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Goldman: "No Rate Hike In September"
While we have exposed the ugly under-belly of today's jobs data, mainstream media is spinning it as a 'Goldilocks' report with enough hits-and-misses for every hawk or dove. The market's initial reaction signals rising expectations of a September rate hike but, as Goldman's Jan Hatzius explains, they continue to expect the FOMC to keep policy rates unchanged at the September 16-17 meeting.
Via Goldman Sachs,
BOTTOM LINE: Nonfarm payroll employment increased less than expected in August, although earlier months were revised up. The unemployment rate and broader measures of underemployment declined. We continue to expect the FOMC to keep policy rates unchanged at the September 16-17 meeting.
MAIN POINTS:
1. Nonfarm payroll employment increased by 173k in August, less than expected by the consensus of economists. The deceleration relative to July reflected a downshift in a variety of components, including manufacturing (-17k vs +12k previously) and retail trade (+11k vs +32k previously). The mining sector continued to shed jobs (-9k in August). Overall private payrolls expanded by 140k, down from 224k in July. Firmer government payrolls provided a partial offset, with gains of 33k in August, an acceleration from +21k in July.
2. Other details in the establishment survey were a bit more encouraging. First, payroll growth over the two prior months was revised up by a net 44k. Second, average weekly hours increased to 34.6, and the index of aggregate hours (i.e. employment multiplied by average weekly hours) has now increased at an annualized rate of 3.1% over the past three months. Third, average hourly earnings growth was also slightly better than expected, rising by 0.3% month-over-month and 2.2% from a year earlier.
3. Results from the household survey were mostly positive. The U3 unemployment rate fell to 5.1% (5.112% unrounded) from 5.3% in July, and the broader U6 underemployment rate fell to 10.3% from 10.4%. Household employment increased by a decent 196k (+106k on a payrolls-consistent basis), although the trends in employment growth from this survey remain relatively soft (with three- and six-month average gains of 80k and 123k, respectively). The labor force participation rate was unchanged at 62.6%.
4. With payrolls, unemployment claims, consumer sentiment, vehicle sales, and a number of business surveys in hand, our preliminary read on the August Current Activity Indicator is +2.8%, in line with the July figure. We continue to expect the FOMC to keep policy rates unchanged at the September 16-17 meeting.
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Soooo, rate hike in September...., got it.
I'm tingling with excitement.
Hold on....let me find my shocked face.
https://www.youtube.com/watch?v=srw3RdiIlrQ
Geez thanks GS...............These are not the droids you're looking for, move along.
GS and AIG and all their owners/managment should have been kicked to the fucking curb a long, long time ago...
there is no spoon.
Fine, no rules for you means no rules for me and my tribe either. Fucking awesome!
The real reason the Fed wants to raise rates has nothing to do with the economy or inflation...the reason has everything to do with IOER's...$2.5 trillion excess reserves held by the big banks. The Fed's plan how they will effect higher rates? Pay these banks billions more not to lend...not just a .25% but significantly higher. And all the while, the Fed will continue repurchasing Treasury's and very well could engage in more QE!!!
...follow the money
http://econimica.blogspot.com/2015/08/rate-hikes-and-qesimultaneously.html
That's Gartman, this is Goldman
You think Goldman will tell the muppets what they really think, or I should say know? Do you follow any of their calls?
my estimate. probably something like 90% of the time they are lying, 9% of time they make random guess, 1% of the time they are bragging.
Gartman can be wrong all the time because he just sells newsletters, GS needs to confuse people in order to skim from the muppets......you can't do that if there's no doubt you always headfake predictively.
Hell I'd bet the GS marketing department is just full of stats on how often they need to tell the truth before lying on their big moves.
Doc, depends on what "great deal" GS is pushing ths week......
6% interest rate or higher within the next ten years.
-.6% interest rate or lower within the next ten years.
The Fed should raise rates just to show their independence from Goldman.
If, in fact, they are independent of Goldman.
Goldman makes money. The FED makes money. Only difference is what is meant by "makes". One prints and other hoards.
That's not money that they are printing and hoarding.
it is "money" only so long as producers actually accept it in exchange...
tick tock motherfuckers...
The Fed is the provincial field office of GS...
Doc, my thoughts exactly. If Goldman says no, the answer is yes.
Ramp fest today
No ramp fest today
Your order of ramp fest will now be served.
If the Fed raised rates they would actually CAUSE deflation.
We have been deflating for some time now.
That's a good sheep. With 7+ billion people on this rock deflation in anything required for a decent standard of living is a fucking myth.
Deflation in unecessary plastic crap and useless toys, sure.
Deposits paid before derivatives
Derivatives paid before deposits
How long will the FDIC take to pay one/the other based on prioritization?
If they just do both, raise rates AND start QE4 (as if they already havent done that through the reverse repo) then they covered their bases. Its coming down folks. No two ways about it. Its only a matter of who gets out of Dodge first.
Of course. It's all a big farce. Why anyone still believes in it is beyond me. You have had 7 years to wake up and realize there is no spoon
Unless you're born with a silver spoon in mouth.
Gun in the hand beats any flavor of spoon.
The FED cannot raise rates before the election.
Anyone who mentioned previously about ending the FED will not be allowed near the election, before the elections.
The FED can still get unforeseen consequences in the political arena if they destabilize the markets before the election. Consequences they will not risk as the credibility payoff would be marginal at best.
-but, the current crash offers the best window of plausible deniability the the Fed will get to raise 1/4 point without obvious linkage to their actions....
The only way they will raise rates in September, or any other month, is if they're stupid enough to believe their own lying data/propaganda.
I think it's fairly well known by now that the numbers of everything are manufactured to wrong foot everybody who "isn't in the club"
It depends on what they are trying to do. Meaning they put their best interests first, not the American citizen.
I recall reading that Jack Welch said that in hindsight he never thought "he should have waited longer to fire someone"... or something to that effect.
The walk of a thousand miles starts with a single step. (Lao Tzu, I think)
If you know it has to get started sometime, then regardless of how difficult it will be, there really is no point in delaying.
Coordinating rate normalization with UN Agenda 2030 is probably as good a timing as any.
These are expected problems when you leave the ruling of the world to a relatively small group of covetous, greedy, insensitive, technologically advanced parasites. You get crap management.
What Goldman wants, Goldman gets.
"as Goldman's Jan Hatzius explains, they continue to "expect" the FOMC to keep policy rates unchanged at the September 16-17 meeting" must be:
as Goldman's Jan Hatzius explains, they continue to "instruct" the FOMC to keep policy rates unchanged at the September 16-17 meeting.
they will lift it in Sept if only to just get this whole mess over it,and them move on
looking forward to opening yet another can of spam(yum)..
This is all noise. Goldman and JPM have had rate hike in December for last 3 months. When we get to November I am sure GS and JPM will have rate hike sometime in March...even with QE4. Not sure why this doofus at GS wastes time with this analysis. CIB and PWM divisions are operating based on Dec rate rise. This has absolutely nothing to do with jobs.
Free advice from Goldman? Translation: "See you on the other side of the trade, Muppets."
there's a 100% probability that rates will stay the same, rise or fall sometime in the future
Oddly I find this to be for entertainment purposes. This house of cards will come down either way very soon. You couldn't pay me to go long into this holiday weekend.
Isn't no rate hike ever already priced in??
FED is floating trial balloons from the hind ends of Fischer & Lacker to see how markets will react. Looking for a bloodbath at the close.
Only point:
Must buy time to unwind long equity positions and enter short positions, ... must buy time to unwind bad bond positions.
I still think a .125% rate hike (whenever they hike) followed closely by QE 4,5,6.
"raise rates because of strong wage numbers"
"dont raise rates because of weak employment numbers"
decision to made by rock paper scissors.
Trade accordingly, bitchez. <wink><wink>
How about a .00001% hike just so they can say they did it and get it the F*CK over with!
Probably because it has something to do with the adage:
"Better to remain silent and be thought a fool than to speak out and remove all doubt."
or in the FED's case;
Better to stand pat and be thought a fool than to act and remove all doubt.
Even IF there comes a rate hike at .25%... so what? Greenspan might be old and spent, but he is right saying it is baffling that an event like that could be anything material for the markets.
The importance of monetary policy decisions is far smaller that what it used to be. If we want to look at something that really matters, we have China, Brasil, Russia and Europe, all with their unendless string of quirks and variou degrees of stupidity. And the list is far from complete.
This "historical" payroll news and its supposed major consequences have barely moved the markets. Old news already...
Monday China re-opens and the US is on holidays... Let's see what happens then
"China, Brasil, Russia and Europe, all with their unendless string of quirks and variou degrees of stupidity."
But on the stupdity stakes the US beat them all in 2008.
Wall Street was the source of the ongoing financial crisis.
James Rickards in Currency Wars gives some figures for the loss magnification of complex financial instruments/derivatives in 2008.
Losses from sub-prime - less than $300 billion
With derivative amplification - over $6 trillion
"It’s nearly $14 trillion pyramid of super leveraged toxic assets was built on the back of $1.4 trillion of US sub-prime loans, and dispersed throughout the world" (pg 404, “All the Presidents Bankers”, Nomi Prins)
True, true... but when the US bank sharks created those toxic assets, the whole world rushed to buy them...
Of all things, stupidity is probably the most universal and common feature of mankind
http://www.cnbc.com/2015/09/03/high-vix-no-hike-what-market-history-tell...
Rates have been declining steadily for thirty fucking years now, no shit they wont rise in September, they have to STOP GOING DOWN FIRST BEFORE THEY CAN GO UP YOU CUNTS!
God dammit I feel like rick santelli
The 30y printed rates at the beginning of this year lower than those at the bottom in 2008/9 and currently the 10y is trading at the same level as in 2008/9; that should tell you all you need to know.
Rates will not rise meaningfully in our lifetime. How do I know? Because its impossible for rates to rise. It is literally impossible. The financial system would implode. Rates are going to stay at zero maybe go even below zero and they are going to stay there unless and until the whole system burns to the ground.
That said, I remain short bonds cause fuck me I aint buying em here. Go ahead and raise those rates Yellen, I dare you....
There it is Janet. From God's mouth. Now make it happen.
It goes from God to Goldman to Janet to the cleaners.
When there would be a 0.25% hike, what would this mean for interest payment on the US debt ?? And what about those companys who borrowed for share-buybacks ?