|  Good morning! Here's what you need to know.
Japan's Trade Stats Disappoint. The Japanese trade deficit widened to ¥1.45 trillion yen, or about $14.1 billion in March. Exports climbed by just 1.8%, missing expectations for a 6.5% gain. Meanwhile, energy costs caused imports to jump 18.1%. Markets Are Quiet. Many markets around the world remain closed to observe Easter Monday. And the ones that are open aren't doing much. Japan's Nikkei closed down a fraction of a percent. U.S. futures are modestly lower. European markets are closed. Japan's Controversial Offering. Prime Minister Shinzo Abe made a ritual offering to Yasukuni Shrine, an act that is likely to anger China and Korea. The shrine honors 14 Japanese leaders who were convicted of war crimes. Oscar Mayer Recall. Kraft Foods is recalling 96,000 pounds of Oscar Meyer wieners because of a labeling issue. The product labels do not reflect the ingredients associated with pasteurized cheese in cheese dogs. Shoe Worker Strike. Employees of China's Yue Yuen Industrial Holdings are continuing their labor strike, which began a week ago. Workers are hoping for better benefits. Yue Yuen mainly produces shoes for Adidas. NYT: GM Sidestepped Recalls. The New York Times has found evidence that for the better part of a decade GM did everything it could to avoid issuing recalls on vehicles now found to have been fatally faulty. Instead they relied mostly instead on a series of alerts. Suit: Tech Giants Colluded. The Wall Street Journal reports a class-action lawsuit alleges tech giants including Google and Apple colluded to, among other things, suppress wages by avoiding poaching one another's talent. The suit has 64,000 seeking $3 billion in damages. Barclays' Commodities Unit. Barclays announced it had begun dismantling parts of its commodities unit, the latest megabank to do so in the face of unfavorable margins and strict regulations. Insider Trading Convictions Endangered. An appeal on an insider trading case from 2012 could endanger convictions in a series of other similar cases. Two hedge fund managers argue they should not be responsible if they did not know a tip had been illicitly obtained. WYNN earnings. The casino giant reports its financial results after the bell. Consensus is for $2.06/share. *** Below is a Q&A with Mac Robertson, an independent portfolio manager and macro strategist who yesterday Tweeted his criticisms to Thomas Piketty's new work "Capitalism In The 21st Century" *** BUSINESS INSIDER: You said Piketty's dataset was fatally flawed. What was wrong with it? MAC ROBERTSON: National account income data is, by definition, of many subaccounts which have various weights waxing and waning. So as particulars weights suddenly surge while others decline, the aggregate summation is not reflective of these dynamics. This is especially problematics with household income, both annual income or accumulating net worth. In particular income is, of coherent, a "fat tail" with extreme skew - a Pareto distribution or is actually a bimodal or multi modal distribution. This means policy acting upon one part of the distribution will often have little impact on another part. Policy changes for, say, the top decile will have no impact on the lower quartiles, or if top decile, which might actually be a separate distribution is reduced by tax the lower quartiles may drops. The connectivity implicit when one discusses inequality does not really exist. So, to use the aggregate tells you nothing and provides no prescription. BI: You also said he erroneously compared the outcomes of nations. Is there really no equivalency between nations of any utility? MR: Nation states as far as macro economics are really a fiction. The real aggregations are for at the hegemonic powers which set economic policy for their group or are a constantly morphing alliances of regions that transcend national borders. And currently there is only one true hegemon which is the USA, but regional hegemons have defining capability if the USA has benign indifference in a certain region. For example Brazil has much clout in S America now. This is always a fact of life now and the usefulness of examining many nations hasn't really been useful since Metternich. In fact much of the war in the last 150 years has been when one power thought that there was a balance of power and one could by strategy dominate. Germany and Japan made that mistake in the 1940s and China may be doing same now. What this means is there is little relevancy or usefulness in comparing Italy in the 20th C to USA, for example. Some economic histories are useful as they produce a laboratory of unique events,like Weimar inflation or Sweden's solvency crisis of 1990s,but then only in terms or organizing ex ante thesis. The empirical record is useless. BI: You said Piketty has ended up describing a "fantasy world." What did you meant? MR: The fantasy world is same as Rogoff and Reinhart offer, that their is a scientific theorem that can be developed from this analysis of many national accounts - but that assumes their is equivalency between nations and consistency of the sub sector input that makes the national accounts. The above two points do a good job in briefly explaining why that is a fantasy. BI: You suggested you preferred the analysis of Henry George on the subject of income distributions. What did he say, and why do you prefer his analysis? MR: Henry George was akin to Keynes and also Locke that sound economic policy cannot leverage "luck" in being given rare resources from an accident of birth or through lucky stratagems. George called this resource "land" , later Keynes would call this capital and land. But the common denominator is one class of folks are "rentiers" who only seek a low risk return on their asset - usually inherited. That income is "rent", again in George's time that was for the most part real rent on land leases. George proposed that all funding of the public purse would be a tax on rent - Keynes went further and proposed that not only would rentiers be disproportionately taxed but their " euthanasia" should be sought. George would propose only inequality between rentiers capital accumulation and income of consumers and entrepreneurs is the only inequality to seek reducing or eliminating. Keynes agrees, so do I. To not differentiate this income type,speaking to the first point above, invites disaster. Why would you tax a Bill Gates midstride? It would be very destructive. Yet Bill Gates income explains much of the income inequality. But would taxing late stage Buffet be good? Perhaps. Certainly to tax third generation rentiers and forcing the money back into the hands of future Bill Gates, perhaps by funding universal education to promote future Bill Gates is good. BI: Was there anything Piketty got right?
MR: No, there is very little Piketty got right and his work lacks integrity with solipsism and "pop" cant that I suspect he is a careerist. All the above he would know well. | 
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