The Mess That Greenspan Made - Part 10

Big Misses for Retail Sales, NY Manufacturing

The Commerce Department reported(.pdf) that retail sales unexpectedly fell last month, down 0.3 percent in September after an increase of 0.6 percent in August. The declines were broad-based and this is a possible indication of slowing growth in the U.S. economy.

Excluding autos, September sales fell 0.2 percent after a gain of 0.3 percent and, excluding both autos and gasoline, sales fell 0.1 percent following a jump of 0.5 percent in August. The consensus estimate for the latter, so-called “core” retail sales, was for a gain of 0.5 percent, so, this report is being rightly viewed as a fairly big miss.

Flagging auto sales and lower gasoline prices (both down 0.8 percent) were key drivers in the overall decline, but a sharp slowdown in clothing store sales (down 1.2 percent), home improvement and internet sales (both down 1.1 percent), and furniture sales (down 0.8 percent) provide fresh evidence that the U.S. economy may struggle late in the year.

In other economic news, manufacturing activity in the New York has slowed sharply in recent weeks according to the New York Fed’s Empire State index that tumbled from a five-year high of 27.5 in September to just 6.2 in October. New orders plunged from +16.9 to -1.7 (indicating contraction), shipments fell from 27.1 to 1.1, and the inventories index rose from -7.6 to +2.2 (from contraction to expansion).

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Wednesday Morning Links

MUST READS
Second Texas Health Worker Tests Positive for Ebola – NY Times
Oil Prices Tumble, Posting Biggest One-Day Drop in Two Years – WSJ
Worrying for Saudi, U.S. oil output cuts could take a while – Reuters
Crashing oil prices could crush Vladimir Putin – CNN/Money
IEA 2014 oil-demand forecast at weakest since 2009 – MarketWatch
Toxic Mix for Fracking: Oil Price Collapse & Junk Bond Insanity – Wolf Street
If Oil Plunge Continues, “Now May Be A Time To Panic” For Shale Companies – Zero Hedge
Crumbling U.S. Fix Seen With Global Trillions of Dollars – Bloomberg
Fed Is Silent on Doomsday Book, a Blueprint for Fighting Crises – NY Times
Richest 1% own 50 percent of world wealth- Credit Suisse report – RT News
Where Do the World’s Wealthiest People Live? – WSJ
Why is Football More Popular than Ever? – Marginal Revolution
The rise of unretirement – LA Times

MARKETS/INVESTING
European stocks wallow, Asia gains amid oil slump – AP
Bond yields, oil prices fall as gloom persists – Reuters
Pillars of Equity Rally Fall Away – Variant Perception
These charts explain when to call a bottom for the S&P – MarketWatch
BIS warns on ‘violent’ reversal of global markets – Telegraph
Stock market scare: 3 key numbers to watch – CNN/Money
Treasuries Extend Gains as Retail Sales Fall More Than Forecast – Bloomberg
Gold Firmer, Hits 4-Week High, Amid Increasing Fear in Market Place – Kitco
Lawsuits Proceed: “Secret Scheme To Manipulate The Price Of Silver” – GoldCore
Expect big silver price surge if gold stays positive – Mineweb
Investors sold heavily into gold, silver price rally – Mining.com

ECONOMY/WORLD/HOUSING/BANKING
The State of Macro, Six Years Later – NY Times
The Inflation Imputation – Real Clear Markets
Why Can’t People Feel the Economic Recovery? – Atlantic
Is the Surge in Capital Goods Orders Due to Malinvestment? – Mises
The $11 Trillion Advantage That Shields U.S. From Turmoil – Bloomberg
Slow Rise in Prices Shows China’s Economy Is Still Struggling – WSJ
Schaeuble Says Germany Will Stay the Course in Difficult Times – Businessweek
German Bond Yields Drop to Records on Economy – Bloomberg
Triple dip for US housing is a questionmark for the recovery – Arabian Money
Mortgage Rates Plunge to Lowest Rate in 16 Months – Zillow Blog
Fed’s Williams downplays global risks, eyes U.S. inflation – Reuters
So Much for Rate Increases… – PragCap

 

Peter Thiel on “the Government Bubble”

Billionaire Silicon Valley venture capitalist and hedge fund manager Peter Thiel talks with the folks at CNBC about central bank money printing and asset valuations.

Thiel notes:

We’ve been in this world where people have been printing money at the Fed for six years and it is a very strange question of what happens when it ends … I think the thing that is most distorted is the bond market and fixed income, and perhaps less on the equity side, but we certainly are back in a government bubble of massive size.

Tuesday Morning Links

MUST READS
Ebola Patient Dies in German Hospital – NY Times
Islamic State seizes third Iraqi army base in Anbar – Washington Post
Mideast violence spreads as Turkey bombs Kurdish militants – Reuters
Draghi’s ‘Whatever It Takes’ Plan on Trial at EU Court – Bloomberg
Americans face post-foreclosure hell as wages garnished, assets seized – Reuters
Too-Big-to-Fail Banks Face Up to $870 Billion Capital Gap – Bloomberg
IEA sees oil demand growth lower, supply hitting prices – Reuters
Oil’s slide will pull more gas prices below $3 – USA Today
Japan’s Amazing 25-Year Post-Bubble Drama – Advisor Perspectives
Where America’s college grads are moving – Washington Post
How to Not Outlive Your Retirement Savings – RCM
The great Lira revolt has begun in Italy – Telegraph
Suddenly, We Have Problems – Dollar Collapse

MARKETS/INVESTING
Stock markets glum as confidence in recovery fades – AP
The Dollar And Now Stocks – Alhambra Investment Partners
Growth fears pushing fund managers from risky positions – MarketWatch
No Happy Ending for Investors in Central Bank Fairy Tale – Bloomberg
Why I’m adding more money to my favorite stocks – MarketWatch
No Stock Salvation Seen in Bank Results as VIX Surges – Bloomberg
Treasury 30-Year Yield Falls Below 3% as Fischer Warns on Growth – Bloomberg
Gold retreats from 4-week high as stocks rebound, dollar firms – Reuters
Silver Price At Historical Extremes Compared To Oil And Stocks – GoldSilverWorlds
Physical Gold Investment: The U.S. Ranks Worst In The World – SRSrocco Report
Swiss Gold Referendum “Propaganda War” Begins – GoldCore

ECONOMY/WORLD/HOUSING/BANKING
U.S. small business confidence declines – Reuters
German government slashes growth forecast – AP
IMF official: Growth slowdown welcome – China Daily
China Sept vehicle sales growth slowest in 19 months – Reuters
India wholesale prices fall to five-year low – BBC
Out of Balance? Criticism of Germany Grows as Economy Stalls – Spiegel
Toronto’s housing boom rolls on as some of the housing falls apart – Financial Post
Chinese continue to snap up properties in US – China Daily
Washington, D.C. Housing Market Rises in Bidding Wars – Curbed
Atlantic City’s housing market can’t catch break – Allentown Morning Call
Falling inflation ‘nail in the coffin’ for early U.K. interest rate rise – Telegraph
Fed’s ‘Doomsday Book’ written to save the market – NY Post

 
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