The Mess That Greenspan Made - Part 6

Jim Grant of Grant’s Interest Rate Observer opines on the “noisy and sudden” impact of artificial interest rates and exchange rates engineered by the world’s central bankers, concluding “It is a day to take measure of our infatuation with central banking”.

Grant reportedly called this move a few months back and recommended cheap (at the time) call options on the CHF/EUR exchange rate that are, today, doing quite well.

Not surprisingly, the key takeaway here for Grant is that, as it relates to influencing prices, Mr. Market is much more powerful than any or all of the world’s central bankers, recent developments demonstrating the temporary nature of the latter.

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Friday Morning Links

MUST READS
Going cuckoo for the Swiss – Economist
Swiss companies and currency brokers bleed – CNN/Money
Asia FX brokers hit hard by Swiss franc shock, regulators probe – Reuters
Carnage continues as Swiss stocks head for worst week in six years – MarketWatch
Two Greek Banks Request Emergency Liquidity Assistance – Greek Reporter
Eastern European Currencies Dive as Swiss Loan Costs Hurt Banks – Bloomberg
Crude oil’s collapse will cost 9,000 jobs at Schlumberger – USA Today
The Problem Is Not Insufficient “Aggregate Demand” – Contra Corner
Why the currency wars are likely to hit the stock market – MarketWatch
Still Trying to Make Sense of SNB’s Bombshell – Marc to Market
End of CB Power – SNB Folds – Bruce Krasting
Francs, Fear and Folly – Krugman, NY Times

MARKETS/INVESTING
Global markets fall after Swiss stunner – AP
RayJay’s Saut: ‘It is too late to panic’ – CNBC
Oil up after IEA cuts non-OPEC supply forecast – MarketWatch
Warning: Bond rates are going negative – CNN/Money
The Bond Market Is Warning of Huge Trouble Ahead – Fiscal Times
Euro-Area Bonds Jump as SNB Shock Adds to Speculation for ECB QE – Bloomberg
Gold set for biggest weekly gain in 10 months on risk aversion – Reuters
HSBC Gold Outlook: Bearish Factors May Not Be So Bearish In 2015 – Kitco
China Continues To Drain Global Gold Inventory – BullionStar
Monster rally for gold stocks – Mining.com

ECONOMY/WORLD/HOUSING/BANKING
Is low inflation good news? – WCI
Why below target inflation is a big problem – mainly macro
Don’t Expect an Economic Boom From Cheap Oil – Bloomberg
How Plunging Oil Prices Could Create Economic Upheaval – Fiscal Times
Why China’s New Power-Use Record Isn’t as Electrifying As it Sounds – WSJ
US housing market booms as foreclosures drop 69% from 2009 peak – Guardian
Without QE, “Eurozone Financial Markets Would Collapse” – Wolf Street
Unfazed by market swings, Fed sticks to mid-2015 hike scenario – Reuters
WSJ Survey: Economists Pare Back Fed Rate Rise Expectations – WSJ
Who Needs A Bank? – Points and Figures

 

Back to the Past

The Detroit Auto Show has focused even more attention on tumbling energy prices that, suddenly, have American car buyers thinking more about how much horsepower they can get instead of how much gas mileage they’ll need to help make ends meet.

This item at the The Atlantic had a series of pretty interesting photos from the area’s heyday many decades ago that included the photo below. Give the aforementioned energy price slide, we might see something similar to this at gas stations in the not-too-distant future.

These photos from the early-1940s include both race riots and war preparations, a timely reminder that, despite the current problems the world faces, things could be worse.

Thursday Morning Links

MUST READS
Swiss currency bombshell stuns markets – CNN/Money
Swiss franc surges after scrapping euro peg – Telegraph
World’s optimism drained as U.S. economy shows signs of weakness – Globe & Mail
Russia Just Pulled Itself Out Of The Petrodollar – Zero Hedge
Russia to Shift Ukraine Gas Transit to Turkey as EU Cries Foul – Bloomberg
A Desperate Putin Makes a Private Sector Power Grab – Fiscal Times
China’s yuan shifts into currency major league – Reuters
Drilling declines in North Dakota on low oil prices – Star Tribune
Caesars Unit Files for Chapter 11 Bankruptcy Protection – NY Times
Glory Days of Muscle Cars Are Back at Detroit Auto Show – NY Times
The only state where less than half its civilians work – MarketWatch
Detroit in the 1940s – Atlantic

MARKETS/INVESTING
Volatile world stock markets swing higher led by China – AP
Swiss stocks sink most since 1989 after shock move – MarketWatch
Is Hugh Hendry A “Greater Fool”? – Global Slant
Oil prices retreat again as Iraq schedules record exports – Reuters
Markets are freaking out for no good reason – Washington Post
Treasuries Advance as Swiss Currency Decision Saps Risk Appetite – Bloomberg
Gold jumps to 4-month high on tumbling shares after SNB move – Reuters
U.S. Mint 2015 Silver Eagle Sales Start Off Strong – SRSrocco Report
Strong dollar, weak oil a lifeline for struggling gold miners – Mineweb
2015 Will Be Good Year For Gold, Not For Equities – Kitco

ECONOMY/WORLD/HOUSING/BANKING
Inflation Doesn’t Hurt So Much, Does It? – Bloomberg
Weak Retail Sales During Holidays Vex Economists – Barron’s
2014 Jobs Market Produced No Wages, And Now No Spending – Alhambra Partners
Continuing Proof of Structural Changes in the U.S. Workforce – Advisor Perspectives
India cuts key interest rate in surprise move – CNN/Money
Good Signs for Housing in 2015 – USA Today
Russians Scramble to Dump Trophy Homes – NY Observer
Fed’s Beige Book: We Read It So You Don’t Have To – WSJ
The Fed and the Price of Oil – of two minds
House passes Dodd-Frank changes – The Hill

 
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