Reading Assignments:

The stock market correction has arrived: Massive global volatility, central bank wizardry, geo-political instability, and people finally realizing how overvalued the market has become.

The stock market is hitting the correction button 

First, much of the selling is being done by big funds triggered by technical trading. Over 80 percent of stock wealth is held in the hands of the top 10 percent. The public is simply a spectator to the stock market. So this correction is happening at higher levels. The public doesn’t need some Wall Street financier telling them that the middle class is shrinking. They are living this on a daily basis. 

The S&P 500 is overvalued. We knew this. So it is no surprise that the S&P 500 has given up the gains of 2014 within a couple of weeks.

Fed opens new era with end of QE stimulus program

Washington (AFP) - The Federal Reserve decided Wednesday to end its quantitative easing stimulus program, after six years of pumping easy money into the US economy via asset purchases to shore up growth. 

It said the market, after several months of solid job creation, has shown "substantial improvement", and that labor market slack -- an issue that has clearly bothered Fed Chair Janet Yellen since the beginning of the year -- was diminishing.

Skittsh markets push Fed to continue QE

As volatility soared during the selloff, many investors saw it as Wall Street once again sending a message to DC: We need help or we can go belly-up before the midterm elections. 

The market reaction, some contend, prompted St. Louis Federal Reserve Bank President James Bullard to call for a pullback on the taper.

The American Dream Goes Bust: Home Ownership Rate Back To 1994 Levels

Since the Fed has done its handiwork, institutional investors have driven up home prices and pushed them out of reach for many first-time buyers, and these potential first-time buyers are now renting homes from investors instead. Given the high home prices, in many cases it may be a better deal. And apartments are often centrally located, rather than in some distant suburb, cutting transportation time and expenses, and allowing people to live where the urban excitement is. Millennials have figured it out too, as America is gradually converting to a country of renters.

Despite low and skidding homeownership rates, home prices have been skyrocketing in recent years, and new home prices have reached ever more unaffordable all-time highs. Housing Bubble 2 came into full bloom, but now it too popped. Mess ensues. Read… New Home Prices Plunge the Worst EVER (in One Ugly Chart)

New Home Prices Plunge the Worst EVER (in One Ugly Chart)

So that’s sort of what should have happened this September … some kind of uptick. Even a small one would have done. But no. The median price plummeted 9.4% from August. A one-month trip from $286,000 to $259,000. It crashed $27,000 in one fell swoop. 

Here is what that plunge looks like (courtesy of the St. Louis Fed). I called it “one heck of an ugly dude” for a reason:

America’s ugly economic truth: Why austerity is generating another slowdown

The global economy is ailing, and the damage done by fiscal policy is going to come crashing. Here's our sad fate

Markets have unquestionably slumped: the S&P 500 is down 8 percent just since mid-September. More important, interest rates have plummeted. Geopolitical tensions, from ISIS to the Ebola outbreak in West Africa, shoulder part of the blame. But markets also fear low inflation, partly due to crashing commodity prices. 

Increased supply tells part of this tale, from a bumper crop in corn and soybeans to higher U.S. shale oil production (thanks to fracking and other extraction tools). There’s even reason to believe that Saudi Arabia has refused to turn off the oil spigot to support prices because it wants to put U.S. production out of business by making it less profitable. And keep in mind that a significant amount of this worry from well-off investors has to do with the fact that ordinary people will pay less for gas and food. In fact, that aspect is likely to boost the economy, at least in the near term (although damage to the domestic energy sector could wipe this out).

Low Oil Prices Means High Anxiety for OPEC as U.S. Flexes its Muscle 

While pension holders and investors watched aghast as billions of pounds were lost to market gyrations, a fossil-fuel glut and a slowing global economy have driven the oil price down to a level that could save the world $1.8bn a day on fuel costs. If this is some consolation for households everywhere after last week’s hit on stock market wealth, it means pain for the Opec cartel, composed mainly of Middle East producers. 

Opec’s 12-member group has largely controlled the global price of crude oil for the past 40 years, but the US’s discovery of shale oil and gas has dramatically shifted the balance of power, to the apparent benefit of consumers and the discomfort of petrostates from Venezuela to Russia.

Retirement age to rise by as much as six months per year

The pensions minister, Steve Webb, says Britons must accept dramatically longer working lives to avoid a health care funding crisis

Ministers believe that the retirement age needs to increase dramatically to reflect Britain’s ageing population and to avoid a health care crisis. 

The average age of retirement is 64.7 for men and 63.1 for women. The Department for Work and Pensions said in its business plan that it would like the average to rise by as much as six months every year.

DYI Comment:  Excellent article.  This is coming to America.

DYI