tag:blogger.com,1999:blog-6616959642391988608.post4166055024584909537..comments2024-03-28T00:18:25.641-07:00Comments on Calafia Beach Pundit: Record lows in TIPS yields reflect deep pessimismScott Grannishttp://www.blogger.com/profile/14028519647946868684noreply@blogger.comBlogger24125tag:blogger.com,1999:blog-6616959642391988608.post-12014666082069225542011-08-04T11:49:40.979-07:002011-08-04T11:49:40.979-07:00Interesting site (index mundi), but I suspect the ...<i>Interesting site (index mundi), but I suspect the GDP per capita figure uses nominal GDP, not real GDP</i><br /><br />I'd have to agree that the numbers are not inflation-adjusted, based on an inspection of the underlying numbers (also available via pull-down menus), which appear to be generated by dividing PPP GDP by the population in the respective years. This means that the numbers tendAnonymousnoreply@blogger.comtag:blogger.com,1999:blog-6616959642391988608.post-32227452641123538682011-08-04T11:36:48.725-07:002011-08-04T11:36:48.725-07:00Ben: I have seen calculations adjusting for per ca...<i>Ben: I have seen calculations adjusting for per capita and other factors in Japan, which make things look not so bad.<br /><br />But your numbers are off the boards--please provide cite.</i><br /><br />Based on the following sources, it appears that Japan and US nominal GDP per capita growth rates were 2.71% and 3.60% respectively, between 1990 and 2010:<br /><br />http://en.wikipedia.org/wikiAnonymousnoreply@blogger.comtag:blogger.com,1999:blog-6616959642391988608.post-83769491112974645102011-08-04T11:27:40.960-07:002011-08-04T11:27:40.960-07:00Interesting site (index mundi), but I suspect the ...Interesting site (index mundi), but I suspect the GDP per capita figure uses nominal GDP, not real GDP, although that wouldn't make much of a difference since Japanese inflation has been zero or negative. More importantly, it measures Japanese GDP per capita in dollar terms, not yen terms. The yen rose about 20% vs the dollar over the past decade, so this is adding almost 2% per year to the Scott Grannishttps://www.blogger.com/profile/14028519647946868684noreply@blogger.comtag:blogger.com,1999:blog-6616959642391988608.post-82914847210025265652011-08-04T11:11:13.778-07:002011-08-04T11:11:13.778-07:00Ben: I have seen calculations adjusting for per ca...Ben: <i>I have seen calculations adjusting for per capita and other factors in Japan, which make things look not so bad.<br /><br />But your numbers are off the boards--please provide cite.</i><br /><br />The growth I cited is only for the last 10 years:<br /><br />Japan: http://www.indexmundi.com/g/g.aspx?c=ja&v=67<br /><br />US: http://www.indexmundi.com/g/g.aspx?c=us&v=67Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-6616959642391988608.post-51650037229674784082011-08-03T15:38:14.968-07:002011-08-03T15:38:14.968-07:00Low real yields in Japan track very weak growth, b...Low real yields in Japan track very weak growth, but not, in the case of Japan, easy money. Inflation expectations are negative (i.e., deflation is expected), as reflected in the -30 bps spread between 5-yr JGBs and 10-yr inflation-adjusted Japanese bonds.Scott Grannishttps://www.blogger.com/profile/14028519647946868684noreply@blogger.comtag:blogger.com,1999:blog-6616959642391988608.post-10914148840765685652011-08-03T10:20:07.822-07:002011-08-03T10:20:07.822-07:00"Very low real yields such as these are sympt..."Very low real yields such as these are symptomatic of a very weak economy and very accommodative monetary policy, which keeps inflation expectations alive."<br /><br />Yet Japan has had very low real yields for 20 years or so. Surely, you cannot contend investors in Japan have inflationary expectations. <br /><br />Does anyone in America have inflationary expectations? Who?Benjamin Colehttps://www.blogger.com/profile/14001038338873263877noreply@blogger.comtag:blogger.com,1999:blog-6616959642391988608.post-52152161648588234062011-08-03T10:11:02.223-07:002011-08-03T10:11:02.223-07:00The real yield you are referring to is a long-term...The real yield you are referring to is a long-term average. At any given point in time, actual real yields may vary considerably from their normal, or average rate. Thanks to TIPS we now what real yields are in real time; 10-yr TIPS real yields are only 0.3% right now. Very low real yields such as these are symptomatic of a very weak economy and very accommodative monetary policy, which keeps Scott Grannishttps://www.blogger.com/profile/14028519647946868684noreply@blogger.comtag:blogger.com,1999:blog-6616959642391988608.post-89673025093446169742011-08-03T09:52:40.622-07:002011-08-03T09:52:40.622-07:00Scott-
I have a question.
The interest rate on ...Scott-<br /><br />I have a question. <br /><br />The interest rate on US 10-year bonds is currently 2.62%.<br /><br />Yet you say investors are expecting inflation in the 2.5-3 percent range.<br /><br />How can this be? <br /><br />Back in the gaslamp era, when I was in college, I think I was taught investors wanted 2 percent real yield on long-term gilts. <br /><br />This suggest to me investorsBenjamin Colehttps://www.blogger.com/profile/14001038338873263877noreply@blogger.comtag:blogger.com,1999:blog-6616959642391988608.post-8981067778180667942011-08-03T09:07:57.963-07:002011-08-03T09:07:57.963-07:00Zhang-
I have seen calculations adjusting for per...Zhang-<br /><br />I have seen calculations adjusting for per capita and other factors in Japan, which make things look not so bad.<br /><br />But your numbers are off the boards--please provide cite.Benjamin Colehttps://www.blogger.com/profile/14001038338873263877noreply@blogger.comtag:blogger.com,1999:blog-6616959642391988608.post-51861547216222505332011-08-03T05:23:26.740-07:002011-08-03T05:23:26.740-07:00I wonder if 20 years ago in Japan--did anyone expe...<i>I wonder if 20 years ago in Japan--did anyone expect two decades of deflation and weak growth?</i><br /><br />Actually, real per capita GDP growth has been higher for Japan than for the US. We've grown 42%, whereas they've grown 60%. GDP growth has been higher for the US because we've admitted large numbers of immigrants, whereas Japan's population growth has flat-lined, due toAnonymousnoreply@blogger.comtag:blogger.com,1999:blog-6616959642391988608.post-91370648215254900882011-08-02T20:00:40.972-07:002011-08-02T20:00:40.972-07:00^
I also just noticed on the Fed's website it ...^<br />I also just noticed on the Fed's website it hasn't been that high since early February.<br /><br />Can't help but wonder if that also had something to do with today's selloff.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-6616959642391988608.post-72500621265844565412011-08-02T19:56:45.079-07:002011-08-02T19:56:45.079-07:00Don't know if anyone else noticed this, but th...Don't know if anyone else noticed this, but the federal funds rate skyrocketed Friday and Monday.<br /><br /><a href="http://www.newyorkfed.org/markets/omo/dmm/fedfundsdata.cfm" rel="nofollow">Federal funds rate</a><br /><br />It would be tempting to attribute that to something to do with the debt ceiling debate, but on Monday it was already announced a deal was made, so why would it still goAnonymousnoreply@blogger.comtag:blogger.com,1999:blog-6616959642391988608.post-55305048112652168072011-08-02T18:38:31.677-07:002011-08-02T18:38:31.677-07:00Here's someone I think Benjamin might like:
D...Here's someone I think Benjamin might like:<br /><br /><a href="http://seekingalpha.com/instablog/926530-stock_creeper/176842-dyseconomics-the-new-macro-econ-and-the-greatest-economic-boom-ever" rel="nofollow">Dyseconomics: The New Macro Econ and the Greatest Economic Boom Ever</a>Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-6616959642391988608.post-6532195210066293662011-08-02T18:23:10.029-07:002011-08-02T18:23:10.029-07:00Benjamin : Reuters, West's mid-life crisis poi...<b> Benjamin</b> : Reuters, West's mid-life crisis points to power shift east<br /><br />"The world's industrialized nations, burdened with aging populations and deeply in debt, face years of slow economic growth that could speed the shift of economic clout to the East."<br /><br />http://www.reuters.com/article/2011/08/02/us-global-economy-trend-idUSTRE7715FD20110802 <br /><br Williamhttps://www.blogger.com/profile/04418491109912775561noreply@blogger.comtag:blogger.com,1999:blog-6616959642391988608.post-55119551475295058222011-08-02T16:46:15.156-07:002011-08-02T16:46:15.156-07:00“I can live with moderate inflation if it means bo...“I can live with moderate inflation if it means boom times again.”<br /><br />Wisest words ever spoken.Benjamin Colehttps://www.blogger.com/profile/14001038338873263877noreply@blogger.comtag:blogger.com,1999:blog-6616959642391988608.post-49124498220542292662011-08-02T16:40:16.636-07:002011-08-02T16:40:16.636-07:00Great cartoon. Captures the idiocity succinctly.Great cartoon. Captures the idiocity succinctly.Public Libraryhttps://www.blogger.com/profile/00017383928897945054noreply@blogger.comtag:blogger.com,1999:blog-6616959642391988608.post-75862123194980721572011-08-02T15:36:05.803-07:002011-08-02T15:36:05.803-07:00Unknown: Perhaps you have something there. On big...<b>Unknown</b>: Perhaps you have something there. On big "downdays" I usually wonder if some hedge fund - or funds - have gotten it badly wrong. If so, that news should come out over the next day or so.Williamhttps://www.blogger.com/profile/04418491109912775561noreply@blogger.comtag:blogger.com,1999:blog-6616959642391988608.post-88373149871151791702011-08-02T15:32:40.046-07:002011-08-02T15:32:40.046-07:00Unknown:
The market is realizing that, juts like ...Unknown:<br /><br />The market is realizing that, juts like Japan, deficit spending will not lead to growth. But, just like Japan, tight money will not lead to growth either.<br /><br />BTW, money is tight if it does not stimulate growth. Money is tight if you see deflation.<br /><br />Signs of deflation are a commercial real estate market with values at 2001 levels, or a S&P 500 below 1999 Benjamin Colehttps://www.blogger.com/profile/14001038338873263877noreply@blogger.comtag:blogger.com,1999:blog-6616959642391988608.post-15275001958657397462011-08-02T14:42:02.193-07:002011-08-02T14:42:02.193-07:00Could today's sell-off have been some sort of ...Could today's sell-off have been some sort of treasury short covering rally? With the debt ceiling issue now resolved and the A-OK given to hold treasuries again, maybe everyone was trying to buy back some treasuries they'd sold off the past few weeks, funding it by selling their stocks??<br /><br />Just an idea.<br /><br />I can't think of any other reason why there'd be such a Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-6616959642391988608.post-72527199886148060462011-08-02T14:15:40.958-07:002011-08-02T14:15:40.958-07:00The ongoing economic depression along Main Street ...The ongoing economic depression along Main Street USA is unlikely to improve anytime soon -- even Federalism is finding itself mired in decline as the nation's lawmapers continue to debate austerity measures ad nauseum -- the worst of all possible worlds is appearing before us in the form of no default, no monetary expansion, and no austerity -- said another way, expect nothing significant toMcKibbinUSAhttps://www.blogger.com/profile/10545798495680527622noreply@blogger.comtag:blogger.com,1999:blog-6616959642391988608.post-38950250377761884552011-08-02T13:57:27.442-07:002011-08-02T13:57:27.442-07:00I suspect that the world is looking also at the sl...I suspect that the world is looking also at the slow down in Japan's growth following the earthquake; the European Union's PIIGS debt issues and their slowing growth; and countries like China and Brazil among others raising interest rates to cool inflationary pressures which is slowing their growth.<br /><br />Hopefully all these well known issues are beginning to resolve and their growthWilliamhttps://www.blogger.com/profile/04418491109912775561noreply@blogger.comtag:blogger.com,1999:blog-6616959642391988608.post-67783918772740291852011-08-02T13:47:25.853-07:002011-08-02T13:47:25.853-07:00I sense we are moving into a new era, one in which...I sense we are moving into a new era, one in which the old bromides and guideposts will not work.<br /><br />I don't know how we can say investors expect 3 percent inflation when the Treasury can borrow money for five years at 1.28 percent. <br /><br />I wonder if 20 years ago in Japan--did anyone expect two decades of deflation and weak growth? They were the most vigorous economy on Earth, Benjamin Colehttps://www.blogger.com/profile/14001038338873263877noreply@blogger.comtag:blogger.com,1999:blog-6616959642391988608.post-73435981523038148492011-08-02T13:38:26.199-07:002011-08-02T13:38:26.199-07:00Libor-OIS today 15....high in 2010
34...Frifay bef...Libor-OIS today 15....high in 2010<br />34...Frifay before Lehman 84...broderohttps://www.blogger.com/profile/12296214283216386700noreply@blogger.comtag:blogger.com,1999:blog-6616959642391988608.post-62308037473185014112011-08-02T13:33:54.329-07:002011-08-02T13:33:54.329-07:00S&P Low for 2010 1022 7/02...TTM GAAP earnings...S&P Low for 2010 1022 7/02...TTM GAAP earnings 67.91....P/E 15.04 Low for ( Now) 2011 1254 8/02 TTM GAAP earnings 83.19 P/E 15.07broderohttps://www.blogger.com/profile/12296214283216386700noreply@blogger.com