Despite endless streams of Fed Speakers proclaiming, in one form or another, that "we are at, or close to, full employment;" many in America - judging by the election of President Trump - are not feeling as exuberant as the jobs data implies they should be. The SF Fed itself now agrees: "the labor market may not be quite as tight as the headline unemployment rate suggests."
Authored by Michael Pento via PentoPort.com,
Surveys of both consumers and businesses show there is an extreme level of confidence regarding future GDP growth. Consumer confidence is now at its highest level since 2001. Small and medium-sized business owners, the driving force of growth in the economy, appear downright giddy; as the NFIB Small Business Optimism Index recently soared to its highest level since 2004.
Government dysfunction is at its worst. We voted them in. We have no one to blame but ourselves.
Granted, the choices were abysmal. But the Republican and Democratic parties,
with no third party competition, can continue to run dysfunctional governments,
whittling away our dominant global position until the cracks of our broken government
becomes abundantly clear. As a society,
we play right into their subterfuge of keeping us so upset at the other party,
Via Global Macro Monitor blog,
The Fed tightens on Wednesday and bonds rally. What the hay?
GaveKal, Jeff Gundlach, and Jim Bianco nailed it in that every spec and their mother are/were short 10-year Treasuries.
Source: Quandl (see here for interactive chart)
But this is only a small part of the story: The global bond markets are broken.
Last week, we presented readers with the latest note from SocGen strategist. Albert Edwards, who explained why after so many years of false rate hike starts, the market not only responded to last week's hike in a dovish manner - interpreting last Wednesday's 0.25% hike as a 0.25% rate cut- but as Goldman Sachs showed previously, the dovish reaction was one of the strongest ones since the financial crisis, in other words: "the market no longer believes the Fed." This is what Edwards said, citing his FX colleague Kit Juckes: