Ask Rande

Top 1839. Aug 17, 1999 9:50 AM

» RandeS - Bazdarich asks, "Where's the beef" when it comes to wage inflat

Bazdarich asks, "Where's the beef" when it comes to wage inflation. Interesting take on the data:

Where's the Beef?

-- posted by RandeS

Top 1840. Aug 17, 1999 10:47 AM

» KirkL - Brilliant Wage Inflation buster example!

Brilliant Wage Inflation buster example!

As a simple example, suppose there are two workers in year one, one making $10 per hour and one making $20. Suppose then in year two that the original two workers' wages remain the same but that a third worker joins the mix at an hourly wage of $20. "Wage inflation" in this example is zero, but average wages have risen from $15 to $16.67, an 11 percent increase. This simple example displays exactly the type of statistical quirk that is distorting hourly wages presently!

This is exactly what is happening too. We are exporting jobs that don't need a college education overseas that can be exported. We have nearly eliminated welfare so there are many people filling the low wage jobs remaining and not using as much resources and thus contributing to a productive economy. Some are working 2 low paying jobs as in the old days. We have lowered the barriers to immigration and let in a few 100K more people with college educations to work the $50K to $100K per yr jobs in the Silicon Valley which raises the high end. Somehow, the overall mix gives you the "average wage number" which doesn't reflect the sailboards being built in Romania for $16 in labor vs $300 US Labor which was preventing these from even being built... This Romanian labor content allows some boards to be built at a low cost at a good profit and not have the owner of the small sailboard shop raise prices for several yrs while his workers are getting nice raises every year for making the custom boards and ringing the cash register.

Just wonderful and shows why the only way to measure inflation is to measure inflation. 8)

-- posted by KirkL

Top 1841. Aug 17, 1999 10:59 AM

» RandeS - Kirk,

Kirk,

I'm going to quote you 'till the die I die on the one about inflation being the best indicator of inflation (with proper attribution, of course). Superb.

-- posted by RandeS

Top 1842. Aug 17, 1999 12:50 PM

» RandeS - Looks like the benchmark 30-year yield got all the way down to 6

Looks like the benchmark 30-year yield got all the way down to 6% before settling on 6.01%. Not to shabby for a day's work. Next hurdle is the 8/24-25 FOMC. What's needed there is the much-anticipated 25 basis point increase in the Fed Funds rate. Then back to econ-watch so the market can get on with handicapping the next meeting in Oct. Sigh. Just wish "econ-watch" was as visually entertaining as Bay Watch, since both seem to share the same old tired script.

-- posted by RandeS

http://quake.wr.usgs.gov/recenteqs/Maps/...

Top 1843. Aug 17, 1999 6:29 PM

» KirkL - Did you feel the Quake?

Did you feel the Quake?

The local news stations are talking about it.
Centered in Bolias

-- posted by KirkL

Top 1844. Aug 17, 1999 6:38 PM

» RandeS - We're not talkin' Turkey, but yes I felt it.

We're not talkin' Turkey, but yes I felt it. Before I look at your link or turn on the radio, I'm going to guess high 3 to low 4 on the Richter.

-- posted by RandeS

Top 1845. Aug 18, 1999 6:44 AM

» RandeS - Looks like today we're on "dollar watch.

Looks like today we're on "dollar watch." The buck dipped below 113 yen this morning. U.S. financial markets don't like this, to say the least.

-- posted by RandeS

Top 1846. Aug 18, 1999 1:15 PM

» RandeS - The market giveth and the market taketh.

The market giveth and the market taketh. After five straight up days, though, only the most unreasonable investor who believes stocks should only go in one direction can be too upset. Seems there's always something new to "worry" about and today it's the dollar. Lots of discussion on this in the past few weeks here at the Suite, so not a new issue for us. Something else to keep our eye on. Meanwhile, with the dollar around 112 vs. the yen, was amazed to see the relatively positive action on the long bond today. Many will say the 30-year yield ended the day today at 6.00%, but we know better -- it closed at 5.996%!!!

-- posted by RandeS

Top 1847. Aug 18, 1999 6:37 PM

» TONYBRIG - Weak dollar very bad for the Market

Weak dollar very bad for the Market.
Wizard agrees with you Rande.
Something like it would be bad news for Stocks.
Big-Time

Do you think it would be effective to change the
name of this thread to Rande Spiegelman or something with your last name in it?

vbolhh

-- posted by TONYBRIG