Federal Reserve

World Economy Seems Trapped in “Death Spiral”

 

"The world appears to be trapped in a circular reference death spiral," wrote Citi strategists, led by Jonathan Stubbs said in a research note. "Stronger U.S. dollar, weaker oil/commodity prices, weaker world trade/petrodollar liquidity, weaker EM (and global growth)... and repeat. Ad infinitum, this would lead to Oilmageddon, a 'significant and synchronized' global recession and a proper modern-day equity bear market... The death spiral is in nobody's interest. Rational behavior, most likely, will prevail.”

Policymakers would likely attempt to “regain credibility” in the near term, according to the Citi analysts. “This is fundamental to avoiding a proper/full global recession and dangerous disorder across financial markets. The stakes are high, perhaps higher than they have ever been in the post-World War II era."

 

 

 

The Banking Industry’s Two Lost Decades

$100 Trillion Up in Smoke

“We aren’t addicted to oil, but our cars are.”
– James Woolsey

“The greatest asset, even in this country, is not oil and gas. It’s integrity.”
– George Foreman

 

So This Is What “Full Employment” Look Like?

“Labor unions, meanwhile, remain a powerful force for shared prosperity, a fact confirmed once again by the release last week of the annual Bureau of Labor Statistics report on union membership,” said Labor Secretary Tom Perez. “Median weekly earnings of full-time union workers ($975) were more than 25 percent higher than those of non-union workers ($776) in 2015. That amounts to more than $10,000 a year for hardworking Americans, and it puts upward pressure on wages and standards throughout the economy.”

“[Government numbers] don't show the quality of the jobs,” said Joseph LaVorgna, chief U.S. economist at Deutsche Bank. “They don't obviously pick up the anxiety that workers are feeling. [Concerns over job security] may also be adding to economic jitters and uncertainties.”

"The problem with the optimist narrative is that so much of total private sector gains are in low-wage industries — hardly the broadening of employment the Fed is looking for," wrote Steve Blitz, chief economist for ITG Investment Research, in a research note. "Most industry sectors still employ fewer people than they did when the recession began."

Source:
CNBC.com
Jeff Cox
February 5, 2016

 

 

 

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