The Mess That Greenspan Made - Part 18

Wednesday Morning Links

CIA Torture Report: Bush Was Kept in the Dark – Bloomberg
CIA torture report claims spy agency lied about ‘ineffective’ program – Guardian
The 10 most harrowing excerpts from the CIA report -Washington Post
Oil Resumes Drop as Iran Sees $40 If There’s OPEC Discord – Bloomberg
BofA: OPEC ‘effectively dissolved’; oil will slide to $50 – RT News
Opec opens door to emergency meeting with oil downgrade – Telegraph
Draghi Stimulus Draws Danish Pledge on Limitless Peg Defense – Bloomberg
Greece gets two more months to exit bailout – euobserver
Deal reached to allow pension benefit cuts – Washington Post
What’s your retirement IQ? For most, it’s lousy – USA Today
Millionaires’ choice for president: Hillary – CNBC
Pay off our debt? Not likely, say some – CNBC

Asian shares mostly lower on weak China data – AP
Investors must believe in magic to buy stocks now – MarketWatch
Might Vanguard Founder Jack Bogle Be Wrong for a Change? – Barron’s
Jim Cramer Hit With Insult He Hurls at Others: Fat Cat – NY Times
Greece’s stock market just suffered its worst collapse ever – MarketWatch
U.S. 10-Year Notes Set to Draw Lowest Auction Yield in 18 Months – Bloomberg
Gold edges lower below 7-week peak on firmer shares, drop in oil – Reuters
Chinese and Indian gold demand boost fundamentals further – Mineweb
Gold Surges As Greece Crashes – Eurozone Debt Crisis Part II Cometh – GoldCore
Silver Eagle Sales Surpass 2013 Record At Nearly 43 Million – SRSrocco Report

Economics, Data and Conspiracy Theories – Bloomberg
Millionaires more confident in US economy – CNBC
China inflation eases to five-year low – BBC
Former Chinese economic planner jailed for graft – AP
RBI finds falling inflation a hard sell for Indian consumers – Reuters
Slumping oil prices to hit home prices in Calgary in 2015 – Financial Post
Feds hope 3%-down-mortgages will boost housing market – MarketWatch
Four predictions for the housing market in 2015 – Forbes
With New Capital Rule, Fed Nudges Big Banks to Shrink – NY Times
Think Central Banks Are Done? Stimulus to Accelerate in 2015 – Bloomberg


Robert Shiller on Stock Market Valuations

After yesterday’s decline and if stock trading today follows what futures are indicating, my guess is that Yale Economist and Nobel laureate Robert Shiller is going to be getting a few more interview requests to talk about the same thing he did yesterday for CNBC.

Not surprisingly, Federal Reserve officials this morning are already running away from the WSJ/Hilsenrath trial balloon of dropping the “considerable time” pledge for the start of interest rate hikes as detailed in Fed Aims to Signal Shift on Low Rates.

Given the difficulties in the rest of the world and how super-sensitive U.S. stocks have become to Fed moves, I’d bet that we won’t see any rate increases in 2015.

Tuesday Morning Links

Fed Aims to Signal Shift on Low Rates – WSJ
Fed could drop ‘considerable time’ pledge – MarketWatch
Shanghai stocks plunge 5.4 percent – Channel News Asia
Merkel condemns Russia ‘interfering’ in Eastern Europe – BBC
Spending slashed in oilpatch shockwave – Financial Post
Crude Rebounds Amid Shale-Oil Spending Curbs – Businessweek
Security Heightened at US Embassies Ahead of CIA Torture Report – Vice News
Fannie Mae, Freddie Mac to offer 3% down-payment mortgages – LA Times
Treasury: This Financial Creature Could Sink the System – Wolf Street
Light-Speed Treasury Trading Governed by Rules Dating to 1998 – Bloomberg
More than 150 arrested in California during police killing protests – Reuters
‘A Universe Beneath Our Feet’: Life In Beijing’s Underground – NPR

Market fall led by sharp drops in China, Greece – AP
VIX Spike Sends Shot Across the Bow – Barron’s
China’s stock mania decouples from economic reality – Telegraph
Jeremy Siegel predicts stock correction in 2015 – CNBC
Treasuries Advance on Refuge Demand as Global Stocks Decline – Bloomberg
Gold strengthens above $1,200/oz as dollar, shares slip – Reuters
Gold Sees Safe-Haven Demand as World Stock Markets Sell Off – Kitco
China Net Gold Import 1,212t Jan – Nov – BullionStar
7 Questions Gold Bears Must Answer – Casey Research
Belgium Central Bank Looking At Repatriating Gold – Kitco

Income inequality hurts economic growth – CNN/Money
Economists Don’t Even Know What Prosperity Is – Alhambra Partners
Job Market Growth Near 2-Year Lows, Fed’s Labor Market Index Shows – Zero Hedge
Indian Current-Account Gap Widens to Largest in a Year – Bloomberg
Crisis returns to Greece as PM gambles on bailout endgame – Fortune
U.K. Manufacturing Unexpectedly Posts First Drop Since May – Bloomberg
Housing Bubble Ahead? Some U.S. Markets Might Be Ready to Pop – Main Street
The Fed ignores external developments at its peril – The Hill
What a Reserve Currency Should Look Like – Mises
Fed Updates Ahead of FOMC Meeting – Fed Watch


Worse than the Great Depression (in Europe)

From this story at Forbes by Neil Howe (of The Fourth Turning fame) comes the rather surprising chart below showing how the post-financial crisis economic recovery in Europe is trailing the recovery after the Great Depression some eight decades ago.

Here in the U.S., we’re ahead of the 1930s pace (and that chart is interesting as well)  but that has a lot to do with how severe the decline was after the 1929 stock market crash. One often overlooked statistic from that era is that the U.S. economy grew at an average annual rate of 8 percent starting in 1933, another reminder of just how severe the decline was.

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