Feels like we've made bottom, but, who knows for sure - at least we've held 110. I would venture a guess that tomorrow will bring some short covering, and may even continue up until the employment numbers are out.
OT:
A 25 basis point rate hike sure feels built into the market. All the focus on the employment numbers reminds me of when Wall St. was obsessed with M2 as 'the' number to watch back in the Volcker/early Greenspan era. Basically, no one talks about M2 anymore, and I will predict that in a few years, no one will be talking about the employment numbers like we are today. Milton Friedman argued the Fed should just be a computer programmed to grow the money supply at 2%/year anyway. Hell, I could write that app in Visual Basic and run the damn thing from Excel. Now that would be cool: running the country's money supply from Excel97. Oh yeah, don't remind me, Gates has already done it!
Bottom line: the economy is just too complex to measure on a couple of statistical metrics. OK - let's say wage inflation becomes real, won't a negative savings rate have to swing back to positive. Actually, the only other era when we experienced a negative savings rate was during the depression, hence, one might argue we are in a depression right now based on this one measure. Hah!
Maybe a more innovative way of setting the Feds fund rate and discount rate is to just use a delta from the 30 yr bond. In effect, that is the way the bond market sends a message to the Fed - so why not just let the bond market do Al's work for him? That would be too easy.
That's all. |
