The Mess That Greenspan Made - Part 4

Tuesday Morning Links

Stocks plunge on Fed rate hike uncertainties – xinhuanet
NY Fed chief: Rate hike coming this year – CNN/Money
Fed’s Evans: Hold Off on Rate Hike – Fox Business News
Fed’s Williams, citing signs of imbalances, wants 2015 rate hike – Reuters
Rajan Surprises Again With Bigger-Than-Forecast India Rate Cut – Bloomberg
How Congress May Have Saved Goldman Sachs From Itself – Bloomberg
Obama and Putin outline competing visions on Syria – Washington Post
Beware the rise of radical Right as migrants arrive in Europe – Telegraph
Here’s Why a Nobel Prize Economist Was Kicked Off His Flight – Fiscal Times
Thomas Jefferson’s prescient warning on the debt ceiling crisis – Sovereign Man
Rush Limbaugh Says Water on Mars Part Of Climate Change Conspiracy – Media Matters
Trump’s tax plan proves he’s serious about winning the White House – The Week
Trump: On taxes? Not so populist – Politico

Global market steady after rout extended into Asia – AP
Commodity rout hits traders, emerging markets – Reuters
The Perils of Forcing a Sale of Illiquid Assets – NY Times
Asian shares slide; Nikkei gives up gains for the year – MarketWatch
Glencore Gloom Envelops Rivals as Asia Commodity Shares Drop – Bloomberg
The one thing the bull market needs to get back on its feet – MarketWatch
Going down: Goldman cuts forecasts for S&P 500 – CNBC
Platinum extends slide, falls below $900 to 6-1/2 year low – Reuters
Latest SGE gold deliveries suggest enormous 2015 total – Daily Coin
China shocker drops copper price to 6-year low –

Inflation Outlook Slumps to 6-Year Low – Bloomberg
Adjusting China’s Growth Path – Caixin Online
How Sweden’s negative interest rates turned economics on its head – Telegraph
What’s next for Spanish region that wants to be Europe’s next nation – Washington Post
Brazil’s Record Overseas Borrowing Comes Back to Bite Companies – Bloomberg
Two tweets from space highlight the miserable lives of North Koreans – MarketWatch
This awkward photo of Obama and Putin locking eyes at the UN speaks volumes – Vox
Los Angeles Housing Market Isn’t Getting Bubbly, Says Study – Curbed
Did the Fed Cause the Commodity Bubble? – PragCap


Inflation and the Fed

They’ll probably be writing about this in the next update to the Federal Reserve policy manual as it has become increasingly clear that current Fed policies that have strengthened the dollar (i.e., talking about raising interest rates) have caused the government’s measure of inflation to move lower as shown below via this story at Bloomberg, all of which makes the case for actually raising rates (in the minds of economists) much more difficult.

Recall that there is a strong inverse correlation between the trade weighted dollar and both import prices and oil prices, so, the more the Fed talks about higher rates, the stronger the dollar gets, and the more difficult it becomes for the central bank to hit its inflation target of 2 percent, a target for which there is virtually no justification.

Monday Morning Links

Russia seizes initiative in Syria – Reuters
Putin calls U.S. support for rebels in Syria illegal – Washington Post
Victorious Catalan separatists claim mandate to break with Spain – Reuters
The More Yellen Talks Up Inflation, the Less Traders Believe Her – Bloomberg
GDP Growth Of 3.9 % Shows That We’re Measuring It Wrong – Forbes
The Money Spent Selling Sugar to Americans Is Staggering – Atlantic
Lunch With Shkreli: What We Should Learn From Pharma’s Latest Monster – Forbes
New Daily Show Host Admits to Political “Romance” with Rand Paul –
Why the GOP is the true party of ‘free stuff’ – The Week
Stop giving Ben Carson a pass on issues – The Hill
Ted Cruz’s big moment – Politico
New World Disorder – CBB

Stock Futures Mired in the Red – MarketWatch
This is When Bonds Go Kaboom! – Wolf Street
Investors to Washington: You’re confusing us – CNN/Money
Valuations Not Only Mean-Revert; They Mean-Invert – Hussman Funds
China Industrial Profits Fall Most Since 2011 as Growth Ebbs – Bloomberg
Cash beats stocks, bonds for first time in 25 years – MarketWatch
Emerging Markets Are Facing a Big Foreign FX Debt Bill – Bloomberg
Gold falls as U.S. rate outlook weighs, platinum at 6-1/2 year low – Reuters
Swiss Regulator Names Seven Banks in Precious Metals Probe – Bloomberg
Buy Gold While You Still Can! – Peak Prosperity

Average American Household’s Income by Age – Motley Fool
Fourth Turning: Crisis of Trust – Part 3 – Burning Platform
How the refugee crisis makes Europe feel – Quartz
The Economic importance of China – Econbrowser
The Top U.S. Financial Diplomat’s Upbeat View on China – WSJ
Why a China Slowdown Is by itself Little Threat to the U.S. Economy – Delong
Q&A: Zillow Economist Says Fed Move Could Cool Hot Housing Markets – WSJ
QE Infinity Calls Continue: “QE4 Will Be Their Next Move” – Zero Hedge
How the Fed could get radical as a seasonal rally lines up – MarketWatch
What if the Fed is wrong? – FT


Yellen: Agonizing to Watch

In a speech at the University of Massachesetts last night, Federal Reserve Chair Janet Yellen said that the prospects for the U.S. economy “generally remain solid” and that the central bank is “on track” to raise interest rates in the months ahead.

Then dehydration is said to have caught up with her and she cut her speech short:

She received medical attention then resumed her schedule as the stock market ripped higher, traders concluding that she was just fake vomiting, something that Stephen Colbert popularized on his Comedy Central show and brought to CBS with Emily Blunt the other day.

Friday Morning Links

Yellen: Fed “on track” to raise rates – BBC
Yellen sets stage for interest rate hike – MarketWatch
Janet Yellen Says Fed Is Likely to Raise Interest Rates This Year – NY Times
Fed’s Yellen gets medical attention after struggling with speech – Reuters
SocGen’s Edwards: Recession Will Force Fed to Replace ZIRP With NIRP – Newsmax
By This Measure, the U.S. has the 2nd Highest National Debt – Visual Capitalist
This is the best time to borrow money — in all of history – Washington Post
Junipero Serra was a brutal colonialist. Why did Pope Francis make him a saint? – Vox
Donald Trump’s slide in the polls is beginning to look real – Washington Post
The strategy behind Rubio’s Trump feud – Politico
Has America really lost its greatness? – The Week
What Is Taking Joe Biden So Long? – Slate

Futures jump as Yellen eases fears of slowing growth – Reuters
Japan stocks climb after Abe stresses economic pledge – MarketWatch
China’s Stocks Fall as Capital Outflows Hit Record in August – Bloomberg
3 Things JPMorgan Chase’s CEO Wants Investors to Know – Motley Fool
European stocks rise ahead of VW chief exec announcement – AP
12 stocks get crushed for good reason – USA Today
The Emerging-Markets Bellwether From Peoria – Bloomberg
Gold falls 1 pct as Yellen speech on rates boosts dollar – Reuters
IMF Data: Kazakhstan, Russia Buy More Gold as Mexico Cuts – Bloomberg
It’s Time To Accumulate Future Gold Mining Tenbaggers – GoldSilverWorlds

Economics Is Too Important to Be Left to Economists – Robert Reich
More Declines in Durable Goods; Economists Hardest Hit – Alhambra Partners
Wealthy Reap the Most as Revenue Rush Triggers U.S. State Rebates – Bloomberg
China to Announce Cap-and-Trade Program to Limit Emissio – NY Times
Japan effectively downgrades view of economy – MarketWatch
In Brazil’s Market Meltdown, a Wave of Panic — Then Silence – Bloomberg
JPMorgan Chase: FHA Loans Are Government Backed Subprime Loans – MFI Miami
Bubble State Home Prices Rising While Income Declines (Juiced!) – Confounded Interest
Goldman Warns Central Bankers Face Limits on Unorthodox Policies – Bloomberg
Fed blowing its chance to raise rates: Economist – CNBC

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