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Strategies & Market Trends : Mish's Global Economic Trend Analysis -- Ignore unavailable to you. Want to Upgrade?

To: Robert Douglas who wrote (6014)	5/10/2004 4:39:56 PM
From: Haim R. Branisteanu	Respond to of 116555

the media trumpets job growth but rate would not rise just because job growth to the contrary interest rates should go down due to more earnings , taxes and less demand for debt. Interest rates rise because of inflation and a slow down in refinancing which removes the need of maturity balancing of fix income pool of money which are huge

To: Robert Douglas who wrote (6014)	5/10/2004 6:06:01 PM
From: NOW	Respond to of 116555

the market is pricing in the effects of rate hikes perhaps. says nothing certain about jobs,

To: Robert Douglas who wrote (6014)	5/10/2004 6:14:45 PM
From: yard_man	Respond to of 116555

you can look at Eurodollar futures to see what hikes are discounted -- the jobs spin is just that -- spin. Higher interest rates short term, long term or otherwise don't imply more jobs

To: Robert Douglas who wrote (6014)	5/10/2004 6:25:34 PM
From: yard_man	Read Replies (1) \| Respond to of 116555

the specific issue addressed in the Wall Street Journal has in fact been debunked in detail if you subscribe to contrary investor -- he looked at increases in jobs by sector a little while back -- job gains are occuring in lower wage positions -- but there is a larger issue. How more jobs are moving into the service sector -- you have to know how to distinguish macro/micro effects and short/long run effects. For the guy who get a service sector job after losing a mfring job s.t. the service job is paying more (it doesn't happen this way in reality, because the guy that lost the mfring job was probably being paid more than the average today and probably, if he is "lucky" enough to get a job in the service sector, finds one paying less than the average for services) -- well suppose it does happen that way -- he is now in services and making a bit more money -- good for him, right?? It's good from a micro perspective -- but what about the shifting of large numbers of jobs from mfring to services -- is it simply the aggregate growth in wages that tells us whether everyone is better off?? Of course not!! First, even in the short run prices may be increasing more rapidly for what the wages are spent on -- there may be benefits to consider -- but underneath it all, is the long run health of the economy I would posit that the financial services, banking, mortgage and other associated services -- making up an ever larger and larger size of the economy is not making us richer, except perhaps in nominal terms --

To: Robert Douglas who wrote (6014)	5/10/2004 7:06:49 PM
From: mishedlo	Read Replies (1) \| Respond to of 116555

The market is pricing in several rate increases by the end of the year which means the market believes the strong jobs reports will continue. Do you disagree with what the market is saying? the market is an indicator of sentiment. No more no less. What did it say at the 2000 top? The 2002 bottom. Last sept bond yield soared only to come crashing down hard. Was the maket right then? Now? If you take the view that the market is never wrong then what happened? Buffet's view is the market is a short term voting machine and a long term weighing machine. That seems more like it to me. If I accept your aparent logic, the market believed strong jobs last sept-dec and did not for jan-march but does again now. WTF? Finally, you need to look back at lots of posts here. The unemployment rate is phony as can be. It is only low because the participation rates has fallen like a rock in spite of a growing population. It is closer to 10% if you add in part time for economic resasons, discouraged workers, people who used up all their benefits ect. Finally even the latest jobs reports are ASSUMED. The BLS assumes we created those jobs. Did we? Is that what the bond market believed or was the bond market just finally sick of rising copper, oil, food, and steel? Even IF we created those jobs, how many were part time jobs, people working two jobs out of desperation etc etc etc? One final thought, if interest rate hikes slow down housing, what do you think the job picture will look like? This economy is toast. And if the stock market is saying anything at all, then that is probably it. Cash out refis and business tax credits just went poof. What does this economy do for an encore? Mish