S&P cuts U.S. ratings outlook to negative

From Ritholz's blog a week ago, Fade the Inflation Hysteria

Unit Labor Costs and CPI sport a high +0.88 correlation:

unit-labor-costs-and-cpi.png


Average Hourly Earnings and CPI have a +0.79 correlation:

average-hourly-earnings-and-cpi.png


An interesting revelation is that low unemployment doesn't lead to overall inflation in the economy but rather asset bubbles, ie tech stocks in the 90's and the housing/credit boom in the '00's.

Stop looking for higher yields, ain't happening.
 
Quote from EMRGLOBAL:

Everyone Else is saying S&P is full of shit and that it's not going to lower Ratings.

man, I feel for you guys who make your living from trading the US markets. I guess you strictly trade via Technicals because the FINANCIAL NEWS is a fucking joke.
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US media is seriously lacking. The commodities section at the WSJ only talks about oil and gold day in day out.
 
One week later, the market is higher, bond yields lower (3.36 vs 3.5 when they announced).

Conclusion: Contact your neurosurgeons to remove that walnut sized gland from your head.
 
Quote from Covertibility:

One week later, the market is higher, bond yields lower (3.36 vs 3.5 when they announced).

Conclusion: Contact your neurosurgeons to remove that walnut sized gland from your head.
More...

Is it opposite day or week or something? New negative outlook => higher markets and lower yields?

That's not what I learned in school!
 
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