The biggest week for economic data in the month last week ended with no change -- because markets had already changed. In the days before the monthly employment report (first Friday every month), typically nobody wants to buy bonds or mortgages for fear of a “tape bomb.” Tape as in antique reference to ticker tape; tape today the news scroll at the bottom of screens, “bomb” as in bad surprise, strong jobs. But this past week, bond buyers exceeded bond sellers nearly every day, the 10-year T-note dropping to 1.75 percent from its 1.93 percent April 26 high. Rates fall on slow economic news. Adding to the timing peculiarity, there was no negative economic news to account for the bond-buying. Spinners are all over last Friday’s job data, but there’s nothing there except a modest deceleration. Same in the other news, the ISM (Institute of Supply Management) survey of manufacturing in a stall, but services brightening. So, why lower rates? Chalk it up to the une...
- One way or another, pretty much everywhere is moving in slow motion.
- In the U.S., Europe, and Japan, promises of future social spending were made decades ago based on population and economic growth assumptions that did not happen. We have been funding those promises with debt growing far faster than population.
- We need more tax revenue and less spending, and we’ll be fine.