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The highlights from the statement, which we’ll update as we make our way through it: Read more
Hi, I’m looking for someone who completes me and… wait, I’m being told that this isn’t an online dating profile. And that I should keep it professional. And put on a shirt.
Born and raised in Tampa, university at Georgetown, and with the exception of a year spent backpacking abroad I’ve been in New York for the past decade. Before joining Alphaville I spent a little more than two years as a reporter at Dow Jones Financial News covering investment banking, asset management, and private equity. Along the way I’ve written freelance pieces on a variety of other topics from behavioural psychology to Muay Thai, the latter also being a personal interest that involves frequently getting kicked in the shins (and torso, and head). When my guard is down I’ll admit to having attended journalism school.
Prior to becoming a journalist, I was an analyst for three years at the JPMorgan Private Bank. I worked for a team that had clients in Mexico and the Southern Cone, and I ran an internal newsletter for other analysts at the bank, overseeing a small staff.
I tend to write mostly about US macroeconomic issues, with daily excursions into other topics. Find me also on Tumblr and as a recurring talking head on the Marketplace Weekly Wrap, NPR’s Here & Now, the Yahoo! Daily Ticker and a few other places.
Have we been early or just wrong? Read more
Our pal Josh Brown has a hilarious post highlighting the pessimism bias in how the fall of oil prices has been discussed in the US:
This past June, crude oil prices were hitting highs above $110 a barrel and the narrative was that this was why stocks were selling off. The S&P 500 had a weekly correlation of .55 with oil, meanwhile, and had actually spent most of the year rising with it. So not only was the “story” of why stocks were dropping false, the data was as well. Read more
Back in 2011, inflation climbed above the Fed’s 2 per cent target, but the FOMC resisted the impulse to tighten monetary conditions. Long-run inflation expectations hadn’t risen to worrying levels, and Ben Bernanke perceived that a price spike led by oil was likely to be “transitory”.
A handy chart from BCA Research (click to embiggen):
The first thing to be said about the macroeconomic impact of Obama’s executive order on immigration is that it will be small but not trivial.
The second thing to be said is that although the impact will be small, it will also be positive. Read more
Split in half the six years from the start of the US recession at the end of 2007 through the end of last year, and consider them as a pair of three-year periods.
In the first period — from 2007 through 2010, and which we’ll refer to as the crisis years — wealth inequality in the US spiked while income inequality actually contracted quite aggressively, the latter a reversal of the pre-recession trend. “Crisis years” isn’t a perfect label, as the recession actually ended in mid-2009, but it’s good enough for our purposes here. Read more
FT Alphaville and the FT’s US markets team are hosting a night of drinks and trivia in New York on the evening of Wednesday, November 19th.
The last time we did this (in London), we grilled you on the eurozone sovereign debt crisis, the complexities of synthetic ETFs, seasonal adjustments in economic indicators, and other proudly nerdy topics. Read more
To our readers, thanks so much for subscribing to The Closer. This is the final daily email from FT Alphaville, but you can continue receiving expertly curated missives from the Financial Times via First FT. We encourage you to have a look and subscribe. Thanks again!
FURTHER FURTHER READING Read more
The third quarter was the second straight three-month period showing a favourable trend for US nominal wage and salary growth, though a lot more acceleration is needed before it’s anything to celebrate:
When city-dwellers moan about their high cost of living, they often elicit the unsympathetic retort that they should shut up and praise the ghost of Jane Jacobs for the cultural vibrancy of their neighborhoods, the lucrative jobs, and the artisanal pizza.
Living in a great city is a consumption good, you whinging ninnies — you SHOULD have to pay for it! Why do you think you’re entitled to live wherever you want?
It’s hard to say which was more surprising — the passages in Janet Yellen’s inequality speech last week that appealed to American values, or the topics she chose to omit entirely.
To start with the latter, the interdependent relationship between inequality and economic growth has become a mainstream topic of economic debate in recent years, and a very contentious one. Read more
Two sets of charts from BCA Research with unclear implications:
From the transcript of St Louis Fed president James Bullard’s interview with Bloomberg Television:
I also think that inflation expectations are dropping in the U.S. And that is something that a central bank cannot abide. We have to make sure that inflation and inflation expectations remain near our target. And for that reason I think a reasonable response of the Fed in this situation would be to invoke the clause on the taper that said that the taper was data dependent. And we could go on pause on the taper at this juncture and wait until we see how the data shakes out into December. So… continue with QE at a very low level as we have it right now. And then assess our options going forward. …
The abundance of worrying news continues growing — the collapse of bond yields and equity markets, falling inflation and inflation expectations all across the developed world, the ongoing slump in commodity prices.
Whether such tumultuous activity in markets accurately reflects the updated prospects for the real economy is a difficult question. The doom-iest news has been coming out of Europe (ex-UK), where concerns of a triple-dip recession do appear warranted given the latest economic indicators from — not to mention the intransigence by policymakers in — Germany. But the prospects for Japan and emerging markets, many of whose fortunes are tied to commodity cycles, have also become more disquieting. Read more
(The chart frames the upper and lower forecasts of the central tendency, which removes the highest three and lowest three forecasts of the FOMC as a whole. The red line is the midpoint between the two.)
Starting in 2009, the midpoint of the central tendency projections for the long-run unemployment rate climbed from 4.9 per cent to 5.6 per cent during the next three years. Read more
Dancing, or better yet as the beginning of my Investment Outlook suggests, being asked to dance, seems to have become an important part of my life over the past month or so. Having first been asked by my wonderful wife, Sue, and now by Dick Weil and Janus from a business standpoint, I write to you today from my desk in a new Janus office in Newport Beach, California. Read more
The FT’s video producer demanded that we wear his outrageously over-sized jacket to appear presentable in this conversation with US markets editor Mike MacKenzie. The least you can do is have a look:
Have a great weekend! Read more
The US employment situation report for September was better than expected but not quite as good as its headline numbers suggest.
First the good news. We can take comfort that the August numbers were very likely anomalous, a blip of the kind that should be expected now and again. Jobs growth had slowed for two straight months prior to September, but the upward revisions now show that July and August were better than first believed, with a respective 243,000 and 180,000 jobs created. Read more
Consider some of the global non-policy forces that might now be weighing on price inflation:
– Aging demographics, high debt loads, weak nominal wage growth and persistent output gaps in advanced economies. Read more