Following up on the whole subsidy issue, GDP versus GDI though here with a determined eye on the Net Operating Surplus (NOS). The way this stuff is accounted for in the government’s (BEA) scheme makes it very confusing; the subsidies are subtracted from indirect taxes, therefore they reduce GDI. The more subsidies, the less aggregate income?It’s not done on purpose, [...]
One final note for 2017 with regard to the long end of the Treasury curve. It may seem as if the interest rate fallacy would combine with specific bouts of illiquidity to create falling yields during them. That is not always the case, and, in fact, a lot of times the opposite does occur. Take October 15, 2014, for example. [...]
The large selloff in UST on Friday has left many wondering what happened. While the jobs report was certainly a catalyst, it wasn’t really out of line with prior months. It’s not as if credit markets were suddenly awakened to the possibility that Yellen’s FOMC may do what it says, so I don’t think that the Establishment Survey provided any [...]
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