The Mess That Greenspan Made - Part 21

Monday Morning Links

MUST READS
Oil price dives after output talks fail – BBC
Oil sinks after top producers fail to reach deal – CNN/Money
Grand Oil Bargain Is Victim of Saudi Arabia’s Iran Fixation – Bloomberg
The US Just Transferred Nine Guantanamo Detainees to Saudi Arabia – Vice News
57% of Americans Say Income Taxes Are Too High. Only 55.5% Pay Income Tax – WSJ
America’s missing wage growth has been particularly cruel to Generation X – Quartz
How the Hyper-Liberal Enclaves of America Could Pick the GOP Nominee – Politico
None of the candidates are viewed favorably by a majority of Americans – The Week
Superdelegates have destroyed the will of the people – Salon
Deflation is the dog that has failed to bark, let alone bite – Telegraph
The United States of Insolvency – Grant, Time
A financial hockey stick – Econbrowser

MARKETS/INVESTING
Stocks: 6 things to know before the open – CNN/Money
Defaults hit highest level since ‘09 bust – USA Today
What if the ‘big, fat, juicy bubble’ bursts? – The Hill
China’s Stocks Slump as Oil Producers Slide – Bloomberg
Pushing Desperate Measures Too Far – Credit Bubble Bulletin
Permanently High Plateaus Have Poor Precedents – Hussman Funds
The Hole at the Center of the Rally: S&P 500 Margins in Decline – Bloomberg
Gold boosted by dollar and equities after oil freeze fails – Reuters
Funds Are Betting the Gravity-Defying Gold Rally Isn’t Over Yet – Bloomberg
Faber: “Messiah” Central Banks Helicopter Money“Will Not End Well” – GoldCore

ECONOMY/WORLD/HOUSING/BANKING
The Keynesian House Of Denial – Contra Corner
Will Autos Be The Cyclical Trigger? – Alhambra Partners
Participation Rate: Aging Is Only Half of the Story – Atlanta Fed
China Ocean Freight Index Collapses to Record Low – Wolf Street
Rousseff Hangs by a Thread After Losing Impeachment Vote – Bloomberg
Putin Swears Off Stimulus as Policy Mix Moves Toward ‘Orthodoxy’ – Bloomberg
China March home prices rise at fastest rate in two years – Reuters
Why the U.S. Housing Market Will Spring Ahead – WSJ
China eyes boost from ‘superpower’ Federal Reserve – CNBC
Federal Reserve heads battle over GDP accuracy – NY Post

 

A Brief History of Credit Cards

From And/Orange comes this history of the credit card in the U.S. that goes a long way in explaining how our credit-enabled economy has evolved and what its future might hold now that we (collectively and in credit card terms) have maxed everything out.

Don’t know about you, but with the end of the Costco/Amex relationship, we’ve gotten lots and lots of credit card offers recently, with almost all of them offering generous introductory benefits that have added up to a startling amount of money.

We’ve taken advantage of nearly all of them, then stopped using the new card, but new offers keep coming in as we await the new Costco Visa card which is supposed to be quite generous in rewards (e.g., an impressive 4% back on gas purchases).

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Thursday Morning Links

MUST READS
Helicopter money: Views of leading economists – voxeu
Bernanke’s New Helicopter Money Plan is Sheer Lunacy – Contra Corner
Central bankers wait in vain for the world to drink their punch – Reuters
China Defaults Prompt Issuers to Pull $5.4 Billion of Bond Sales – Bloomberg
Solar Energy Giant SunEdison May Be In Technical Default – Forbes
Energy XXI Files for Bankruptcy After $5 Billion Expansion – Bloomberg
Why Obama is forgiving the student loans of nearly 400,000 people – MarketWatch
Psychiatrist: Overprotective Parents Create Easily-Offended College Students – reason.com
Why the Verizon strike is the perfect economic morality play for Bernie Sanders – Vox
Why Aren’t Presidential Candidates Talking About the Federal Reserve? – Fiscal Times
A State-By-State Roadmap For The Rest Of The Republican Primary – Five Thirty Eight
Karl Rove-backed PAC warms to Trump – Politico

MARKETS/INVESTING
Stocks: 5 things to know before the open – CNN/Money
Hedge funds post best gains in 4 years in March – CNBC
Are Stock Market Bears About to Get Clobbered Yet Again? – Fiscal Times
Band plays on, as global oil glut leaves supertankers in a huge jam – Reuters
IEA Sees Oil Oversupply Almost Gone in Second Half on Shale Drop – Bloomberg
A real profits recession may be on its way – but there’s no need to panic – Guardian
Gold prices retreat as dollar extends gains – Reuters
What’s so Bad about the Gold Standard? – Uneasy Money
Copper price jumps on record Chinese imports – Mining.com

ECONOMY/WORLD/HOUSING/BANKING
Dueling Fed GDP Trackers – Marc to Market
Why This Economy Is Now Running Aground – Wolf Street
The last chance for China’s leaders to avert an economic crisis – Telegraph
Breaking the link between housing cycles, banking crises, and recessions – voxeu
Argentina wins big victory to end 15 years in default – CNN/Money
Traveling to Cuba is easier than you think—if you read this guide first – Quartz
China and India Have Different Answers for Their Debt Messes – Bloomberg
Number of vacant new Edmonton houses skyrockets 70 per cent – Edmonton Journal
Elizabeth Warren Is Why JPMorgan Has a Living Will Problem – Wall Street on Parade
What’s Wrong With Negative Rates? – Project Syndicate

 

Credit Crunch for Shale Drillers

Bloomberg reports on the long-awaited (yet still painfully slow) comeuppance for shale oil companies and the big U.S. banks who have lent to them. Of course, freakishly low interest rates that were too low for too long are in no way related to any of this.

This seems to be the new normal (that is, unless we get a huge rebound in oil prices):

Chesapeake Energy Corp., the deeply indebted shale producer, said that it can hang on to its $4 billion bank line as long as it posts just about everything it owns as collateral.

Wednesday Morning Links

MUST READS
Coal giant Peabody files for bankruptcy – BBC
Oil Drillers Feel the Pain as Banks Slash Their Credit Lines – Bloomberg
Just Released: Introducing the FRBNY Nowcast – New York Fed
‘GDPNow’ Got You Down? Meet the NY Fed’s New ‘Nowcast’ – Barron’s
Italy’s “Last Resort” Bank Bailout Fails to Calm Investors’ Fears – Fortune
International Monetary Fund lowers forecast for global economy – Washington Post
No room for mistakes if the global economy is as bad as the IMF thinks – Telegraph
News About Obamacare Has Been Bad Lately. How Bad? – NY Times
Most investors in the U.S. are happy with their 401(k) – Gallup
New Credit Cards a Headache at Stores Across America – Bloomberg
The Spiritual Crisis of America’s White Working Class – National Review
Donald Trump’s Role Model Is an Ayn Rand Character – New York Magazine

MARKETS/INVESTING
Stocks: 5 things to know before the open – CNN/Money
Oil prices fall on producer meeting doubts, stronger dollar – Reuters
When the oil recovery comes, it won’t look like anything we’ve seen before – FP
Oil surges to 2016 highs on reported Saudi-Russian deal – Channel News Asia
Funds shy from Europe, Japan amid fear of ‘quantitative failure’ – CNBC
JPMorgan Profit Beats Estimates on Pay Cuts, Trading Results – Bloomberg
Here’s why investors are losing sleep over banks this earnings season – MarketWatch
Gold slips as equities rise, dollar rebounds – Reuters
Buy Gold ! – HSBC – GoldCore
Glittering – Macro Man

ECONOMY/WORLD/HOUSING/BANKING
U.S. Economic Confidence Index Dips to -14 – Gallup
World Recession: History’s about to repeat itself – CNBC
China March exports rise 11.5% on-year, log first increase since Jun 2015 – CNA
‘Good start’ for Chinese economy in Q1: economic planner – China Daily
Shanghai: People Who Fail to Visit Parents Will Have Credit Scores Lowered – Caixin
‘We thought we were over all that’: angry Icelanders feel like it’s 2008 again – Guardian
Housing Market Primed For Massive Spring Season – Mortgage Reports
Homebuyers finally fuel mortgage volume, applications up 10% – CNBC
Regulators: 5 big banks get failing grades for crisis plans – AP
Fed Reform Should Focus on the Economy – Bloomberg

 
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