Submitted by Adam Smith via PeakProsperity.com,
Students of Austrian business cycle theory are familiar with the term malinvestment. A malinvestment is any poor use of resources or capital, commonly made in response to bad policy (usually artificially low interest rates and/or unsustainable increases in the monetary supply). The dot-com bubble that popped in 2001? The housing bubble that similarly burst in 2008? Those were classic examples of malinvestment.
Millennials have now overtaken baby boomers as America's largest living generation according to Pew Research. Millennials as defined by Pew as ages 18-34 now number 75.4 million, slightly edging out Baby Boomers (ages 51-69) numbering 74.9 million.
Millennials also have a few other things going for them, however not in a good way.
As the WSJ reports, Millennials in New York City are earning about 20% less than the previous generation of workers, and they are absolutely drowning in $14 billion in debt.
While one can blame algos and "macros" for snapping up oil the commodity, as Morgan Stanley did recently, another question is who is the relentless buyer of energy stocks to a level that makes little sense from a forward P/E multiple.
One of the more important companies reporting today was commodity king Freeport McMoRan which in 2016 has seen its stock plunge then surge on hopes the Chinese bubble reflation will push commodities higher. So far it has worked, but far more important was what FCX' own assessment of the future was: was it preparing for a strong rebound, or instead, was it slashing costs and firing employees in another confirmation that the recent rally has been, as Bank of America's "smart money" clients admit for 13 consecutive weeks, nothing but fumes.