The Mess That Greenspan Made - Part 32

Easing is Easy, Hiking is Hard

The recent weakness in major U.S. equity indexes (that now appears ready to continue for the fifth straight day) has surely not escaped the attention of Federal Reserve officials who have been attempting to “prepare markets” for the eventual end of super-accommodative monetary policy but, as shown below via this item at The Fiscal Times the other day, we’ve been down this road many times before since the 2008 financial crisis.

On a completely unrelated note, see this Friday Funny at that weighs in on the Ted Cruz presidential campaign announcement in The Next Political Messiah.

Friday Morning Links

Mini-corrections emerge as new Wall Street M.O. – USA Today
Planes of Saudi-led alliance hit Yemen capital, Houthi heartland – Reuters
Yemen Government’s Fall Is Blow to Obama’s War on Terror – Bloomberg
Saudi battle for Yemen exposes fragility of global oil supply – Telegraph
Germany hunts for co-pilot motive amid reports of depression – AP
Look out Rockies – millions of novice Chinese skiers may be headed your way – Quartz
House GOP leader asks for Obamacare horror stories but gets love letters instead – Vox
As the G.O.P. Promises to Address Inequality, Follow the Money – New Yorker
The Real Singapore Model – Project Syndicate
Fed focuses on shadow banking – Business Times
Dreaming of ‘Normal’ Monetary Policy – Bloomberg
The Fed’s dollar question – The Hill

Stock futures point to fifth day of losses – MarketWatch
Buh-bye, Wall Street! I’m a lot happier now – CNBC
Biotech woes: Deja vu all over again – CNBC
China’s Stock Bubble Leaves BNP Speechless – Zero Hedge
4 ways robo-advisers will change investing – MarketWatch
Gold falls on dollar after 7-day rally; set for 2nd weekly gain – Reuters
German Gold Repatriation Is “Proceeding Smoothly” – Deputy Head – Kitco
China should boost gold reserves to 5 pct, says World Gold Council – Reuters
The Largest Gold Mints Of The World – BullionStar
Further downside on gold prices limited – CPM – Mineweb

More Illegal Immigrants Snagging White-Collar Jobs – Fiscal Times
Is Inflation Returning? Inflation Expectations are Rising – Marc to Market
The U.S. economy is about to pull itself out of this slump – MarketWatch
Japan nears deflation as consumer prices stop rising – BBC
Japan Retail Sales Tumble 1.8% In February – RTT News
Cutting China’s Smog Will Come at a Massive Cost – Bloomberg
A Potentially Powerful New Weapon in China’s War on Pollution – WSJ
Shaky housing market about to get even shakier – Housing Wire
Draghi Says ECB Will Reach QE Target Even in Shorter First Month – Bloomberg
In Australia, More Rate Cuts Become a Matter of When, Not If – WSJ


A New Kind of Crazy in Canada Housing

There’s lots of crazy stuff going on in the world these days, both global finance and geopolitics-wise, but one of the crazier elements of the former has been the continuation of what, for many years, has appeared to be an unstoppable asset bubble (yes, that’s an oxymoron) in Canada’s housing market that, recently, appears to be veering toward a pin.

This chart of home prices from Vikram Mansharamani serves as a timely reminder of how nuts it’s been north of the border and how much potential currently exists for an unpleasant change in direction for that light violet curve.

Surging household credit, soaring home prices, tumbling oil prices, and now an admission by the Bank of Canada that they really don’t understand what’s been driving Canada’s housing market make this a situation that is just begging for a resolution of some sort.

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Thursday Morning Links

Germanwings pilot ‘locked out’ of cockpit – euronews
Oil prices surge after Saudi air strikes in Yemen – Reuters
Why Bombing This Tiny Oil Producer Is Roiling the Energy Market – Bloomberg
Saudi forces strike rebels in Yemen as Iran warns of ‘dangerous step’ – Fox News
US risks epic blunder by treating China as an economic enemy – Telegraph
China’s yuan may join elite money club this year – MarketWatch
Moody’s downgrades Ukraine heralding imminent default – RT News
Ukraine’s New Problem: An Oligarch with a Private Army – Fiscal Times
The Central Banker Who Saved the Russian Economy From the Abyss – Bloomberg
Report: Body Cameras Effective Only When Cops Can’t Turn Them Off – Vice News
Paid to sleep: NY cracks down on napping health workers – AP
Lessons From the 1937-38 Recession For the Fed – RCM
US stock market is just way too riggin’ easy – NY Post

World stocks down on weak data, Wall Street dive – AP
Why some aren’t buying the tech bubble talk – MarketWatch
The Arguments for and Against a Tech Bubble – Barron’s
Why the Dow is wildly careening up and down – USA Today
Majority of U.S. Investors Anticipate Interest Rate Hike – Gallup
Stocks are overpriced, overleveraged, headed for trouble – MarketWatch
Gold hits 3-1/2 week high as Yemen air strikes rattle markets – Reuters
If China Joins The New Gold Fix, There’ll Be Less Manipulation – BullionStar
BofAML’s Curry: Gold Rally Has Just Begun –
Deflation may be good for gold – HSBC – Mineweb

Wells Fargo to lay off 1,000 workers – USA Today
Atlanta Fed gauge shows U.S. GDP nearly flat in first quarter – Reuters
The debate within the Fed: Jobs matter, not the dollar – Economist
UK retail sales rise helped by housing market recovery – BBC
China’s housing market is now recovering – China Daily
Bank of Canada says foreign buyers complicate housing market – Reuters
U.S. Home Prices Are Surging 13 Times Faster Than Wages – Bloomberg
The Fed Still Needs to Figure Out How to Raise Rates – Bloomberg
Bullard: now may be good time to normalize U.S. monetary policy – Reuters


Like a Ball and Chain

Someday, these post-financial crisis years will be looked back upon as being one of the most damaging periods to the American psyche with soaring wealth/income inequality topping the list of ills due, in large part, to monetary/fiscal policies enacted by TPTB.

Not far down said list is the burgeoning student loan problem that is transforming an entire generation and this CNN/Money story provides a view of things from recent graduates.

Interestingly, I have some first hand experience with this issue recently where a surprising number of ski instructors I’ve worked with over the winter are 20-something recent graduates who, you’d think, should be doing something different at this time.

A common refrain is that the four-year degree is the new high-school diploma and they all dread the student loan bills coming due.

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