The Mess That Greenspan Made - Part 10

Much Ado About the Fed’s LMCI

After Friday’s disastrous labor report, financial scribes are poring over other economic data (that is, when they’re not marveling at levitating stock prices) in an attempt to figure out what the heck is going on in the nation’s labor market and a few of them (see here and here) have homed in on the startling decline in the Federal Reserve’s all-encompassing Labor Market Conditions Index, reproduced below courtesy of the St. Louis Fed.

After this many months below zero on the y-axis, history shows that interest rate cuts are more likely than rate hikes, meaning that, absent a significant change to the slope of that curve, it’ll be “one and done” for this rate hike cycle.

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Thursday Morning Links

MUST READS
Negative rates stir bank mutiny – Financial Times
The Global Economy’s Dismal Outlook in 6 Charts – WSJ
Korea Unexpectedly Cuts Rate to Support Debt Restructuring – Bloomberg
Bank of Japan’s Nakaso warns of risks, says ready to ease if needed – Reuters
ECB Policies Could Backfire As Commerzbank Mulls Hoarding Cash – Value Walk
The ECB’s Corporate Bond-Buying Is Making Waves All the Way to the U.S. – Bloomberg
Clinton’s win was historic, but she’s still very much the status quo – National Post
Sanders supporters warn Obama: Don’t try to stop Bernie – Politico
Who Will Grab the Bernie-or-Bust and the Never-Trump Vote? – Atlantic
Thought experiment shows how outrageous Donald Trump’s bigotry is – Vox
Roseanne Barr, Socialist for Trump – reason.com

MARKETS/INVESTING
Stocks: 5 things to know before the open – CNN/Money
That’s no bull: S&P 500 can rise 15%-20% – USA Today
Fund managers fear central banks will create next ‘Lehman’ moment – MarketWatch
Thiel Says ‘Real Bubble’ Is in Government Bonds, Negative Rates – Bloomberg
Gold eases from 3-week high as dollar claws back losses – Reuters
ETF Investors Want Gold, Gold and More Gold – Barron’s
Gold firms gear up for growth as cost of mining falls – Mining.com
Get rich while sleeping with gold mining shares – Secular Investor
George Soros opts for gold saying Brexit would spell end of EU – Telegraph

ECONOMY/WORLD/HOUSING/BANKING
Most People Just Want a Regular Job – Bloomberg
Top 1% see incomes soar 188%. Everyone else … not so much – CNN/Money
It’s Time to Blame Obamacare for Losing So Many Full-Time Jobs – Fiscal Times
China May inflation muted but producer deflation eases – Reuters
GDP growth of 9, 8, 7, 6.7,… Speculating on China growth – Antonio Fatas
Brazil’s Chief Prosecutor Goes After Top Politicians on Corruption Probe – Vice News
Canada is the least xenophobic country in the Western world. Here’s why. – Vox
Why the Housing Market Will Boom Again – Fiscal Times
Central Bankers Claim: Things Are Better than You Think – Mises
Janet Yellen and the Four Big Uncertainties – WSJ
FedSpeak: Lost in Translation – Dimartino Booth

 

Obesity … In the News

It’s been an interesting week for obesity news as the Center for Disease Control reported that women in the U.S. cracked the 40 percent threshold for the first time ever (men trail at 35 percent), all part of an epidemic that future historians will no doubt marvel at.

From the CDC’s website, these three charts are kind of interesting – obesity in the U.S. for White, Hispanic, and Black adults. Someone please pass this along to Donald Trump.

Meanwhile, in the U.K., there’s a row about fat and carbs:

It would appear that nutrition experts are as bad as economists – there’s a major problem and they may have been wrong about the root cause for decades.

Wednesday Morning Links

MUST READS
Hillary Clinton’s Remarkable Triumph – Atlantic
Inside the bitter last days of Bernie’s revolution – Politico
Bow out, Bernie. Hillary needs a clear run at the White House – Guardian
The meaning of Hillary and the long, hard climb to the top of the ticket – Washington Post
Anonymous Superdelegates Declare Winner Through Media – The Intercept
The Media Called the Democratic Race a Day Early – New Yorker
Is This Where Libertarians Say Goodbye to Conservatives? – reason.com
Donald Trump and the destruction of America’s political norms – Vox
Trump Has One Card to Play and He Better Play it Now – The Economy – Fiscal Times
Here’s the thing about debt: It’s not nearly as bad as everyone says it is. – Washington Post
The Brutal Journey Back to Work for Millions of Americans – Bloomberg
The Documentary Fastball Tosses Some Physics at Fans – Scientific American
The unconscionable abandonment of rural America – The Week

MARKETS/INVESTING
Stocks: 4 things to know before the open – CNN/Money
Oil hits eight-month high on disruptions, China demand – Reuters
If S&P 500 clears this hurdle, record territory may await – MarketWatch
Fortunes of Ultra-Wealthy to Grow Fastest as Stocks Recover – Bloomberg
Fund manager’s warning to traders: You’re getting the Fed all wrong – CNBC
Why Oil Prices Fluctuate – Visual Capitalist
Gold hits 2-week high as rate expectations fade – Reuters
Are Junior Gold Stocks Following 2008-2009 Recovery? – GoldSilverWorlds
It’s Sensible For Central Banks To Hold Gold – Former BOE Head Mervyn King – Kitco

ECONOMY/WORLD/HOUSING/BANKING
Trends in the Teenage Workforce Update – Advisor Perspectives
France shuns Europe as Brexit revolt spreads – Telegraph
Venezuela in Crisis: Families Are Fed Up With Going Hungry – Vice News
China Exports Stabilize as Imports Hint at Improving Demand – Bloomberg
The $13 trillion question: How fast are India and China really growing? – CNN/Money
The smugger Germany gets about its economy, the less competitive it becomes – Quartz
Study Finds Evidence That Rents Might Be Higher in the US than in Europe – Pro Market
The Federal Reserve’s Strange Behavior Makes Perfect Sense – Alt-Market
10 Most Hated Banks in America – Motley Fool
The Fed’s credibility gap is getting wider – CNBC

 

Black Swans Anyone?

Michala Marcussen, chief economist at Societe Generale, talks about what could go wrong this summer and, of course, in the fall with a little election scheduled here in the U.S.

Yeah, black swan is a term that has been over-used and mis-used in recent years.

As Donald Rumsfeld noted, “there are also unknown unknowns – the ones we don’t know we don’t know. And if one looks throughout the history of our country and other free countries, it is the latter category that tend to be the difficult ones”.

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