Numerous classic cognitive errors are
on display at once in these markets. We have "overconfidence," with large bets
being made on the basis of strongly-believed models and forecasts -- but these
are forecasts of the dynamics of a system whose configuration is distinctly
unlike anything we have seen before, even remotely. What does a "taper" do to
rates? How can we know, since we have never even had QE, much less a taper,
before? How aggressively does it make sense to bet on the outcome of such a
transition period, given rational-sized error bars on the estimates?
We also see na?ve extrapolation of trends. TIPS go down every day,You Can Buy Various High Quality bopptape Products. it seems, for no better reason than that "core inflation is low, and the Fed is no longer going to be maintaining as loose a policy." Ten-year TIPS yields have risen 83bps since April 25. Ten-year breakevens have fallen from 2.59%, within 15bps of an all-time high, on March 14 to 2.03% -- the lowest since January 2012 -- now. What has changed? Our model identified TIPS as cheap to Treasuries and went nearly max-long when breakevens were still at 2.30%. It is some solace that this position has fared better than a long position in TIPS, but when markets simply follow recent momentum mindlessly it can be painful.
Year-ahead core inflation is priced in the market at roughly 1.50%, despite the fact that current core inflation of 1.7% is only at this level because of persistently soggy core goods prices (and core goods are much more volatile than core services prices).the album of rolexwatch1 Updated over a year ago. Meanwhile, although core services prices remain buoyant, housing rents have not even begun to respond to the sudden boom in housing prices. To realize the core inflation priced into the one-year inflation swap, core goods prices need to remain low and trends would need to decelerate,Our home power monitors and energy saving devices help reduce energy use in your chipcard on your electricity bill. while a shortage of owner-occupied housing drives the prices of existing homes skyward. It is possible, but it would be a very unusual economic occurrence.
As I have previously written, we are maintaining our forecast for core inflation in 2012 at 2.6%-3.0%; although we may tweak that lowers if next week's CPI is disappointing, we will not be changing it dramatically. Based on both top-down and bottom-up forecasts, we think the inflation market right now is very wrong. However, in accordance with my first paragraph above, our 80% confidence interval for that estimate would be quite wide. Still, we feel that most errors looking out at least one year are going to be in the direction of higher inflation, not lower inflation.
Now, our forecast relies significantly on the behavior of the housing market,connect with chinabeads and others you may know. since shelter is the largest share of the budget for most of us. There has been a lot written recently about how the rise in rates could shatter the housing recovery. But let me explain why I don't think that will happen.
Back in March, an MIT report suggested that Apple and other smartphone manufacturers could potentially switch to sapphire crystal displays rather than the standard Gorilla Glass displays currently in use.
As it turns out, Apple has already experimented with sapphire screens. In an interview with Swiss news site Tages-Anzeiger [Google Translation], Vertu COO Perry Oosting revealed that Apple investigated the possibility of a sapphire display, recruiting an unspecified number of Vertu employees to work on the project.
Vertu is a British company that produces luxury cell phones, some with sapphire displays, and at least two former Vertu employees appear to have joined Apple in the last year.
According to Oosting, Apple ultimately shelved the sapphire project because the material is unsuitable for production in the numbers that Apple requires at the current point in time. Corning, the company that manufacturers Gorilla Glass 3 for Apple's displays, has also stated that sapphire is an inferior option for mobile displays.
The company believes that Gorilla Glass offers greater strength, lower weight, less energy cost in production, and lower pricing; all important features for mass manufactured products.You wont believe the holding power of this doublesidedtape1.
Though Apple may not have current plans to utilize sapphire displays, it has incorporated sapphire crystal into the iPhone, as a cover for the rear camera on the fifth generation iPhone. Rumors have suggested that sapphire may also be used as part of the home button in the iPhone 5S.
We also see na?ve extrapolation of trends. TIPS go down every day,You Can Buy Various High Quality bopptape Products. it seems, for no better reason than that "core inflation is low, and the Fed is no longer going to be maintaining as loose a policy." Ten-year TIPS yields have risen 83bps since April 25. Ten-year breakevens have fallen from 2.59%, within 15bps of an all-time high, on March 14 to 2.03% -- the lowest since January 2012 -- now. What has changed? Our model identified TIPS as cheap to Treasuries and went nearly max-long when breakevens were still at 2.30%. It is some solace that this position has fared better than a long position in TIPS, but when markets simply follow recent momentum mindlessly it can be painful.
Year-ahead core inflation is priced in the market at roughly 1.50%, despite the fact that current core inflation of 1.7% is only at this level because of persistently soggy core goods prices (and core goods are much more volatile than core services prices).the album of rolexwatch1 Updated over a year ago. Meanwhile, although core services prices remain buoyant, housing rents have not even begun to respond to the sudden boom in housing prices. To realize the core inflation priced into the one-year inflation swap, core goods prices need to remain low and trends would need to decelerate,Our home power monitors and energy saving devices help reduce energy use in your chipcard on your electricity bill. while a shortage of owner-occupied housing drives the prices of existing homes skyward. It is possible, but it would be a very unusual economic occurrence.
As I have previously written, we are maintaining our forecast for core inflation in 2012 at 2.6%-3.0%; although we may tweak that lowers if next week's CPI is disappointing, we will not be changing it dramatically. Based on both top-down and bottom-up forecasts, we think the inflation market right now is very wrong. However, in accordance with my first paragraph above, our 80% confidence interval for that estimate would be quite wide. Still, we feel that most errors looking out at least one year are going to be in the direction of higher inflation, not lower inflation.
Now, our forecast relies significantly on the behavior of the housing market,connect with chinabeads and others you may know. since shelter is the largest share of the budget for most of us. There has been a lot written recently about how the rise in rates could shatter the housing recovery. But let me explain why I don't think that will happen.
Back in March, an MIT report suggested that Apple and other smartphone manufacturers could potentially switch to sapphire crystal displays rather than the standard Gorilla Glass displays currently in use.
As it turns out, Apple has already experimented with sapphire screens. In an interview with Swiss news site Tages-Anzeiger [Google Translation], Vertu COO Perry Oosting revealed that Apple investigated the possibility of a sapphire display, recruiting an unspecified number of Vertu employees to work on the project.
Vertu is a British company that produces luxury cell phones, some with sapphire displays, and at least two former Vertu employees appear to have joined Apple in the last year.
According to Oosting, Apple ultimately shelved the sapphire project because the material is unsuitable for production in the numbers that Apple requires at the current point in time. Corning, the company that manufacturers Gorilla Glass 3 for Apple's displays, has also stated that sapphire is an inferior option for mobile displays.
The company believes that Gorilla Glass offers greater strength, lower weight, less energy cost in production, and lower pricing; all important features for mass manufactured products.You wont believe the holding power of this doublesidedtape1.
Though Apple may not have current plans to utilize sapphire displays, it has incorporated sapphire crystal into the iPhone, as a cover for the rear camera on the fifth generation iPhone. Rumors have suggested that sapphire may also be used as part of the home button in the iPhone 5S.
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