The Mess That Greenspan Made

Meals on Wheels in British Columbia

Here’s one bear that is apparently quite hungry after hibernating all winter and, perhaps, awaking a little earlier than usual due to a warm winter in British Columbia (hat tip AJ).

I wouldn’t be surprised if this was photoshopped as the cyclist appears to be under-dressed and it seems pretty cold still for a bear to come out of hibernation and already be this active.

Nonetheless, an interesting image and a good reminder that bears can run pretty fast.

The Fed/Dollar/Oil Menage a Trois

More evidence of the outsized impact that traders have on the financial world and, as a result, the lives of billions of people on the planet, comes via recent developments in the U.S. economy, signals from the Fed, the trade-weighted dollar, and energy prices.

Yesterday’s stinker of a GDP report and the recent central bank caution about raising interest rates compelled traders to hit the sell button on their U.S. dollar positions and the greenback went tumbling from its recent perch, a trend that seems likely to continue.

Of course, energy traders saw the falling dollar and hit the buy button on oil futures so, now, all of a sudden bottom-calling for  crude oil prices is back in fashion.

Obviously, there are other important factors involved in the 50 percent plunge in oil prices since last summer (i.e., shale oil, Saudi policy), but the 25 percent strengthening of the U.S. currency was a big factor as commodity traders are like Pavlov’s dogs when it comes to the value of the world’s reserve currency relative to its freely traded rivals.

Thursday Morning Links

MUST READS
Fed Signals Tightening, Loosely – Bloomberg
Ignore the ‘whiff of panic’ as US economy stalls – Telegraph
Shrugging Off Slow Growth, Fed Predicts a Rebound – NY Times
The economy’s biggest weakness is … winter? – Washington Post
Analysts Cut Q2 GDP Forecasts Even More After Ugly Report – Bloomberg
A Tale of Two Cities: How Baltimore Reached Its Boiling Point – Vice News
Protesters are right: Smashing police cars is a legitimate political strategy – Salon
Some Baltimore residents see rioting as a rational response to daily despair – Vox
Financial Pros Now Say Greece Is Headed for Euro Exit – Bloomberg
California’s drought and water crisis, explained – Vox
Lies, Damn Lies, and the British Election – Project Syndicate
The austerity delusion – Guardian

MARKETS/INVESTING
Stocks stabilize after global drop on weak US data – AP
Twitter is in trouble and its options are now bleak – Slate
The Dollar Is on Its Longest Losing Streak Since 2011 – Bloomberg
Here’s why oil is rallying to its highest level this year – MarketWatch
Longtime stock bull now concerned about earnings and rising rates – MarketWatch
Euro-Area Bonds Slump for Second Day, Extending $61 Billion Loss – Bloomberg
Gold steady on weaker dollar after cautious Fed statement – Reuters
Silver set for longest slump in 24 years – CPM – Mineweb
Gold price slides as Fed rate hike draws nearer – Mining.com

ECONOMY/WORLD/HOUSING/BANKING
Consumers Near Collapse? – Alhambra Partners
How Millennials Could Damage the U.S. Economy – Fiscal Times
Student-Loan Surge Undercuts Millennials’ Place in Economy – Bloomberg
Bank of Japan stands pat as inflation weakens – MarketWatch
Eurozone Consumer Prices Stopped Falling in April – NY Times
The Oil Slump is Emptying the Stores of Dubai – Bloomberg
How millennials and Depression-era generation are similar – S&P Housing Views
New York Construction Booms With Focus on Luxury Housing – Bloomberg
Why Ben Bernanke’s new PIMCO gig is so troubling – The Week
Fed Removes All Calendar References Statement – Confounded Interest
FOMC Snoozer – Fed Watch

 

Atlanta Fed’s GDPNow Nails Q1 GDP

A screenshot of first quarter U.S. economic growth was quickly grabbed from the Atlanta Fed’s GDPNow page as they will soon switch over to estimating economic activity for the second quarter, but they really did a bang-up job for the first three months of the year.

They’ve had the Q1 GDP growth rate at about 0.25 percent for some time now as analysts have repeatedly revised their forecasts lower.  The government said today that their first estimate of first quarter growth is 0.2 percent, far below analysts’ estimate of 1.0 percent.

Market reaction to this news along with whatever it is Federal Reserve officials have to say at the conclusion of their policy meeting today should be fun to watch, the operative question being whether “bad news is still good news” for stock prices.

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