Business

Moments ago the Philadelphia Fed tweeted something that is actually spot on, namely that the American economy is only as resilient as the American consumer.

RT @PhilFedComDev: Have you read What It's Worth? Get a free copy & see what we're discussing: https://t.co/LJ96hkTOrm #WhatItsWorthPHL

— Philadelphia Fed (@philadelphiafed) May 5, 2016

Which if one looks at the state of retail companies reporting same-store sales results today, is a problem because they all missed.

In an oddly ironic twist, today Donald Trump announced that he has picked as chairman of his newly launched fundraising operation none other than a former employee of the bank he has repeatedly criticized in the past, and which he used as a foil to criticize Ted Cruz: Goldman Sachs.

Submitted by Charles Hugh-Smith via OfTwoMinds blog,

People sense the 'recovery" is bogus, and their rational response is to save more money rather than squander it.

Sometimes one chart captures the fundamental reality of the economy: for example, this chart of money velocity and the civilian-population ratio. (thank you, Joseph Y. for posting it on my Facebook feed.)

It was almost a year ago, when having tumbled in early 2015, oil proceeded to rebound strongly into the summer, where it traded at about $60 for three months, before US production resumed resulting in the next big leg lower which culminated with this's February drop to 13 year lows. At that point a comparable rebound to last year materialized, and just like last year,  the pundits have emerged claiming that there will be no further downside. Incidentally, we covered this comparison previously in "For Oil 2016 Is Setting Up To Be A Rerun Of Last Year."

"Own volatility.." is the subtle message from BofA's Michael Hartnett, who warns "don't add risk before SPX 1950-2000 range and/or VIX>20." Simply put, as he explains below, bullish "positioning shocks" & "policy shocks" are largely behind us; and there is no bullish "profits shock" coming in a world that cannot cope with a higher US dollar & higher rates.

2016 YTD global total returns: commodities 7.6%, bonds 7.5%, equities 1.1%, the US dollar -5.8%.

Our base case remains: