The Mess That Greenspan Made - Part 32

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.]

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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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Thursday Morning Links

Apple shares soar on increased buyback – CNN/Money
Facebook earnings surge on mobile advertising – BBC
If a Bubble Bursts in Palo Alto, Does It Make a Sound? – NY Times
Bizarre reality of US housing market: Sales tank, prices soar – Quartz
Ukraine Steps Up Offensive, Putin Issues Warning – Businessweek
Vladimir Putin has learned what U.S. didn’t – Reuters
Germany puts military exports to Russia on hold – AP
Putin’s Dilemma: Fending Off the U.S Imperial Hand – Counterpunch
America has conquered its debt crisis with incredible speed – Telegraph
Shale Boom Sends U.S. Crude Supply to Highest Since 1930s – Bloomberg
Mobile addiction growing at an alarming rate – CNBC
The Case for Race-Blind Affirmative Action – New Yorker
The Shoe Dropped. What’s Next? – aucontrarian

Stocks higher, Tokyo drops on trade woes – AP
Why This Bull Market Feels Familiar – WSJ
“Cool Kid” Tech Stocks Are a Lightning Rod – Barron’s
Apple, Facebook draw line under tech stocks – USA Today
Last year’s deadbeats do best as stocks stall – AP
Four red flags stock investors need to watch – Financial Post
U.S. 7- to 30-Year Spread Reaches Least Since 2009 Before Sale – Bloomberg
Gold around 2-1/2-mth low on risk aversion ahead of U.S. data – Reuters
DB: Russia-Ukraine geopolitical tensions not supporting Gold – BullionStreet
E-trading pulls gold into forex units as commodity desks shrink – Reuters
Chorus to lower gold curbs grows louder in India – Mineweb

In Disney’s shadow, homeless families struggle – AP
The Economic Monster Called Deflation – Shilling, Bloomberg
Central bank says Spanish growth doubled in Q1 – AP
Infrastructure projects set to boost growth – China Daily
Obama urges Japan to take “bold steps” in huge trade deal – CNA
Weapon of Last Resort: ECB Considers Possible Deflation Measures – Spiegel
Russia’s Bond Market Return Aborted as Yields Surpass 9% – Bloomberg
Independent Scotland has parallels with Iceland, warns S&P – Telegraph
Is there a new housing bubble in the U.S.? – LA Times
Wall Street Fuels Surge in Hamptons Home Prices – Bloomberg
Bubbles Are Doing What Bubbles Do – Alhambra Partners
QE Is A Fraud Perpetrated By Made Men – Automatic Earth


Middle-Aged and Back with Mom & Dad

This LA Times story about Californians in their 50s and 60s moving back in with their parents has been making the rounds over the last day or so and for good reason – it’s yet another indication that, despite rising stock prices, rising home prices, and an improving economy, something is still seriously wrong here in the good ‘ol US of A.

It would seem the most surprising thing about this is that people actually agree to be interviewed on the subject like Debbie and Ron Rohr below who were photographed at the Salinas home of Debbie’s mother (at least Debbie had the good sense, apparently, to take down the Peter Frampton Olivia Newton-John posters from her old room).

At a time when the still sluggish economy has sent a flood of jobless young adults back home, older people are quietly moving in with their parents at twice the rate of their younger counterparts.

For seven years through 2012, the number of Californians aged 50 to 64 who live in their parents’ homes swelled 67.6% to about 194,000, according to the UCLA Center for Health Policy Research and the Insight Center for Community Economic Development.

The jump is almost exclusively the result of financial hardship caused by the recession rather than for other reasons, such as the need to care for aging parents, said Steven P. Wallace, a UCLA professor of public health who crunched the data.

“The numbers are pretty amazing,” Wallace said. “It’s an age group that you normally think of as pretty financially stable. They’re mid-career. They may be thinking ahead toward retirement. They’ve got a nest egg going. And then all of a sudden you see this huge push back into their parents’ homes.”

Many more young adults live with their parents than those in their 50s and early 60s live with theirs. Among 18- to 29-year-olds, 1.6 million Californians have taken up residence in their childhood bedrooms, according to the data. Though that’s a 33% jump from 2006, the pace is half that of the 50 to 64 age group.

At first, this seemed like one of those stories where you’ve got a huge increase to a small number and that makes for a sensational headline and story, but the simple fact that there is now only an 8-to-1 ratio between 50-64 year olds and 18-29 year olds who live with their parents (and not as caregivers) seems pretty disturbing, at least to me.

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