Thursday, June 4, 2015

A bit of news

I've been kinda working my ass off these past few days, but here's some news:

WSJ RTE - Fed's Evans sees no rate hike til 2016. So quit piddling your pink panties.

FRBSF - path for monetary policy going forward. John Williams has this interesting comment regarding the lack of wage growth:
Wage growth in particular has been sluggish. There’s been some upward movement, but not what one would consider representative of a fully recovered economy.

There are a few reasons for that.

My research staff has been studying a feature of the last recession with the imaginative name “downward nominal wage rigidity.” Put simply, employers were loath to cut pay during and after the Great Recession. As a result, wages remained stagnant to make up for the pay cuts that never came, but businesses wanted to impose (Daly and Hobijn 2015). As the economy picks up, these pent-up wage cuts will dissipate, the gap will close, and we should see wages start to rise more strongly.

This lagging effect of economic recovery on wage growth is a recurring pattern (Daly and Hobijn 2014). We’ve seen in prior recessions that wage growth doesn’t tend to really pick up until the economy nears full employment. I’m therefore not particularly surprised that the acceleration in wage growth has been slow to materialize.
This fits in with the idea of "labour stockpiling" that I remember someone writing about a few years back (Kruggers maybe). The various FRB websites have a lot of great US macro articles free to read, by the way, in case you're into getting an education in that sort of thing.

WSJ RTE - Bernanke says stocks aren't expensive. Of course they're not, and only a dumbass like Shiller would say they are. Quote:
“Stock prices have risen rapidly over the past six years or so, but they were also severely depressed during and just after the financial crisis,” Mr. Bernanke wrote on the website of the Washington think tank. “Arguably, the Fed’s actions have not led to permanent increases in stock prices, but instead have returned them to trend.”
Goddammit it's been a secular bull market for years! Now can you all please stop piddling your frilly little pink panties?

Chronicles of Brodrick - check out the bullish action in Canada. Huh? Canada, you say? Pity!

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