Monday, March 24, 2014

When Gods War

by Cognitive Dissonance

When I entered high school back in 1969 the small town I grew up in was just introducing a more flexible, dare I say liberal, curriculum to broaden my indoctrination experience. I vividly remember the excitement exhibited by the principal as he (there were no ‘she’ high school principals in Southern New England back then) addressed the incoming freshman class about the educational wonders “We the Guinea Pigs” were about to encounter.

I for one was as excited as the principal, having grown exceedingly bored with the standard canned textbook fare that passed for a Middle School (then called Junior High) education. In fact it was so new that even though we had already selected our High School freshman classes several months earlier just before leaving for summer vacation, there were now a few gaps in the schedule we could fill with ‘electives’. I thought I had died and gone to heaven. “Electives? You mean I can pick my own poison?”

Quickly I seized upon two courses that sounded interesting, “Greek Mythology” and “Totalitarianism and Appeasement”. The guidance counselor who was assisting the planning of my cognitive conditioning was aghast, quickly informing me that oil and water do not mix. Thankfully she (guidance counselors of that era were almost exclusively female, the maternal instinct considered oh so important to my guidance) could find no published rules disallowing my choices and I would not be swayed by her stern disapproval. I was in like Flynn. 

Looking back from the vantage point of four plus decades of acquired wisdom I can better appreciate her concern for my welfare. Was I insane? Learning about the Gods of ancient Greece in conjunction with global politics during the run up to the World War Two madness was most assuredly a potent cocktail for my tender brain cells and not to be treated lightly. Our formal grade school ‘education’ is carefully planned out by ‘experts’, with one conditioning step after another explicitly designed to properly train Pavlov’s Dogs. Clearly I was messing with the secret sauce.

Similar to two classes of drugs that by themselves are ‘safe’, but when taken together are deadly, recognizing similarities between the ancient Greek War Gods and the Nuclear Gods of twentieth century Warring Earth was either going to be supremely enlightening or my cognitive subsystems would go critical and melt down. From the point of view of the masters of the universe it was the latter that befell me. As Mrs. Cog would say “I was ruint” and would never be a fit wage slave suitable for gainful exploitation….err….employment.

Two hundred years ago I would have been cast out of school on my arse and sent off to the salt mines to toil away my days till death did I part, broken by hard labor, slave wages and the foreman’s whip. Thankfully this was 1969 in New England so my sentence was commuted to two more years as a Roman Catholic altar boy and seventeen million recitals of the “Act of Contrition”. Ah, those were the blessed days my friend. “Thank you Father, may I have another?”

I suppose if I had taken both courses during the same semester my head would have exploded. Thankfully this was not the case, having elected to swim with the Gods during the first semester and then dive into the dictators during the second marking period. To this day I’m not sure exactly why I selected the Greek Gods first; though being pubescent I suspect the opportunity to gaze upon images of half naked statues of Goddesses for homework might have been a significant draw.

A Nubile No-No

To be perfectly frank I didn’t quite understand what the term mythology meant since everything I had learned up to this point was taught as iron clad fact, no questions allowed. Early on in our indoctrination we are trained to question who, what, where, and when, but never ever why. One simply does not question the control system itself, only the cancerous symptoms of the control system.

One of the advantages of being ‘me’ was a last name that fell near the end of the alphabet, which nearly always assured me a seat in the back of the class. Strategically located as I was during the first day of Mythology class, as soon as the textbooks were passed out I quickly scanned the pages for images, then dog-eared each nubile no-no for rapid retrieval at any time.

I wasn’t too concerned about the disposition of my soul considering all the images were school board approved and I attended confession every Saturday and did God’s service on Sundays. Doing so assured me I was a lock, so why not dabble with the devil now and then as long as I confessed my transgressions to the proper authorities?

By the end of the first week I was thoroughly traumatized by how utterly violent, homicidal actually, and quite human-like these Greek Gods of War seemed to be. The Catholic Church assured me ‘my’ War God was all cuddles and kittens (as long as I ignored the Old Testament) so to find ‘these’ Gods sleeping around without wearing a condom, smiting the poor humans just because of a bad hair day and falling down drunk at all times of the day was, in my opinion at least, conduct unbecoming of a True God.

Even though I had not begun the “Totalitarianism and Appeasement” class, thus I had not gained that particularly unique perspective yet, the similarities between the angry spiteful Greek Gods and present day society’s duplicitous leaders were glaringly obvious and I was foolish enough to say so in my out loud voice. Since I was speaking truth to the blind I quickly became persona non grata, with even my fellow slave students turning on me.

“Just shut up and stop asking questions” I was told, then beaten about the head by the school bully-for-hire as the blunt instrument designed to drive home the message. Half way through the second week the teacher stopped answering my questions altogether and simply ignored my raised hand, regardless of if it was just a request for a visit to the comfort station. Thank the Gods of War that I had superior bladder control.

One must carefully consider the cultural time frame in order to appreciate the insanity I was pushing back against. A year or so removed from “The Tet Offensive” which coincided with peak United States involvement in the insanity called “The Vietnam War”, Walter Cronkite’s evening news was a grim blood and guts recital of bombs, booby traps and body counts, both ‘ours’ and ‘theirs’.

I was curious, fascinated even, about the ‘fact’ that the number of enemy soldiers killed was always two to three times ours. Kind of made you proud in a sick sort of way that our War Gods were that much more effective at squashing the puny humans then their clearly inferior junior grade war gods (please note the small ‘g’). Odd how it was that only much later did we ‘discover’ there were huge numbers of women and children mixed into that bloody body count.

Women and Children of War

While it appeared our Gods of War wanted to ‘win’ the conflict, or at least they said they did, they certainly weren’t trying very hard. Little did I know this was the new blueprint for future God like productions such as Afghanistan and Iraq. I was old enough to comprehend the facts, but much too young to fully understand the madness. Cultural insanity is learned the hard way; by brute force repetition and total immersion rather than the light touch of reason and logic.

My questions were reasonable enough by any standards…..at least for a nation that wasn’t already totally insane. “Why were the Gods Warring” I would ask mom, dad, teachers, anyone I perceived to be an authority. Terms such as collateral damage, fratricide, napalm, friendly fire, My Lai, mine fields, cluster bombs and fragging were bandied about on the TV, in the newspapers, even between family members and strangers in the same tone of voice one would use to discuss the weather, gardening or the locally beloved Red Sox. Same ole same old.

The insanity was so normalized, so integrated into everyday living, that it was rendered innocuous, harmless even, or so it was thought. Sure, ‘our’ boys were dying over there, but it was the returning walking (or wheeled) wounded you actually had to watch out for. While the dead mortals were quickly shipped home in flag draped boxes and honorably buried (“Teacher, why don’t we honor the living so they won’t be shot dead?”) those damn wounded just wouldn’t go away. They were so public, so obvious, so in your face. It was one thing to read about ‘them’ in the papers, another thing entirely to meet them face to face.

To this day I vividly remember overhearing a conversation between my father and the next door neighbor about another neighbor’s son. He had returned home after surviving his turn as cannon fodder for the Warring Gods missing ‘only’ his right arm and several fingers on his left hand. My father was irritated that this ‘wounded warrior’ was walking around the neighborhood scaring the kids half to death. Why didn’t he have the decency to remain inside during daylight hours? Out of sight, out of mind I guess.

My head still spins when I think about how people would talk about ‘The War’ without ever discussing anything significant or relevant. Always who, what, when, where and never WHY. We are only as sick as our deepest darkest secrets, those inner Uglies we’d rather not discuss collectively or individually. Best to leave the boogieman under the bed where he belongs rather than drag him out for confrontation. We were all just cannon fodder for the War Gods, so why get all worked up over it?

Patty Hearst and the SLA had not yet appeared on the scene to mirror our own inner madness, Stockholm Syndrome writ large in our hearts and minds. Embrace the insanity with a full body love hug or be consumed by our own cognitive dissonance. Besides….the Warring Gods would eventually tire from their labors and collapse into bed to sleep it off, leaving us chattel to get back to the business of living before another royal row sets up the next cattle slaughter.

The Next Cattle Slaughter

Like a hot potato passed rapidly from hand to hand to avoid a nasty scorching, my Mythology instructor bestowed upon me near perfect grades, regardless of my actual classroom submissions, in order to avoid any possibility of an after school one on one for conduct unbecoming of a student peon. Mama didn’t raise no fool and she wasn’t going to put herself alone in the same room with me and my questions.

Regardless of the quality of the homework handed in or the mark received when it was returned, the report card always showed I was at the top of the class. The teacher was not going to risk a parent teacher conference for a closer inspection of the offspring’s Genesis, let alone a return for a second semester.

Of course this was shear brilliance on her part because I wasn’t going to complain about grade inflation. Besides, I wanted to believe that the higher grade was based upon my classroom participation. It seems my conditioning was working after all. I got the message and kept my head, and hand, down for the rest of the semester.

The Greek Mythology class completed, my reputation preceded me when I walked into the “Totalitarianism and Appeasement” class to start the second semester (I loved referring to it as my “T&A class”, always with a dirty smirk on my face) and was greeted with a scowl from the teacher, quickly followed by “Oh, it’s you”. Even before the other students were seated I was escorted out to the hall and verbally dressed down, in essence read the riot act for crimes against the state of education.

“I’ve heard you’re a trouble maker, and I’ll have none of that in my class,” I was informed, finger wagging two inches from my face. “You mind your P’s and Q’s and we’ll get along just fine.” I suppose that was not the time to ask my first question, but it wasn’t my fault that I didn’t know the definition of P’s and Q’s. “Don’t you be smart with me young man” was the explanation I received. Not a good start by any stretch of the imagination, and it was all downhill from there.

While Greek Mythology could always be, and actually was, explained away as fantasy story telling by toga wearing Neanderthals if some rabble rousing child started asking difficult questions, T&A was an entirely different matter. This was modern history, the reciting of horrible events barely 20 years past, massaged and managed of course to agree with generally accepted lies. Worse, the present day (1970) Godly hostilities playing out in Southeast Asia were simply a continuation of “WW(restlemania) II, When Gods Play Rough” and no freshman teacher was going to stop the flood of questions that floated to the surface of the cesspool once the top was popped open.

When Gods War

With the benefit of hindsight it is now clear that what really irked me about that class was the tone of the instruction, which just reflected the arrogance expressed in the textbook and of the times. Look at what those silly War Gods did back in the 30’s and 40’s, how misguided they were while power wrestling among the mortals. Too bad several million were crushed under foot over such a silly misunderstanding. Our Gods of War, the new and improved Gods of 1970, would never be so foolish as to make the same mistake again. And the teacher said all this and more with a straight face.

I was equally dumbstruck by the fact that the teacher appeared to believe what she was saying and that my fellow student slaves were lapping it up unquestioningly. I was not gifted with immense insight or great intelligence, but even at my tender young age I could recognize that the mighty War Gods had not learned the error of their ways and were in fact just playing the same old tune in a different key.

Dear teacher assured me otherwise. “It’s different this time. We’re stopping the spread of God hating commies.” Well……that explained that, and I of all people should understand the importance of his Holiness’s crusade since I was an altar boy who wore the sacred black and white vestments and could regurgitate Latin adoration upon command. “Mea Culpa, mea culpa, mea maxima culpa.” Translation: “My bad bro.”

We mere mortals are not properly wired to understand the wondrous ways of the War Gods, having been deeply conditioned into the slave mentality from birth. All we need to know, the one training we must embody in order to be properly assimilated and then exploited, is what’s good for the Gods of Mayhem is good for the slaves. Always remember, when the Gods feast on barbecued humanity and drink their blood wine we are blessed with God given Golden Showers.

Don’t bother yourself with trying to understand the divine madness of the God Wars, the fallout which consumes your mind and destroys your body. Just busy yourself with counting the nano angels dancing on the head of that nail driven through the palm of your hand while you follow the slave into the valley of death. One hot potato, two hot potato, three hot potatoes more. Blinders or blindfolds anyone? I’ve got plenty more where they came from.

Insanity Incarnate

There seems to be a general consensus among those whom you and I may consider at least somewhat ‘awake’ and those whom we might consider still deeply asleep. Sooner or later war is inevitable because the Divine Gods of War deem bloodletting to be good….or at least vitally necessary. Who needs leaches to cure our ills when we have Divine intervention?

I would hazard a guess that the vast majority of ‘We the Fragile Humans’, when encouraged to think for ourselves and to ponder the terrible destruction to our own life and limb, would agree that wars have no purpose or benefit to us personally. Then again, what good is a war machine if you ain’t gonna use it.

The next time the War Gods of finance, government, politics, industry, military, health care and especially the Divine Gods of the mainstream media implore ‘us’ to fight their wars of Peace and Godliness, just say NO. These are not ‘your’ wars, these are the Wars of Gods fought by the fragile humans of Earth for the benefit and amusement of the self appointed and self proclaimed Divine and Omnipotent. Cast off the mind meme and reject the wizard’s war ‘spell’, the claims of imminent attack and close proximity to danger. They are all lies.

The Money Meme is failing and the Ponzi is crumbling; the central banking War Gods are losing control of the ‘faith and belief’ support that is the glue that holds it all together. Public support for the Pontificating Politicians is at all time lows, and these mid level Mayhem Muckers are desperate to distract, divide and destroy in order to divert attention from themselves and their puppeteers.

The war drums are booming and those among us susceptible to the blood lust beat are beginning to rouse. In other words, the table is set for that inevitable war everyone expects and feels powerless to stop. You and I are not responsible, nor should we be responsible, for the decisions others make unless and until we are responsible for our own.

Do not defer to the herd, to assume it is hopeless simply because the herd is surging. Refuse to be passive, to go limp in the face of insanity and a perceived lost cause. Be personally sovereign and responsible to and for yourself. Do not under any circumstances surrender your power to the Gods of War. By not preserving and conserving our power exclusively for ourselves it is slowly bled from us as if we are mortally wounded, slowly bleeding out on the battle field. Worse, we don’t die, but rather remain in a severely weakened state, near comatose and tragically incoherent.  

I have been speaking of late about personal sovereignty, of how first and foremost it is a State of Mind. The buck stops here for I alone decide if I will release the power that springs from within me and transfer it to the War Gods. If I were to do so, the sole result of this transaction would be that my power is used against me. I am a sovereign entity, a State of One, head honcho and chief bottle washer of Cognitive Dissonance. The Gods of War will not have my consent. Will they have yours?

03-23-2014

Cognitive Dissonance

www.TwoIceFloes.com is unlike anything you will find on the web, a truly unique destination. There you will find distinctive Premium Members only articles as well as discussions on wellness and health, homesteading, spirituality & philosophy and most importantly ‘safe’ forums not found anywhere else. Come by for a peek and stay a while.

Man's Best Friend - War

Man's Best Friend – WAR

See the original article >>

Probably The Most Important Chart In The World

by Tyler Durden

Having discussed the links between economic growth and energy resource constraints, and with the current geo-political fireworks as much about energy (costs, supply, and demand) as they are human rights, it would appear the following chart may well become the most-important indicator of future tensions...

Source: Goldman Sachs

This is not the first time we have discussed "self-sufficiency" - As none other than Bridgewater's Ray Dalio noted in a slightly different context:

"self-sufficiency encourages productivity by tying the ability to spend to the need to produce,"

"Societies in which individuals are more responsible for themselves grow more than those in which they are less responsible for themselves." The nine-factor gauge of self-sufficiency provides some interesting insights into those nations most likely to experience above-average growth going-forward and those that are not; as European countries, notably Italy, France, Spain, and Belgium, all ranking at the very bottom on self-sufficiency.

And here we discussed, What If Nations Were Less Dependent On One Another?

The ability to survive without trade or aid from other nations, for example, is not the same as the ability to reap enormous profits or grow one’s economy without trade with other nations. In other words, 'self-sufficiency' in terms of survival does not necessarily imply prosperity, but it does imply freedom of action without dependency on foreign approval, capital, resources, and expertise.

Freedom of action provided by independence/autarky also implies a pivotal reduction in vulnerability to foreign control of the cost and/or availability of essentials such as food and energy, and the resulting power of providers to blackmail or influence national priorities and policies.

...

Consider petroleum/fossil fuels as an example. Nations blessed with large reserves of fossil fuels are self-sufficient in terms of their own consumption, but the value of their resources on the international market generally leads to dependence on exports of oil/gas to fund the government, political elites, and general welfare. This dependence on the revenues derived from exporting oil/gas leads to what is known as the resource curse: The rest of the oil-exporting nation’s economy withers as capital and political favoritism concentrate on the revenues of exporting oil, and this distortion of the political order leads to cronyism, corruption, and misallocation of national wealth on a scale so vast that nations suffering from an abundance of marketable resources often decline into poverty and instability.

The other path to autarky is selecting and funding policies designed to directly increase self-sufficiency. One example might be Germany’s pursuit of alternative energy via state policies such as subsidies.

That policy-driven autarky requires trade-offs is apparent in Germany’s relative success in growing alternative energy production; the subsidies that have incentivized alternative energy production are now seen as costing more than the presumed gain in self-sufficiency, as fossil-fueled power generation is still needed as backup for fluctuating alt-energy production.

Though dependence on foreign energy has been lowered, Germany remains entirely dependent on its foreign energy suppliers, and as costs of that energy rise, Germany’s position as a competitive industrial powerhouse is being threatened: Industrial production is moving out of Germany to locales with lower energy costs, including the U.S.

The increase in domestic energy production was intended to reduce the vulnerability implicit in dependence on foreign energy providers, yet the increase in domestic energy production has not yet reached the critical threshold where vulnerability to price shocks has been significantly reduced.

...

America’s ability to project power and maintain its freedom of action both presume a network of diplomatic, military, and economic alliances and trading relationships which have (not coincidentally) fueled American corporation’s unprecedented profits.

The recent past has created an assumption that the U.S. can only prosper if it imports oil, goods, and services on a vast scale.

See the original article >>

Countdown Begins To USDA Reports

By: Paul Georgy

Good Morning! Paul Georgy with early morning comments for March 24, 2014 at 4:35 am. 

Grain futures are higher due to lack of fresh news stories. The week ahead should provide for some volatile markets.

Grain traders are looking for confirmation of soybeans cargoes switched from Brazil to the US. Late in the week we were getting talk of 10 or more cargoes being imported on the East Coast.

Catch up on Meteorologist Ryan Martin’s daily weather forecast

Headlines will be a market mover ahead of the USDA reports next Monday.

Informa will release their planting estimates on Tuesday.

The CFTC report showed managed money increasing long positions in corn by 18,299, soybeans by 6,024 and wheat by 13,521.

I attended the "Exchange of Ideas" Conference and R J O’Brien’s 100 Years in business celebration over the weekend. They had analysts present on several key topics affecting the agricultural markets. We also got to talk with other industry leaders about the future of agricultural. The bottom line was they were friendly on outlooks but suggested we should be prepared for some very volatile price swings.

The macro markets will be watching the Ukraine situation as we wait to see if Russia will announce retaliatory sanctions to those levied by the U.S. and Europe late last week and whether Russia will move its military into eastern Ukraine. President Obama has a busy week as he will be in The Hague for a 20 nation summit on how to curb nuclear proliferation.  He will also attend a G7 summit designed to forge a response to Russia’s military takeover of Crimea and will attend a US-EU summit in Brussels.  Later in the week, Mr. Obama will meet with Pope Francis at the Vatican. Watch for comments and headlines that will move the market.

The Cattle on Feed report was a little bearish for the late summer/early fall period. Placements of calves and feeders entering the feedlots were 14.7% over last year. This was above the average guess of a 9.2% increase. February placed cattle are marketed as fats from July through early October. This will weigh on the June and August contracts on the opening. Marketing’s ran 3.4% under last year. This was pretty close to the average guess of -3.3%. We don’t see too much of a problem on Monday’s open for the April contract. Early calls are lower to slightly lower. Beef cutout values are lower with choice down 1.41 and select down 1.11. The CME Feeder Index is 173.93.

PEDv and herd rebuilding is the driver on the supply side of the balance sheet. Consumer demand is being watched closely for indication that prices are too high. Pork cutout values were up .24 on Friday. Call the hogs mixed on the opening.

See the original article >>

Weekly Cattle Summary: Slaughter Running 6 Per Cent Below Last Year

by Ron Plain

US - Beef cow slaughter is 6.4 per cent below year ago levels through the first two months of 2014, report Ron Plain and Scott Brown from Missouri State University. This decline combined with cattle on feed inventories that have trailed year ago levels for nineteen consecutive months are producing the tight beef supplies that analysts have been expecting for quite some time. Commercial beef production in February posted the lowest absolute level since February 2005 and the lowest per slaughter day average since March 2005. In February the choice retail beef price increased by 23 cents to $5.58 per pound. That was the largest monthly jump since November 2003. Relative to the 2007 annual average, choice retail beef was 34 per cent more expensive in February, compared to a 30 per cent gain for pork during that period and 18 per cent for chicken. Boxed beef cutout values were mixed for the week, with the choice cutout gaining $0.20 to $240.83/cwt on Friday morning, while the select cutout lost $1.84 for the week to $234.95/cwt. At $5.88/cwt the choice-select spread has widened in recent weeks after being near zero in early February. Fed cattle prices strengthened again this week. Through Thursday, the 5-area average price for slaughter steers sold on a live weight basis was $150.10/cwt, up $2.18 from last week and up $25.33/cwt from the same week last year. Steer prices on a dressed basis averaged $240.11/cwt this week, up 31 cents from a week ago and up $42.40 from a year ago. This week's cattle slaughter totaled 575,000 head, up 11,000 head from last week, but down 29,000 head from a year ago. The average steer dressed weight for the week ending on March 8 was 858 pounds, down 5 pounds from last week and down 2 pounds from last year. Oklahoma City feeder cattle prices were $1-3 higher this week for lighter animals, with cattle over 800 pounds steady to $1 higher. Prices for medium and large frame #1 steers were as follows: 400-450# $226-$233, 450-500# $214-$230, 500-550# $215-$230, 550-600# $205-$229, 600-650# $180-$213, 650-700# $176-$196, 700-750# $174-$181, 750-800# $166-$178.50, 800-900# $157-$168.25, and 900-1000# $152-$160.25/cwt. The April live cattle futures contract closed at $144.12/cwt today, down $1.13 from last week's close. The June fed cattle contract declined $1.65 from last Friday to settle at $136.20/cwt. August ended the week at $133.47/cwt. April feeder cattle futures settled at $175.52/cwt, down $1.70 for the week. The May contract lost $1.45 from last Friday to close at $176.85/cwt. August settled at $178.22/cwt. -

See the original article >>

China Output At 18-Month Low: Epi-Center of Global Credit Bubble Cracking

by Mike Mish Shedlock

The HSBC Flash China Manufacturing PMI shows Output Contracts at Quickest Pace in 18 Months. The overall PMI index, new orders, and production were all lower.

Key points

  • Flash China Manufacturing PMI™ at 48.1 in March (48.5 in February). Eight-month low.
  • Flash China Manufacturing Output Index at 47.3 in March (48.8 in February). Eighteen-month low.

Commenting on the Flash China Manufacturing PMI survey, Hongbin Qu, Chief Economist, China & Co – Head of Asian Economic Research at HSBC said: “The HSBC Flash China Manufacturing PMI reading for March suggests that China’s growth momentum continued to slow down. Weakness is broadly-based with domestic demand softening further. We expect Beijing to launch a series of policy measures to stabilize growth. Likely options include lowering entry barriers for private investment, targeted spending on subways, air-cleaning and public housing, and guiding lending rates lower.”

In the face of an explosion of credit, still growing imbalances, malinvestments, property and other bubbles, it is a mystery why anyone expects China to make efforts to “stabilize growth”.

To stabilize growth implies more bad loans and more SOE malinvestment. Given China’s massive housing vacancies, support for still more housing is ridiculous.

More malinvestment is possible of course, but the longer China attempts to keep the credit party going, the worse the ultimate implosion.

See the original article >>

Futures Rise As More Weak Chinese Data Prompts More Stimulus Hopes

by Tyler Durden

If there was one thing that the market was demanding after last night's disappointing March HSBC manufacturing PMI, which has now fallen so low, local market participants are convinced a stimulus is imminent (despite China's own warnings not to expect this), and sent both the SHCOMP and the CNY surging, it would have been further weak data out of Europe, where the other possible, if not probable, "QE-stimulus" bank is located now that the Fed is in full taper mode. It didn't get precisely that however there was a step in the right direction when overnight the Euro area Composite Flash PMI eased marginally from 53.3 to 53.2 in March, largely as expected. The country breakdown showed a narrowing of the Germany/France Composite PMI gap owing to a notable (3.7pt) increase in the French PMI while the German PMI eased somewhat (1.4pt). On the basis of past correlations, a Euro area Composite PMI of 53.2 is consistent with GDP growth of around +0.4%qoq, slightly stronger than our Current Activity Indicator (+0.35%qoq).

The breakdown for Eurozone manufacturing is shown in the charts below:

The full European PMI breakdown via Goldman:

  1. The Manufacturing PMI fell by 0.2pt to 53.0, squarely in line with expectations. The services PMI also eased by 0.2pt to register a reading of 52.4 in March, slightly weaker than the consensus expectation of an unchanged figure.
  2. Developments in the forward-looking indicators were more positive than the headline figure. The new orders component within the manufacturing survey rose slightly by 0.3pt while stocks eased 0.4pt. Within services, 'business expectations' rose by 2.5pt while 'incoming new business' was up 0.4pt. ‘Business expectations’ in particular has risen notably in recent months and now stands at levels last seen around the spring of 2011. ‘Incoming new business’ has risen somewhat less and now matches levels seen around mid-2011.
  3. In addition to the Euro area aggregate, Flash PMIs were also released for Germany and France. Developments improved in France, which surprised notably on the upside by registering an increase in the Composite PMI from 47.9 to 51.6. Germany saw a small easing from a relatively high level as its Composite PMI eased from 56.4 to 55.0, a somewhat larger-than-expected decline. With these developments, the France/Germany gap narrowed substantially although France remains below the Euro area average and Germany is above (Charts 1 and 2).
  4. The final reading of the Euro area Composite PMI (which includes data for Italy and Spain) will only be available on April 3 (the final manufacturing PMI will be out two days ahead of the Composite reading). The area-wide figure released today (as well as the German and French equivalents) suggests around a 2pt decline in the services PMI in Italy and Spain and a broadly unchanged manufacturing PMI across the periphery.
  5. At a level of 53.2, past correlations would suggest Euro area GDP growth of +0.4%qoq. This is above our Current Activity Indicator (CAI), which points to a rate of expansion of around 1.4% (annualised) (0.35% non-annulised).

So for those wondering why futures have managed to regain virtually the entire lower closing gap from Friday's surprising late day tumble, now you know - more bad news masked with hopes that central banks will come in and fix things and this time it may actually work.

Other weekend headlines were relatively few and far between but there was some focus on French local elections, the ECB, geopolitical tensions in various pockets of the globe and ongoing corporate distress in China. Starting with France the far-right National Front party made significant gains in local elections in what is being spun as a backlash against Francois Hollande’s policies. The National Front party is reportedly ahead in some towns including the northern town of Henin-Beaumont which has historically voted for the left. All in all, the National Front is predicted to win half a dozen towns after next Sunday’s round two run-offs (Reuters). In terms of the ECB, Vice President Vitor Constancio, speaking on Saturday at a Fed-sponsored conference, said that the ECB will not adopt threshold-based rate guidance. Constancio also remarked that markets had mostly missed that the ECB actually strengthened its forward guidance at the March meeting, tying its accommodative stance to the closure of slack in the economy. In Ukraine, NATO’s commander in Europe warned on Sunday that Russian forces just to the east of Ukraine were “very, very sizeable and very, very ready”. This came after pro-Russian forces seized a couple more of the remaining military bases in Crimea held by Ukrainian troops on the weekend. In Asia, there were reports that more Chinese onshorebonds will be suspended from trading after the Chinese corporate reporting season concludes in March-April. Indeed there is talk that some 24 bonds from 19 Chinese domestic issuers are in danger of having their bonds suspended in the near future (IFR).

Headline bulletin from RanSquawk and Bloomberg

  • At 0700 GMT Bunds opened lower and index futures opened higher following gains of 1.8% in the Nikkei 225 and 0.9% for the Shanghai Comp.
  • Asian gains were made following Chinese PMI exports rebounding for the first time in 4 months (although the headline manufacturing number was softer) and the CNY saw the best one-day session in over two years which eased fears in the market following last weeks concerns of TRF winds.
  • From 0900 GMT EUR/USD and equities headed lower following a weak German PMI reading, weak EU services PMI and dovish comments from ECB's Liikanen.
  • Focus is back on Russia where there has been press speculation that Moldova may be the next ex-Soviet republic in sight for Putin. This has pushed Palladium (of which, Russia corners over 40% of the market) to three-year highs topping USD 800/oz.
  • Treasuries decline, 10Y yield holding just above 100-DMA; 5Y at highest since Jan. 9 before U.S. sells $109b in 2Y fixed/FRN, 5Y and 7Y notes beginning tomorrow.
  • China’s manufacturing weakened for a fifth straight month, with the HSBC/Markit PMI dropping to 48.1 from 48.5, est 48.7
  • Chinese stocks rebounded from initial losses on speculation that weakening growth will prompt policy makers to reconsider their aversion to broad stimulus measures
  • Ukraine’s foreign minister said the risk of war with Russia was growing as world leaders gather in The Hague to discuss  the situation amid growing concern over a Russian buildup on its neighbor’s border as pro-Kremlin troops seized a Ukrainian base in Crimea
  • Growth in euro-area manufacturing and services stayed close to the fastest since 2011 in March as France improved
  • Fang Fang, JPMorgan’s CEO of investment banking for China, is leaving after more than 12 years at the firm
  • Sovereign yields mostly higher. Asian equities rise, Nikkei +1.8%, Shanghai +0.9%. European equity markets decline U.S. stock-index futures gain.  WTI crude and copper steady, gold lower

In conclusion, here is the complete overnight recap from DB's Jim Reid

Overnight the preliminary HSBC Chinese manufacturing PMI for March was released which disappointed relative to market expectations (48.1 vs 48.7 expected). The PMI is down 0.4 pts MoM and down 3.5 pts YoY which is disappointing to those who expected the PMI to bounce back after potential  Lunar New Year seasonal distortions in January and February’s data. Asian stocks and credit edged lower following the data but overall the market reaction has been limited, potentially because the weak PMI has renewed calls for the Chinese authorities to expand fiscal spending this year. We note though  hat the Chinese Finance Minister Lou Jiwei ruled out large fiscal stimulus in a speech at a development forum in Beijing yesterday, instead stressing Beijing’s commitment to carrying out reforms. The Nikkei (+1.9%) is leading gains in Asia after reopening from its long weekend, and Chinese banking stocks are underpinning the Shanghai Composite (+0.5%). Chinese bank stocks have been buoyed by news that the government may allow banks to issue preference shares to open up an additional source of funding. The underperformers post-PMI are copper futures (-0.3%) and the AUDUSD (- 0.05%) but initial losses have been pared.

The weekend commentary devoted substantial ink to discussing the exact meaning of Yellen’s “six months” remark at last Wednesday’s FOMC press conference. This was spurred by the St Louis Fed’s Bullard’s comments on Friday where he suggested that Yellen’s “six month” estimate of the interval between QE ending and the first rate hikes was an assessment that was in line  with private sector surveys. Bullard’s comments on Friday precipitated a brief wobble in the S&P500 (-0.29%) late in the session. The weekend commentary suggested that perhaps Yellen had made a “gaffe” in her first press conference as Fed Chair (CNBC). Despite Bullards’ comments, Reuters said on Sunday that its survey of economists shows that Yellen's comments have not altered their views. Ten dealers of 17 polled see rate hikes in the second half of 2015, with another four saying increases would not start until 2016.

Previewing what’s in store for the rest of the week, we have the release of the flash global manufacturing PMIs today in the Euroarea and US. Further out on the data docket, the release of US new homes sales and consumer confidence comes tomorrow, durable goods orders on Wednesday, initial jobless claims and Q4 GDP (3rd estimate) on Thursday, followed by personal income/spending data on Friday. In the Euroarea, German IFO will be released on Tuesday, followed by the ECB’s February money supply report and UK retail data on Thursday. Japan reports CPI on Friday. In China, the focus will be on Chinese bank earnings announcements throughout the week.

On the diplomatic front,. President Obama attends a G7 meeting in The Hague this week, called in response to the crisis in Ukraine. Obama will also meet with leaders from 20 nations to discuss nuclear security. In terms of the Fed, DB’s Joe Lavorgna notes that we have an eventful week of Fedspeak lined up.

This week’s lineup includes Atlanta Fed President Lockhart (non-voter) and the Philadelphia Fed’s Plosser (voter), who will both be speaking on the economyand monetary policy tomorrow. Bullard speaks on Wednesday afternoon where we may get some clarification of his comments from Friday. Sandra Pianalto’s speech on Thursday will not be less relevant, despite her impending retirement from the Cleveland Fed, because she is a useful bellwether of the moderates on the Committee. Chicago Fed President Evans (non-voter), one of the more dovish of the regional Presidents, also speaks on Thursday. Kansas City’s Esther George (non-voter), a well- known hawk, is the last scheduled Fed  speaker on Friday afternoon. Elsewhere the Fed releases its Comprehensive Capital Analysis and Review on Wednesday which provides its assessment on bank’s ability to keep making dividend payments and funding share buy backs.

In the EM space, our strategists highlight two bellwether trade reports this week which will shed more light on regional Asian trade. Thailand and Hong Kong are expected to see a boost in exports after earlier reports were affected by poor weather and seasonal one-offs. In EMEA, there are rate meetings in Israel (Mon), Hungary (Tue), South Africa (Thu), Czech Republic (Thu) and Romania (Fri). There will also be landmark local elections held in Turkey (Sun) which are being viewed as a referendum on the future of PM Erdogan’s
government.

See the original article >>

Follow Us