Weekly Jobless Claims Continue To Decline

by: Calafia Beach Pundit

Weekly claims for unemployment continue to slowly decline.

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No sign of anything unusual going on in the labor market. That's good, because avoiding recession is all that matters from an investment perspective these days.

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When yields on risk-free assets are close to zero, it only makes sense to hold those assets if you need liquidity and/or are highly concerned about the potential for losses in other assets, most of which are yielding substantially more, as shown in the chart above. From a macro perspective, the fact that significant assets are being held with virtually a zero yield (e.g., bank savings deposits are now $6.8 trillion, up from $4 trillion in late 2008) can be interpreted as a sign that the market is very worried about a recession, since that is the one event most likely to create widespread losses in risky assets.