Ideally, a central bank would like the party to be rocking when it takes away the punch bowl. This party, however, is not cooperating. For every sign of exuberance (high-end real estate bubbles, equity and bond bull markets, job growth) there are five or six things going wrong, some of them in a big way. This morning’s news illustrates the point:

Oil slump resumes on U.S. supply build, expected Fed rate hike
Plunging energy prices are a tax cut for consumers but a calamity for the leveraged speculating community. And since finance now wags the economic dog, the latter effect is potentially a lot more serious. Look for a wave of bankruptcies and defaults across the energy world in 2016.

Why the current credit crisis might be 35 times worse than you thought
The failure of Third Avenue high yield fund spooked the market, but might have been nothing more than a one-off event. But Yahoo Finance crunched the numbers and found a long list of other funds in similar straits, most of which are concentrated in energy assets, and concluded that liquidity problems are about to become a lot more widespread.

Freight Shipments Hammered by Inventory Glut, Weak Demand
Wolf Richter’s blog notes that “In November, the number of freight shipments in North America plunged 5.1% from a year ago, according to the Cass Freight Index. It hit the worst level for any November since 2011.”

Baltic Dry Crashes To New Record Low As China “Demand Is Collapsing”
This measure of shipping rates fell to its lowest level ever, indicating that global trade is shrinking — something which simply doesn’t happen outside of recessions (and is rare even then).

US Markit flash manufacturing PMI slips to three-year low in December
This measure of the manufacturing sector’s health is still showing expansion, but at a dramatically slower rate. Another few months like the last one and this part of the economy will be back in recession.