Recent Blog Posts
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The Times' Rorshach Geithner Story
Apr 27 20099:04am EDT -
Sinking Animal Spirits
Apr 27 20098:04am EDT -
Counter-cyclical Urban Policy
Apr 26 200910:04am EDT -
Be Your Own Counterfeiter
Apr 26 20099:04am EDT -
Being Tim Geithner
Apr 25 200912:04pm EDT -
Notes From a Press Conference Naif
Apr 25 20099:04am EDT -
What Good is the News?
Apr 25 20098:04am EDT -
Stressful Enough
Apr 24 20092:04pm EDT -
Not Regretting the Pound
Apr 24 20091:04pm EDT -
Introducing the New Ford Squeeze
Apr 24 20099:04am EDT -
Non-Economic Questions of the Day
Apr 24 20099:04am EDT -
The Stress Test Blind Alley
Apr 24 20098:04am EDT -
Happy Hour
Apr 23 20099:04pm EDT -
Recovery Without Rebalancing
Apr 23 20096:04pm EDT -
The Shape of Your Recession
Apr 23 20095:04pm EDT
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Payrolls: An Apology
Why did I pick today to resuscitate my extremely occasional series of blog entries on the uselessness and irrelevance of the payrolls report? In reality, it would seem that the report was responsible for the decimation of technology stocks, the capitulation of the market into the realization that recession is now more likely than not, and generalized fear that inflation is going to prevent the Fed from cutting interest rates aggressively.
Well, you win some, you lose some, I suppose. I could attempt a correlation-is-not-causation post, trying to say that the markets are moving in a random fashion and that any connection to this morning's payrolls report is entirely coincidental. I could, but that would be rather desperate, and a bit dishonest, to boot.
I don't think that the report changed a lot of investors' minds about the future of the economy - but then it didn't need to: it only needed to change the marginal investor's mind. And in practice there's very little difference between stocks dropping rationally in reaction to new information, on the one hand, and a panicked stock-market sell-off precipitated by a worse-than-expected-but-hardly-paradigm-shifting statistical release, on the other.
The fact is that anybody who sold stocks or bought Treasuries when they got the NFP news is smiling this afternoon, and anybody who ignored the report on the grounds of its uselessness and irrelevance is looking rather sheepish right now. So, um, sorry. My bad.
