Juggling Dynamite

There is great strength and hope in the basic, common needs of the collective. Dedicated to the brave fight for fairness, truth and equality. Here is a direct video link.

So long as the consumer is pouring on debt, spending can continue longer than reason would suggest. But once the consumer has committed financial suicide and is buried in debt payments, income growth reasserts itself as the defining force on consumption, corporate sales and the consumer dependent economy. And in that regard, this chart of US household income since 2000 shows that consumers have less real income today than they did in 2000 and 2007. Less income and more debt payments than ever before equates to less consumption over the next few years. It also highlights the precarious perch of the S&P 500 now recklessly decoupled from the real economy and teetering far above demand/sales support.

India central bank Governor Raghuram Rajan talks about interest rates, fund outflows, the rupee and global monetary policy coordination and the damage QE-driven speculative money flows have had both flooding into emerging markets and as they now rush out. Here is a direct video link.

I can’t help but recall some comments made by a certain aged mut-fund patriarch I was on a panel with last fall here, challenging my comments on the risks of hot money flows in global markets. He insisted that there was no such thing and embarrassingly read a McKinsey report as the authority (hired research) asserting emerging market growth would continue to drive rabid demand for commodities. HHMMMMM….