Financials, Equity Bear Markets and the Real Economy [Updated]

Updates –

Advanced Economies – Recent Developments

http://vivekjayakumar.blogspot.com/2016/02/global-economic-update-advanced.html

SWFs Dump Equities [A factor that may be roiling global equity markets]

http://www.bloomberg.com/news/articles/2016-02-22/sovereign-wealth-funds-seen-selling-404-billion-of-equities

Predicting Recessions – Financial Indicators and the Real Economy

http://vivekjayakumar.blogspot.com/2016/02/leading-indicators-and-recession.html

Central Banks, Fiscal Policymakers and Negative Interest Rates

http://vivekjayakumar.blogspot.com/2016/02/negative-rates-failure-of-fiscal-policy.html

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Financial Sector, Market Gyrations and the Real Economy

Bear market may hurt the real economy –

https://www.washingtonpost.com/news/get-there/wp/2016/02/12/as-stocks-fall-anxiety-soars-for-retirement-savers/

“Americans in the past few years had been able to use stock market investments as a way to recover from losses during the Great Recession and fared better than those who locked most of their wealth into their homes. Investors enjoyed a handsome payout, as the Dow more than doubled between 2009 and 2015… But some economists had long called for a correction, and it came suddenly with the collision of several new economic forces….

In the U.S. the most vulnerable are those approaching retirement, or otherwise close to needing the savings they have invested in the stock market. If the losses turn out to be more prolonged, they could find themselves forced to draw down on their savings just as their balances are shrinking, reducing the chances that they’ll be able to fully recover from those losses.”

Financial sector woes push global equities into bear market territory

http://www.bloomberg.com/news/articles/2016-02-13/bank-credit-risk-crimps-u-s-stocks-as-investors-tune-out-yellen

P/E Ratios Get More Realistic

http://www.bloomberg.com/news/articles/2016-02-12/smashed-valuations-show-s-p-500-getting-used-to-profit-recession

Global equity market movements have become increasingly correlated
http://www.cnbc.com/2016/02/12/the-majority-of-international-markets-are-down.html

The Weird Oil-Equity Co-Dependence [Interesting cover story from BusinessWeek] –

http://www.bloomberg.com/news/articles/2016-02-12/smashed-valuations-show-s-p-500-getting-used-to-profit-recession

“Just in time for Valentine’s Day, it appears that oil and stocks have developed an unhealthy, codependent relationship. They’re way too deep into each other. Where one market goes, the other follows. If they were people, a counselor would be urging a trial separation. “This is highly unusual,” Torsten Slok, chief international economist at Deutsche Bank, wrote to clients in late January. “Call it the oil correlation conundrum.””

Related:

The Doom Loop - Banks and the Real Economy

http://www.wsj.com/articles/subzero-rates-deepen-fears-of-slowdown-1455228151 [gated]