(OT) Bank of Japan's Governor Says Wages in Japan Are Rising

Uh... rising?

In this post-Lehman "New Normal" world, particularly in the so-called developed nations of the US, Japan and EU, 22 straight months of wage decline must mean wages are rising.

Governor Haruhiko Kuroda of Bank of Japan had an exclusive interview with the US's financial news channel CNBC while attending the Asian Development Bank meeting in Kazakhstan.

From the video in the CNBC article (5/4/2014):

Kuroda starts out by declaring that economists have been consistently wrong about Japan in the past twelve months because they have failed to predict the inflation that is actually happening.

Then, at about 1:23,

Susan Li, CNBC: Wages have been down for 22 straight months, and it's not keeping up with the inflation ...

Kuroda: (cutting the interviewer off) But that, that is not true. Actually, wages have started to rise. We expect uh nominal wages uh continue to rise, coupled with improving employment situation, means that employer's (sic) income would increase by about 3%.

I am sure Mr. Kuroda meant "employee". For sure, Japan's employers, particularly large multinationals, are raking in huge revenues, partly thanks to cheapened yen.

Then Kuroda prattles on about employment situation, and Ms. Li drops the topic of wages completely.

So are wages in Japan rising, or falling, in the reality-based world?

22 straight months of decline, from Zero Hedge (4/29/2014):

"monthly wages excluding overtime and bonus payments fell 0.4 percent in March from a year earlier (the biggest drop in 2014), a series of declines which has now stretched to 22 consecutive months."

Reading Japan's Nikkei Shinbun (4/30/2014), you wouldn't know that unless you pay attention to detail. Governor Kuroda wants you to focus on the positive message of "wage increase". Clearly, the "wages" Mr. Kuroda is talking about are wages including overtime pay and bonus:

３月の給与総額、３カ月ぶり増加　残業代増える

Total wages in March increased for the first time in three months, overtime pay increased

厚生労働省が30日まとめた３月の毎月勤労統計調査（速報）によると、残業代を含む給与総額の平均は27万6740円と前年同月に比べて0.7％増えた。増加は３カ月ぶりで、伸び率は２年ぶりの大きさ。消費増税前の駆け込み需要で残業代が増えたため。一方、基本給にあたる所定内給与は0.4％減の24万656円と22カ月連続で前年を下回った。

According to the monthly labor statistics (preliminary) announced by Ministry of Health, Welfare and Labor on April 30, the average total wages including overtime increased by 0.7% in March compared to a year ago to 276,740 yen [US$2760] . It was the first increase in three months, and the rate of increase was the biggest in two years. The increase was due to the increase in overtime pay, to meet the last-minute demand [for goods and services] before the sales tax increase [on April 1, 2014]. On the other hand, fixed wages, or base wages dropped by 0.4% to 240,656 yen [US$2400], decline of 22 consecutive months.

As far as I know, when comparing wages over time or across different regions/countries, you don't include overtime pay, benefits, or one-time pay like bonuses. But that's not Kuroda BOJ, apparently.

Pick the data that justifies your position, conviction or belief, even if you can't objectively compare that data with anything else. That seems totally normal in post-Obokata Japan. (Maybe Ms. Obokata should have been an economist or a banker, like Mr. Kuroda. Or politician, like Mr. Shinzo "contaminated water at Fukushima I NPP totally controlled" Abe.)

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CNBC: Is an Overconfident BOJ to Blame for Market Woes? Is BOJ a Market Virus?

(My personal answers are yes and yes.)

Political and financial elites full of themselves rule Japan, so what else can you expect?

From CNBC (6/13/2013; emphasis is mine):

Is an Overconfident BOJ to Blame for Market Woes?

By: Ansuya Harjani, Assistant Producer, CNBC Asia

Since stunning the markets with unprecedented monetary easing in April, the Bank of Japan has taken a back seat, failing to offer solace to investors that have been rattled by violent swings in the country's bond and equity markets.

According to Kathy Lien, managing director, BK Asset Management, the central bank's "overconfidence" is to blame for the instability plaguing the market.

"They did nothing because they were stubborn and overconfident that their policies were enough to stabilize markets and the markets said no," Lien told CNBC Asia's "Squawk Box" on Friday.

"This is Japan's own doing, they had the opportunity to provide markets with a small dose of stimulus in the form of increasing asset purchases or even the maturity on fund supply operations and they did nothing," she added.

Lien was referring to the BOJ's meeting this week when the central bank failed to announce additional measures like increasing the maturity on its fixed-rate loan facility to two years from one year.

Prime Minister Shinzo Abe's recent announcement of his longer term growth strategy which fell short of expectations, coupled with the disappointment with the BOJ has forced investors to reassess their outlook for the market.

... "They [BOJ] feel their weekly operations are sufficient to calm the [bond] market volatility - The market is saying the BOJ needs to be a little more active than that," she said.

At this point, Japan watchers say it is vital that BOJ Governor Haruhiko Kuroda betters his communication with the market in order to restore investor confidence.

It's a failure to communicate. For example, the governor of BOJ saying 'I think we've done enough' is the wrong thing to say. The correct thing to say is that 'There is no limit to what we are prepared to do'. The psychology is really important with this," said Nicholas Smith, Japan strategist at CLSA.

In April, Kuroda said the Bank of Japan's plans to double the monetary base would be enough to achieve its 2 percent inflation goal, noting that the central bank has taken all the "necessary" and "possible" measures.

A contrast from European Central Bank Chief Mario Draghi who pledged to do"whatever it takes" to save the euro zone last year.

With investors on edge in the face of uncertainty over when the Federal Reserve will begin scaling back its bond buying program, it has become increasingly important for major central banks to clearly communicate their intentions, said strategists.

David Kotok, chief investment officer, Cumberland Advisors, agrees, noting that recent havoc in global markets is largely a result of poor communication by both Kuroda and Bernanke.

"You had a failure to communicate in two central banks at the same time - two of the G-4 botched it up. Bernanke did - he sent a mixed message and stirred a pot. The BOJ has done the same," he said.

(Full article at the link)

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Rick Santelli Slams CNBC Panelists for Their Spin on Job Non-Numbers

During Squawk Box at CNBC this morning...

CNBC's parent company, NBC Universal, by the way, is now 51% owned by Comcast while 49% is still owned by GE. GE's CEO is now Obama's Job Czar.

Care to know the job number?

Unemployment rate (U3): 9%

No. of jobs created in January: 36,000

Remember, the consensus was 146,000 jobs, with some so-called economists saying the number might be much higher.

The spin is full-on, and not just at CNBC. The AP's article says:

It conflicts with a business payroll survey last month that showed relatively weak job growth. But that survey doesn't count the self-employed and likely undercounts the nation's smallest businesses. Also, harsh weather disrupted business payrolls in January.

RRRIIIGGGTTT. It's just weather.

By the way, the more frigid Canada created 69,200 jobs in January, 4 times as many as forecasts, while their unemployment rose because more people started looking.

Which would we rather have? Clearly CNBC panelists have us believe a lower unemployment number is good for us.

But as I said, it doesn't matter to the permanently levitating stock market. Dow's up, so is Nasdaq and S&P500. Not by much, but who cares?

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CNBC Cheerfully Announces Housing Depression

Permanently bullish (probably by decree from the higher up) CNBC reports that home values have declined 26 percent since the housing market top in June 2006.

Since the decline is more than 25.9% decline during the Great Depression, by golly the housing market is solidly in depression! And it's the 53rd consecutive months (as of November) that home values have fallen!

But if you listen to the timbre of the article, you may conclude it's a jolly good fun thing, just like the comedy "Home Alone"...

From CNBC:

As the economy revs back to life, with signs of hiring on the horizon, the housing market is being left behind like Macaulay Culkin in “Home Alone.”

In the past few years, we’ve all been careful to choose our words carefully, not calling it a recession until it fit the technical definition and avoiding any inappropriate use of the “D” word — Depression.

Things were bad but the broader economy never reached Depression territory. The housing market, on the other hand, just crossed that threshold.

Home values have fallen 26 percent since their peak in June 2006, worse than the 25.9-percent decline seen during the Depression years between 1928 and 1933, Zillow reported.

November marked the 53^rd consecutive month (4 ½ years) that home values have fallen.

What’s worse, it’s not over yet: Home values are expected to continue to slide as inventories pile up, and likely won't recover until the job market improves.

And while the president is physically protected in an emergency, whisked to a bunker at an undisclosed location, the actual White House is not: The value of 1600 Pennsylvania Avenue has dropped by $80 million, or nearly 25 percent since the peak of the housing boom. It’s current value is $251.6 million, according to Zillow, down from $331.5 million.

At the end, the writer (Cindy Perman) even starts to sing the National Anthem. I just couldn't reproduce that singing above, as I felt so put off by her mindless dribble.

In many parts of the country, homeowners would be lucky if the decline is only 25%. After the real estate bubble burst, home values in Tokyo declined more than 90% from the peak, while commercial properties in central Tokyo saw the value dropped to less than 1% of the peak. Some parts of California so far have seen 75% decline since the top.

You would hope that is the bottom...

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CNBC Sponsors Town Hall Meeting for Obama

Despite the recent unhappiness of Mr. Immelt, CEO of Government Electric aka General Electric toward the administration he serves as economic advisor, his media subsidiary CNBC dutifully set up a town hall meeting for President Obama this morning so that the Prez can promote himself as the epitome of the "American Dream".

Oh that's rich.

Obama Town Hall: Defending His Record on Economy, Jobs
(9/20/2010 CNBC)

"President Obama spoke Monday to a cross-section of Main Street, Wall Street and Washington gathered at a CNBC-sponsored town hall, with the economy at a crossroads and the nation's precarious political structure hanging in the balance.

"Sharing an hour with a largely friendly crowd that gave him hoots of approval and a standing ovation at the end of the "Investing in America" forum, Obama defended his administration's record toward business while simultaneously deriding his critics as being politically motivated and saying he would work "setting a better tone" in Washington.

""I know how frustrated people. I know in some cases how desperate people are," he said, later adding, "I am confident that if we stay on course that gets us back to old-fashioned values of hard work and responsiblity and looking out for one another, that America will thrive."

"The president spoke just as the National Bureau of Economic Research proclaimed an end to the recession. But Obama acknowledged that times are still tough.

""Obviously for the millions of people still out of work, people who have seen their home values decline, people struggling to pay their home bills every day, it's still very real for them," Obama said.

"The audience also includes college students and union leaders, small business owners and retirees.

"...."My life, I'm testimony to the American Dream. Everything I've been doing since I came into office is to make sure that American dream continues for future generations," Obama said. "The challenge now is I'm thinking about the next generation and there are a lot of people out there thinking about the next election."" [The article continues.]

A lot of people thinking about the next election? Like yourself, Mr. President?

He claims he's "testimony to the American Dream" which he wants to make sure continues for future generations. So the American Dream these days is to receive endless subsidies and preferred treatments from the government based on anything from race, ethnicity, gender, union membership, income level, what have you, to breeze through top Ivy-league schools without worrying about paying back student loans for decades, and not to work a single day in the real world.

OK, I'm all for it. Sounds good.

How are you going to pay for that, Mr. President? Out of your own multi-million dollar pocket?

The American Dream as I've understood is more like him - "Up by the bootstraps". I guess I'm too old-fashioned.

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CNBC Is Assuring Us Everything Is Back to Normal

It is hilarious, really, to check the headlines of the mainstream financial news media like CNBC. Right now, these headlines inhabit the front page (of no specific order):

Cramer: 5 Stocks Powering This Market Higher

Mr. Cramer was reportedly saying just last Friday after the "flash crash" that he would put his money in CD... He has proved himself to be a total contrarian indicator, yet again. So what is he peddling now? Apple, Deckers Outdoor, Salesforce.com, Intuitive Surgical, Chipotle. As if nothing happened. Move along, nothing to see here.

Fast Money: Gold Making Double Tops?

According to Fast Money, technical analysts are huffing and puffing about "double top" in gold chart which is bearish. Uh huh.

Technical analysis? We now know what happens when algo bots disappear. Good luck with TA.

Gold Price May Still Have a Way to Go: Analysts

So, which is it? The article is rather devoid of solid analysis. What's more interesting is this Zero Hedge's article that Europe is running out of gold and silver due to exploding demand from the concerned citizens over there.

Dont Fight the Fed - Power of Central Bank Preserved

The Senate voted to keep the Fed in charge of smaller banks. Combine that with the very narrow audit, and you should join CNBC in congratulating the Fed for the successful lobbying - the Fed got all it wanted. So much for "reform".

My moment of insight about the US market a while back - that it will just keep going up because all these large companies listed on the stock exchanges are safe, backstopped by the taxpayers - can now extend to the global markets. The entire world is on hook to save the EU governments and large multinational bankers who lend them money.

After last Thursday's mistake of revealing what's underneath the veneer floor that we stand on - it was like staring into a dark, bottomless elevator shaft - algo bots have been scolded by the financial authority (the Fed comes to mind) never to do that again. Bad bots, you're bad bots!

With the likes of Cramer, they are inviting you, retail investors, to put your money in the stock market. Trust us, your money is in good hands.

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"He looks like a crook. He looks like he would take every single thing you have."

This footballer was referring to Ben Bernanke, whose face he didn't recognize, but he saw the truth deeper down.

This from Lew Rockwell at LRC Blog, "Football Truth":

"Every year, CNBC’s Squawk Box quizzes some of the Super Bowl players on current financial issues. I only caught a little of it this morning, when they were asked to identify a photo of Ben Bernanke. One untutored guy was full of wisdom: “I don’t know who he is, but he looks like a crook. He looks like he would take every single thing you have.”" [emphasis is mine]

Here's the video clip of the show segment. When he was asked if he knew what the Fed (Federal Reserve) does, his answer was "To lock you up."

Another player, when asked if he knew what the current unemployment number was, answered "50%. 38%?" The reporter was saying no, no, until the player came down the right answer that he was looking for (10%). For him, the number was surprisingly LOW. I tend to share his surprise than the government number. In some cities the true unemployment number (U6) is that high, actually, and the unemployment among young blacks is 35%.

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Traders Have No Doubts About Manipulation By Government

Good to see Steve Liesman (many people spell Steve LIESman) getting outnumbered in green shooting CNBC.

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