Unemployment

Bill Gross Warns "Central Bankers Are Destroying The Engine Of The Real Economy"

In the US the year-on-year trend for productivity has turned negative . Most central bankers dismiss this fact as a short-term aberration. But the Japanese economy provides an example of what interest rates at or near zero can do to a large, developed economy. The answer is not much: not much real growth; not much inflation - and, together, not enough nominal GDP growth to repay historic debt should yields on sovereign debt ever return to normal.

What Janet Yellen Will Say At Next Week's Jackson Hole Meeting: BofA's Preview

"Yellen might argue that conditions are increasingly being met to further normalize rates before the end of the year, consistent with the latest communication from the FOMC. However, we do not expect guidance on the exact timing of the next hike.Yellen might argue that conditions are increasingly being met to further normalize rates before the end of the year, consistent with the latest communication from the FOMC. However, we do not expect guidance on the exact timing of the next hike."

Frontrunning: August 18

  • World stocks rise, dollar weakens on divided Fed  (Reuters)
  • U.S. Held Cash Until Iran Freed Prisoners (WSJ)
  • Brazil police pull U.S. swimmers from flight amid robbery probe (Reuters)
  • Rio’s Latest Headache: Loads of Empty Seats (WSJ)
  • Clinton Foundation hired cyber firm after suspected hacking (Reuters)

S&P Futures Unchanged As Europe Rises; Dollar Slide Sends Oil Above $47

In the latest quiet trading session, European shares rose while Asian stocks fell and S&P futures were little changed. Minutes of the Fed’s last meeting damped prospects for a U.S. interest-rate hike, sending the Bloomberg Dollar Spot Index doen 0.3%, approaching a three-month low. Dollar weakness continues to buoy commodities, with the Bloomberg Commodity Index set for the most enduring rally in more than two months, as WTI flirted with $47

Carl Icahn Turns Apocalyptic: "I Am More Hedged Than Ever, A Day Of Reckoning Is Coming"

"I have hedges on, I'm more hedged than I ever was. [The market] is way overvalued at 20 times the S&P and I'll tell you why: a lot of it is a result of zero interest rates. That's going to be hurtThere's going to be a day of reckoning here.  I've seen it many times in my life.  When things look good, they look great.  You go into the sky.  But that's when you have to really pull down and really stop buying."

Bad Data, Broader Alarms, And Business Cycles

The economy is pointing downward with alarms ringing in a wider and broader variety of important economic accounts. From this view, it is no wonder the FOMC overreacted to the May payroll report; that’s all that is left as it is more and more isolated.

European Stocks Drop, Futures Flat As Rising Dollar Pressures Oil, EMs: All Eyes On The Fed Minutes

European stocks are down led by tech, chemicals, alongside EM stocks which retreated from near a one-year high and oil fell for the first time in a week after hawkish comments from Federal Reserve officials revived bets on U.S. interest rate rises this year, and pushed the dollar higher from 7 week lows ahead of today's Fed Minutes. S&P 500 futures were little changed following yesterday's drop from record highs

Milwaukee Homicides Soar - What Is Going On In the Murderous Midwest?

Milwaukee homicides went vertical in 2015, up 69% YoY and over 100% since the recent low recorded in 2007.  But why the spike in violence now?  We explore some of the potential causes of soaring violence in the Midwest other than the media's favorite narrative calling for more gun control.

Why Paul Krugman Should Go Back To 5th Grade

Economist Paul Krugman is whining for more fiscal stimulus, his favorite pastime by far. Krugman’s target this time is Japan... "The average 5th grader understands it’s absurd to pay money for something guaranteed to be useless, but the average Keynesian economist doesn’t."

Mexico's New Auto Plants Unable To Find Enough Labor... As Detroit Still Suffers Massive Unemployment

Soaring auto production in Mexico is creating a bit of a labor shortage as US production continues to migrate south of the border.  Supporters of minimum wage hikes could learn from the efforts of the United Auto Workers Union which did a masterful job negotiating off-market wage and benefits packages which ultimately only served to provide their members with permanent job losses.

Fed's Williams Calls For An Overhaul Of Monetary And Fiscal Policy... But There Is A Problem

According to John Williams, central banks and governments must come up with new monetary and fiscal policies to kickstart a global economy which is barely growing (thanks to 7 years of flawed monetary policy). "We can wait for the next storm and hope for better outcomes or prepare for them now and be ready." As a result, Williams believes that a major fiscal stimulus thrust is now critical to propel the US economy higher. And he is, mostly, right. There is just one problem...