Thursday, October 9, 2014

Thu AM news


New Deal Demoncrat - the oil choke collar is disappearing. By this he means:
in the aftermath of the Great Recession, every time the economy appeared to pick up steam, gasoline prices would rocket toward $4 a gallon. This slowed the economy down, as a result of which gas prices would fall, starting the cycle again. In other words, gas prices acted as a governor regulating the speed of the economy. Or, like a choke collar.
Now read this:
If the US economy breaks free of the Oil choke collar, even for a year or two, we can expect an acceleration of growth, consumption, and jobs.
He's hedging this, but I think that's only cos he's agnostic on the idea of a secular bear in commodities. But even still, reduction in gas prices will improve consumer spending and improve corporate earnings ex oils. So therefore, OMG sell US equities!

Bespoke - jobless claims better than expected. Therefore sell US equities! OMG!

Kruggers - the deficit is down and nobody cares. Hey, I just remembered that a certain individual of my acquaintance was predicting just 2 years ago that USTs would collapse and rates would go sky high. Something along the lines of "there is no way the US will be able to roll over all this debt". I guess that person doesn't know anything about Krugman's liquidity trap idea, and thus his economic predictions are meaningless. I wonder if he'll ever explicitly admit how wrong he was, or if he'll just keep putting off his prediction.

FT beyond brics - Modi effect yet to kick in. I guess there is no such magic item as a "holy handbag of Margaret Thatcher".

BI - Russian economy is collapsing. Well, it's from Slate, so don't expect the article to be anything more than propaganda. Still, how the heck is Pooty-Poot supposed to finance his country with oil prices dropping?

Reuters - gold went up yesterday. Yup, and meanwhile GLD continues its outflows - another 5 tons on Wednesday. Good, I say.

Asia One - solve a puzzle in a book, win $500,000 in gold. Why gold, and not dollars? Is this illustrative of some special, magical value attached to gold beyond what the next fool will pay for it? Why didn't he offer to give away $500,000 in zinc, or USTs, or shares in Exxon Mobil, or US farmland?

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