Wednesday, October 1, 2014

Markets Are Breaking Down

 
 
The transports have broken through a year long trend line with a decreasing MACD.  There is also the increase in volume on the sell-off.  
 
 
The Microcaps have broken through support and are moving lower, printing stronger bars on increasing volume.  Also note the increasing volatility.
 
 
The Russell 2000s are approaching long-term support.  Today's sell-off was on increasing volume with increasing volatility. 


Tuesday, September 30, 2014

Sadly, Ed Yardeni is the Wanker of the Day - wage stagnation edition

 - by New Deal democrat

Dr. Ed Yardeni has some clickbait up at his blog titled, The Wage Stagnation Myth.

Yardeni is a highly-regarded financial markets analyst, but this is just sad.

He writes that
There is a widespread myth that real incomes have been stagnating for many years.  That's apparently true based on real median income for households.... [but]
real pre-tax compensation per payroll employee (including wages, salaries, and supplements) is up ... 16.8% since the start of 2000.
Real wages and salaries in personal income is ... up 14.6% since the start of 2000.  Real average hourly earnings of production and nonsupervisory workers i sup ... 13.4% since the start of 2000.
 In the first place, like so many others, he starts by conflating wages and income, setting up a straw man.  No, Dr. Ed, the fact of wage stagnation is not based on income metrics, but on wage metrics.  To give you a head start, here are 7 of them I helpfully catalogued in a post only one month ago.

Secondly, note that all of Yardeni's metrics appear to be mean, not median, measures.  You remember the old saw about Bill Gates walking into a bar, and now the mean wealth of the patron is $1 billion.  That's what Yardeni does. When you measure in median, not mean terms, wage stagnation is blazingly apparent.

The only measure he cites which might possibly be a median measure ("real pre-tax compensation," he doesn't name the data series), includes "supplements." Whether these are management bonuses or e.g., health benefits, they hardly are contrary evidence.  We know that health cost inflation has soared for several decades.  That companies may have picked up some of these has nothing to do with actual wages.

That a premier Wall Street analyst is so blind to the blazingly bright evidence is, sadly, not shocking at all.






Housing sales and construction show slight improvement to stagnation


 - by New Deal democrat

I have a new post up at XE.com discussing this month's housing sales and construction releases.

There is a very slight uptrend, but by and large, the market has stagnated. I also comment on what I expect in the next 6 months or so.  Housing is crucially important, because more than anything else, it forecasts the economy 12-18 months out.