The Mess That Greenspan Made - Part 32

Oil Boom-Bust Redux

The image below (via this story from Canada’s Financial Post) is actually from the 1980s (Texas, perhaps, or maybe Canada – that was a long time ago) when a similar energy boom went bust, leaving untold thousands of people out of work and wondering if they should have, maybe, saved a little more money when times were good in case times turned lean.

The subject of the FP story is, like many others these days in the financial media, whether or not the U.S. and/or Canada are headed for another recession and, naturally, economists are reluctant to answer that generally in the affirmative, even though the evidence is mounting that that’s the direction we’re headed with energy markets central to the discussion.

Thursday Morning Links

MUST READS
Dow tumbles after Fed statement – CNN/Money
Fed keeps rates unchanged while monitoring markets – Guardian
Feldstein: Fed should hike rates and let the market fall – MarketWatch
Central Bank Credibility: What Does it Mean? – Marc to Market
Italy gets its deal on bad loans but bank problems persist – Reuters
Why economists are starting to use the ‘R’ word again – Financial Post
Are Economists in Denial About What’s Driving the Inequality Trainwreck? – INET
Bill O’Reilly to Trump: It’s not ‘good for America’ to skip GOP debate – CNN/Money
Chart: How many sexist slurs Trump supporters are tweeting at Megyn Kelly – Vox
Trump’s Fox News Feud May Be Another Sign The GOP Is Failing – Five Thirty Eight
Here’s Why the Republican Populist Revolt Will Backfire – Fiscal Times
Poll: Sanders and Clinton in tight battle for Iowa – Politico

MARKETS/INVESTING
Stocks set for upbeat day as oil rallies – MarketWatch
Hysteria over China has become ridiculous – Telegraph
3 reasons the S&P 500 may revisit its all-time high – MarketWatch
Janet Yellen Doesn’t Care About Your 401(k) – Fortune
Foreigners Flee Japan Market by Dumping Futures – Bloomberg
Ka-boom Goes the Bottom of the US Bond Market – Wolf Street
CHARTS: Chinese supercycle can’t be repeated – Mining.com
Gold retreats from 12-week high after Fed meeting – Reuters
German Gold Repatriation Continues – Smaugold
F(r)actions of Gold – Alhambra Partners

ECONOMY/WORLD/HOUSING/BANKING
Economists Get Closer to Spotting Recessions – Bloomberg
Why Low Gas Prices Are Not Stimulating Economy – McClellan Financial
Why GDP fails as a measure of well-being – CBS Moneywatch
China’s Bumpy New Normal – Project Syndicate
U.K. GDP grows 0.5% in sign of economic resilience – MarketWatch
Goldman Sachs Calls Brazil a ‘Mess’ After Warning on Depression – Bloomberg
Are you a Canadian cash hoarder? Here’s why you shouldn’t run and hide – Financial Post
After 2015 Surge, Housing Market Faces Bumpy Road Ahead – US News
Opinion: The Fed says sorry for its rate-hike forecast – MarketWatch
FOMC Recap – Fed Watch

 

Two-Term Presidents and U.S. Stocks

Another fine infographic over at the Visual Capitalist reminds us of how the last few eight-year stock cycles coinciding with two-term presidents haven’t worked out so well toward the end of those periods, that is, unless you’re a short-seller.

Of course, the main subject for the infographic is gold as an investment and it’s worth pointing out (as many others have already done so far this year) that the yellow metal is doing exactly what it’s supposed to do at times like this.

Wednesday Morning Links

MUST READS
The Chances of a Global Meltdown – WSJ
The Federal Reserve may have made a huge mistake -Washington Post
A China bank contagion could blow up global markets – CNBC
China’s $1 Trillion Money Exodus Isn’t About Capital Controls – Bloomberg
China accuses George Soros of ‘declaring war’ on yuan – Guardian
An NFL player was just accepted to the math PhD program at MIT – Quartz
A Day In The Life Of An Iowa Family Drowning In Campaign Ads – Five Thirty Eight
Hillary Clinton thinks Obama on the Supreme Court is a ‘great idea’ – Politico
A Michael Bloomberg Run Could Make Donald Trump Our President – LawNewz
No cure in sight for Donald Trump Derangement Syndrome – Washington Times
Donald Trump will skip Fox News’s debate because of Megyn Kelly – Vox
The Rejection Election – Pat Buchanan

MARKETS/INVESTING
Oil and Apple sour stock market mood – CNN/Money
Oil fuels ’schizophrenic’ rebound on Wall Street – Reuters
“Stress Levels” Two Months Before The Last Three Crashes – Zero Hedge
Did Wall Street Banks Create the Oil Crash? – Wall Street on Parade
S&P 500’s dead-cat bounce remains underway – MarketWatch
A Year Where I Hope I’m Too Pessimistic – Real Clear Markets
Gold below 12-week top on investor caution before Fed statement – Reuters
COMEX Registered Gold Inventories Plummet 73% In One Day – SRSrocco Report
China Stops Publishing SGE Withdrawal Figures – BullionStar
Three Major Reasons for Gold in 2016 – Visual Capitalist

ECONOMY/WORLD/HOUSING/BANKING
Goodbye, Golden Age of Growth – Bloomberg
U.S. recession cries get louder – CNN/Money
Goldman Sachs: Recession fear overblown – CNBC
Brazil to Announce $12.3B in Credit to Boost Economy – Bloomberg
China GDP Growth Could Be as Low as 4.3%, Chinese Professor Says – WSJ
Puerto Rico to Present Broad Debt-Restructuring Plan Friday – Bloomberg
The Surge in U.S. Mansion Prices Is Now Over – Bloomberg
What’s Next for the Housing Market? – Time
Subprime Reasoning on Housing – NY Times
5 Things to Watch at the Fed Meeting – WSJ

 

Gundlach on the Fed

From this story at Barron’s detailing the views of DoubleLine Capital bond fund king Jeffrey Gundlach at a recent conference come these gems about the central bank’s group therapy session now underway in snow covered Washington D.C.

“Frozen in their thinking”

“The Fed really needs to dial down the rhetoric or the markets will humiliate them with further declines”

The Fed’s models are based on “GDP forecast that has been wrong for years — it’s like the triumph of hope over experience, like a second marriage.”

“What the heck are these people doing?”

“Whistling past the graveyard.”

Of course, it’s all about that little squiggle to the right in the chart below (via this item at Quartz) and, more importantly, the possibility that more squiggles appear.

Boy, that 2004-2006 Greenspan “baby-steps” campaign is a thing of beauty. No?

© 2010-2011 The Mess That Greenspan Made