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Weekend Macro Summation
The charts this week much like with last weeks Morgan highlights speak for themselves.
Summation of last weeks key comments:
"The real risk to the market is not the end of QE buying, but when the Fed finally
acknowledges that rate hikes are in sight"
Weak Wage Growth Shows FED Failing To Maintain It's Mandates
BOA/ML Said That Data For Monitoring Impact May Be Shit:
Wage growth disappointed for a second consecutive month, inching up only 0.1% mom in October after no gain in September. Expectations were for a trend-like 0.2% increase. This left annual wage growth at 2.0% yoy. Despite the significant improvement in the unemployment rate, wage growth has shown no signs of acceleration. There are a few possible explanations: 1) the standard U3 unemployment rate is not sufficient and we should monitor broader measures, including discouraged and workers marginally attached to the labor force. These broader indicators reveal greater slack. 2) Pent-up wage deflation: since employers did not cut wages during the recession, they will not rise as quickly during the expansion. This suggests a greater lag between reaching full employment and wage growth. 3) Sample issues: we aren’t controlling for changes in the quality of job growth when measuring average hourly earnings
Fifth District Unemployment Looking Worse For Wear
Money Market Rates
Core Inflation Outlook
Goldman's Jan Hatzius Said In Friday's "Economics Analyst" Note:
Exhibit 6 shows a few of the key category-level models. To forecast year-on-year inflation beyond September, we combine the model’s predictions for the next year with already-reported data for previous months. The model projects a softening both in most core goods categories, especially apparel and new and used vehicles, and in transportation services, the latter driven by lower energy costs. In contrast, the model expects a modest pickup in shelter prices and the residual services category.
Europe Remains F*@ked
Huw Pill Said In Thursday's Note:
The main data releases this week are Q2 GDP data for the Euro area, France, Germany and Italy. We now expect Euro area GDP to have grown by just 0.1%qoq. National GDP growth numbers will also likely be weak, with Germany GDP growing by just 0.2% qoq. In the UK, we expect the unemployment rate to fall further, from 6.0% to 5.9%. Moreover, the Bank of England will publish its November Inflation Report. We estimate that the MPC would only need to revise down its outlook for GDP growth next year by a modest amount – [0.2 - 0.3%] – to implicitly ‘endorse’ financial markets’ move to a lower path for expected Bank Rate.
If there's one thing to walk-away with right now it would be that managed economies fail, central planners are too disconnected from the general public to comprehend policy impacts even if those in power have MBA case-studies, magnum cum laudes and other bullshit designations that do nothing to build trust or confidence in the systems these psychopathic liars manage and pretend to control. Inflation is shit, wages growth is garbage, and globally we're sliding into a "new normal" of "less is more". Central Bankers control the indeces, standards of living remain stagnant and the ability of our monetary system to lift souls out of poverty has reversed and continues to push people into poverty. Soveriegn Treasuries bailout the Big Swinging Dicks and supress the public who funded those Treasuries.
We're sold one story about the benefits of central planned economies...
But in the longrun, the story ends with....
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http://pragcap.com/quantitative-easing-the-greatest-monetary-non-event
QUANTITATIVE EASING: “THE GREATEST MONETARY NON-EVENT”2009
Has any central bank in history every bankrupted it's country?
The Fed simply cannot raise rates without ruining the books of the USA...so it won't. It will wait for the real improvement in the economy that it knows can never come as long as the dollar is still in use.
Yes it should do a bunch of things but the rules will bechanged as they have been changed already. The Fed is just pretending as though all is well. One has to suspect that they know things are not well and are merely playing their part much like the band on the deck of the Titanic....they played on even though death was hours away. Certainly the Fed can play as they face only the death of a currency. No big deal in the history of money really. Sure it will be huge but nothing the world can't get over....in the very long run.
"Inflation is shit..."
By TMS-2, yes - for now anyway. By the effects however - which are nearly always delayed, we have Plenty of 'stealth' inflation. Higher prices for food and other necessities, smaller volume/sizes and a general loss of purchasing power, save for the temporary anomaly of lower pump prices for fuel. I really wish we could (collectively) alter the dialogue when it comes to discussing 'inflation', and redirect the focus to Loss of Purchasing Power - which is where the discussion really belongs in the context of centrally planned/manipulated/skullduggered economies - like the U.S.
stupid people will always vote their own jobs away.
covert.co.nr
When viewing the charts in exhibit 6 please note the "projected inflation charts" do not extend very far into the future. I contend the primary reason that inflation has not raised its ugly head or become a major economic issue is because we are pouring such a large percentage of wealth into intangible products or goods. This includes currencies. If faith drops in these intangible "promises" and money suddenly flows into tangible goods seeking a safe haven inflation will soar.
Like many of those who study the economy I worry about the massive debt being accumulated by governments and the rate that central banks have expanded the money supply. The timetable on which economic events unfold is often quite uneven and this supports the possibility of an inflation scenario. A key issue being one of timing. If the price of gas jumps to $8 a gallon overnight do you buy gas and not make your car payment or stop driving the twenty miles to work? Answer, it could be months before your car is repossessed so you buy gas.
It is important to remember that debts can go unpaid and promises be left unfilled. If this happens where does it leave us? Chaos and major disruption would result from such a scenario. As we have seen from the economic crisis of 2008 and following many other unsettling developments legal actions can continue to drag on for years. More in the article below.
http://brucewilds.blogspot.com/2014/04/inflation-seed-of-economic-chaos....
I immediately am forced to ask how much Obama has skewed these numbers to the high side through initiatives he has initiated in Washington. Obamacare has blown the lid off the cost of health insurance. Also recent minimum wage hikes that affect workers in companies doing business with the government could have a massive impact on wages and salaries even if what might be "large percentage raises" only effect a limited number of workers. My point is the numbers in the charts above could be very "skewed", note this is not a comment on their real benefit or value to the economy. Wage growth while disappointing for a second consecutive month may "not have inching up" at all for a large number of Americans.
We are coming face to face with a harsh reality. The long term implications of poor job creation are massive. We are seeing that a huge number of people have dropped out of the work force. Often these people have little in the way of savings, this means the burden of caring for them will be transferred to society. If to many people shift into this category we will slowly wear down through attrition. Finding a fair way to share and balance the work load that goes on every day is one of the most important problems facing our modern world.
Failure to discover a solution to this dilemma bodes poorly for our consumer driven economy and adds to the toxic problem of inequality. Many of the numbers and budget projections of the government have been based on far better employment numbers then we are currently facing or will be facing if this continues. The article below looks at the long-term implication of poor job creation and how it will drastically impact in a negative way both the wealth and future of America.
http://brucewilds.blogspot.com/2013/09/implications-of-poor-job-creation.html
First I think it is lost on many people how tragically fucked GDP is as a measure of anything. Famously, Ron Paul said that if you build a missile and explode it in Iraq, it adds positively to GDP even though it's adestruction of capital. (I'm paraphrasing.)
Also look at the graph where it shows the surge in the cost of benefits around 2011/2012. Forcing labor costs higher makes people poorer! Why is it so difficult for most people to see the direct connection between government/banking complex theft, and your poverty?
Anyways sheesh that chick is hot.