Submitted by Thad Beversdorf via FirstRebuttal.com,
Let me say it has been a couple months since I’ve felt compelled to post which may account for the length of this latest piece but I hope and believe most will find it worth the full read. A coffee and 10 minutes (ok maybe 15…) are a perfect compliment to this piece.
Submitted by Jim Quinn via The Burning Platform blog,
Two months ago, and roughly 6 weeks before the Fed's first rate hike in 9 years, Janet Yellen warned that if the "outlook worsened, the fed might weight negative rates" adding that "negative rates could help encourage banks to lend."
Submitted by Peter Tchir of Brean Capital,
The Manufacturing Economy versus The Service Economy
As we start the new year, there is a debate raging within the market. No the debate isn’t whether there is weakness in the manufacturing economy, that is taken as a given, especially after Friday’s awful Chicago Purchasing Manager number of 42.9.
No, the debate boils down to this:
The bears will argue that
The U.S. economy has always done poorly when manufacturing has turned this weak
With the Fed hiking rates in order to signal a "return of confidence" to the economy, one - the most important - aspect of a recovering economy continues to be absent: rising wages.
As the following chart showing the annual growth in wages of production and non-supervisory workers (who make up 83% of the US workforce) reveals, wage growth is not only well below the Fed's goal of 4.5%, at 1.7% it is below the Fed's goal of 2% inflation, suggestion that on a real basis wages would be declining if the Fed had attained its 2% inflation mandate.