumer Confidence; Switzerland M3; NZ Dairy Auction; Australia Westpac Consumer Confidence [EM] Mexico Retail Sales, Unemployment, Banxico’s Quarterly Inflation Report; Argentina Trade Balance.

Thursday, May 22

  • Events: European Parliament Elections throughout EU; Speeches by Fed’s Williams, ECB’s Linde, Polish Central Bank’s Belka, EU’s Van Rompuy.
  • United States | Markit US Manufacturing PMI (May P): Consensus 55.5, previous (r) 55.4
  • United States | Existing Home Sales MoM (Apr): Consensus 2.20%, previous (r) -0.20%
  • United States | Leading Index (Apr): Consensus 0.30%, previous (r) 0.80%
  • United States | Kansas City Fed Manf. Activity (May): Consensus 7, previous (r) 7
  • Canada | Retail Sales MoM (Mar): Consensus 0.20%, previous (r) 0.50%
  • Euro area | Markit Euro area Manufacturing PMI (May P): Consensus 53.5, previous (r) 53.4
  • Euro area | Markit Euro area Services PMI (May P): Consensus 53, previous (r) 53.1
  • Euro area | Markit Euro area Composite PMI (May P): Consensus 54.2, previous (r) 54
  • France | Markit France Composite PMI (May P): Previous (r) 50.6
  • Germany | Markit/BME Germany Composite PMI (May P): Previous (r) 56.1
  • United Kingdom | GDP QoQ (1Q P): consensus 0.80% (3.10% yoy), previous (r) 0.80% (3.10% yoy)
  • United Kingdom | Retail Sales ex Autos MoM (April): Previous -0.4% (4.2% yoy)
  • Japan | Markit/JMMA Japan Manufacturing PMI (May P): Previous (r) 49.4
  • China | HSBC China Manufacturing PMI (May P): consensus 48.1, previous (r) 48.1
  • Hong Kong | CPI Composite YoY (Apr): Previous (r) 3.90%
  • South Africa | MP Decision: Goldman expects the repo rate on hold (at 5.50%, same as consensus and previous), on the back of the marginal easing of inflationary pressures from the recent FX market rally. Since divergence of views also occurs within the MPC, GS expects the statement to keep a hawkish tone to balance a holding decision, which effectively reflects a dovish bias.
  • Turkey | MP Decision: Goldman expects all rates unchanged (Benchmark Repo Rate at 10.0%, OLR at 12.0%, OBR at 8.0%). However, in the accompanying policy statement, the bank expects the bank to sound dovish and open the door to possible future easing, putting stronger emphasis on the recent compression in Turkey’s risk premium, the acceleration in rebalancing of the economy and the related slowdown in credit volumes. This is broadly in line with consensus.
  • Israel | Manufacturing Production MoM (Mar): Previous 3.40%
  • Russia | Real Wages YoY (Apr): Consensus 2.50%, previous (r) 3.10%
  • Also interesting: [DM] US Chicago Fed Nat Activity Index; Flash manufacturing and services PMIs in France and Germany; France Business Confidence; Norway Unemployment; UK Services Output, CBI Industrial Trends Survey, PSNB ex Interventions; Denmark Retail Sales; Australia Consumer Inflation Expectations; NZ ANZ Job Advertisements, Consumer Confidence and Inflation Expectations; Taiwan Unemployment; Foreign Buying Japan Bonds [EM] Russia Unemployment and Real Disposable Income, Investment Statistics, Retail Sales; Mexico Bi-Weekly CPI and Unemployment; Brazil Unemployment.

Friday, May 23

  • Events: Speeches by ECB’s Lautenschlager and Linde, Spain’s Economy Minister de Guindos; Sovereign Ratings may be published for France (Moody’s), Greece (Fitch), Netherlands (S&P), Slovenia (Moody’s), Spain (S&P) and/or UK (Moody’s).
  • United States | New Home Sales MoM (Apr): Consensus 10.6%, previous (r) -14.50%
  • Canada | CPI NSA MoM (Apr): Consensus 0.20% (1.90% yoy), previous (r) 0.60% (1.50% yoy)
  • Germany | GDP SA QoQ (1Q F): Previous (r) 0.80% (2.50% yoy)
  • Germany | IFO Business Climate (May): Consensus 111, previous (r) 111.2
  • Sweden | NIER Business and Consumer Survey (May): Previous 102.6
  • Singapore | CPI NSA MoM (Apr): Previous (r) 0.30% (1.20% yoy)
  • Taiwan | Industrial Production YoY (Apr): Consensus 3.00%, previous (r) 3.05%
  • Mexico | Economic Activity IGAE YoY (Mar): previous (r) 1.70%
  • Mexico | GDP NSA YoY (1Q): consensus 2.00%, previous (r) 0.70%
  • Argentina | Industrial Production MoM (Apr): previous (r) -1.80% (5.90% yoy)
  • Also interesting: [DM] Canada Core CPI; Italy Retail Sales and Hourly Wages; Sweden Economic Tendency Survey; Taiwan Commercial Sales [EM] Taiwan GDP (f); Turkey Capacity Utilization; CA in Brazil and Mexico; Brazil FGV Consumer Confidence; Chile PPI

However, looking at just the US, the week is actually shaping up to be quite a snoozer.

Source: GS and BofA




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Is Small Business A Threat To The Status Quo?

Submitted by Charles Hugh-Smith of OfTwoMinds blog,

Truth is the first victim of the Company Store's dominance.

 
My view of the Status Quo as a neocolonial, neofeudal arrangement is succinctly captured by correspondent D.C.'s description of state-corporate capitalism: the Company Store. In the plantation model (i.e. any economic setting dominated by a primary corporate employer and/or the state), almost everyone works for the company, and is beholden to the company for their livelihood and security.
 
In exchange for this neofeudal (often described as paternal) security, employees must shop at the company store, which maintains a near-monopoly (i.e. competition is limited because the company owns the land and/or colludes with local government) as a means of extracting monopoly prices.
 
The company store extends credit to employees (in the modern version, student loans take the place of employee credit), and since prices are kept artificially high and wages are kept stagnant, the employees never manage to pay off their debts at the company store.
 
This describes the core dynamic in our state-corporate system. The state-corporate Status Quo suppresses competition (few other stores are allowed in town), usually by indirect means: high land leases, high fees for doing business in town, mountains of absurd regulations no small businesses can afford to meet, etc.
 
In state-corporate capitalism, small business thus poses a threat to the monopolistic partnership of the government and dominant corporations. Small businesses that try to meet all the regulations and pay all the fees and taxes are either marginalized or driven out of business by the high overhead.
 
But those that live in the nooks and crannies between the major players pose a threat to the guaranteed profits of the state-corporate Status Quo. As a result, despite the propaganda about how the state supports small business, the real agenda is to marginalize small business in every way possible so the small-business sector can never gain enough political weight to challenge the corporate interests and their partners, the state fiefdoms.
 
Here is D.C.'s gloves-off, truth-to-power commentary: 
 


The decline of small businesses serves the same purpose as continuous, compound monetary inflation: Both keep everyone on "company property" buying at the "company store."

Inflation means that people can't save in a medium that is not ready-to-be-seized (by the IRS, any Federal court, any creditor like a hospital, i.e. by any minion of the central state Corporation). If people could save honest money "under the mattress" without continuous erosion, then some of their wealth might remain fully private.
 
We can't have fully private wealth. The Company must always be able to take what the Company deems its fair share, or take whatever payments the Company Store levies (since people are largely compelled to purchase their medical services, for instance, from the CS and prices are not marked on the shelf…only assessed in arrears).
 
The same is true of employment. If people are able to earn a living apart from the Company, they become less subject to the Company's innumerable rules (including, especially, the requirement to buy everything at…you guessed it…the Company Store).
 
Small businesses are messy little vermin much more difficult to regulate (and corral, and milk) than what otherwise amount to subsidiaries of the Company Store. All significant corporations in the USA today are clearly such subsidiaries. What else do their legal departments do but finagle "deals" and navigate "hyper-compliance" with the larger Company? The corporations for which I have worked behave like subordinates in a branch of the military: "Sir, YES Sir!" A larger phylum of invertebrates will never be discovered.
 
Small businessmen, however, comply only under overt duress and are apt to seek end-arounds at every opportunity due to self-interest and lack of bureaucratic organizational incentives. Seeking alternate paths to exercise greater liberty and keep a larger share of their product puts them on the side of nascent informal networks to which you refer.
 
Your conception of private or informal networks side-stepping the Company is both (in my opinion) the future and an existential adversary of the central state Corporation. This means to me that we will see an increasingly hot war emerge as the early adopters pursue their fledgling networks while the minions of the Corporate State ever-more-openly chase and harass them.
My belief is that people only abandon a failing paradigm when the cost of duplicating the "service" privately is lower than the combined cost of the old paradigm plus the cost of its failures. For example, people will abandon the tax-paid, centrally-planned education paradigm only as they perceive the cost of duplicating it privately (home schooling, unschooling, foregone income, etc.) is lower than the "cost" of uneducated, mis-educated, unsafe kids.
 
Early adopters must be willing to pay twice (private duplication plus tax extortion) so their formula for the decision is Private+Tax < tax-produced output.
 
(By the way, I consider current "private" schools to largely be the same as tax-paid. Until a market fully emerges, finding a true alternative to the tax-paid model is challenging.)
 
This means that early adopters of non-Corporate State paradigms must evaluate the "costs" of the old paradigm higher than their neighbors. The lingering consent of the neighbors to the old paradigm will place heavy burdens on the early adopters of new paradigms.
 
A significant problem with forging new paradigms is that the earliest of adopters are overt criminal organizations. Non-criminals will intentionally be conflated with criminal networks as the Corporate State's minions war on alternatives that threaten its parasitic and dysfunctional monopoly.




via Zero Hedge http://ift.tt/1khzsFd Tyler Durden