Posted by: Tom Keene on September 2, 2010
Homer & Leibowitz Suggest Toxic Combination
Is there a bond bubble? Chris Whalen, of Institutional Risk Analytics, reaches back-to-the-past at zerohedge.com and drags out the classic Inside the Yield Book. Go here to see an important paragraph on Macaulay Duration. Summary: we are reflating to avoid deflation and there is a price.
This Time Beware Pied Pipers
Ken Rogoff creates a must-read essay on jobs. Note, the comments on tax cuts. I’m shocked. Inflation is preferable to deflation. The dollar is feeling very Feldsteinian.
Here Begineth Job Chartapalooza
400,000 Where Are You?
Weekly Jobless Claims Out 1-Deviation+, Centered About 380K
A Modest Bright Spot
Avg. Weekly Hours Needs to Get From 34.2 to 34.5
We Feel Broke
This is a bit hard to see, but a killer chart. Here is Per Capita Personal Disposable Income and the 12-month Rate of Change. It’s simple. Income has leveled out (the upper white line goes flat); and the year-over-year dipped negative and is still way low (the yellow line below zero then to a snappy 2 percent. Translation: No wonder they’re mad at the incumbents.
Here is the number I look at at 08:30:24, Ken Prewitt goes over the headlines as I print out the reports and I reach first for Median Duration. We are out about nine standard deviations, way above 20 weeks where say, 12 weeks has been ugly previously. I’m Sorry Carmen and Ken, This time is Different.