Via Charles Hugh-Smith of OfTwoMinds blog,
Strip away the centralized power that protects and funds cartels, and prices would plummet.
The mainstream narrative is "the problem is low wages." Actually, the problem is the soaring cost of living. If essentials such as healthcare, housing, higher education and government services were as cheap as they once were, a wage of $10 or $12 an hour would be more than enough to maintain a decent everyday life.
Dear Readers, I appeal to you four times a year. This is my quarterly call for your support of your site.
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In the first stage of the Trump Rally (from the election to year-end), investors appeared to hedge as the market rallied. However, since the start of the new year, Goldman Sachs' proprietary macro hedging indicator has traded along with equities, suggesting that investors are buying stocks and discarding protection. As Goldman's John Marshall and Katherine Fogertey explain, the Trump rally has changed the market - Investors Stopped Hedging.
As the Goldman duo notes, Long-dated liquid hedge costs at a multi-year low, and explains:
Markit's Services PMI tumbled to 5-month lows in February (down to 53.8) - erasing the post-Trump-bounce - as rates of expansion in activity, new work and employment all eased. The February drop in PMI is the largest in a year as Markit warns that "business optimism has mellowed.. and companies are becoming more cautious."
Of course that is the absolute opposite of what ISM Services reports - surging higher to a 15-month high at 57.6 (well above expectations)
With the Fed Funds future market pricing in an almost certain 25 bps rate hike on March 15 following a series of hawkish comments by Fed officials this week, hitting 90% as of this morning, up threefold in the past week...