The problem for a city like Houston (or many others like it), with deep ties to the production and oil, is a "shock" from a supply/demand reversion could bring the economic "boom" quickly to an end. We are certainly not saying that the "wheels are about to come off of the cart." However, we do suggest that there is a potential for a very negative shock in the energy space given the extreme complacency that current exists. History suggests that true "miracles" are few and far between as most tend to just "illusions of hope."
Yesterday, Obama made a rare campaign trail appearance in Maryland where he spoke in support of Democratic candidate for governor, Anthony Brown, proceeded with his usual bulletin of reading fabricated economic data off the teleprompter in which he highlighted improvements in US unemployment (if not the 46.5 million people on foodstamps or the 93 million Americans out of the labor force), a rebounding housing market (just as the bouncing dead cat is once again dead), the benefits of health insurance (if no mention of the disaster for small businesses that Obamacare now definitively is) a resurgent manufacturing sector (just don't look at this chart) even if he did point out the unfairness of families having "two folks working", and... a mass audience exodus followed.
Squeezed between steering wheel, handbrake, door and dashboard, Katerina reads in her history book, takes notes for school. Next to her, on the driver’s seat, cat Eddy stares right in the camera lens. It may look like a cute snapshot on a sunny day, if it wasn’t for a sad detail: a withering spring stuck in a roll of toilet paper. A distinctive memory of a former normal life that turned into a grim reality for a family of four.
"The Economic Outlook Keeps Getting Better And Better" Says Fed President Who Last Week Unveiled QE4Submitted by Tyler Durden on 10/20/2014 14:02 -0400
"I’ll be honest: These speeches get more and more enjoyable as time goes by because the economic outlook keeps getting better and better. Instead of gloom and doom with a scattering of hopeful notes, things are now pretty upbeat, with only a couple of standard economist’s caveats thrown in.... So the message is that things are getting better. We’re on track to end our asset purchases and we’re preparing for the time the economy can sustain an end to accommodation. We’ll want to see improvements in unemployment, wages, and inflation, and we’ll be driven by the data. But all in all, it’s good news—with just a few of those requisite caveats thrown in."
Why Chinese Growth Forecasts Just Crashed To A Paltry 3.9% - And Are Going Even Lower - In One ChartSubmitted by Tyler Durden on 10/20/2014 12:11 -0400
Sadly for China's social instability, Chinese growth is going not only to 3.9% but much, much lower. The reason? Quietly, over the past 5 years, China raked up an epic debt load, which by 2015 is expected to hit a whopping 252% of GDP, or a 100% of GDP increase in debt, just to keep its growth dynamo running. A dynamo which has now fizzled, as can be seen best in the Chinese housing bubble which as we have reported previously, has now burst, and China is desperate to keep imminent hard landing, as controlled as possible. Here is Exhibit A...
Janet Yellen is a career academic. This is not necessarily a bad thing. However, unlike most career academics, Janet Yellen is in charge of the US economy. In this light, one has to ask aloud, “why would you put someone with absolutely zero experience in creating jobs, growing a business, lending money, hiring, firing, etc. in
The European status quo and EU elites are becoming increasingly concerned by popular calls in Italy for Italy to leave the European Monetary Union and the euro "as soon as possible" and return to the lira.
And the overnight futures ramp started off so promising.
The lofty leaders at the ECB, and Berlin, Paris, Brussels, pretend they can make everything right that’s wrong inside their toy monetary union through asset purchases, sovereign bond purchases, and anything that falls in the ‘whatever it takes’ category. But it’s all just bluff. Because, what it all boils down to, they can’t keep buying Greek bonds with German taxpayer money until the end of time. And the markets know this.
The level of micro-management by the Fed appears to have reached a new shockingly high plateau. Recently prices have been driven more by liquidity, fear, greed, and Fed policy, than by valuation. It is time that the Fed stops being a source of interference and confusion. There are also two less obvious or less discussed economic reasons why the Obama administration may be urgently focusing more on the Ebola crises.
With a combined position of nearly $2 trillion in US government debt, against which they hold little or no capital buffer, US banks are now extremely vulnerable to a bond market sell-off.
"I see deflation flirting with America." Retail sales equals consumer spending equals velocity of money. And unless the money supply is rising, hardly likely in the taper, less spending is deflation by definition. Forget about PMI and all that kind of data, it’s much simpler than that. Central banks can do all kinds of stuff, but they can’t make us spend our money on things we don’t want or need. Let alone make us borrow to do so. And if we don’t, deflation is an inevitable fact. That doesn’t mean prices for some items won’t go up, but that’s not what counts. It’s about how fast we either spend the money we have – if we have any left – or how much we borrow. And if time is money, then borrowed money is borrowed time. So we really shouldn’t.
This is all only the beginning. When the smoke clears, stocks could be 30% lower than where they are now, if not more.
What's French for 'sacre bleu'? While the fundamental reality of France's record unemployment, plunging industrial production and economic growth, and treaty-busting deficits are all fact, for many months now, the 'market' has been convinced at Draghi's omnipotence and enabled French bonds to trade as if they are 'in the core'. But... on the heels of Sapin's slap in the face of Schaeuble, shunning of Brussels, the market appears to be changing its mind about France's credit worthiness (risk is up over 30% in the last week). Across Europe, we are witnessing a 2012 replay as re-denomination risk rises and risk spreads between the periphery (which means everything but Germany) and Germany surge...
Here is why the center will hold.