The Mess That Greenspan Made - Part 21

Friday Morning Links

MUST READS
Iraq conflict sparks oil price rise – BBC
Iraq’s Long Unraveling – The Atlantic
Militants Seize Towns as Advance Continues – Bloomberg
No immediate risk to Iraq’s oil supplies: IEA – MarketWatch
Iraq’s civil war threatens structure of global energy supply – Telegraph
As Iraqi crisis escalates, Anglophone press slams Obama, Maliki – France24
This map shows how violence in Iraq could threaten the oil supply – Vox
IEA sees much higher demand for OPEC oil for rest of 2014 – Economic Times
Subprime Trading Like It’s ’07 in Car-Loan Bonds – Bloomberg
Ukraine says ‘Russian tank incursion’ unacceptable – BBC
Wall Street loses a good friend in Eric Cantor – CNBC
Political Polarization in the American Public – Pew
How Smugglers Made America – Mises

MARKETS/INVESTING
Stocks: 6 things to know before the open – CNN/Money
How Should Investors Handle Iraq? – Ciovacco Capital
Bullish Sentiment Spikes to Highest Level of 2014 – Bespoke
Iraq flight to safety dangerous for stocks, but good for gold and oil – Arabian Money
The Reason for Interest Rate Declines: Bullish Sentiment is a Problem – Comstock Funds
Treasury Yield Curve Flattens Amid Fed Interest-Rate Speculation – Bloomberg
Palladium falls to one-month low as S.Africa wage deal looks to be in sight – Reuters
Gold Set for First Back-to-Back Weekly Gain Since April – Bloomberg
India’s gold imports soar in March but may now be in hiatus – Mineweb
March Indian Gold Import Highest In 10 Months – In Gold We Trust
Iraq chaos lifts gold price – still cheap vs oil – Mining.com

ECONOMY/WORLD/HOUSING/BANKING
Spending Worries? – House of Debt
Amid Upbeat Economic News, Many Reasons for Pause – WSJ
Yes, Theoclassical “Economists [are] Basically Immoral” – NEP
Japan’s Abe unveils plan to cut corporate tax rate – Reuters
Osborne pledges criminal action against banks and traders – BBC
Mark Carney: Interest rates could go up sooner – Independent
Carney Sees Housing Debt Risk as Rate Increases Near – Bloomberg
Here comes the echo boomer to save Canada’s housing market – Financial Post
No Miracle In the Offing for China’s Housing Market – WSJ
IMF Warns Global Housing Market Overheating, Including In U.S. – Forbes
Americans are moving back to the suburbs, but now as renters – Quartz
Senate Confirms Two Fed Governors, Makes Fischer Vice Chairman – Businessweek

 

The Commerce Department reported(.pdf) that May retail sales came in lower than expected, however, upward revisions to the April data offset much of last month’s disappointment.

Overall retail sales rose 0.3 percent in May, well short of the consensus estimate for a gain of 0.6 percent, as strong auto sales were partially offset by lower receipts at department stores and clothing stores. April sales were revised up from a gain of just 0.1 percent to a relatively strong 0.5 percent, this following a surge in both February and March after a sharp winter slowdown due largely to severe winter weather.

Excluding the 1.4 percent jump in auto sales, receipts rose just 0.1 percent last month and, excluding both autos and gasoline, sales were flat. Leading the advancing categories, miscellaneous store retailers saw a sales increase of 1.8 percent, home improvement store sales rose 1.1 percent, and nonstore (internet) retailers improved 0.6 percent.

Surprisingly, 8 of the 13 major categories saw lower sales, paced by drops of 0.6 percent at both general merchandise stores and clothing stores, 0.3 percent at electronics and appliance stores, and 0.2 percent at restaurants and bars.

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Thursday Morning Links

MUST READS
Govt steps on fiscal pump – China Daily
China takes new steps to boost growth – BBC
Iraq crisis: oil spikes to three-year high of $112 a barrel – Telegraph
China’s Record Oil Hoarding Seen Keeping Crude Above $100 – Bloomberg
Islamist militants seize control of Iraq’s second city – France24
How Squandered U.S. Money Fuels Iraq’s Insurgents – Fiscal Times
Will another oil price surge tip the world into a global financial crisis? – Arabian Money
Ukraine to shut down border with Russia, considers using land mines – Voice of Russia
Unintended Consequences of Obama’s Student Loan Policies – Cyniconomics
OECD calls for Canada to shift mortgage risk to private-sector – Financial Post
Cantor exit raises Wall Street fears of renewed debt fight – Reuters
Greenspan in China: Not the Opera (Yet) – aucontrarian
Selling Obamacare – vox

MARKETS/INVESTING
Asian stocks fall again, Europe drifts – AP
Why the Dow hitting 17,000 actually matters – MarketWatch
Main Street investors sell in May, go away – USA Today
Debt Risk Shifting to Investors as Bank Regulations Bite – Bloomberg
Do We Need a Recession for a Meaningful Correction in Stocks? – AWOCS
Treasury 30-Year Rally Ebbs in June Before $13 Billion Bond Sale – Bloomberg
Palladium around 13-1/2 year high as supply fears spur buying – Reuters
Gold looks to extend win streak to four – MarketWatch
China metal financing fears spread to Singapore – Financial Times
Gundlach: Gold could go to $1,500/ – Yahoo! Finance
Gold ATM Dispenses $1,300 Gold Bars In Midtown – Gothamist

ECONOMY/WORLD/HOUSING/BANKING
U.S. Economic Recovery Looks Distant as Growth Lingers – NY Times
U.S. healthcare data points to much weaker first-quarter GDP – Reuters
Euro zone robust April output boosts second-quarter GDP growth hopes – Reuters
Japan’s “Abenomics” faces critical test – Channel News Asia
Japan to keep printing money for years to come, so learn to enjoy it – Telegraph
New Zealand raises key rate but not done yet – South China Morning Post
22.4% urban homes lying vacant in China: report – China Daily
Vince Cable: UK housing boom ‘needs stopping’ – BBC
Once-hot Southern California housing market further cooled in May – LA Times
Central banks, please remember there are worse problems than deflation – Quartz
Great Moderation 2.0 Seen Lasting by JPMorgan Until Fed Shifts – Bloomberg
Paul Volcker: Back to the Woods? – WSJ

 

On Wealth, Means, and Medians

Anyone familiar with the math behind mean (average) vs. median as it relates to the graphic below from this CNN/Money story about individual net worth around the world would immediately conclude that we’ve got quite the wealth inequality problem here in the U.S., at least relative to other developed nations.

The much higher average net worth relative to median net worth in the U.S. is rivaled only by Sweden and Denmark, whereas, countries such as France, Finland, Italy, Japan, and the U.K. actually have a higher median than mean.

The math is best demonstrated by the case of Bill Gates walking into a room full of ordinary Americans. While the median net worth would be virtually unchanged, the average net worth of those people would go up by an extraordinary amount (e.g., if  the room has ten ordinary people, the average net worth would rise to somewhere around $4 billion).

Though a stubborn housing bubble (that may not always be so stubborn) has much to do with it, Australia certainly seems to have the whole wealth thing figured out.

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