Negative Yields And The Current Strength In The U.S. Labor Market
“If financial theory is grounded in one principal, it’s the ‘time value of money,’ or the idea that individuals prefer consumption today over consumption in the more uncertain future…Currently 25% of the European sovereign bond market is trading with a negative nominal yield…Why would anyone pay to lend money? There are several reasons.” 1) “you expect a significant decline in prices,” and 2) buy low, sell to the ECB. “What does a persistent regime of negative yield mean for investors?” 1) “income-producing stocks in Europe have a natural edge,” 2) strong dollar, and 3) “they are suppressing U.S. rates. It’s hard to reconcile a sub-2% U.S. 10-year yield with the current strength in the U.S. labor market.” …
Black Swans Shocking Headlines And The Current Weakness In The U.S. Labor Market
“US companies scaled back hiring sharply last month, adding to evidence that the economy has lost momentum since the start of the year….Payrolls increased by 126,000 in March (alt), well below Wall Street expectations (244,000) and snapping a 12-month spell of gains above 200,000…The previous two months’ readings were also revised down by a net 69,000, while the unemployment rate was unchanged at 5.5 per cent…The data pushed the dollar down to the $1.10 mark against the euro, while the yield on the 10-year note fell 8 basis points to 1.84 per cent…None of the 98 economists polled by Bloomberg had forecast such a low figure.” “Now you’ll see economists ratcheting down their job creation expectations for next month, next quarter, the full year etc. They’ll also be pushing back their expectations for when the Fed will first raise interest rates from June to September or even sometime in 2016. The one thing they won’t be doing is ending the forecasting nonsense.” Meanwhile: Are The Best Days Of The Recovery Behind Us? Why Are Wages Growing Slowly Despite McDonald’s, Wal-Mart Raises? Bottom Line: Ouch.
Teraflops Of Tweets And Jay-Z
“Scientists at the firm, Two Sigma Investments LLC, program itcs machines to cull torrents of information from sources like newswires, earnings reports, weather bulletins and Twitter…the firm has more than 100 teraflops of power — more than 100 trillion calculations a second — and more than 11 petabytes of storage, the equivalent of five times the data stored in all U.S. academic libraries.” Meanwhile, “people lost maybe as much as a few hundred thousand dollars because, for a brief stupid minute, they thought Tesla was introducing…a watch? No, of course they didn’t. They thought Tesla was introducing a thing called the Model W, and they didn’t read any further than the headline, and they bought Tesla stock hoping the Model W, whatever it was, would be a huge success…And when I say ‘people’ I mean mostly ‘algorithms,’ which are faster and more literal than humans.” Meanwhile, “shares in music streamer Aspiro, a majority of which was bought earlier this month by hip-hop star Jay-Z, soared on Tuesday to as much as 11 times the price at which remaining shares will be acquired in a compulsory squeeze-out only days away…buyers [look] set to face losses of some 90 percent…’There are reasons to suppose that some have not noticed the communication around the bid.’”
Global: Krugman On Summers And Bernanke
Also, here’s a neat gif of Warren Buffett making a lot of money.
“While the amount of marketable Treasuries outstanding has almost tripled since 2007 to $12.5 trillion at the end of last year, trading has fallen 11 percent.”