The Mess That Greenspan Made - Part 20

Waiting to Exhale in Houston

Office construction data has never been anything that I’ve had any interest in, however, in light of the recent oil bust and the slow-motion reaction to the 50 percent drop in energy prices, charts like the one below from this Wall Street Journal story are hard to ignore.

A few more related charts appear in this offering from the WSJ Economics Blog and added context on the subject can be found in Oil Bust Hits Office Construction Boom, Banks, Suppliers – But Hey, “So Far” No Apocalypse.

Thursday Morning Links

MUST READS
Ukraine crisis: Leaders agree peace roadmap – BBC
IMF Announces $17.5B Package for Ukraine -NY Times
Sweden Cuts Main Interest Rate Into Negative Territory – WSJ
Greek bailout talks fail to make progress – as it happened – Guardian
China’s Li Invites Tsipras to Visit Amid Port-Sale Doubts – Bloomberg
Germany faces impossible choice as Greek austerity revolt spreads – Telegraph
Who’s Afraid of the Rising Dollar? Not the Thriving U.S. Economy – Bloomberg
One-Sixth Of US Office Space Under Construction Is In Houston – Zero Hedge
Oil Plunge Hits Office Market, But “So Far” No Apocalypse – Wolf Street
The Problem of Debt as We Reach Oil Limits – Our Finite World
Why medical debt is the most dangerous kind – Quartz
Why John Oliver will not replace Jon Stewart – Vox

MARKETS/INVESTING
Stocks: 5 things to know before the open – CNN/Money
A big part of the market is headed for the rocks – CNBC
High Market Valuations May Signal Low Future Returns – Morningstar
Will 2015 mark the end of the great stock buyback binge? – Fortune
Japan stocks rally to seven-year high after holiday – MarketWatch
Treasuries Advance for First Time in Six Days on Greece Impasse – Bloomberg
Gold edges up from 5-week low on weaker dollar, Greece – Reuters
Is Russia Planning a Gold-Based Currency? – Mises
The Fed president who owns the most gold – Mining.com
WGC: Gold Market Finds Balance In 2014 – Kitco

ECONOMY/WORLD/HOUSING/BANKING
Republicans don’t really care about inequality – The Hill
Piketty a ‘Strong Influence’ as Japan Eyes Debt – WSJ
German inflation tips into negative territory – Economic Times
Eurozone Industrial Output Remains Flat In December – RTT News
Carney Looks Past Low Inflation to Signal Faster Rate Increases – Bloomberg
Australia unemployment in surprise jump to 6.4pc – Sydney Morning Herald
U.S. foreclosure activity rises 5 percent in January – Reuters
What Is Citigroup Hiding From Its Shareholders Now? – Baseline Scenario
The Spectacular Way Too Big Failure of Dodd-Frank – Fiscal Times
Fisher Says Fed Should Move Power Away From New York Fed – WSJ

 

Paul Krugman and David Stockman offer up some thoughts on Sen. Rand Paul’s much debated “Audit the Fed” bill. First, from the Nobel Laureate via this item at the NY Times.

Here’s my current thought: in some sense money is a really weird thing, which can look to individuals like a real asset — cold, hard, cash — but is ultimately, as Paul Samuelson put it, a “social contrivance” whose value is more or less conjured out of thin air. Mainstream macroeconomics acknowledges the weirdness — in particular, makes heavy reliance on the ability of central banks to create more fiat money at will — but otherwise treats money a lot like ordinary goods. But that intellectual strategy doesn’t come naturally to many people, so there’s always a constituency for monetary cranks.

Yes, anyone who questions the longevity of the world’s latest fling with a pure fiat currency is a monetary crank and, given the staunch defense of the Fed in this latest round of commentaries by the mainstream financial media, that is clearly the consensus view.

Enter David Stockman, former Reagaon Budget Director and monetary crank who teaches us (or, at least, me) a new word in this piece at his Contra Corner blog.

The reason to be fearful about the economic and financial future is that we are in the thrall of a mainstream consensus that is downright meretricious.

Folks, this whole chorus of Fed governors—–yesterday’s lineup included Richard Fisher and Charles Plossner—-defending the sacred “independence” of the Federal Reserve is downright Kafkaesque. Rather than protecting the Fed from meddling politicians, it is the American public that desperately needs protection from the depredations of an unelected monetary politburo that runs the entire financial system.

The outpouring of anti-”Audit the Fed” commentaries is something to behold, as should be clear when looking at today’s links post. I rarely read comments on news stories or blog posts, but I’ve been making an exception for this subject since you can really get a good feel for the vast Krugman/Stockman divide when doing so.

Wednesday Morning Links

MUST READS
Greece to present bailout plans to EU – BBC
Greek foreign minister in Russia for talks with Lavrov – Reuters
Leaders due in Minsk for Ukraine talks as heavy fighting continues – Guardian
Saudi Oil Is Seen as Lever to Pry Russian Support From Syria – NY Times
Central Bankers Bash Rand Paul’s ‘Audit the Fed’ Bill – WSJ
Fed boosts audit-bill criticism, White House joins in – Business Times
Rand Paul’s ideas about the Fed make absolutely no sense – Washington Post
Senator Elizabeth Warren Opposes ‘Audit the Fed’ Bill – WSJ
There’s Something About Money – Krugman, NY Times
Audit The Fed——And Shackle It, Too – Contra Corner
Now Watch Denmark – Dollar Collapse
Germany Emerges – Stratfor

MARKETS/INVESTING
Stocks muted ahead of Greek debt meeting – AP
What a ‘Grexit’ would mean for U.S. stocks – MarketWatch
Is the Energy-Stock Rebound for Real? – Barron’s
How Sector Allocation Makes or Breaks Investors – WSJ
What About Commodities in the 1970s? – A Wealth of Common Sense
U.S. 10-Year Notes Advance Before Retail Sales, Price Data – Bloomberg
Gold ticks higher as investors back off on risk – MarketWatch
Gold Bear Market About To End In 2015? – GoldSilverWorlds
Repression Investing: Got Gold? – Merk Investments
Indian Trade Ministry Wants To Reduce Gold Tariffs – Kitco

ECONOMY/WORLD/HOUSING/BANKING
Winter Is Coming – E-piphany
Moody’s: Cheaper oil will not boost global growth – BBC
U.S. Q4 Growth Estimates Are Dropping After A Strong Six-Month Stretch – WSJ
Economists: They Can Add But Can’t Put Two and Two Together – Mark St. Cyr
What’s fueling the boomerang generation? – CBS Moneywatch
PBOC Enlarges Liquidity Tool to Avoid Cash Squeeze – Bloomberg
China’s War on Western Values – Project Syndicate
South Korea Cuts Prices Amid Currency War – WSJ
Banks May Have Overplayed Their Hand Fighting Wall Street Regulation – Bloomberg
Shifting goal posts on employment may signal slower Fed rate hikes – Reuters

 
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