The Mess That Greenspan Made - Part 4

Thursday Morning Links

Shale-Oil Producers to Raise Production – WSJ
Economic growth: Where’s the beef? – USA Today
How will we cope with another downturn? – Economist
The global economy has a ‘titanic problem’ – CNN/Money
The Recovery Itself Unravels; Consumer Recession – Alhambra Partners
Dollar Bulls Wonder What Went Wrong in Drop to Four-Month Low – Bloomberg
Dollar index slides to lowest level since January – MarketWatch
The Biggest Surprise of the Global Bond-Market Butchering – Bloomberg
Greece’s Varoufakis says debt swap fills Draghi’s ’soul with fear’ – Reuters
Why the Heck Is the Trucking Business Slowing Down? – Wolf Street
Food-Stamp Use Is Now the Lowest Since 2011 – WSJ
Australia Issues Death Threat to Johnny Depp’s Dogs – Vice News

Global stocks listless after retail sales – AP
It’s Official: The BoJ Has Broken The Japanese Stock Market – Zero Hedge
ETF Giants Aim to Sidestep Bond-Market Chaos With New Credit Lines – Barron’s
Buffett and Vanguard: Different paths to the same destination – Washington Post
Greenspan sees another taper tantrum once rates rise – MarketWatch
Gold hits 5-week high as soft U.S. data eased rate rise fears – Reuters
Russia continues to buy gold, China could cause a shake-up – Secular Investor
Germans pile into gold amid Greek eurozone default fears – Telegraph
Global gold demand drops 1%, but investments jump –
Scotia: Gold ‘cheap’ safe haven – Mineweb

An Economics to Fit the Facts – Project Syndicate
Facebook to Raise Minimum Wage, Benefits for Contractors – Wall Street OTC
Finland, Once a Eurozone Point of Pride, Is Now Faltering – NY Times
In China, Legal Status of Many Golf Courses Is Full of Holes – WSJ
Abe Vows to Limit Use of Force After Approval of Defense Bills – Bloomberg
China’s fiscal spending jumps 33.2 percent year-on-year in April – Reuters
Survey: More Millennials Renting, But Just As Many Want To Own – WSJ
China Housing Market Shows Signs of Turnaround – WSJ
HSBC: Central Banks Are Running Low on Ammunition – Bloomberg
We need the Fed to be credible – MarketWatch


April Retail Sales Disappoints

Markets will likely cheer the news from the Commerce Department that U.S. retail sales flat-lined in April (when most analysts were expecting solid gains) as this makes it less likely that the Federal Reserve will raise interest rates anytime soon.

As shown above, the result for April was slightly negative, but rounded to zero and, when combined with the report on business inventories in the next hour or so should make for an exciting update to the Atlanta Fed’s closely watched GDPNow forecast at 10 AM.

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Wednesday Morning Links

Oil glut worsens as OPEC market-share battle just beginning – Reuters
Greece Back in Recession as Bailout Impasse Drains Economy – Bloomberg
US considers military patrols of South China Sea – Guardian
Ruble-yuan settlements booming, set to reshape global finance – RT News
China April Economic Reports Signal PBOC Has More Work Ahead – Bloomberg
Chicago credit rating plummets to junk status following pension ruling – Chicago Tribune
An Incredible Time-Capsule View of One Downtown’s Development – Atlantic
Christians drop, ‘nones’ soar in new religion portrait – USA Today
American Religion: Complicated, Not Dead – The Atlantic
‘Many powerful people don’t want peace,’ Pope tells children – RT News
Rand Paul plans Patriot Act filibuster in Senate – Yahoo!
Paul Krugman’s Pretense of Economic Knowledge – National Review

Stocks: Get ready for a rebound – CNN/Money
When both bonds and equities sell off… – Economist
Fed Officials Tell Markets the Training Wheels Are Off – WSJ
Main Street Portfolios Are Investing in Unicorns – NY Times
Bears Beware: Rout Puts Investors on Wrong Side of Central Banks – Bloomberg
Why ‘rate rage’ may not be coming for this market after all – MarketWatch
Gold steadies on weaker dollar, higher shares limit gains – Reuters
Silver Bullion Buying Outstripping Supply As JP Morgan Buys – GoldCore
Goldmine cheaper than Sydney house as boom ends in fire sale – Mineweb

The U.S. economy has left behind 20 million Americans – MarketWatch
Wage growth may be on tap as more Americans quit jobs – Reuters
U.K. Election Isn’t a Win for Austerity – Bloomberg
Bank of England slashes its UK growth forecast – Standard
For the first time in five years, the euro zone’s largest economies are all growing – Quartz
Brazil’s $900 million World Cup stadium is now being used as a parking lot – Vox
Oil, Politics Pave Path Toward $9 Billion Default in Puerto Rico – Bloomberg
With Manhattan Luxury Property Hitting Highs, Some Fear Air Is Getting Thin – WSJ
Foreign Money Is Pouring Into U.S. Real Estate, and It’s Not Just Houses – Bloomberg
The Problem with Central Banks: They Become the Greater Fools/Bag-Holders – of two minds
Fed said to have emergency plan to intervene if U.S. defaulted on debt – Reuters


U.S. Debt and Equities Since 1981

Doug Noland’s weekly commentary that provided some hard numbers to back up Bill Gross’ recent claim that the end may be nigh for the global financial system as we know it seemed to just be crying out for someone to make a stacked bar chart or two, so, voila!

Of course, for data points that span 33 years, you have to somehow adjust this to take into account population growth and inflation. Looking at stocks and bonds as a percentage of GDP seems like the right thing to do here, so, again, voila!

Less dramatic, to be sure, but equally disturbing when you think about it.

I mean, what, aside from the grotesque multi-decade expansion and current size of the global financial system itself, is so different between 1981 and 2014.

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