The Mess That Greenspan Made - Part 10

Friday Morning Links

Equities at all-time high after Nasdaq record – Reuters
Investors’ exuberance at frighteningly high level – MarketWatch
Greece’s Scary Calendar of Debt Payments Due – Bloomberg
Greece, European creditors fail to reach deal on bailout – US News
EU Frustration Mounts as Greeks Try to Bypass Aid Process – Bloomberg
U.S. sues Quicken Loans, accuses it of mortgage lending violations – Fortune
Confirmed: Oklahoma Earthquakes Caused By Fracking – EcoWatch
Oklahoma Lawmakers Vote To Outlaw Fracking Bans – Think Progress
Clinton Campaign Not Answering Questions About Sketchy Donations –
Two-thirds of Americans don’t understand how credit cards work – My Budget 360
Where the Bad of Deflation Looks Good – true economics
Crash Boys – Lewis, Bloomberg

Stocks mostly up after Nasdaq record – AP
Google, Amazon poised to lead Nasdaq higher – MarketWatch
Oil prices trade near 2015 highs on Yemen worries – Reuters
Problem: Many investors are ‘rate hike newbies’ – CNN/Money
As China Stocks Outrun the 2007 Bubble, UBS Braces for Clampdown – Bloomberg
If China Sees Capital Outflows Now, What Happens in Crisis? – Bloomberg
Gold retreats as global equities hit all-time highs – Reuters
The Rehypothecation of Gold, and Why It Matters – of two minds
Silver – Four Years Later – GoldSilverWorlds

The Disappointing U.S. Economy – Bloomberg
Strong dollar winning in Battle Against Cheap Gas – NY Times
Paul Volcker Isn’t Worried About Low Inflation. You Shouldn’t Be Either – Bloomberg
Are Leading Economists Corrupt, or Just Mind-Blowingly Ignorant? – Washington’s Blog
Putin’s Miracle Dissolves as Russian Middle Class Faces Crunch – Bloomberg
RT News: When words speak louder than guns – euobserver
Work Tensions Rise in China, Despite Calls for Harmony – WSJ
The Recovery in the Housing Market is Still Blotchy – Fox Business News
Julian Castro, HUD Secretary, Admits Affordable Housing Difficulties – Latin Post
Swiss Central Bank Says Negative Rates Won’t Become ‘New Normal’ – WSJ
San Francisco Fed Sticks to Rosy Forecast Despite Recent Weakness – WSJ


Another Stunning Long-Term Chart

From a recent presentation(.pdf) by Agustín Carstens, Bank of Mexico governor and chairman of the IMF’s International Monetary and Financial Committee, via this item at Wolf Street comes the chart below that, once again, reminds us all how far removed the global financial system is from anything that could be considered “normal”.

Carstens doesn’t oppose recent interest rate and QE policies by central banks, but he is quite concerned about how it all turns out, summing things up rather nicely by noting:

The crux of the matter is that financial risk-taking has been far more responsive to unconventional monetary policies than real risk-taking has been.

This would be less troubling (well, at least a little less troubling) if not for the fact that the world’s most important central bankers in general (and former Fed Chief Bernanke in particular) have never acknowledged that “the reach for yield” even exists.

Thursday Morning Links

China Manufacturing Gauge Drops to 12 Month Low – Bloomberg
Sweatpants-Wearing Rando May Have Caused the Flash Crash – New Yorker
Deutsche Bank to pay more than $2 billion on rate-rigging – The Age
The ‘Rationality’ Behind the Currency Genocide – Alhambra Partners
Central Banker Sees “Illusion of Liquidity” & “Asset Bubbles,” Dreads Crash – Wolf Street
Half of U.S. Fracking Companies Will Be Dead or Sold This Year – Bloomberg
Oil slump may deepen as US shale fights Opec to a standstill – Telegraph
Raising Social Security’s retirement age is a disaster for the poor – Vox
Smoky Restaurants Worse than Air Pollution in China – WSJ
The 10 healthiest countries in the world – Marketwatch
Get rid of that debt before you retire – USA Today
The Euthanasia of the Saver – Zero Hedge

Stocks turn lower after weak data – AP
Hong Kong stocks slip after China data – MarketWatch
With a bullet: Pros panic first – USA Today
Should you “Sell in May and go away”? – Fidelity
The Irresistible 2% Yield Whose Downside Appears Forgotten – Bloomberg
Dollar Bulls: Check Yourself Before You Wreck Yourself – Barron’s
Surprising stocks push Nasdaq closer to record – CNN/Money
Gold around 3-week lows on dollar strength, U.S. data – Reuters
Are Gold Bears Starting To Wake From Hibernation? – GoldSilverWorlds
Does any nation hold the gold it says it does? – Mineweb

Debt supercycle, not secular stagnation – voxeu
Airbrushing Austerity – Krugman, NY Times
Secular Stagnation or Golden Era of Low and Stable Growth? – PragCap
France declared “lost in stagnation” by economists – Telegraph
Surprise, Surprise: The U.S. May Be Growing Faster Than China – WSJ
Euro-Region Output Growth Slows as Economy Awaits QE Effect – Bloomberg
Rabid buyers may end doubts about B.C. micro-condos – Business Vancouver
Even as Home Values Rise, Negative Equity Rate Flattens – Zillow
Was Monetary Policy Loose During the Housing Boom? – MAOMM
The preferences of FOMC members – voxeu


Feeling Better About This?

It’s not clear in this Fiscal Times story why, in a recent survey, millennials were found to be more upbeat about their finances, but the graphic below is surely not one of the reasons.

This chart has made the rounds since surging student loan debt started making headlines a few years ago, but I’ve never seen it with a timeline going back to the early-2000s.

Obviously, the student loan curve looks much worse than when depicted from the financial crisis onward, particularly when observing the fairly neat hand-off that occurred about six years ago from credit card debt and home equity loans, the latter continuing to decline.

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