The Mess That Greenspan Made - Part 10

What Could Go Wrong?

Via Deutsche Bank and this Business Insider item comes the graphic below that is only slightly out-of-date following geopolitical developments yesterday in Ukraine and Gaza.

It appears that markets are already getting over both of these stories as prices for safe haven investments such as Treasuries and gold are tumbling while stock market futures are up, though the latest data indicate only a portion of yesterday’s decline has been reversed.

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Friday Morning Links

MUST READS
181 bodies found at Malaysia crash site in Ukraine – AP
Putin: If MH17 Crashed in Ukraine, It’s Ukraine’s Fault – Time
European Stocks Drop for Second Day on Ukraine Conflict – Bloomberg
‘Further Escalation Not Out of the Question’ in Ukraine – Spiegel
Israel ready to widen Gaza ground offensive – PM – BBC
Netanyahu Orders Military to Ready Wider Gaza Incursion – Bloomberg
Value of worldwide mergers and acquisitions hits $2 trillion this year – Reuters
What a pet insurer’s IPO tells us about America’s dog and cat obsession – Quartz
APNewsBreak: Shipwreck’s gold inventory released – AP
The Real Message of the BRICS Summit – Bloomberg
We Now Know Janet Yellen Is Not Very Bright – IRD
7 reasons the gold standard is a terrible idea – Vox
Trust Will Kill Bitcoin – Bloomberg

MARKETS/INVESTING
World stocks shaky as jetliner downed over Ukraine – AP
Market reaction could be harsh but short-lived – CNBC
6 events that spooked the market in 2014 – CNN/Money
Bull market sends 401(k)s soaring to record highs – USA Today
VIX Jumps With Gold Bets as Ukraine Ignites Stock Selloff – Businessweek
Russian stocks slide for fifth day after MH17 crash – MarketWatch
Treasuries Fall for First Time in Three Days as Safety Bid Wanes – Bloomberg
Gold dips after spike on Ukraine crash, set for first weekly fall in 7 – Reuters
Amid economic revival, gold duty cut unlikely – Mineweb
After winning the silver fix, CME goes for the gold – Mining.com
Commerzbank neutralises outlook, may fall to 1286 levels – BullionStreet

ECONOMY/WORLD/HOUSING/BANKING
Addicted to Inflation – Krugman, NY Times
Another Nail In The Payroll Coffin? – Alhambra Partners
Kuroda Softens Yen Stance as Export Pain Evaporates – Bloomberg
Growth slightly lower than 7.5 percent ‘acceptable’: China’s Li – Reuters
China Bailouts Questions as Second Company Faces Default – Bloomberg
Canada housing market skewed by handful of hot markets – FP
Home prices continue to fall in more cities – China Daily
Is a Housing Crash Coming to the U.S.? – Investor Place
The Debate Over FHA’s Growing Role in the Housing Market – WSJ
Bullard Says Fed May Need to Move Forward Start of Exit – Businessweek
Janet Yellen Uses Fed Failures to Expand the Fed’s Mandate – RCM
The Fed in Danger – NY Sun

 

Housing Starts, Permits Drop Sharply

The Commerce Department reported(.pdf) that housing starts and permits for new construction came in well below expectations last month, casting fresh doubt on the sustainability of the housing market rebound.

Housing starts fell 9.3 percent in June to a seasonally adjusted annual rate of 983,000, this coming after a drop of 7.3 percent in May that marked the worst two-month decline since late 2010, save for the sharp winter slowdown six months ago.

Building permits dropped 4.2 percent last month to a rate of 963,000 after a falling 5.1 percent the month prior, all but reversing the spring rebound.

From year ago levels, construction is still higher – up 7.5 percent for starts and 2.7 percent for permits – however, the recent trend should be disconcerting for anyone thinking that the construction industry was on a path back toward more normal levels as the latest readings are still nearly 50 percent below the pre-housing bubble norms.

In a separate report released yesterday, the National Association of Home Builders’ Housing Market Index rose to a six month high, due largely to an optimistic outlook for sales over the next six months.

In a survey where numbers above and below 50 indicate better or worse, respectively, the overall index jumped from 49 in June to 53 in July with the sales expectations component jumping 6 points to 64 and current sales rising 4 points to 57. Buyer traffic continues to be disappointing at just 39, however, it did rise 2 points this month.

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Thursday Morning Links

MUST READS
Microsoft set to axe 18,000 jobs – BBC
Two Camps in the Fed’s Rate Debate – WSJ
Fed hawks: Start draining the punch bowl! – CNN/Money
Fed kicks off global dollar squeeze as Yellen turns hawkish – Telegraph
Yellen Balks at Proposal to Tie Rates to Formula – WSJ
Should Janet Yellen Be Giving Us Stock Picks? – NY Times
Bubble Paranoia Setting in as S&P 500 Surge Stirs Angst – Bloomberg
India to head the BRICS Bank for first five years – Economic Times
The Buzz in Berlin: Is Merkel Thinking of Stepping Down? – Spiegel
Record 57 Million Americans Living in Multi-Generational Households – WSJ
What Happens When Detroit Shuts Off the Water of 100,000 People – Atlantic
U.S. gold dealer launches first digital currency backed by bullion – Reuters
Downtown L.A. is now driest since rain records started in 1877 – LA Times

MARKETS/INVESTING
Global stocks down ahead of US data, earnings – AP
Here’s why stocks could keep hitting new highs – CNBC
China Rallying for All Wrong Reasons to Top-Rated Analyst – Bloomberg
Russian stocks drop as Putin hints at sanctions revenge – MarketWatch
Treasuries Rise on Safety Demand as U.S. Adds Russian Sanctions – Bloomberg
Gold edges above $1,300/oz as price drop draws buyers – Reuters
How Eastern Gold Demand Is Transforming The Gold Market – GoldSilverWorlds
Bulls might take heart from latest gold smashdown failure – Mineweb
India Imported 713 MT Of Silver In April, 1921 MT YTD – BullionStar
Gold Should Rise if Stocks Fall — But Here’s When It Didn’t – Barron’s
Scorching June for gold imports in India – Mineweb

ECONOMY/WORLD/HOUSING/BANKING
The Rise of the Non-Working Rich – Robert Reich
Why Amity Shlaes is dead wrong about inflation – AEIdeas
The Post-1979 Shortfall in American Economic Growth – WCGC
Euro zone June inflation unchanged at low levels as expected – Reuters
Yes, China is Beginning to “Rebalance,” But There’s a Long Way to Go – WSJ
Services sector offsets gloom in manufacturing – China Daily
Scotland’s economy stands above pre-recession peak – xinhuanet
Eight biggest mistakes first-time homebuyers make – CNBC
States with the biggest house price discounts – MarketWatch
Bay Area housing market keeps surging, but lending remains tight – LA Times
PBoC follows other central banks in suppressing volatility – Sober Look

 
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