The Mess That Greenspan Made - Part 12

Monday Morning Links

MUST READS
Japan falls into recession – BBC
Five Takeaways on Japan’s GDP Numbers – WSJ
Dismal quarter pushes Japan into recession – CNN/Money
Japan Q3 GDP shrinks, Abe likely to delay tax hike – Reuters
What Japan’s recession means for country, world – AP
Finally, the US admits it: AP classes are way too white – Quartz
Obama defends healthcare law after adviser criticism – Reuters
Gruber and “Stupid Voters”: It Couldn’t Happen to a Nicer Shill – NC
What the Fed has wrought – Burning Platform
Bubble Behavior? – Alhambra Investment Partners
Financial Sphere Bubbles – Prudent Bear
These Go to Eleven – Hussman Funds

MARKETS/INVESTING
Futures lower after Japan falls into recession – MarketWatch
Time for a ‘melt-up’: the coming global boom – Reuters
Japan Shocks, BOE Warns, Europe Prepares – Marc to Market
Mounting Pressure on OPEC Spurs Wagers on Oil Rally – Bloomberg
Treasuries Rise for Third Day as Japan’s Economy Shrinks – Bloomberg
Gold around two-week high as shares drop on Japan recession – Reuters
Gold miners’ pain could be investors’ gain – MarketWatch
Modi effect on gold market ‘remarkably impressive’ – BullionDesk
Paulson hangs on to gold in 3rd quarter; Soros cuts back – Reuters

ECONOMY/WORLD/HOUSING/BANKING
Are the Long-Term Unemployed Different? – NY Fed
Pay rising sharply for young, low-wage workers – USA Today
Number of foreign students in US hits record high – AP
Australia and China seal bumper trade deal – Channel News Asia
Money flows to Shanghai as landmark stocks link with Hong Kong opens – Reuters
Harper Uses Handshake to Tell Putin to ‘Get Out of Ukraine’ – Bloomberg
A ‘gentle cooling’ in Canada’s housing market – Globe & Mail
What’s keeping the housing market from reaching its full potential? – LA Times
The Cruel Injustice of the Fed’s Bubbles in Housing – oftwominds
Central Banks are Not Innocent Bystanders – Mises
Carney puts bankers’ pay in spotlight – BBC

 

Young and Dumb Again

Via this story by Catherine Rampell at the Washington Post comes the graphic below showing how personal savings rates have changed over the years by age group.

Recall that the personal savings rate is simply disposable income less spending, so, if you’ve got a negative savings rate, it means you’re probably not putting away much (or anything at all) for retirement while subsidizing your spending by going further into debt.

The 0-34 crowd is quickly getting back into the “buy stuff with money you don’t have” mindset as the yellow line has recently diverged sharply from the others. Presumably, some of this is being forced upon them due to wages rising slower than the cost of living.

Also, it’s interesting to note that, at the peak of the financial crisis/deleveraging , we barely got back to the savings rate of the early 1990s which, as compared to prior decades was well below the 12-13 percent norm.

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Friday Morning Links

MUST READS
Volcker at Odds With Fed Policy – WSJ
Moscow gives France warship delivery deadline – The Local
Putin Hoards Gold, Rattles Sabers – What’s Next? – Fiscal Times
IEA sees new era, no quick rebound in oil prices – Reuters
Oil Price Slide – No Good Way Out – Our Finite World
How Low Can the Price of Oil Plunge? – Wolf Street
Anxious gold bugs swarm Switzerland’s central bank – Financial Times
Inflation: Art Prices So High, “The Crowd Forgot To Clap” – Dollar Collapse
Could a China Currency War spark the next financial crisis? – Sober Look
Nancy Pelosi Cited Jonathan Gruber’s Work By Name in 2009 – reason.com
Twitter trashed with ‘junk’ rating from S&P – CNN/Money

MARKETS/INVESTING
Stocks mostly rise as Europe, Japan data awaited – AP
SocGen bear warns of yen-dollar ‘tidal-wave’ – CNBC
Sickly yen hits seven-year low on likely Japan sales tax delay – Reuters
Heartland Central Banker Calls Asset Bubbles Top Concern – Bloomberg
Take Cover Now—-They Don’t Ring A Bell At The Top – Contra Corner
Treasury Auction Demand Lowest in a Year on Reduced Haven Bid – Bloomberg
Gold slides towards $1,150/oz as dollar strengthens – Reuters
India back to being world’s top gold consumer – Mining.com
The gold standard is a perfect currency choice for ISIS – Vox
This Will Be Fun As Islamic State Mints Its Own Gold Dinar – Forbes

ECONOMY/WORLD/HOUSING/BANKING
Why Keynes is important today – voxeu
Nearly Half of Us Are Dangling on the Edge of Financial Ruin – Fiscal Times
The coming-of-age ritual of spend now, save later – Washington Post
German-French Rebound Helps Euro-Area Keep Expanding – Bloomberg
Ghost of 1997 Haunts Japan With Abe Set to Delay Tax Increase – Bloomberg
China’s Property Market Bottoming Out? Not So Fast – WSJ
A House Is Not a Credit Card – NY Times
The Unfinished Suburbs of America – The Atlantic
The Fed is not the Reason You’ve Been Wrong – Prag Cap
Kocherlakota: Low Inflation Should Keep Fed on Hold – WSJ
Let’s Meet The Hard Money Extremists – Forbes

 

Russia Continues to Buy Gold

While their total is likely dwarfed by what goes unreported in China, the Russian central bank was, by far, the biggest buyer of gold during the third quarter as shown below in the World Gold Council’s latest report on Gold Demand Trends.

I suppose if I were Vladimir Putin here in 2014, I’d be trading in U.S. dollars for gold too, particularly given the developments in Ukraine so far this year and after the metal’s price has fallen to such low levels in recent weeks.

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