The Mess That Greenspan Made - Part 6

The Long-Term Dollar Index

The words of wisdom often (mistakenly) attributed to Mark Twain – “History doesn’t repeat itself, but it does rhyme” – come to mind when sizing up the possibilities for another financial crisis sooner-rather-than-later amid all the global hand-wringing about the rapidly rising U.S. dollar, depicted below via this item at Bloomberg.

Note that, despite the recent reversal, the long-term trend is decidedly down, however, the more important point might be that there’s a curve here at all – prior to the end of the Bretton Woods System in the early-1970s, this curve would have been flat for decades.

Of course, that point is routinely overlooked in the financial media as everybody has, over the years, seemed to convince themselves that a world full of freely floating fiat currencies is just the way things work and we have to make the best of it.

Friday Morning Links

MUST READS
Russia cuts rates as crisis eases – BBC
The Strong, Weak Dollar – Bloomberg
Watch this signal for more dollar strength – CNBC
Global finance faces $9 trillion stress test as dollar soars – Telegraph
U.S. economy’s surprise risk: Dollar surge could weaken growth – Washington Post
Greece Complains About Schaeuble in Deepening Conflict – Bloomberg
What Did We Learn From the Dotcom Stock Bubble of 2000? – Time
Eastern, High Arctic regain sea ice during cold winter – UPI
Rumors of Putin’s Illness Run Rife in Russian Media – Russia Insider
Wondering What the Fed’s Statements Mean? Be Patient – NY Times
UBS: Fed Will Open “Pandora’s Box” With Rate Hike – Zero Hedge
What the Fed Will Do and Why – Bloomberg

MARKETS/INVESTING
Global stocks gain as weak retail sales shift Fed thinking – AP
Brent Crude oil slips under $57 as IEA sees bigger glut – Reuters
Japan stocks post first finish above 19,000 in 15 years – MarketWatch
U.S. Index Futures Fall After Rally as Energy Companies Decline – Bloomberg
For active managers, it’s been a brutal 10 years – CNBC
Gold firms after worst losing streak since 1973 – Reuters
Gold demand in Asia picks up due to lower prices – MoneyControl
Not another groundhog year for metals – Wrathall – Mineweb
The Mechanics Of The Chinese Gold Market – BullionStar
Don’t Fret Gold’s Seasonal Decline – Casey Research

ECONOMY/WORLD/HOUSING/BANKING
Retail sales fall for third straight month – USA Today
Good News for Some of Us: Other People Are Quitting Jobs – AP
China’s New Normal Means More Jobs in U.S. – Bloomberg
UK seeks to become member of China-proposed bank – China Daily
China-IMF talks to endorse yuan as global reserve currency – BRICSPost
German consumer prices inch up again in February – BBC
Confidence in U.S. Housing Market On The Rise – PRNewsWire
The entry-level housing market may be on the upswing – US News
What You Tweet Might Tell Janet Yellen It’s Time to Raise Rates – Bloomberg
From Yellen Put To Yellen Massacre – Automatic Earth

 

Another Way to Look at the Job Market

Among the Federal Reserve’s dozen or so ways to look at the labor market as they debate monetary policy next week will no doubt be this new alternative found at the Wall Street Journal Economics blog in which the difference between the U3 jobless rate and the U6 gauge of under-employment is charted (recall that U6 includes U3 plus discouraged workers and those stuck in part-time jobs who would like full-time work).

Interestingly, back in January 1994 (the first month that U6 is available), the two components were slightly different. The U3 rate back then – about three years after the 1991 recession – was nearly 12 percent and the U3 rate was 6.6 percent versus, today, when U6 is 11.0 percent and U3 is 5.5 percent.

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Thursday Morning Links

MUST READS
Euro pulls out of dive, stocks edge higher – Reuters
Delight or Dread as Euro Falls – NY Times
ECB buys $10.3 billion of bonds in first 3 days of QE – MarketWatch
Euro’s Freefall Toward U.S. Dollar Parity Continues – Forbes
German central bank: ECB stimulus means less reform pressure – AP
ECB ‘Chasing Own Tail’ as Bond Rates Turn Negative: SocGen – Bloomberg
Dollar Surge Versus Euro May Be ‘Only Half Over’ – Barron’s
Soaring Dollar Could Unleash a Currency Crisis – Fiscal Times
Sovereign debt, bailouts and contagion in the Eurozone – voxeu
Exporting Europe’s Stagnation – Krugman, NY Times
The U.S. Has Too Much Oil and Nowhere to Put It – Bloomberg
Watch American passenger rail shrivel up and die in this animated map – Vox

MARKETS/INVESTING
Global shares steady as US rate hike jitters fade – AP
Wall St. banks launch massive buybacks, boost dividends – USA Today
Buy the best performing stock sector for 87 years – MarketWatch
Those stock buybacks are just another Wall Street scam – MarketWatch
Are U.S. stocks ready for rate hikes? 10 things to know – FP
Gold snaps eight-day losing streak as dollar retreats – Reuters
World top 10 gold miners face negative free cash flows – Mineweb
Gold price in danger zone not attracting bargain hunters – Mining.com
Three Catalysts for the Price of Gold – Daily Reckoning

ECONOMY/WORLD/HOUSING/BANKING
Why salaries don’t rise – Washington Post
A Better Gauge of Labor Slack May Be the Gap Between Two Jobless Rates – WSJ
The Great Immoderation: How The Fed Is Sowing The Next Recession – Contra Corner
PBOC Pledges to Press on With Rate Liberalization Amid Slowdown – Bloomberg
No Reason Why India Can’t Resume 8-9% Growth: IMF – Business World
South Korea joins global easing with surprise rate cut as growth falters – Reuters
France Consumer Prices Fall For Second Straight Month – RTT News
Mortgage applications slip slightly in first week of March – Housing Wire
That’ll Kill the High-End Housing Bubble in US Trophy Cities – Wolf Street
Three Banks Uncover the Path to Payouts in the Fed’s Stress Test – Bloomberg
Here’s what Fed interest rate hikes mean – CBS News

 
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