The collision of global markets and social mood

Wednesday, April 30, 2014

All The Latest Excitement

While the markets may have bored everyone yesterday almost as soon as they opened, there is some fascinating stuff going on in the periphery.

Japanese PMI just posted its biggest month-over-month drop on record. Markit reported that Japan Manufacturing PMI plunged from 53.9 to 49.4, while output fell at the fastest pace since December 2012 and new orders were also down.

Desperate Nikkei bulls may have thought this would mean more QE, but the BOJ's Kuroda said no way. And so NK futures are down over 1% and the yen strengthened -- not what PM Shinzo Abe wants. And to add insult to injury, the labor ministry reported that monthly wages excluding overtime and bonus payments fell 0.4 percent in March from a year earlier . . . the biggest drop in 2014 so far.

Bloomberg reported that Venezuela’s largest privately-held company, Empresas Polar SA, has halted pasta production at its Maracaibo plant because it can’t get dollars from the government to import wheat.

It has been stated many times on this blog that there are more dollar credits worldwide than actual dollars to back them up. The situation in Venezuela is merely the latest example. Look for more of this to occur as global debt deflation intensifies.

Meanwhile, because of expansionary monetary policies, Venezuela has the world's fastest inflation, which is probably why they just hiked the minimum wage 30%. Wage inflation chokes the people while debt deflation chokes the government, which then finds more ways to choke the people.

Back in America, which seems to edge closer to Venezuela each day, GDP is nowhere. First Quarter gross domestic product grew at a stunning 0.1 percent annualized rate. Futures have reacted negatively, but with a statement from Yellen & Co due up later at 2pm EDT, there seems to be, for now at least, enough hopeful buyers willing to bet that Yellen will slow the Taper.

The S&P remains in a weird spot. I'd like it 20-30 points higher or 100 points lower, for selling or buying respectively.

A glimmer of hope from the computer tech: he got my computer to boot. That's a good sign. It may just require a reinstall of Windows 7 or some new drivers. That's my hope at least. Still digging the market from the sidelines.

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