The word that first popped into my head this morning as I sat down to write was “droll.” I wanted to say the content of today’s writing was lacking pizzazz, in effect, boring. The problem I have, though, is I have long misunderstood the meaning of droll. I thought it meant dull, but, in fact, “dull” is its antonym, which means, I am backward on the meaning of the word. No matter, as the first topic for thought coming your way is boring. Nevertheless …
- Dimon, now Summers: There’s a liquidity problem.
We have heard these words before regarding the commercial paper market. Back in 2007-2008, folks were warning of a liquidity problem in the commercial-paper market, and for good reason –
- Direct issuers of commercial paper usually are financial companies that have frequent and sizable borrowing needs and find it more economical to sell paper without the use of an intermediary.
Now, the warnings are back, coming from no less than Larry Summers and Jamie Dimon, a former US Treasury Secretary and the CEO of JP Morgan, one of the largest banks in the world.
- Former Treasury Secretary Larry Summers said regulators should make a priority of addressing the problems of bond market liquidity, brought on by their very efforts to make institutions safer after the financial crisis.
- CEO Jamie Dimon who said recent volatility in the currency and Treasury markets was a “warning shot across the bow.”
Now, one would think warnings from these two bastions of knowledge in the financial world should be taken seriously, and they should, but with this particular “warning,” I have doubts about the actual immediacy of any threat, even as Summers speaks to it.
- I think there’s a danger that in their enthusiasm for keeping each individual institution safe that regulatory authorities will lose sight of keeping markets open and liquid, and I think that is a legitimate concern.
Yes, it is a legitimate concern, but right now the bond market appears liquid, as do currency markets. Keeping an eye on this, however, is a prudent thing to do.
- In an economy where wage growth has been virtually stagnant for almost six years, everyone is scanning the skies for the first sign of a pick-up.
I love the writing above. It has fluidity to it, a ring, if you will, and it is speaking to something I have mentioned several times in the last few months – rising wages.
- There were 1.86 people competing for every job opening in February, using data that’s not adjusted for seasonal variations. That compares with 2.76 people in the year before.
Overall,labor markets are tightening, and that is a good thing for the economy and the market.
- The number of job openings increasing to the highest level in February since January 2001.
Some, but not all, and the one that is most tight is a good one, one that speaks to high-paying jobs in a fast-growing area.
- The education and health services industry is seeing the tightest labor market, with just 0.9 unemployed people available per job vacancy.
The weakest industry for wage growth is construction, which is not great, as the construction industry is traditionally one of the larger employers in the US. My guess on that is that the pool of workers for that industry is a lot higher than the pool for the education and health-services industries. The point, however, is that on average wages are rising as more folks are working.
- The number of Americans filing new claims for jobless benefits rose less than expected last week and the four-week moving average of claims hit its lowest level since 2000, suggesting an abrupt slowdown in job growth in March was likely a fluke.
See what I mean?
Trade in the day; invest in your life …
