The Mess That Greenspan Made - Part 30

A Stinker of a Jobs Report

It’s probably a good thing that financial markets are closed today in observance of the Good Friday holiday as today’s big jobs report miss would no doubt have sent traders into a frenzy of some sort, direction of markets unknown. Now they’ll have the long Easter weekend to think about the implications of the data shown below via this story at CNN/Money.

In addition to falling well short of the consensus estimate of nearly a quarter million new jobs, prior months’ labor market gains were revised downward by 69,000. Also, it’s important to remember employment is a lagging indicator that, now, may be confirming what many other indicators are pointing to – sharply slower growth for the U.S. economy.

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Friday Morning Links

‘Soft patch’ could weigh on March job tally – USA Today
Streak of strong US hiring likely extended into March – AP
Greece says ready to make IMF payment on April 9 – Reuters
Both sides are playing a risky game over Greece. Are we approaching the end? – Telegraph
Iran Agrees to Detailed Nuclear Outline, First Step Toward a Wider Deal – NY Times
What the Nuclear Accord Means for Business Opportunities in Iran – Bloomberg
California activists want water restrictions to include oil industry – Reuters
Cutting back on water use: Q&A on California’s drought – AP
This Is How Long Your Business Will Last, According to Science – Time
Soon, Students May Learn to Code Instead of Taking French Class – Bloomberg
IRS Budget Cuts Decreases Tax Audit For The Wealthy – Forbes
The healthiest countries in the world – USA Today

Asian stocks higher as jobs data awaited – AP
Rethinking Emerging Markets – Bloomberg
Oil falls nearly 4 percent after tentative nuclear deal for Iran – Reuters
Will Pimco Total Return Lose Its Top Spot to Vanguard? – Barron’s
How to buy stocks now if you’ve missed this massive bull market – MarketWatch
Some big name fund managers lose money in March as rally stalls – Reuters
It’s a game of musical chairs at the Wall Street casino – and the loser is you – MarketWatch
Wall Street and Silicon Valley Form an Uneasy Alliance – NY Times
Gold holds above $1,200 ahead of U.S. payrolls data – Reuters
U.S. Employment Data To Drive Gold Next Week – Kitco

Why Did Walmart Raise Its Wages? – Forbes
McDonald’s wage plan renews debate on franchisees – Reuters
Japan’s Battery-Powered Economic Recovery – Bloomberg
Stampede to Join China’s Development Bank Stuns Even Its Founder – NY Times
Cyprus Lifts Capital Controls Two Years After Deposits Bail-In – Bloomberg
Antitrust and Other Inquiries in Europe Target U.S. Tech Giants – NY Times
Toronto Housing Market May Not Join in Soft Landing – WSJ
Study Reveals Housing Market To Be At Its ‘Healthiest’ Level Since 2001 – DS News
Traders Now Expect Fed to Raise Rates Later Than Ever Before – Bloomberg
Mighty Janet Strikes Out – Confounded Interest


A Dearth of First Quarter Economic Growth

As was the case a year ago when harsh winter weather visited the East Coast, the first quarter of 2015 is turning out to be something of a bust GDP growth-wise as evidenced by the Atlanta Federal Reserve’s GDPNow forecast shown below.

Bolstering the argument that this was a weather-related slowdown, about a quarter of the recent decline can be attributed to shrinking fixed investment in structures by businesses (though, countering that argument is the lack of a similar decline in residential building).

A widening trade gap accounts for another quarter of the drop but, despite the conventional wisdom of the impact of sharply lower energy prices, it was consumption – America’s growth engine – that accounted for about half of the overall decline since this data series began in January,  all of which suggests the growth slowdown may not be a transitory.

Thursday Morning Links

Doubts over U.S. growth cool dollar rally – Reuters
Going Down: GDP Growth For Q1 2015 Is Now 0 – Confounded Interest
Greece unveils reforms, says euro ‘viability’ at stake – euobserver
Greek defiance mounts as Alexis Tsipras turns to Russia and China – Telegraph
Brown orders California’s first mandatory water restrictions – LA Times
These Charts Show the Horrific California Drought Conditions – Bloomberg
How one California farmer is battling the worst drought in 1,200 years – Quartz
This Anti-Gay Pizza Place Got Trashed on Yelp. Why Isn’t That Enough? –
Stanford just made tuition free for families earning less than $125,000 per year – Vox
The economically lost generation of Millennials – My Budget 360
False Signs Of “Recovery” Hide Economic Wall Dead Ahead – Contra Corner
Our Current Illusion of Prosperity – Mises

Asia stocks higher on stimulus hopes, European markets tepid – AP
Oil prices may be about ready to prove Warren Buffett wrong – MarketWatch
Shanghai Traders Make Trillion-Yuan Stock Bet Backed by Debt – Bloomberg
How Bill Gross will march through the low-rate madness – MarketWatch
Chinese investors trade way more often than Americans – CNN/Money
Gold holds around $1,200/oz ahead of U.S. payrolls data – Reuters
Gold’s Bull Market In Europe and Japan Remain Unnoticed – GoldSilverWorlds
Disappointing Nonfarm Payrolls Won’t Necessarily Help Gold – HSBC – Kitco
US Mint Bullion Sales Quicken in March – Coin News

McDonald’s to raise wages for 90,000 US employees – BBC
Private Payrolls, Factory Data Point to Weak Economic Growth – Reuters
Why Investors May Be Rooting for a Weak Jobs Report – Fiscal Times
European Central Bank determined to stick with stimulus plan – AP
Abenomics: Overcoming the Legacy of the Lost Decades? – IMF Direct
Japan on Brink of Another GDP Contraction – WSJ
Vacation home sales exploded last year – CNN/Money
Central Bank Solvency and Inflation – Liberty Street Economics
Ben Bernanke’s second life as just another blogger – Fortune
Bernanke’s Misguided Global Savings Glut Hypothesis – Prag Cap
Why are interest rates so low: The Global Savings Glut – Bernanke’s Blog


China Stocks: What Could Go Wrong?

Bloomberg reports that China equity markets have become even bubblier after a wave of new irrationally exuberant “investors” that harken back to the U.S. in the 1920s when Joseph Kennedy purportedly began selling stocks after receiving a hot tip from a shoe-shine boy.

On a positive note, they now appear to have their real estate bubble under control…

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