the 10-year Treasury yield has been hovering around 2.5 percent, down from around 3.0 percent in January. Bond yields move inversely to prices. In addition, around $85.52 billion has flowed into bond funds so far this year, outpacing the $45.98 billion that flowed into equities over the same period, according to data from Jefferies....
To be sure, some believe the low bond yields have a more traditional macro-economic cause.
"U.S. bond yields are low because growth and inflation are low, not just in absolute sense, but also relative to expectations," JPMorgan said in a note last week. U.S. economic growth expectations rose steadily from May to December of 2013, and then fell back quickly this year, it noted.
The current economic recovery in the U.S. is the weakest since World War II, it noted.
2--Grand Central: BOJ’s Kuroda Awakening to His Limits? , WSJ
Mr. Shirakawa, a stern economist, spoke often about the limits of monetary policy, especially in the context of Japan’s economic problems. “Japan’s deflation can’t be solved by a massive increase in monetary base alone. Those efforts have to be complemented by other structural measures,” Mr. Shirakawa said in an interview with The Wall Street Journal in 2011. Japan was plagued by a slow underlying trend growth rate tied to low productivity and a decline in the working population, Mr. Shirakawa argued. “We have to tackle the root cause of the problem.”
Mr. Kuroda turned to similar themes with Wall Street Journal managing editor Gerard Baker and correspondent Jacob Schlesinger. “Our medium-term potential growth rate is less than 1%,” Mr. Kuroda said. “Unless this growth potential is raised, the end result may be only the 2% inflation target achieved, but real growth is meager.” He called on Mr. Abe to pursue deeper structural changes that go far beyond monetary policy. That included opening the way to more foreign laborers and finding ways to keep women in the workforce.
As BOJ governor, Mr. Kuroda has amped up a number of programs pioneered by Mr. Shirakawa, such as central bank purchases of risky assets such as exchange traded funds, real estate investment trusts and long-term government bonds.
3---Housing Bubble 2 Already Collapsing for the 99% , Testosterone Pit
real-estate broker Redfin has made it official: in 2014 through April, sales of the most expensive 1% of homes have soared 21.1%, while sales in the lower 99% have dropped 7.6%.
And it wasn’t the first year. In 2013, sales of 1%-homes jumped 35.7%, while sales of the other 99% rose 10.1%. And in 2012, sales of 1%-homes rose 17.5%, while the rest of the market inched up a mere 2.9%.
In 9 of the 29 markets Redfin tracked, sales of the priciest 1% of homes jumped by over 50%. The top three were all here in the Bay Area – not surprisingly, after the miracles of the worldwide money transfer machine that are IPOs and multi-billion-dollar startup acquisitions [Momentum Stock Fiasco Pricks San Francisco Housing Bubble].
In Oakland, sales of 1%-homes skyrocketed 96.2%, in San Jose 91.2%, and in San Francisco 72.2%. But in all three cities, sales of the 99% are down so far this year! So this isn't exactly a booming housing market but a booming luxury market...
In a number of cities, including in some of the red-hottest housing markets of last summer, sales of homes in the 99% category have plunged. The worst: Los Angeles -11.7%, San Diego -12.3%, Minneapolis - 12.5%, Orange County - 12.7%, Sacramento -15.5%, Phoenix -15.7%, Las Vegas -16.3%, and Ventura -16.3%.
4--Retail sales slump points to dismal conditions for US workers, wsws
5---RETAIL DEATH RATTLE GROWS LOUDER, Burning Platform
6--Ukraine: A Prize Neither Russia Nor the West Can Afford to Win , Brookings
7--Bad Trend Breaking: Why Retail Results Are Not Better Than Expected, But Worse Than Ever, David Stockman
A December 2013 poll by CNN/Opinion Research showed public opposition to the war hitting a new high, with 82 percent of respondents opposing it. This level of opposition is higher than for any other recent conflict, CNN noted, with opposition to the Iraq and Vietnam wars never surpassing 70 percent....
Saying, “We will bring America’s longest war to a responsible end,” Obama announced that the number of US troops would be reduced from the current level of 32,000 to 9,800 by the beginning of 2015. Military analysts say this would allow the US military, working with Afghan forces, to operate six bases and maintain air bases and drone operations in key parts of the country.
By the end of 2015, the president said, the US would still have a force of more than 4,000 troops in the country, mostly concentrated in the capital of Kabul and at Bagram Air Base...
While stating that US forces would no longer be patrolling Afghan “cities, towns, mountains and valleys” after this year, the president said the US was open to “cooperate after 2014” in “training forces and supporting anti-terrorism operations against remnants of Al Qaeda
9---More private insurers to hop on Obamacare gravy train, wsws
A recent study by the American Health Policy Institute (AHPI) projects that the ACA will save US businesses $3.25 trillion through 2025, largely by shifting health insurance costs to workers and their families, through increasing cost-sharing, forcing employees onto the Obamacare and private exchanges, or ending insurance coverage altogether.
The excise tax set to go into effect in 2018 on “lavish” health plans—those with premiums greater than $10,200 for individuals and $27,500 for families—will levy a 40 percent penalty on corporations. As with the other features of Obamacare, companies are expected to dodge the financial impact of this “Cadillac tax” through gutting their health coverage or passing the costs on to workers in the form of decreased wages and other benefit cuts....
A number of private insurance companies that have not yet sold policies on the Affordable Care Act (ACA) exchanges plan to do so in the coming year. The reason is simple: the health care overhaul popularly known as Obamacare offers a virtually risk-free opportunity for insurers to increase their profits.
Insurance giants such as UnitedHealth Group and Cigna, as well as smaller companies, plan to enter the Obamacare market in 2015 and beyond. “Insurers continue to see this as a good business opportunity,” Larry Levitt of the Kaiser Family Foundation told the New York Times. “They see it as an attractive market, with enrollment expected to ramp up in the second year.”
The ACA was designed from the start as a pro-corporate piece of legislation, boosting the bottom line of the insurance industry. The law’s core component, the so-called individual mandate, requires those without insurance from a government program such as Medicare or Medicaid to purchase coverage from a private insurer in the Obamacare “marketplace” or pay a penalty.
New changes to the legislation by the Obama administration virtually guarantee the insurance companies that any dent in their profits will be offset by a complex system of government funds. The Department of Health and Human Services (HHS) has assured the private insurers that ACA mechanisms already in place will be made fully available to them, if need be at taxpayer expense
10---The bloodbath in Donetsk, wsws
It is now clear that the election was organized to establish a political basis for the military onslaught in the east. The poll was carried out to provide a fig leaf of legitimacy to a regime installed illegally by means of a coup led by neo-fascist forces in the Svoboda Party and Right Sector militia.
In fact, the election exposed the government’s extremely narrow base of popular support. There was a near-total boycott in the Russian-speaking industrial heartland in the east and widespread abstention in the south of the country. The leaders of Svoboda and the Right Sector received negligible votes.
The bloodletting in Donetsk and mounting attacks in Luhansk and other rebellious areas are aimed not only at crushing a regional insurgency, but at terrorizing the population as a whole. At the urging of Washington’s CIA and military personnel in Kiev, the regime is seeking to intimidate anyone, in the west as well as the east of Ukraine, who opposes its IMF-dictated policies of austerity, privatization and unlimited plundering by Western banks and corporations.
This economic scorched earth program is to be accompanied by the transformation of Ukraine into an advanced staging area for US-NATO military operations against Russia....
The official statement released by the Obama administration made clear that rapid implementation of the West’s economic agenda will be the basis of Ukraine’s “unity.” The statement stressed “the importance of quickly implementing the reforms necessary for Ukraine to bring the country together and to develop a sustainable economy, attractive investment climate, and transparent and accountable government
11---Fed Watch, econ view
Last week's speech by New York Federal Reserve President William Dudley noted the reasons monetary policymakers expected the economy to improve this year:
Since the downturn ended in mid-2009, real GDP growth has averaged only 2.2 percent per year despite a very accommodative monetary policy....
By lowering its assessment of how fast the economy can expand and conducting policy accordingly, the Fed runs the risk of locking the U.S. into a slow-growth path, said Tim Duy, a former Treasury Department economist who is now a professor at the University of Oregon in Eugene...
...“They offset fiscal austerity on the downside but then arguably also offset the upside,” Duy said. “They seem to have lost interest in speeding the pace of the recovery
12---Large real estate investor purchases steeply decline in California, oc housing
For the month, both distressed and non-distressed property sales posted gains. April 2014 distressed property sales gained 13.1% from March, while non-distressed property sales were up 21.8%.
“Despite back-to-back double digit sales gains in both March and April, total sales volume since the January continues to lag sales in 2013,” said Madeline Schnapp, Director of Economic Research for PropertyRadar. “In fact, what is surprising to me is that year-to-date sales volumes in 2014 are the lowest since 2008.”
The bottom line for California? Schnapp is pessimistic about the rest of 2014.
“While most real estate analysts are forecasting a robust real estate recovery for the rest of 2014, our data suggests anemic sales growth,” said Schnapp. “Elevated negative equity, high prices and low inventory are depressing sales volumes and crowding out potential buyers.”
13--The Big Lebowski” Housing Recovery: Mortgage Purchase Applications Down 15% YoY Despite Credit Easing, confounded interest
14--Is student debt hindering young people from buying homes or is it low incomes? Both mortgage and rental payments consuming a larger portion of income., Dr Housing Bubble