There was another round of somewhat positive unemployment data on Friday. The U.S. release was tepid but juxtaposed with the Canada data it would seem robust. The Canadian jobs number was dismal on its face as 213,000 jobs were lost and the unemployment rate jumped to 9.4% from 8.6%, although a slight increase was expected (around 8.9%). The U.S. unemployment rate dropped to 6.3% from 6.7% with a slight gain in nonfarm payroll of 49,000, although much of that was in public sector employment. Average hourly earnings rose 0.2% but of greater interest was the increase in average hours worked, which reached a highest in history according to the Liscio report at 35 hours.
Posts Tagged ‘Larry Summers’
Notes From Underground: At the Fed, Jobs is Priority Number One
February 7, 2021Notes From Underground: Happy Anniversary Twentieth ZIRPiversary, BOJ!
February 12, 2019This is the perfect time to discuss the effects of zero interest rates as it has been 20 years since the Bank of Japan embarked upon the path of crushing interest rates in an effort to jump-start inflation in Japan. This is very important as we enter into the discussions about the potential for negative interest rates in the U.S. while also entertaining the idea that the U.S.’s growing debt pile and deficit have no consequence as long as the government borrows in its own currency and optimizes its printing press.
Notes From Underground: Mario, Don’t Try to Lay No Boogie Woogie On the King of Rock ‘n’ Roll
April 27, 2017Mario Draghi’s nonsense is a compost heap as he tries to continue his efforts to build the ECB‘s balance sheet to the point of no escape. The ECB president danced around inflation questions by generally holding to the view that inflation across the entire euro zone would have to rise to the 2% level for the central bank’s mandate to be met. Currently, Draghi holds to the view that the recent elevated levels of inflation are transitory due to higher energy costs. It was noted that there has been a decline in service sector costs, which could put downward pressure on inflation once the energy prices pass through the data. Draghi also emphasized that with the current unemployment levels in some EU countries there was far too much slack which keeps wages from rising. A positive point for the ECB is that it does not follow NAIRU as a major gatekeeper of wage levels. In his typical effort to elevate his position, Draghi applauded the ECB for saving the EU financial system and economy, but until the politicians make the needed structural changes there will be continued “substantial monetary accommodation” so the ECB can meet its inflation mandate.
Notes From Underground: In Preparation For Things To Come
September 6, 2016On the Santelli Exchange, me and Rick discussed the very weak ISM non-manufacturing and its impact on the FOMC. The surprise weakness sent PRECIOUS METALS soaring, the DOLLAR lower, BONDS AND EUROPEAN SOVEREIGNS HIGHER and EQUITY MARKETS moderately higher. The FED is under the microscope from so many analysts but the surprise of the day was the OP-ED piece by Professor Larry Summers in the Washington Post. Summers put an academic gloss on the erudite review of Jackson Hole but this sentiment is key: “My second reason for disappointment in Jackson Hole was that Fed Chair Janet Yellen, while very thoughtful and analytic, was too complacent to conclude that even if average interest rates remain lower than in the past, I believe that monetary policy will, under most conditions, be able to respond effectively. THIS STATEMENT MAY RANK WITH FORMER FED CHAIRMAN BEN BERNANKE’S UNFORTUNATE OBSERVATION THAT SUBPRIME PROBLEMS WOULD BE EASILY CONTAINED,” [emphasis mine]. This is a harsh assessment from a fellow academic, but more importantly it is a stinging criticism of the FED’s forecasting history.
(Click on the image to watch me and Rick discuss weak U.S. data, the Fed and G-20)
Notes From Underground: The Hokey POLLkey
June 14, 2016You put your left poll in, you take your left poll out, you put your right poll in and you shake it all about … and that is how you get the hokey POLLKEY. The markets are moved by the cacophony of polls, both private and public. Couple that with the ability to broadcast any and all results via social media in an immediate fashion, the markets get high frequency volatility. This is why I keep advising to trade with FERVOR, invest with FEAR. Brexit is keeping everyone on edge but the most confusing variable is the BETTING LINES at the London bookmakers. Always deemed the smart money, the odds are favoring a REMAIN vote while the markets are pricing in a higher probability of BREXIT. It’s a great arbitrage opportunity. Global equity markets are certainly fearful as investors are leery of being caught in the downdraft of a BREXIT vote.
Notes From Underground: How Do You Say Chutzpah in Chinese (Or G-7: Part II)
May 25, 2016As I begin my further analysis of the unfolding political/economic factors facing the global markets I seek your indulgence and set the table by quoting from what I believe is one of the most significant chapters in western literature. Notes From Underground takes its title from the essay of the same name of by Fyodor Dostoyevsky. The tagline, 2+2=5, is a summation by Dostoyevsky to poke at the Rationalists of his day. But the chapter of note is from the novel The Brothers Karamazov titled, “The Grand Inquisitor.” The scene is set as the Grand Inquisitor has arrested the Christ figure for daring to upset the social order that the Church has created. The entire chapter is so moving but allow me to quote a small part:
Notes From Underground: A Quickie On the G-20, Or the Summers of Enchantment
February 25, 2016It was nice to be away, playing some golf and visiting with friends. And now it’s back to work. (Confession: I was engrossed in reading for part of my days.) There two key issues before us: BREXIT and this weekend’s G-20. (Side note: I did a radio interview yesterday with Anthony Crudele on #FuturesRadio. Anthony did a great job and we covered a lot of ground. Listen to the piece and it will rehash much of what my blog readers have been reading during the past six years.) Here is my take on the G-20 meeting and it is interesting how the British elites are trying to co-opt part of the G-20 meeting to get support for the British Prime Minister David Cameron and his bumbling sidekick George Osborne.
Notes From Underground: Indulge Me During Times of Quiet Markets
October 20, 2015In yesterday’s Financial Times, one of the giants of the economics profession, Luigi Zingales, wrote an op-ed, “A Strong Free Press Is Our Best Defence Against Crony Capitalism.” Zingales takes the financial media to task for failing to be a watchdog against the corruption that exists in global capital markets.He poignantly states:”While nowadays almost all the world professes itself to be capitalist,not everybody experiences the same type of capitalism.In fact,the form of capitalism prevailing in most of the world is very distant from the ideal competitive and meritocratic system we economists theorise in our analyses and most of us aspire to. It is a corrupt form, in which incumbents and special-interest groups shape the rules of the game to their advantage, at the expense of everybody else: it is crony capitalism.”
Notes From Underground: A Few Things Before the Financial Ship Sails
October 12, 2015When holiday markets quash volume and new items repetitive, it provides an opportunity to catch up with some general concepts in a style I like to call “Quick Hitters.”
Notes From Underground: “You Say Why and I Say I Don’t Know” (Because Confusion Reigns)
September 9, 2015The FED‘s upcoming FOMC meeting (September 16-17) is resembling the theatrics of the Greek debt crisis: Opinions abound about what do to and the entire world has voiced concerns about the outcomes from whatever decision Chair Yellen decides. The media is filled with articles advising the Fed to raise/don’t raise. However, we’ve come to the point, JUST DO IT. Unlike Nike, there will be no victory.