tag:blogger.com,1999:blog-1110014885778996459.post8078285562350846544..comments2024-03-29T04:50:03.060-07:00Comments on Idiosyncratic Whisk: Today's bond reaction to the employment report is not as optimistic as it first appearsKevin Erdmannhttp://www.blogger.com/profile/07431566729667544886noreply@blogger.comBlogger4125tag:blogger.com,1999:blog-1110014885778996459.post-76871423375728320952015-10-03T19:08:14.987-07:002015-10-03T19:08:14.987-07:00I was not criticizing your post. All of your posts...I was not criticizing your post. All of your posts are extremely intelligent, moreover you "pioneered" the right way to look at housing costs. Benjamin Colehttps://www.blogger.com/profile/14001038338873263877noreply@blogger.comtag:blogger.com,1999:blog-1110014885778996459.post-10814288249702959922015-10-03T09:36:08.928-07:002015-10-03T09:36:08.928-07:00You're right, Benjamin. I thought it was inte...You're right, Benjamin. I thought it was interesting that the expected date of the first hike didn't move. But the rest of the post is weak.Kevin Erdmannhttps://www.blogger.com/profile/07431566729667544886noreply@blogger.comtag:blogger.com,1999:blog-1110014885778996459.post-80765700517401706232015-10-02T22:39:56.452-07:002015-10-02T22:39:56.452-07:00I agree with Scott Sumner and others that markets ...I agree with Scott Sumner and others that markets tell us a lot. On the other hand, maybe not every day, in every hour. <br /><br />I believe in efficient markets---but there are undervalued stocks due to information gaps, for example, or occasional market fads that can waylay market results. I supple even political upheavals could play a role (Russia in Syria?).<br /><br />In general, interest rates are very low (in terms of recent history) a sign the market expects little inflation, and also that capital is abundant. <br /><br />Another thought: Supplies of capital are entering the market in huge dollops, perhaps irregularly, thanks to sovereign wealth funds and other huge institutions (for that matter, the People's Bank of China has been buying gold). <br /><br />If there is "too much" capital ("too much money chasing too few deals") then we can expect low interest rates, even as central banks jigger things around. <br /><br />So, to sum up, I think it takes a few days, or even more, of the dust to settle sometimes. <br /><br />Besides, this view allows one to cite the market when it agrees with our position, and then to cite imponderables when it doesn't. The most important thing in macroeconomic discourse is to never change your mind. <br /><br /><br />Benjamin Colehttps://www.blogger.com/profile/14001038338873263877noreply@blogger.comtag:blogger.com,1999:blog-1110014885778996459.post-41176162294556947762015-10-02T15:56:55.183-07:002015-10-02T15:56:55.183-07:00You're thinking too hard. The path of short-te...You're thinking too hard. The path of short-term rates is considerably lower. Long-term inflation expectations went up (would not be the case if your labor theory were true). Emerging markets outperformed domestic markets (again, wouldn't be the case if this were about US labor pressure). Discount rate down, stocks up.Anonymousnoreply@blogger.com