The Mess That Greenspan Made - Part 8

Second Quarter GDP Growth Revised Higher

The Commerce Department reported that the U.S. economy expanded at an annualized rate of 4.2 percent in the second quarter, slightly higher than the 4.0 percent estimate provided a month ago. This follows a first quarter weather-related decline of 2.1 percent.


In this second of three estimates for the April-to-June period, the increase in nonresidential fixed investment was larger than previously reported, while the increase in private inventory investment was smaller than previously estimated.

Interestingly, the Congressional Budget Office just released a downwardly revised estimate of 1.5 percent for 2014 economic growth (previously, it was 3.1 percent), meaning that they’re not very optimistic about the second half of the year. With an average growth rate of 1.05 percent for the first six months, this puts second half growth at just over a 2 percent rate meaning that, once again, a strong “second half rebound” is not likely to materialize.

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Thursday Morning Links

MUST READS
Ukraine Reports Russian Invasion on a New Front – NY Times
Nato says ‘over 1,000 Russian troops’ in Ukraine – AFP
Boomer Wealth Dented by Mortgages Poses U.S. Risk – Bloomberg
FBI, Secret Service investigate reports of cyber attacks on U.S. banks – Reuters
The economy is getting better. Why are student loan defaults still high? – Vox
Another reason to spend money on experiences rather than things – Quartz
CBO Warns Anew of Uncontrolled Long-Term Debt Risk – Fiscal Times
Snapchat Founders Likely Billionaires With New, Reported Investment – Forbes
Lending Club could be one of Silicon Valley’s biggest tech IPOs of 2014 – Mercury News
A World Without Fractional Reserve Banks and Central Planning – Dollar Collapse
It Begins: “Central Banks Should Hand Consumers Cash Directly” – Zero Hedge
The Committee to Blow Up the World! – Bonner & Partners
Dethrone ‘King Dollar’ – NY Times

MARKETS/INVESTING
Ukraine fears weigh on global stock markets – AP
Attending the Exits, Part 3 – Alhambra Investment Partners
Retail Investors ‘Are Not Moving Back Into the Market’ – MoneyNews
Markets could be heading for ’scary’ 60pc crash, warns analyst – Telegraph
Charley Ellis: Active managers take 100% of your gains – MarketWatch
Global Sovereign Bond Index Rises Toward Record on ECB Outlook – Bloomberg
Gold up for 3rd day on softer dollar, Ukraine tensions – Reuters
What the Next Gold Confiscation Will Look Like – International Man
The interest rate trap…and what it means to the gold market – USAGold
Canadian Silver Maple Sales Stronger Than Last Year – SRSrocco Report
Safe-Haven Demand Boosts Gold as Russia-Ukraine Tensions Rising – Kitco

ECONOMY/WORLD/HOUSING/BANKING
Seeing the Great Depression – Vox
2008: Worse than the Great Depression? – CNN/Money
Why We’re So Down in the Dumps About the Economy – Fiscal Times
U.S. economy forecast to grow by only 1.5 percent in 2014 – St. Peter’s Blog
This is how much it really costs to live in San Francisco – Quartz
German Unemployment Rises as Risks to Economy Build – Businessweek
What’s The Matter With France? – NY Times
India’s Coal Conundrum – Bloomberg
The Housing Echo-Bubble Is Popping – of two minds
Home prices just hit a 70-month high. Now for the bad news – MarketWatch
Quantitative Easing and Intellectual Coordination Failures – WCEG
Paths Diverge For Yellen and Draghi on Inflation Expectations – WSJ

 

Those Pesky Student Loan Balances

The graphic below from this story at Vox serves as a timely reminder that, while much of the rest of the U.S. credit market continues to improve after a multi-year bout of deleveraging, student loans are an ongoing problem for many Americans, both young and old.

There are more and more reports of senior citizens having trouble paying back student loans (mostly as co-signers) and, lately, of social security checks being garnished when these co-borrowers fall behind.

The other charts in the Vox story are even more interesting than the one above, particularly the last one that really doesn’t paint for-profit higher education in a positive light.

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Wednesday Morning Links

MUST READS
In search of signs of irrational exuberance – USA Today
Equities Reach Record $66 Trillion, S&P 500 Hits 2,000 – Bloomberg
Here’s what the S&P500 did the last 2 times the Fed started hiking rates – MarketWatch
Eurozone borrowing costs fall to record lows – Channel News Asia
Deflationary Fears Are Spreading Globally – Financial Sense
Europe will be Russia’s gas hostage for at least another decade – Telegraph
Finding your ‘magic number’ for retirement savings – CNBC
Harvard Endowment Compensation Sparks Letter From Alumni – Bloomberg
Buffett puts shareholders ahead of patriotism in Canadian deal – Reuters
Buffett’s Burger King Move To Canada Reeks Of Hypocrisy – IBD
The GOP Could Reform Its Way To Keynesianism – Forbes
Why Isn’t Monetary Pumping Helping the Economy? – Mises
Is Secular Stagnation Real? – Bloomberg

MARKETS/INVESTING
Europe shares ease, Asia higher after S&P record – AP
The Bull Market’s Strength Is Reaching Epic Proportions – WSJ
Get ready for S&P 500 at 2,150, top market timer says – MarketWatch
The Greater the Stock Bubble, the Less Monetary Theory Holds – Alhambra Partners
The S&P 500 Through The Ages – From 200 To 2000 In 30 Years – Zero Hedge
U.S. Treasuries Rise as Cheapness Versus Peers Draws Demand – Bloomberg
Gold edges higher as dollar retreats, equities steady after record – Reuters
Is A Looming War Coincident With Low Gold Price And Stock Market Peak? – GoldSilverWorlds
Gold Shines Most in September on Seasonal Buys: Bloomberg Chart of Day – GoldCore
Gold struggling to escape grips of summer slowdown – BullionDesk
Gold price lifted out of danger zone – Mining.com

ECONOMY/WORLD/HOUSING/BANKING
More laid-off workers find jobs in their fields – Bloomberg
Conflicts weighing heavily on German consumers – AP
Objecting to Austerity, French Style – New Yorker
IMF chief Lagarde charged over corruption case – CNA
French Manufacturing Confidence Falls to 13-Month Low – Bloomberg
‘Yes’ or ‘No’? A Divided Scotland Confronts Independence Vote – Spiegel
Can South Korea Tax Itself to Prosperity? – Bloomberg
London housing market shuts out Bridget Jones generation – Telegraph
Why a Slowdown in Housing Prices Is Great News – NY Times
This house market is falling apart – MarketWatch
Central Banks Playing Own Version of FX Monopoly – Bloomberg
The Fed can wait to act on interest rates – Washington Post

 
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