The Mess That Greenspan Made - Part 32

Friday Morning Links

MUST READS
Demand for Home Loans Plunges – WSJ
Why the Housing Market Is Stalling the Economy – NY Times
Why David Einhorn is right about tech stocks – MarketWatch
Russia’s currency ratings downgraded by Standard & Poor’s – BBC
Kerry Warns Putin on Ukraine as Russia Opens Troop Drills – Bloomberg
NYT publishes fake photos of “Russian militant” in Ukraine – Voice of Russia
Have the Limits to Economic Growth Really Been Reached? – The American
BOE Chief Economist-To-Be Warns: “It’s Time To Rethink Everything” – Zero Hedge
Why Obama may still yet approve the Keystone XL pipeline – Financial Post
Study links California drought to global warming – AP
5 Things to Know about Colorado pot revenue – AP
The Piketty Panic – Krugman, NY Times
Paying for Obamacare – reason.com

MARKETS/INVESTING
Ukraine tensions roil markets once again – AP
Goldman Sachs: This could ruin your portfolio – CNBC
Why Markets Are Caught In a Tug-of-War – Bloomberg
Key Market Movers Turning Negative – Comstock Funds
Enough already! — Why are we still waiting for that correction? – Financial Post
Has The S&P 500 Topped At Exactly The Same Price As Gold? – GoldSilverWorlds
Treasury Long Bond’s Record Year-to-Date Return Four Times S&P – Bloomberg
Gold edges up as dollar, shares struggle on Ukraine worries – Reuters
Barrick’s Munk Says Einstein Couldn’t Predict Gold Prices – Bloomberg
U.S. Exports A Record Amount Of Gold To Hong Kong In January – SRSrocco Report
CME plans to launch physically settled Asia gold futures-sources – Reuters

ECONOMY/WORLD/HOUSING/BANKING
New report calls U.S. a ‘rising star’ of global manufacturing – Reuters
Safeway Will Raise Prices to Cover Higher Meat, Produce Costs – Money News
Conditions exist for yuan’s two-way fluctuation: official – xinhuanet
China exports deflation worldwide by driving down yuan – Telegraph
Pesek on Asia: New Zealand’s China Boom – Bloomberg
S&P upgrades Cyprus on better economic performance – AP
Tokyo Inflation Quickens to Fastest Since 1992 – Bloomberg
Soviet Yearnings: Hopes Rise in Transnistria of a Russian Annexation – Spiegel
The Chinese take Manhattan: replace Russians as top apartment buyers – Reuters
Can Warren Buffett Save the U.S. Housing Market? – Motley Fool
U.S. Said to Ask BofA for More Than $13 Billion Over RMBS – Bloomberg
Federal Reserve Couldn’t Pass A Stress Test, Says Former Fed Economist – Value Walk

 

I must confess, I occasionally look at Zillow.com to get some idea about the value of our home, purchased here in Bozeman, Montana about three-and-a-half years ago, and was recently astonished to see its Zestimate at about 60 percent above what we paid.

Apparently, I’m not the only one who does this, at least based on the results of a new survey from Gallup (they’re really on a roll this week) from which the chart below was pulled.

As noted in the report, there are big differences in expectations based on where you live as some 72 percent of those in the West think home prices will rise versus only 44 percent in the East (the South and the Midwest are somewhere in between).

This is consistent with data last week (as noted here) where real estate is again seen as the best investment choice, overtaking gold, much to the surprise of stock and bond investors.

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Me Again

That was quite a rebound for gold, just in the time it took yours truly to get in a morning workout. From down $10+ an ounce to up $5+ an ounce, the current Bloomberg story about the disastrous knock-on effects of (what else?) China gold demand and technical levels being breached to the downside are now mute, at least for the time being.

Short-covering and renewed safe haven demand after renewed violence in Ukraine are also credited with the rebound from multi-month lows, however, gold traders have reportedly been bored by the whole Russia/Ukraine thing lately.

Anyway, I chatted with Cory Fleck of the Korelin Economics Report again yesterday.

The .mp3 file is again available here at the blog – just click on the image to the right – or you can go directly to this page over at KER.

We talked about the ongoing story of China gold demand and how it’s being told in the West in what, in my view, is a pretty remarkable demonstration of just how much many in the West hate the metal.

As detailed here on multiple occasions over the last week or so, one off-hand comment by one precious metals consultant about the amount of gold that could be deployed as collateral in China’s banking system and, all of a sudden, China is a negative for the gold market rather than a huge positive. Sometimes I wish I could get a look 10 years into the future to see how the whole China-gold thing plays out.

[To access commentary that Tim only shares with subscribers, join Iacono Research.]

http://www.kereport.com/2014/04/23/update-chinese-gold-demand-sentiment-gold-west/
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It’s probably not such a bad thing that, in recent years, it has become much more expensive to get a law degree here in the U.S., at least based on the graduate school debt levels reported in this Wall Street Journal story the other day in the graphic below, but the idea that some of that law school debt may end up being forgiven is somewhat troubling.

Based on the WSJ story, there has recently been a sharp increase in college loans that have built-in maximum payment/long-term forgiveness features and these now account for almost 10 percent of the nation’s $1+ trillion in outstanding student loans.

Also see this commentary on the subject by Megan McCardle at Bloomberg.

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