Weighing The Week Ahead: Will The Interest Rate Surge Continue? [View article]
dogs that bark --
Just to be clear, the two points are part of Doug Short's summary. He is basically pointing out that the recession forecast has not been helpful, despite the continual re-definition of terms by the ECRI.
I agree with you that the unemployment rate over-states the improvement because of changes in the labor force participation rate. Some of that was going to happen anyway, as people got older, but some reflects actual labor conditions. Young people are staying in school longer or traveling. Some older folks give up looking for work and retire early.
The employment story is getting better, but it is happening slowly and we are nowhere near the goal line.
Ted -- The Fed has not "driven down interest rates to multi-decade lows." At least not by itself! As I noted, the QE effect is one percent or so lower than rates would otherwise be. Investor fear of recession, skepticism about earnings, and a flight from other countries has driven rates lower.
If we are going to forecast accurately, we need to include all elements of the cause of the current low rates.
Weighing The Week Ahead: Time For More Volatility? [View article]
daro -- In Bill McBride's article he points out a combination of factors including revisions, sales, and inventory. The sales are still low, but the improvement is significant.
This is a lot better than many have been suggesting -- especially those that emphasize the foreclosure inventory.
Calculated Risk was excellent in identifying and analyzing housing problems, earning the respect of everyone. I watch Bill's analysis carefully, and frequently highlight items here, as you know.
Anyway, that's what I see from his summary, but discussion is always most welcome. He also provides a lot of local color in some other posts.
Weighing The Week Ahead: Time For More Volatility? [View article]
Dancing diva -- Thanks for pointing out the error. I have submitted a correction. As you know, I like to keep things accurate.
I agree with your point about the mini flash crash, which I did consider including. I think that they are in the process of changing this rule, but it will be too late for those who had stop orders entered.
The Small, But Important, Flaw In The Tepper Analysis [View article]
Northwest -- you may be a great startup investor -- a valued role -- but you do not understand markets. There are plenty of Treasuries available every day, as I have explained.
The number "available tomorrow" has not changed. That is what the market data tell you.
Your comment demonstrates the problem in trying to teach something about markets to those who have closed minds.
If you stay with the future articles, maybe you will come around.
Weighing The Week Ahead: Are You Ready For Some Fedspeak? [View article]
Cliff (and Left Banker as well) --
Feel free to view it as good news. I pondered this item, along with the news about the debt limit not being an issue until autumn (which I chose not to include this week).
For what it is worth, here is my thinking --The pace of debt reduction is either good or bad depending upon your perspective. I usually classify good and bad news based upon market reaction, but this story does not generate an immediate impact.
A rapid pace of debt reduction (both household and government) reflects one set of objectives. More current consumption helps the economy, so there is a tradeoff.
I am seriously concerned about debt issues (as you will see in an upcoming piece) but more urgently concerned about economic growth.
But I take your point. If that is my interpretation, I certainly should explain it better!
Weighing The Week Ahead: Are You Ready For Some Fedspeak? [View article]
Cautious Investor -- Thanks for your contribution and also the helpful link.
In the stock market world, everyone jumps on references to QE and stock prices, acting like that was the only mechanism for QE to help the economy. For a much stronger view, go to Fed expert Tim Duy: http://bit.ly/189HYyy
The Small, But Important, Flaw In The Tepper Analysis [View article]
Northwest -- You need to ask yourself what the market would be in the absence of the Fed action. You are not doing that.
When a trade is made, there is no record made of "permanent supply".
Try thinking about it in terms of a stock -- like Intel or something. Suppose you have a mix of long-term buyers and traders. There is no overwhelming issue about he "supply" of Intel stock.
If you are willing to bid more, the supply will be there.
Try also thinking about the Treasury auction, as I explained in the article.
That is my best effort to explain. If you don't get it, you will soon learn.
Weighing The Week Ahead: Will The Interest Rate Surge Continue? [View article]
Just to be clear, the two points are part of Doug Short's summary. He is basically pointing out that the recession forecast has not been helpful, despite the continual re-definition of terms by the ECRI.
I agree with you that the unemployment rate over-states the improvement because of changes in the labor force participation rate. Some of that was going to happen anyway, as people got older, but some reflects actual labor conditions. Young people are staying in school longer or traveling. Some older folks give up looking for work and retire early.
The employment story is getting better, but it is happening slowly and we are nowhere near the goal line.
Thanks for joining in.
Jeff
Using The Fed As A Fig Leaf [View article]
If we are going to forecast accurately, we need to include all elements of the cause of the current low rates.
I'll have more on this tonight.
Jeff
Weighing The Week Ahead: Time For More Volatility? [View article]
And thanks also to the regular readers who join in the discussion. I think it helps all of us reflect on the week ahead :)
Jeff
Weighing The Week Ahead: Time For More Volatility? [View article]
Weighing The Week Ahead: Time For More Volatility? [View article]
It is a good point. If you check out the Calculated Risk link and look at other articles, you will see quite a few that provide some local color.
Thanks for joining in.
Jeff
Weighing The Week Ahead: Time For More Volatility? [View article]
This is a lot better than many have been suggesting -- especially those that emphasize the foreclosure inventory.
Calculated Risk was excellent in identifying and analyzing housing problems, earning the respect of everyone. I watch Bill's analysis carefully, and frequently highlight items here, as you know.
Anyway, that's what I see from his summary, but discussion is always most welcome. He also provides a lot of local color in some other posts.
Jeff
Weighing The Week Ahead: Time For More Volatility? [View article]
I agree with your point about the mini flash crash, which I did consider including. I think that they are in the process of changing this rule, but it will be too late for those who had stop orders entered.
Thanks again..
Jeff
Weighing The Week Ahead: Time For More Volatility? [View article]
Thanks for pointing this out.
Jeff
The Small, But Important, Flaw In The Tepper Analysis [View article]
The number "available tomorrow" has not changed. That is what the market data tell you.
Your comment demonstrates the problem in trying to teach something about markets to those who have closed minds.
If you stay with the future articles, maybe you will come around.
Jeff
Weighing The Week Ahead: Are You Ready For Some Fedspeak? [View article]
and thanks..
Jeff
Weighing The Week Ahead: Are You Ready For Some Fedspeak? [View article]
Feel free to view it as good news. I pondered this item, along with the news about the debt limit not being an issue until autumn (which I chose not to include this week).
For what it is worth, here is my thinking --The pace of debt reduction is either good or bad depending upon your perspective. I usually classify good and bad news based upon market reaction, but this story does not generate an immediate impact.
A rapid pace of debt reduction (both household and government) reflects one set of objectives. More current consumption helps the economy, so there is a tradeoff.
I am seriously concerned about debt issues (as you will see in an upcoming piece) but more urgently concerned about economic growth.
But I take your point. If that is my interpretation, I certainly should explain it better!
Thanks,
Jeff
Weighing The Week Ahead: Are You Ready For Some Fedspeak? [View article]
Weighing The Week Ahead: Are You Ready For Some Fedspeak? [View article]
In the stock market world, everyone jumps on references to QE and stock prices, acting like that was the only mechanism for QE to help the economy. For a much stronger view, go to Fed expert Tim Duy: http://bit.ly/189HYyy
Thanks again!
Jeff
Dow 20K - A Halfway Update [View article]
Do you have a better idea?
Is it better to hold cash?
Just wondering....
Jeff
The Small, But Important, Flaw In The Tepper Analysis [View article]
When a trade is made, there is no record made of "permanent supply".
Try thinking about it in terms of a stock -- like Intel or something. Suppose you have a mix of long-term buyers and traders. There is no overwhelming issue about he "supply" of Intel stock.
If you are willing to bid more, the supply will be there.
Try also thinking about the Treasury auction, as I explained in the article.
That is my best effort to explain. If you don't get it, you will soon learn.
Best of luck!!
Jeff