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Tuesday, April 7, 2015

A couple morning newsbits

Instead of the ignorant blather of CNBC and the hard-money crypto-racist Russian-puppet end of the blogosphere, here's some real commentary for you:

Bespoke - ISM services inline. So quit piddling your panties.

New Deal Demoncrat - the March jobs report was primarily an oil patch story. Most of the job losses were in Oklahoma and Texas, two states that can go to hell for all we care. Oh, and he also reminds us that today's JOLTS is for February, which (in case you haven't been following things) is a month that already happened, and we know the data was bad, so let's just ignore it, m'kay?

Calculated Risk - US heavy truck sales update. Still nothing to worry about, again quit with the piddling of your panties.

Brad DeLong - Here's what Bernanke is really thinking. An important commentary on something in the recent Bernanke blog posts. Then he goes on to identify in simple terms the difference of opinion re: secstag between Bernanke, Krugman and Summers. Really useful post. As for my opinion:
You may say: A 10-year nominal Treasury bond rate no higher than inflation is supposed to be the current value of the natural interest-rate? Good God! That is absurd! Something is wrong with our economy, and wrong at a much deeper level than a simple shortage relative to demand of the supply of safe-and-liquid-store-of-value assets that can be hoarded! It makes no sense that real capital assets must be at such a premium valuation in order to induce wealthholders not to hoard but rather to invest in the future!

And if you were to say that, you would be Larry Summers.
If Summers is really saying "why oh why is life so unfair for the plutocratic rentier class", his position is objectively wrong. Because there is no justifiable reason in a properly free market for rentiers to earn more than inflation. Now that capital worldwide has expanded to fill its container, there should be no mispriced risk left for anyone to arb a profit from.

FT Alphaville - EM FX and the case for calm. Well, the last EM secular bear market saw major currency crises, so maybe simple recency effect is why we expect future crises in the new EM bear market. But certainly the world is a different place - you can't even call China an EM anymore, for example, and US rates are far lower.

1 comment:

  1. The Plutocratic rentier class relies on handmaidens like Larry Summers.