The Mess That Greenspan Made - Part 6

Running to Stand Still

It’s that time of the year again when families all across the country are grappling with the increased cost of health insurance during open enrollment (our premiums rose about 20 percent, necessitating a change in plan with higher deductibles, etc.).

This WSJ story looks at where spending has increased and decreased in recent years (much of which is due to prices that are rising or falling) and, not surprisingly, it has become increasingly difficult for many families to make ends meet.

Importantly, a 25 percent gain over six or seven years is an inflation rate of only 4 percent, but this has come at a time when wage gains have been only a fraction of that or much less for those who have transitioned to lower paying jobs since the last boom went bust.

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Wednesday Morning Links

MUST READS
Abe Shouldn’t Make His Mentor’s Mistakes – Bloomberg
Brent rebounds above $71 in turbulent oil market – Reuters
Oil futures slightly higher but markets remain jittery – MarketWatch
Russia Recession Signs Mount as Central Bank Stems Ruble Losses – Bloomberg
Oil Plunge: Who on Wall Street Got it Right? – Fox Business News
Uncertainty in Washington Poses Long List of Economic Perils – NY Times
Americans get failing grades in retirement knowledge – USA Today
Canadians’ debt mountain tops $1.5-trillion, and that’s not including mortgages – FP
The Truth Behind The Swiss Gold Referendum Escapes The Mainstream Media – Forbes
Deficit Spending And Money Printing: A German Point Of View – Zero Hedge
Five reasons why markets are heading for a crash – Telegraph
The Return of Currency Wars – Roubini, Project Syndicate

MARKETS/INVESTING
Stocks: 4 things to know before the open – CNN/Money
Brave speculators score on energy stock – USA Today
Note to investors: Stop being so lazy! – CNN/Money
Stocks are expensive, but here’s why 2015 could feed the bull – MarketWatch
Treasury Yields Extend Advance Versus G-7 Peers as Economy Grows – Bloomberg
Gold above $1,200/oz on investor repositioning, firm oil – Reuters
What Investors Can Learn from Sprott’s Shift from Resources – Gold Investing
Gold in ‘no-man’s land’, needs fresh catalysts – Bulliondesk
RBI chief says govt will review gold import norms – Reuters

ECONOMY/WORLD/HOUSING/BANKING
Long-term unemployment after the Great Recession – voxeu
Bank of China forecasts 7.2% GDP growth for 2015 – China Daily
Autumn Statement: Osborne says UK ‘on path to prosperity’ – BBC
If deflation is so terrible, why are Spain, Greece growing? – MarketWatch
More pressure for the ECB: Producer prices slide most in a year – MarketWatch
The Economist explains why the Ukrainian economy is in deep trouble – Economist
China’s Housing Market Still Struggling After the Interest Rate Cut – Forbes
Job, Income Gains to Propel Top 10 Housing Markets – U.S. News
B-Dud Explains The Fed’s Economic Coup – Contra Corner
Fischer’s Circle – Alhambra Partners

 

Hoarders

Future historians will no doubt have some fun with 20th and 21st century Americans’ propensity to buy stuff that they really don’t need with money they don’t have and then go store it in some shed. Businessweek recounts the dramatic increase in self-storage capacity in this story today, from which the graphic below was drawn.

While much of this is no doubt temporary storage due to life changes (divorce, relocation, etc.) much of it is likely akin to people who mindlessly pay the minimum balance on their credit cards every month, not really thinking about how this sort of thing adds up over the long haul, and, like banks, storage companies are more than happy to take their money.

Tuesday Morning Links

MUST READS
S&P doubts Japan’s fiscal consolidation plan – Reuters
As Japan campaign opens, a look at what’s a stake – AP
China plays a big role in oil’s recent slide – MarketWatch
China Winning in OPEC Price War as Hoarding Accelerates – Bloomberg
October oil shale permits drop: is the slowdown here? – Reuters
These U.S. oil producers have the most to lose – MarketWatch
Saudis risk playing with fire in shale-price showdown as crude crashes – Telegraph
Saudi Attempt to Kill U.S. Fracking Could Kill Some Unsavory Regimes Too – reason.com
The Only Fracked Site in the U.K. Suffered Structural Failure – Vice News
Hoarder Nation: America’s Self-Storage Industry Is Booming – Businessweek
Hayek’s Warning: The Social Engineer’s Pretense of Knowledge – EpicTimes
Why the Scientist Who Discovered DNA’s Structure Is Selling His Nobel Prize – Atlantic

MARKETS/INVESTING
Stock markets kept in check by doubts over growth – AP
Japan’s Nikkei hits fresh seven-year high – BBC
This time is different? Hedge funds in ‘08 vs. now – CNBC
What Happens When the Buyback Boom Ends? – Bonner & Partners
Oil Investors May Be Running Off a Cliff They Can’t See – Bloomberg
Don’t fight the ECB in 2015 — buy Europe, says SocGen – MarketWatch
Treasury Inflation Outlook Drops to Three-Year Low on Oil Slide – Bloomberg
Gold dips 1 percent as dollar strengthens, oil retreats – Reuters
Gold Falls With Silver After Rally Yesterday as Dollar Climbs – Bloomberg
A Golden Bank Run – Gold Market Macro

ECONOMY/WORLD/HOUSING/BANKING
Why the Next Recession Will Be Different – Fiscal Times
Americans’ Consumer Spending Inches Up in November – Gallup
Russian economy needs restructuring to avoid recession: officials – xinhuanet
How might a China slowdown affect the world? – China Financial Markets
The Greek Patient: Europe Debates Third Bailout Package for Athens – Spiegel
Yup, the Housing Market is Still Insane: 2014 Edition – SF Chronicle
Dodgy Home Appraisals Are Making a Comeback – WSJ
Fed rattled by elusive inflation, but loath to sound alarm yet – Reuters
Dudley: Financial Market Reaction Key to Pace of Rate Increases – WSJ

 
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