The US is the world’s largest economy. Even so, $16.8 trillion in 2013 represents just 26% of the 75 trillion global GDP. It is not an island that can drive global growth unilaterally.
CNBC contributor Ron Insana explains how a “silent commodity crash” impacts the global economy. Here is a direct video link.
Many people are talking about the supply glut while ignoring the mean reversion of global demand now underway. Both are working prices lower.
Andy Xie, independent economist, weighs in on oil’s plunge, as demand wanes in China. Here is a direct video link.
Bloomberg reports on OPEC’s crude oil production forecast. Here is a direct video link.
Another day another meltdown in risk markets. As shown below, non-investment grade bond prices are leading the S&P 500 down to their level, as their yields gap wide with a new found appreciation for the growing default risk in many highly levered sectors.
With cash flow evaporating by the hour in the energy sector–and therefore all the many governments and businesses who have been feeding on it–eyes are now focusing on the reckless levels of debt that was taken on during the heady days of ‘QE-confidence’.
“What were we thinking?” is a phrase back in vogue. The answer of course: ‘You weren’t thinking, you were following false prophets.’
