J Clinton Hill

Green Shoots Rule Over Safe Havens in Small Signs of Progress

Whidbey,

The original title of the article on my website reads: "Green Shoots Rule Over Safe Havens as Consumer Credit Contracts". The editor has modified the title and unfortunately it does not accurately reflect my intentions.

In the bond market, we have only seen rising rates at the long end of the curve. This time we saw a bump up at the short end because some traders speculate that the Fed may raise rates.

This observation should be monitored to see if it develops into a sustainable pattern. I am skeptical of the employment #s & state this in my report. I would prefer to see the revision and even take this with a grain of salt. I've also noted that the employment report does not take into account high school & college graduates joining the labor force. Even if the BLS manipulates the "birth/death matrix", census stats numbers show the U.S. population is steadily growing and it doesn't take too much effort to connect the dots and realize the BLS is telling a whopper.

If a shift in sentiment is underway towards the short end of the curve, then the implications deserve respect. Rising short-term rates typically forecast economic recovery. I happen to believe that we still have a long way to go before seeing any daylight in these woods and that consumer weakness does not support the late 2009 or early 2010 recovery that many anticipate.

The purpose of this report is not to offer advice but share notes on economic events and what I perceive to be the market's reaction towards them.

I am not sure if this answers your question. Hope it clarifies things...


On Jun 07 02:10 PM whidbey wrote:

> Wild!! Your advice seems bold and short range, or is this a long
> range guess? In any case why believe the employment report?? The
> BLS manipulation of the Birth/Death matrix was shameless and so are
> you for blindly accepting the hoax. Go easy on your advice someone
> might think you know something.
>
> "The bond market’s reaction to the employment report tells me that
> green shoots supersede the safety of parking money in short term
> instruments and earning relatively nothing on cash."
>
> How soon we forget, quickly we come to believe.