Saturday, January 23, 2016

Today's links

1--Nearly $8 trillion wiped off world stocks in January, U.S. recession chances rising: BAML, Reuters

2--Dow could fall 5,000 points and still not be ‘cheap’ , MW

3-- Mario Draghi denies that ECB bazooka is empty amid fears QE is turning toxic, Telegraph

'The side effects of the QE medicine are getting stronger: the curative effects are getting weaker', warns UBS chief Axel Weber

Draghi: "We have plenty of instruments. We have the determination, and the willingness of the governing council to act and deploy these instruments,” he said, speaking at the World Economic Forum.

4--Felix Zulauf: The bull market is over. No more QE?

Zulauf: In the past, investors could count on the Fed to bail them out – the Greenspan and Bernanke Put, if you will. Now, however, the US central bank – and it’s still the world’s most important central bank – is keen on raising interest rates. It wants to normalize monetary policy and to end quantitative easing. As a consequence, a sudden about-turn in the Fed’s policy is unlikely.

5-- The Recovery was built on Bubbles, Guardian (Today's "must read")

The truth is that there has never been a real recovery from the 2008 crisis in North America and western Europe. According to the IMF, at the end of 2015, inflation-adjusted income per head (in national currency) was lower than the pre-crisis peak in 11 out of 20 of those countries. In five (Austria, Iceland, Ireland, Switzerland and the UK), it was only just higher – by between 0.05% (Austria) and 0.3% (Ireland). Only in four countries – Germany, Canada, the US and Sweden – was per-capita income materially higher than the pre-crisis peak.

Even in Germany, the best performing of those four countries, per capita income growth rate was just 0.8% a year between its last peak (2008) and 2015. The US growth rate, at 0.4% per year, was half that. Compare that with the 1% annual growth rate that Japan notched up during its so-called “lost two decades” between 1990 and 2010.

To make things worse, much of the recovery has been driven by asset market bubbles, blown up by the injection of cash into the financial market through quantitative easing. These asset bubbles have been most dramatic in the US and UK. They were already at an unprecedented level in 2013 and 2014, but scaled new heights in 2015. The US stock market reached the highest ever level in May 2015 and, after the dip over the summer, more or less came back to that level in December...

the main causes of the current economic turmoil lie firmly in the rich nations – especially in the finance-driven US and UK. Having refused to fundamentally restructure their economies after 2008, the only way they could generate any sort of recovery was with another set of asset bubbles. Their governments and financial sectors talked up anaemic recovery as an impressive comeback, propagating the myth that huge bubbles are a measure of economic health.

Whether or not the recent market turmoil leads to a protracted slide or a violent crash, it is proof that we have wasted the past seven years propping up a bankrupt economic model.

6--Moody's Just Put Over Half A Trillion Dollars In Energy Debt On Downgrade Review

7--Oil services giant Schlumberger axes 10,000 jobs after $1bn loss

8--Bank Loans

9--Black Knight's First Look at December Mortgage Data

10--Roubini: video, global economy: NO RETURN TO 2008

11---"As goes oil..."

The correlation between the price of oil and the price of stocks has intensified this year, to a whopping 96 percent.

"These are more tied than I've ever seen them in the 25 years I've been trading oil," said Anthony Grisanti, president of GRZ Energy.

12--We're All Paying for the Unaccountability of So-Called Experts Who Screwed Up the World Economy , Mark Weisbrot

13--What the American Dream means today ---Percent of Americans who say these are important to achieving the American Dream

Living comfortably


Achieving financial security


Being debt free


Providing a comfortable quality of life for your family


A healthy marriage


Owning a nice home


Having affordable healthcare


Pursuing happiness


Being free to pursue your personal or professional passions


Getting ahead through hard work


A healthy balance between my professional and personal lives


Helping others

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