The Mess That Greenspan Made - Part 30

U.S. Retail Sales in April Disappoint

The Commerce Department reported(.pdf) that retail sales rose far less than expected last month, up just 0.1 percent in April after big upwardly revised gains during the prior two months and a sharp slowdown over the winter.

The consensus of analysts was for a gain of 0.4 percent in the headline figure, but the miss was even worse when excluding automobiles and gasoline as expectations were higher but sales were even lower, flat and down 0.1 percent, respectively.

Sales rose for 8 of the 13 major categories, but big declines in a few groups offset nearly all of the modest gains elsewhere. Sales at both miscellaneous stores and electronics & appliance stores tumbled 2.3 percent while sales at non-store retailers and restaurants & bars both fell 0.9 percent to pace the declining categories.

Clothing store sales rose 1.2 percent, gasoline station receipts were 0.8 percent higher, and automobile sales were up 0.7 percent to lead the rising categories.

If not for the huge upward revision to prior months – the March increase was adjusted up from 1.2 percent to 1.5 percent for the biggest gain in four years and February’s 0.7 percent gain rose to 0.9 percent – this report would have been even worse.

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Tuesday Morning Links

Dow and S&P 500 Hit New Highs – WSJ
China Slowdown Deepens – Bloomberg
Economists React: China Slows Down – WSJ
Tim Geithner’s new book faces blowback – CNN/Money
Russians ditch ruble en masse, data shows – Reuters
Russian Dilemma: Why EU Sanctions are a Bluff – Spiegel
Rise of Oceans Due to Melting Antarctic Ice Sheet Is ‘Unstoppable’ – The Wire
This Is What a Holy Shit Moment for Global Warming Looks Like – Mother Jones
Mom with HP printer shows the ease of making counterfeit bills – Financial Post
The Mysterious Death of Entrepreneurship in America – The Atlantic
Success in life doesn’t depend on college choice – Reuters
Australia aims to nearly halve budget deficit – AP
Consumers: ‘We don’t need our stuff’ – USA Today

Stocks: Sell in May? No way! – CNN/Money
India shares at record high on exit polls – BBC
Copper price hits two-month high – Australian
Corporate bond rally is next to bust, some fear – MarketWatch
‘Stealth correction’ could cause quite a stock market ride – CNBC
The Great Hedge-Fund Mystery: Why Do They Make So Much? – New Yorker
Treasuries Rise on Bets Inflation to Be Subdued – Bloomberg
Gold retreats as euro falls, stocks rally in Europe – Reuters
BNP Paribas revises gold forecast up to $1,255 an ounce from $1,095 – BullionStreet
Gold price likely to get a big hike from the new Indian government – Arabian Money
Gold’s pent-up demand – Mineweb

Vermont hikes minimum wage to $10.50 – CNN/Money
Jobless and Obese? Why You’re in Trouble – Fiscal Times
Euro Bonds Lose Sway in Blow to Draghi Stimulus Plan – Businessweek
Bundesbank ready to back ‘significant’ ECB easing – MarketWatch
German Investor Confidence Drops for Fifth Straight Month – Bloomberg
How China Is Eclipsing Japan in Asia — An IMF Snapshot – WSJ
China’s GDP (PPP) to surpass the United States? – Bruegel
China Housing Market at ‘Tipping Point’ This Year – Caixin Online
Why the Nation’s Hot Housing Market Is Cooling, Slightly – WSJ
7 places where property prices are falling – MarketWatch
Cleveland Fed: Slow Growth Help Hold Down U.S. Inflation – WSJ
Yellen Wage Signals Showing Slack May Be Missing Cost Speedup – Bloomberg


Graduation Day Gallows Humor

Well, maybe the term gallows humor is overstating things just a bit since the job prospects for college graduates these days are much better than they were just a few years ago. Nonetheless, there are still an awful lot of kids with no better place to hang up their sheepskin than on one of the basement walls in their parents’ house.

From the Drew Sheneman archives at

On a related note, this story at USA Today recounts some of the most entertaining commencement speeches of recent years including the following quip from Stephen Colbert:

At his alma mater, Northwestern, in 2011, he started off by thanking the university president, the board … “and thank you, parents! Of course, if you don’t thank them now, you’ll have plenty of time to thank them tomorrow when you move back in with them.”

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A dearth of positive catalysts for precious metals could make the period ahead a trying one for gold and silver investors, as two bullish factors – safe haven demand stemming from violence in the Ukraine and the weakening U.S. dollar – could be fading. This sets the stage for another move lower this summer, and the possible completion of a reverse head-and-shoulders bottom later this year that would be wildly bullish.

Due in large part to seasonal factors, demand for gold and silver in Asia is likely to offer little support to metal prices over the near-term after record buying last year in China and the reluctance to lift gold import curbs in India this year.

Traders and investors in the West are decidedly uninterested in precious metals as evidenced by steady ETF holdings, however, a surprise in this week’s U.S. inflation report could rekindle their interest.

Gold and silver prices jumped early last week on renewed tensions in the Ukraine, however, the move higher was short-lived after Russian President Vladimir Putin called for a delay in the secession vote in Eastern Ukraine and said that Russian troops massed at the border would be moved back. Pro-Russian separatists are planning to conduct the vote on Sunday anyway and, as a result, some fresh safe haven demand for precious metals could emerge depending upon how this all plays out, but Putin taking a step back has surely turned some gold bulls into gold bears.

Another bearish development last week was…

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