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A lack of data, a lack of rationality?

| Posted by: Paul Donovan | Tags: Paul Donovan

The economic data calendar is pretty quiet today. Friday's US employment report confirmed reasonable labor market strength. Contrary to some media comments, Friday's employment report said nothing about wages (wages are not part of the employment report).

The Trump Twitter Feed was quiet over the weekend, although there were comments promoting the sunlit uplands that the new tax legislation is supposed to produce. This view is somewhat undermined by media reports that the current Senate proposals will create marginal tax rates of over 100%.

North Korea has been muttering that any blockade represents a declaration of war. Markets tend not to pay attention to North Korean mutterings. Several countries have been muttering support for the World Trade Organization. Markets tend not to pay attention to WTO politics. Some UK government ministers have been muttering that the Brexit deal is not really a deal. Markets tend not to care at all.

The bubble to end all bubbles continues. Cryptocurrencies only have value if accepted as currencies. However, they cannot be used for the most important transaction in an economy, and cryptocurrency supply can only rise and never fall (making them a poor store of value). To date, using cryptocurrencies requires (effectively) a simultaneous asset sale and purchase of goods or services.