http://www.crossville-chronicle.com/community-news-network/x864265646/Job-market-tilting-toward-workers
The vacancies data for June are scheduled for release Tuesday. Average hourly
earnings, in contrast, increased just 2 percent in July from a year earlier,
barely keeping up with the rise in inflation. Employers in general have been
"pretty stubborn" about increasing wages, said Jeffrey Joerres, executive
chairman of ManpowerGroup, a Milwaukee-based staffing company with $20.3 billion
in revenue last year. That may be about to change as the pool of available
candidates shrinks. "You can see a little anxiety among employers," he said. "I
can feel the inflection point is coming."
What inflation? Where?
About a year early but may be starting Wage Inflation in the US?
Wednesday, August 13, 2014
Wednesday, July 2, 2014
The truth behind the last 15 years is starting to become clearer to everyone
Labor arbitrage has stolen demand by not creating wealth in a one to one or 1+ fashion by exporting technology.
"The crux of the problem is income inequality.Reducing rates won't make much difference.Inflation can be raised by giving handouts to the poor,they r sure going to spend it.Reducing rates won't help as long wealth is concentrated.2-3 long decade of globalization resulted in a surge of labour supply from asia as people moved from rural to urban or industrial centres.This structural change kept wage inflation low ,but owners of capital gained a lot.The savings glut that AEP keeps talking in a simultaneous environment of credit binge is due to this structural inequality.The have nots kept on piling credit and the haves did not know what to do with surplus wealth ,of course apart from lending to those who cannot pay.Thankfully this cycle has run its course.As labour market tightens in Asia and costly fuel makes transportation a significant cost the abnormal competitiveness gap would reduce giving labour bargaining power.The focus should be on fiscal policy rather than monitary policy."
"The crux of the problem is income inequality.Reducing rates won't make much difference.Inflation can be raised by giving handouts to the poor,they r sure going to spend it.Reducing rates won't help as long wealth is concentrated.2-3 long decade of globalization resulted in a surge of labour supply from asia as people moved from rural to urban or industrial centres.This structural change kept wage inflation low ,but owners of capital gained a lot.The savings glut that AEP keeps talking in a simultaneous environment of credit binge is due to this structural inequality.The have nots kept on piling credit and the haves did not know what to do with surplus wealth ,of course apart from lending to those who cannot pay.Thankfully this cycle has run its course.As labour market tightens in Asia and costly fuel makes transportation a significant cost the abnormal competitiveness gap would reduce giving labour bargaining power.The focus should be on fiscal policy rather than monitary policy."
Thursday, May 22, 2014
Time to sell Leveraged Loans and High Yield Bonds, exited 1-3yr bonds and 5 yr intermediate
I've exited short term bonds SHY (1- 3yr) and some medium term CIU and SHY.
Fed will raise rates before it makes any significant move in reducing QE and/or unloading its balance sheet.
Now it looks like it's time to exit leveraged loans EFR and high yield bonds HYG too.
http://www.ft.com/cms/s/0/f9992ce2-e11e-11e3-b59f-00144feabdc0.html#ixzz32TdpEY6P
The search for yield is creating a dangerous environment for investors, with less call
Financial markets are reaching a tipping point and typically that means most financial asset prices will decline.
Increasingly it seems developed countries will get closer to balanced budgets, tax offshore havens to do this, in coordination.
In short term I like treasuries 7yr+ and cash. i like my house, real assets.
it's worth considering the possibility of a crash, brief deflation, followed by high inflation shortly thereafter. in essence that's my portfolio 7yr+ treasury will appreciate in a crash as will optionality of cash and trade weighted FX value of USDs. Then a quick shift to equities and assets that do well in an inflationary period. Inflation is such a vague word however. Not sure if i'm a realist or an optimist or a fool but we may see a very tight labor market in the US in coming years.
That global company profit margin reversion to the mean from 12% to 6% in addition to the transfer of wealth from an aging generation will mean, a lot, lot of money to spend.
What will do well? Labor. you can't print labor, you can't import it, there will be less of it. What do workers get paid in dollars. What will everyone want when SHTF, cash, the optionality of cash is increasing rapidly.
Many that have left the workforce will not return. Those that will, will take years to retrain.
Fed will raise rates before it makes any significant move in reducing QE and/or unloading its balance sheet.
Now it looks like it's time to exit leveraged loans EFR and high yield bonds HYG too.
http://www.ft.com/cms/s/0/f9992ce2-e11e-11e3-b59f-00144feabdc0.html#ixzz32TdpEY6P
The search for yield is creating a dangerous environment for investors, with less call
Financial markets are reaching a tipping point and typically that means most financial asset prices will decline.
Increasingly it seems developed countries will get closer to balanced budgets, tax offshore havens to do this, in coordination.
In short term I like treasuries 7yr+ and cash. i like my house, real assets.
it's worth considering the possibility of a crash, brief deflation, followed by high inflation shortly thereafter. in essence that's my portfolio 7yr+ treasury will appreciate in a crash as will optionality of cash and trade weighted FX value of USDs. Then a quick shift to equities and assets that do well in an inflationary period. Inflation is such a vague word however. Not sure if i'm a realist or an optimist or a fool but we may see a very tight labor market in the US in coming years.
That global company profit margin reversion to the mean from 12% to 6% in addition to the transfer of wealth from an aging generation will mean, a lot, lot of money to spend.
What will do well? Labor. you can't print labor, you can't import it, there will be less of it. What do workers get paid in dollars. What will everyone want when SHTF, cash, the optionality of cash is increasing rapidly.
Many that have left the workforce will not return. Those that will, will take years to retrain.
Retail Store Space Closures 2005 - 2014
Does this look like a strong recovery? I know we shop at Amazon and online more but, this is a slowdown in spending.
Monday, April 21, 2014
Thursday, April 10, 2014
How will the USD react when Renminbi (Chinese Yuan) is introduced into the global market
What will happen to the US Dollar when the Renmbinbi because the 4th major trade currency? Well let's look at the introduction of the EURO, the Euro share of trade after 2002, and the US dollar after 2002. Correlation isn't causation but....
Thursday, April 3, 2014
Keep an Eye on The Fed
With Bernank gone there are 3 more nominations pending for the 7 member FED.
http://www.stltoday.com/business/local/fed-board-member-stein-announces-resignation/article_dd68a39d-68c8-5d66-9b63-d68b83363609.html
Currently, there are three Obama nominations pending before the Senate including Stanley Fischer, a former head of Israel's central bank who Obama has nominated as vice chairman. Fischer would succeed Janet Yellen who in February became Fed chair, the first woman to hold the position in the Fed's 100 year history.
Just a guess here but I predict the FED will increasingly look like a 7 pack of Dove soap. ZIRP til mid-term elections.
I'd love to see a graph of 'FED independence' at least from the rest of the political branch, bank influence, well you know. I have heard it from the horse's mouth, "Do you really think a bunch of poorly paid PhDs are making the decisions. The brightest are at the banks and they telegraph directions to the Fed." At least that is how it used to work. Ah financial repression, now what should a retiree invest in for some income...
http://www.stltoday.com/business/local/fed-board-member-stein-announces-resignation/article_dd68a39d-68c8-5d66-9b63-d68b83363609.html
Currently, there are three Obama nominations pending before the Senate including Stanley Fischer, a former head of Israel's central bank who Obama has nominated as vice chairman. Fischer would succeed Janet Yellen who in February became Fed chair, the first woman to hold the position in the Fed's 100 year history.
Just a guess here but I predict the FED will increasingly look like a 7 pack of Dove soap. ZIRP til mid-term elections.
I'd love to see a graph of 'FED independence' at least from the rest of the political branch, bank influence, well you know. I have heard it from the horse's mouth, "Do you really think a bunch of poorly paid PhDs are making the decisions. The brightest are at the banks and they telegraph directions to the Fed." At least that is how it used to work. Ah financial repression, now what should a retiree invest in for some income...
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