Bond Selloff in Perspective

The recent decline in bond prices has been significant, but actually not on the highest end of selloffs since 1960. The selloff of a 10 year zero coupon treasury over a 10 month time period is in the bottom distribution, but not extreme by any means:

Despite the unprecedented actions through quantitative easing and the market’s recent interpretation that the fed might lift off the gas pedal, the pace of the selloff is actually a bit slower than it was in 2003:

So I guess for now, we can stop concerning ourselves with early 1980’s price action. We just aren’t there yet.

Read the New York Fed’s full report.

Posted in Markets.

Tagged with bonds, fixed income, hyperinflation, market crash.

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By SurlyTrader – August 6, 2013

Noteworthy News – August 5, 2013

Economy:

This Is What Would Happen If Fast-Food Workers Got Raises – Business Week

Part-Time America – Wall Street Journal

U.S. Employers Add 162K Jobs; Unemployment Rate Falls to 7.4% – Time

Consumer Spending in U.S. Rose in Line With Forecast in June – Bloomberg

The King of Human Error – Vanity Fair (Michael Lewis)

Here’s why economists hate software patents – Washington Post

Markets:

The $4 Million Teacher – Wall Street Journal

Foreigners buy nearly 75% of new homes in inner London – Financial Times

Michigan County Pulls Bond Offering – Wall Street Journal

American Homes 4 Rent Falls 2.5% After $705.9 Million IPO – Bloomberg

Politics:

U.S. Cuts Take Increasing Toll on Job Growth – NY Times

President Obama’s Plan For Corporate Tax Reform: A ‘Grand Bargain’ Or Simply Another Name For An Old Proposal? – Forbes

Countering devaluation: Govt slaps temporary ban on gold import – The Express Tribune

Posted in Economics, Markets, Media, Politics.

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By SurlyTrader – August 4, 2013

Income Mobility: Causation or Correlation?

A new study was just released that is considered the most detailed study of income mobility yet. One of their most significant findings:

Finally, some of the strongest predictors of upward mobility are correlates of social capital and family structure. For instance, high upward mobility areas tended to have higher fractions of religious individuals and fewer children raised by single parents

Unlike most studies that are released, the authors were kind enough to be honest with their results:

We caution that all of the findings in this study are correlational and cannot be interpreted as causal effects.

What is factual is that many areas in the southeast of the United States show very little upward mobility including the large metropolitan areas of Atlanta and Charlotte: