Here We Go Again

<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgSrkLKmelmgSgGsBTFhbnFramx2ndZP5ZG0A4kiCRZRaQl6EAwg2GUUGQT4MaGUgnp0yHzV8ldV4cV2QRJCJ39E1BEjzYE9fPpinNZS6R0GhDT3cJ8-pWBdqY666MGWugvV_HV6DkK9AA/s1600/Employment+vs.+New+Orders.jpg" imageanchor="1"><img border="0" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgSrkLKmelmgSgGsBTFhbnFramx2ndZP5ZG0A4kiCRZRaQl6EAwg2GUUGQT4MaGUgnp0yHzV8ldV4cV2QRJCJ39E1BEjzYE9fPpinNZS6R0GhDT3cJ8-pWBdqY666MGWugvV_HV6DkK9AA/s320/Employment+vs.+New+Orders.jpg" /></a><br /><span style="font-size: x-small;">Click to enlarge.</span><br /><br />Just look at that stock market setting new inflation adjusted highs! It's a sight to behold! Amazing!<br /><br />Oh, wait. In my nearly infinite exuberance, I appear to be using the wrong data set.<br /><br />The chart above actually shows the ISM Non-manufacturing Employment Index divided by the ISM Non-manufacturing New Orders Index. What was I thinking? Sloppy, sloppy, sloppy.<br /><br />Don't let it concern you that the non-manufacturing employment index is growing faster than its new orders index. I'm sure it will be totally sustainable this time! We can just extrapolate that out to infinity and call it good. No business cycle worries at all! None! Nada! ZIRP! Just keep believing in the dreams!<br /><br /><b>Dream #1:</b> The stock market only goes up!<br /><b>Dream #2:</b> Long-term bond yields only go up (even during ZIRP)!<br /><br />This is not investment advice. As always, just opinions.<br /><br /><b>Source Data:</b><br /><a href="http://research.stlouisfed.org/fred2/graph/?g=qHs">St. Louis Fed: Custom Chart</a>

Here We Go Again

Click to enlarge. Just look at that stock market setting new inflation adjusted highs! It's a sight to behold! Amazing! Oh, wait. In my ...

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