The Mess That Greenspan Made - Part 5

Income Inequality Chart of the Year

Via this item from Pavlina Tcherneva comes the graphic below that goes a long way in explaining why there’s been so much fuss about growing income inequality.

Anyone with a good sense for statistics surely realizes the reason this data is so compelling is because it represents incremental change rather income data in absolute terms. It’d be interesting to see this same data broken down by the 1 percent versus the 99 percent.

While both fiscal policy and monetary policy are key drivers behind the trends shown above, one need look no further than this chart to understand just about everything there is to understand about the role of the Federal Reserve in all of this.

Thursday Morning Links

Big price swings return to Dow – USA Today
The Dollar Rally May Have a Long Way to Run – Barron’s
The Dollar Short, What and Where Now? – Alhambra Partners
US Dollar Breaks Through Overhead Resistance; Euro Sinks – Trader Dan
Forget The “Alibaba Top” – This Is The Chart Everyone Is Watching – Zero Hedge
Islamic State Oil Refineries in Syria Hit in Airstrikes – Bloomberg
The forgotten financial crisis of 1914 has parallels 100 years on – Telegraph
German Central Bank Head Weidmann: ‘The Euro Crisis Is Not Yet Behind Us’ – Spiegel
Standard & Poor’s Warns on Germany Triggering the Next Debt Crisis, – Wolf Street
Household Net Worth Just Hit A Record High: Here Is Who Benefited – Zero Hedge
Zero Hedge: Wall Street’s daily dose of doom and gloom – CNN/Money
Why Fears of a Subprime Auto Bubble Are Overblown—For Now – WSJ
Student loan default rate drops to 13.7% – CNN/Money

Global stocks track US higher; dollar marches on – AP
Occupational Hazards of Working on Wall Street – Bloomberg
Japanese stocks turn positive for the year as yen drops – MarketWatch
With China Set to Open Stock Trading, Investors Lay Groundwork – NY Times
Get ready for rising interest rates — and stocks – MarketWatch
Gold drops to 9-month low as dollar hits 4-year peak – Reuters
Gold’s fall to pump up Indian demand – bullion traders – Mineweb
Gold Downside Risk Seen ‘Significant’ to Goldman Sachs – Businessweek
Shanghai Silver Stocks Fall As Silver Eagle Sales Explode Higher – SRSrocco Report
Gold price seen near tipping point for mine cuts, closures – Reuters
Is This A Triple Bottom In Gold? – GoldSilverWorlds

Watch US inflation expectations – Sober Look
Where macroeconomics went wrong – mainly macro
Rich Gain More Ground in Every US Expansion – Naked Capitalism
Housing Prices, “Real” Interest Rates, and the “Real” CPI – Mish
Weak euro zone lending data underscores need for ECB stimulus – Reuters
Putin leaves Germany’s factories in a worse state than anyone imagined – Telegraph
China steel demand shrinks for first time in 14 years as slowdown stings – Reuters
House prices: Londoners threaten to flee the capital over housing costs – Telegraph
Last Time this Happened, the Housing Market Crashed – Wolf Street
Fed’s Fisher says rates may rise ’sooner rather than later’ – Reuters
Federal Reserve Policies Cause Booms and Busts – Mises
Connecting “the Dots”: Disagreement in the FOMC – NY Fed


Keynesian vs. Austrian Economics

Here’s a pretty neat infographic from the Austrian Insider detailing the key differences between two very different schools of thought on economics – Keynesian and Austrian.

After working as an engineer for many years before even looking closely at this, I never understood the fixation on supporting aggregate demand regardless of how you got to the position where aggregate demand needed to be supported (i.e., reckless credit expansion leading to asset bubbles), which is why I’d guess that most engineering-types who look at this sort of thing favor the Austrian view.

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Wednesday Morning Links

World leaders meet with multiple crises on agenda – AP
Islamic State crisis: New strikes near Syria-Turkey border – BBC
A Month of Bombs Dropped in One Night of Strikes on Syria – Bloomberg
Why ISIS Hasn’t Really Scared the Stock Market – Fisca Times
Did Alibaba’s IPO signal a top in the stock market? – MarketWatch
Yellen Warns on Market Calm Before ‘Considerable Time’ Up – Bloomberg
Dudley Opens New Front for Fed Doves With Dollar Warning – Bloomberg
Dollar Hollers – What does it say? – Market Anthropology
Credit Warnings Starting To Penetrate – Alhambra Partners
The Euro and Commodity Prices – Marc to Market
Billionaires are hoarding more cash – CNN/Money
The short-sighted US buyback boom – FT
America Out of Whack – NY Times

Stocks drift as divergent economic fates weighed – AP
Draghi helps halt European stock sell-off – Reuters
A Coming Winter of Investor Discontent – Real Clear Markets
On The Market’s Central-Bank-Induced Bipolar Disease – Zero Hedge
Here’s what will happen to stocks before and after rates rise – MarketWatch
Gold steadies as dollar rally halts, wary ahead of US data – Reuters
Gold: Why ‘golden’ is worse than ‘death’ when it comes to crosses – MarketWatch
50 tonne gold smuggled into India in 10 days, 30% reached Mumbai – Hindu Times
What’s behind the current silver disconnect? – Mineweb
Silver Loses its Shine – Syncubate
Iron ore price below $80 –

Inflation Watch as Fed Hawks Retire – Fox Business
Markets and the economy: Losing momentum – Buttonwood
ECRI recession call: unhappy three year anniverary – Bonddad
Developing a Narrative: The Great Recession and Its Aftermath – NY Fed
New U.S. tax rules chill ‘inversion’ deal-making; shares dive – Reuters
German Business Confidence Drops for Fifth Month – Bloomberg
Moscow’s ‘Mr. Yuan’ Builds China Link as Putin Tilts East – Bloomberg
Subprime loans are making a comeback, and it’s a disaster – Vox
After Mucking up Housing Market, Investors Flee – Wolf Street
The Fed’s Credit Channel Is Broken And Its Bathtub Economics Has Failed – Contra Corner
Explaining Why U.S. Rates Have Suddenly Gone Negative – WSJ
Mathew D. Rose: “We Need A Banking evolution” – Naked Capitalism

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