The Mess That Greenspan Made - Part 4

Wednesday Morning Links

MUST READS
Obama demands spread of wealth – BBC
Obama dares Republicans to live on $15,000 a year – AP
How Come the President Never Talks About My Rent? – Businessweek
People Blame Bad Government Policy for Runaway Inequality – Washington’s Blog
Gold Prices Top $1,300 an Ounce for First Time in Five Months – Bloomberg
Central bankers lurch from ‘whatever it takes’ to ‘whatever next’ – Reuters
QE warfare pushing world financial system out of control – Telegraph
Baker Hughes to lay off 7,000 as oil patch layoffs mount – USA Today
Crude Collapse Has Investors Braced for ’80s-Like Oil Casualties – Bloomberg
As Yemen’s Government Falls, So May a U.S. Strategy for Fighting Terror – Time
Woman spends $164K a year living on a cruise ship – NY Post
10 Worst Places to Live for Obamacare – Kaiser Family News

MARKETS/INVESTING
Asian stocks higher, ECB decision awaits – AP
Albert Edwards – “Markets to Riot” – Advisor Perspectives
The Virtues of Europe and Hated U.S. Stocks – Barron’s
Is Dollar Next? Investors Reassess After Swiss Shock – Bloomberg
Ignoring the Yield Curve May Be Dangerous to Your Health – e21
Treasuries Drop as Nowotny Urges Calm Before ECB Meeting – Bloomberg
Gold tops $1,300 on weak dollar, stimulus hopes – Reuters
U.S MINT Unloads Another Million Silver Eagles – SRSrocco Report
Gold Market Momentum In 7 Great Charts – GoldSilverWorlds
Swiss franc farce may be gold price tipping point – Mining.com

ECONOMY/WORLD/HOUSING/BANKING
Is the U.S. really decoupling from the world? – Pension Partners
Will Deflation Make You Naked, Homeless and Hungry? – Bloomberg
A new normal Chinese economy still ballast for world – China Daily
Bank of Japan slashes inflation outlook, boosts growth forecast – CNA
Sea change in investor sentiment as Modi govt restoring confidence – FE
China Boots Up an Internet Banking Industry – Caixin Online
Home prices fall in Calgary as real estate chill deepens – Global News
New Survey Shows U.S. Economists See Housing-Market Pickup – WSJ
‘Lowflation’ worries prompt rate rise retreat by Bank of England – Telegraph
Fed Officials Reassess U.S. Growth Outlook Amid Global Weakness – Bloomberg

 

The IMF’s latest report on slowing growth in the global economy makes it easy for a skeptical reader to connect a few dots regarding the latest round of central bank sponsored malinvestment in general (a word that clearly doesn’t exist in the modern economists’ lexicon) and the shale oil boom/bust cycle in particular.

From this Reuters story we get the following summary about what’s ailing the world::

“New factors supporting growth, lower oil prices, but also depreciation of euro and yen, are more than offset by persistent negative forces, including the lingering legacies of the crisis and lower potential growth in many countries,” Olivier Blanchard, the IMF’s chief economist, said in a statement.

The IMF advised advanced economies to maintain accommodative monetary policies to avoid increasing real interest rates as cheaper oil heightens the risk of deflation.

If policy rates could not be reduced further, the IMF recommended pursuing an accommodative policy “through other means”.

Left unsaid was that cheap money gushing from the Federal Reserve in Washington and big banks on Wall Street was a major factor driving the shale oil boom that played a key role in recently plunging energy prices that, now, are raising the specter of world wide deflation that – you guessed it – should be countered by even more cheap money.

Vicious cycle anyone?

It seems former Bank of England governor Mervyn King is on to something in this report at the Telegraph when he notes the following:

We have had the biggest monetary stimulus that the world has ever seen … The idea that monetary stimulus after six years is the answer doesn’t seem (right) to me.

Why is it that central bankers suddenly seem to make much more sense when they are no longer central bankers? King joins suddenly lucid former Fed Chief Alan Greenspan who has recently been famously fond of a barbarous relic and makes you wonder where the heck central bankers still employed by central banks are steering the ship.

Tuesday Morning Links

MUST READS
China’s growth slows to weakest in 24 years – BBC
Pay No Attention to That Slower Growth Figure, China Says – WSJ
IMF cuts global growth outlook, calls for accommodative policy – Reuters
Global Economy Faces Strong and Complex Cross Currents – IMF Direct
More QE will not help the world, says Mervyn King – Telegraph
The IMF Downgrade: Two Questions for a Souring Global Economy – WSJ
One sentence explains why the middle class has to care about inequality – Vox
The Rich Get Richer: 80 Billionaires Control Most of World’s Wealth – Vice News
Dangerously in denial on climate change – Washington Post
How Obamacare Will Impact Your 2014 Taxes – Fiscal Times
Republicans target Social Security disability – Politico
Does marriage make you healthier? – voxeu

MARKETS/INVESTING
Global stocks rise, Shanghai steadies – AP
Where to Exit the Market Herd – WSJ
Oil steady after IMF cuts growth forecast – Reuters
The Dangers Of Leverage – Alhambra Partners
Crude reality: Oil prices are going to stay low — for now – MarketWatch
Big Trouble Ahead For Bakken Oil Production – SRSrocco Report
Treasuries Gain as Outlook for ECB Buying Drives Hunt for Yield – Bloomberg
Gold hits 4-1/2-month high on worries over Europe – Reuters
Gold Demand Explodes as Volatility and Fear Stalk Market – GoldCore

ECONOMY/WORLD/HOUSING/BANKING
Human-Like Robots Are Getting Jobs – Forbes
On to Plan B as Oil Work Stalls in Texas – NY Times
Americans’ Personal Financial Assessments Up Sharply – Gallup
Falling oil prices hit Venezuela, Iran and Russia hard – Washington Post
Winners and losers in China’s deepening economic slowdown – AP
The New Normal in China’s Big Cities – Project Syndicate
German survey data improves ahead of ECB decision – AP
Demand for home loans jumps in euro zone – Reuters
Markets Restrain Bank Fraud, But Central Banks Enable It – Mises
How Darwin Would Solve Too Big to Fail – Bloomberg
Fed’s Bullard Eager to Raise Rates Soon – WSJ

 

Americans, Religion, and Evolution

A reminder of how different we, as a nation, are as compared to the rest of the developed world when it comes to the things we believe in (or don’t believe in) comes via this story at Vox where they found someone who thought it might be a good idea to create a scatter plot to demonstrate just how much of an outlier we really are.

Reports such as Among Wealthy Nations U.S. Stands Alone in Its Embrace of Religion from Pew Research and the sortable results of this Gallup poll about the importance of religion in countries around the world provide added context to the West’s heightened tensions with other religions around the world while, at the same time, add weight to the argument that Devo may have been right all along about our collective future.

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