Morning Report: The Fed intends to start tapering soon

Vital Statistics:

  Last Change
S&P futures 4,394 39.2
Oil (WTI) 80.82 0.39
10 year government bond yield   1.54%
30 year fixed rate mortgage   3.20%

Stocks are higher this morning as earnings season begins in earnest. Bonds and MBS are up.


The FOMC minutes pretty much confirmed what we already knew – that that the Fed will begin its tapering process shortly – either at the November or December meeting.

In the discussion of the economy, the job market and inflation seem to have differing views. The Fed participants thought that employment would continue to accelerate, and that the labor force participation rate would increase. So far, that is not happening. The Fed is not sure why this is happening, but it offered explanations like COVID resurgence, school and childcare.

On the inflation front, there is some concern that the identifiable COVID bottlenecks are translating into higher inflationary expectations, although the consensus seems to be that inflation will moderate back to 2% or so once these bottlenecks have worked out.

Overall, the explanation for the worker shortage seems to be largely boilerplate, and it seems unsatisfying. The Great Resignation seems to be something different, and so far no one seems to have a good explanation for it. Much of it is falling down ideological lines.


Initial Jobless Claims fell to 293,000 last week. We are still elevated, however we are well above pre-COVID levels.


Inflation at the wholesale level came in below expectations, however the numbers are still pretty high. The producer price index rose 0.5% MOM and 8.6% YOY. Ex-food and energy, it rose 0.2% MOM and 6.8% YOY.

26 Responses

  1. I guess the price isn’t right yet.


    • The left may have overplayed its had on COVID fearporn. Now it may bite them in the ass.

      The economy will probably slow to an obama-esque crawl, along with carter-esque inflation.

      malaise 2.0


  2. Entertaining interview with the Editor in Cheif of Babylon Bee:

    “The Christians Who Mock Wokeness for a Living

    The Babylon Bee, an online satire publication, has become a popular destination for Christians disaffected with megachurch culture and right-wingers who crave clever commentary about the hypocritical left.

    By Emma Green”


    • The interviewer couldn’t have been a more perfect progressive foil in not getting the jokes.

      The left, really, truly lives in such a bubble that it has no concept of how it appears to those outside of the bubble.

      It really is a red pill / blue pill thing


      • Yep. This was perfect:

        “Green: You guys wrote an article in January 2020 that was shared roughly 3 million times, claiming that Democrats called for the American flag to be flown at half-staff when the Iranian general Qasem Soleimani was killed in an American strike.

        What makes this funny? I know that’s the worst question to ask somebody who writes jokes.

        Mann: It’s funny because General Soleimani died and then they called for flags to be flown at half-mast. Get it?

        Green: But that’s what I’m saying. Besides just saying the joke again, what makes it funny?

        Mann: Do you want me to explain the joke to you? Because the joke is that General Soleimani died and Democrats were sad.

        If you don’t know why that’s funny, then you’re not the audience for the joke. The funniest part is that it got fact-checked because it was so believable that Democrats would do that. That’s a real honor.”


        • Green: Does that impose any ethical responsibility on you?

          Mann: Not any more than any other comedian whose joke gets mistaken for reality. Does SNL bear responsibility because people still think Sarah Palin said she could see Russia from her house?

          and there it is. you can’t do that. only we can do that.


        • Biden is the left’s version of Trump, only a less competent administrator but better and not Tweeting at 3 am.


        • Correct. But it’s not just “only we” but that “you’re not allowed to make jokes at the expense of your betters and more superiors”. They punch down all the time-Trump jokes are in part jokes about his supporters. Same with Palin jokes. Most of them.

          Progressive humor is constantly punching down. All the jokes are basically fraught with an undercurrent of “you’re dumb and we are smart”.

          Sometimes they tackle bigger ideas, like the cultural bubbles people live in, observational humor about human nature—but a lot of the humor is straight up “punching down”, and much more so than “conservative” humor.


        • This is the key point right here:

          “But I reject the punch-down, punch-up dichotomy. The main litmus test of comedy is, “Is it funny?” We’re going to continue to make fun of people, no matter if it’s seen as punching up or punching down.

          Would Jesus joke about the things that The Babylon Bee jokes about? Yeah, I think Jesus would make fun of the most powerful man in the world, the president of the United States. I think he would call to repentance the LGBTQ community. I think he’d make fun of major corporations. I think he’d make fun of universities. The real irony right now is that the left controls a ton of our cultural institutions and still thinks they’re oppressed.”


        • Yes. But again I’d argue the left is much more prone to punch down in their humor. Progressive comedians are much more likely to punch down—especially when they are “joking” about politics.

          And it’s the premise of the joke is almost always “we’re smart and they’re dumb”. The AOC joke cited-even though it literally says “she’s so stupid” is about unearned power and authority, the celebrity politician class, and so on.

          Not sure they get that. Or want to get that.


        • do you recall a few (maybe more than a few) years back I circulated the 24 types of libertarians on the PL. it’s hilarious.

          and then someone did a rejoiner .. 24 types of progressives. it wasn’t as funny. it was okay but the reaction wasn’t about that. it was a critique of how it wasn’t accurate, etc. just couldn’t for a second laugh at themselves.

          and, of course, simpsons did it.


        • Oh I remember. It was part and parcel with the lying that always went on there.


        • The author tries to explain why a gag was fact-checked as something reasonable instead of admitting that, yeah, that doesn’t sound like the roll of fact-checking.

          There should be another form of online information flagging such as: hey, you know this is a joke, right?-ing.


  3. Worth noting:


  4. GREAT thread on current shipping issues surrounding the Port of LA, along Beach and Oakland.


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