Open thread August 7, 2015 Dan Crawford | August 7, 2015 7:13 am Tags: open thread Comments (45) | Digg Facebook Twitter |
Another “good” Jobs report this morning. The report confirms that the Fed will make a move in September with the first (small) rate rise in 8 years.
Separately, the Fed’s Now Cast of GDP (it’s been remarkably accurate so far) is indicating 3Q growth of only 1%.
What to make of this? It looks like a bump in the road is ahead.
The Fed Now Cast:
“The first GDPNow model forecast for real GDP growth (seasonally adjusted annual rate) in the third quarter of 2015 was 1.0 percent on August 6. The model projects that lower inventory investment will subtract 1.7 percentage points from third quarter real GDP growth. Real GDP grew 2.3 percent in the second quarter according to the advance estimate from the U.S. Bureau of Economic Analysis.”
Unemployment steady at 5.3% Real GDP slowing from 2.3% 2nd Qtr to preliminary 1% 3rd Qtr. So obviously confirmation that it is time for the Fed to start raising interest rates.
Why? I guess because the Confidence Fairy is crying out “Feed Me!”
Not only that, core inflation less than 2% (actual inflation close to 0 over the last year). Wages are up about 2% over the last year. I don’t see any reason to raise rates.
“Yet some economists and demographers who have studied Mexican immigration suggest that stricter security at the border could actually increase the number of undocumented immigrants in the country. One group of researchers estimates that by 2010, increased border enforcement over the decades had increased the number of unauthorized migrants in this country by 44 percent.”
If this is so, then, maybe we should give thought to making the border with Mexico open to Mexicans only. They could move freely back and forth through designated check points — thinning out to the point of manageability all the other illegal immigration which now hides among the movement of millions of undocumented Mexicans. Make things much easier for the border patrol which would be much less inundated with numbers.
Be infinitely more humane for Mexican families too who are now sealed on this side of the border once they get here.
Denis I am an Open Border guy by inclination. But have to wonder how tightly controlled Mexican identity papers are, particularly in these days of cartels running wild and having all too many apparent connections/influence with local and national officials.
I now live 40 miles from the border in a majority hispanic city (Las Cruces, New Mexico) with a mixture of folk whose families came here with the Conquistadores 450 years ago and every migration since and so I fully get the concept. On the other hand El Paso Texas (35 miles away) now has one of the lowest murder rates in the U.S. while Juarez (across a wall and an often dry Rio Grande River from E.P.) has one of the highest in Mexico and so I am not sure how many people on this side of the border, even or especially those whose families came from Ciudad Juarez, would just welcome open entry to Mexicans. That is for every cousin visiting for a holiday you might have two or three cartel contract murderers. Juarez is a dangerous place, especially for women for whom there is a near epidemic of unsolved killings.
Webb – Confidence fairy needs to be fed? By a % rate rise? Were you being sarcastic?
The Fed has been saying for months that rates will rise in the fall. The consequences of the impending actions has already being felt. Brazil, China, Mexico, Australia, Canada and Russia all have seen their currencies weaken with the expectation of higher US rates. So it is a global phenomenon.
Look at US stocks. Flat – some sectors have been hit hard. Chinese stocks have fallen 30%.
Then there is US consumer confidence. This from 7/28:
The Conference Board Consumer Confidence Index®, which had improved in June, declined in July. The Index now stands at 90.9 (1985=100), down from 99.8 in June. The Present Situation Index decreased moderately from 110.3 last month to 107.4 in July, while the Expectations Index declined sharply to 79.9 from 92.8 in June.
It’s the expectations that are of concern.
Me? I’m scratching my head on why the Fed needs to act now. There are significant downside risks. The Fed’s own model is flashing a red light.
I am perfectly serious. There has been consistent pressure from inflation hawks to increase rates sooner rather than later and very often explicitly posed as a confidence measure rather than due to any specific sign of inflation taking off in the near term. You might not like the mocking term ‘Confidence Fairy’ but along with his ally the ‘Invisible Bond Vigilante’ identifies a consistent line of argumentation not just since the current regime of ZLB but in decades before that it is the Fed’s job to supply the market with the confidence that they will avoid policy that would trigger a bond selloff by foreign holders or a refusal to continue purchasing U.S. Treasury debt.
If it makes you feel better and is a better fit with your analysis fell free to all these people the ‘Expectations Fairies’. So yes I was being sarcastic. About an entire complex of policy mavens that believe that any positive signs in the way of better wages for workers is a dangerous warning about damaging inflation. By which they mostly mean damaging to their portfolios and fixed rate income returns rather than the economy at large. They profit when interest rates are high and wage driven inflation low, which combo is best served by just squelching wages all along.
Dean Baker has posted more than once that one of the benefits of ACA is that more people can CHOOSE to work part time now that they can get healthcare without working fulltime. A feature which some of the press have reported as a bug. Certainly it is a feature that people who are forced to retire early get subsidies.
I am not sure than I should be able to get subsidies if I choose to retire early, but if I schedule my income for that purpose, I can. Is that a feature or is it a bug?
Arne: “I am not sure that I should be able to get subsidies if I choose to retire early, but if I schedule my income for that purpose, I can. Is that a feature or is it a bug?”
I doubt there are many people choose to retire early who would have so little in retirement income that they would qualify for subsidies.
Even so, I would say it is a feature, not a bug. The retiring employee will be replaced by someone who is not now employed, who is probably receiving unemployment and/or food stamps and/or Medicaid. I would rather we subsidize the man who chooses retire early than the man whose future is at risk because he cannot find a job.
Bkrasting: “Another ‘good’ Jobs report this morning.”
“Good”? Looks fantastic to me.
We have a total of 101,000 MORE people employed in July than in June.
We have a total of 769,000 FEWER people working part-time.
That means that there were 870,000 more FULL-time jobs in July than in June!!
What more do you want?
“I doubt there are many people choose to retire early who would have so little in retirement income that they would qualify for subsidies.”
I don’t need to live on a borderline budget to have borderline income. If I use the money Suze Orman told me to put away and supplement that by withdrawing principle only from my Roth, I can live for two years on ZERO income. If I arrange to have $20-30K of “income”, I can get a nice subsidy for twice that long before I need to start in on my 401k.
Without an incentive, there would be no reason to rearrange my income, but there is an incentive.
Then more power to you Arne. There will always be a few who take advantage of the system in ways that were not intended by it’s designers.
I just don’t see it as that big of a problem, and the government won’t be subsidizing the person who takes your job after you retire.
“We have a total of 769,000 FEWER people working part-time.”
Ok, I can’t find this. Instead I see:
“The number of persons employed part time for economic reasons (sometimes referred to as involuntary part-time workers) was little changed in July at 6.3 million.”
Arne my reading of Baker on this doesn’t have the issue turn on “subsidy” vs “no subsidy” but instead on “insurable” vs “not insurable”.
One of my co-workers in my last full time job was actually quite wealthy from his previous career in commercial real estate and subsequent careful investments. But he and I worked in a mid-level job as far as pay but high stress one overall not only despite but because he had a blood vessel issue that put him at great risk of stroke and required some surgery. Why did he keep working even though he lived in a beautiful house on a high cost island community and had a perfect second career as a luxury tour organizer and guide?
Because the County insured him despite is pre-existing condition. Which was serious enough that he probably couldn’t have gotten private insurance at any price. So he was stuck in a shitty job until he was Medicare eligible.
He almost certainly wouldn’t have qualified for subsidies, along with his investments his wife had a full 30 year pension from the State and he was vested under the County pension plan. But until the advent of must issue community rating he would have been on bad medical incident from poverty.
To get political for a second this may be one reason employers are still resistant to single payer and committed to employer based insurance even though the former would taken on its own almost certainly pencil out better for them. Because the latter allows them to retain their most skilled and experienced employees without actually having to promote them or give them big pay raises. Because before ACA you could be fully vested in a pension and still handcuffed to your job by the benefits.
Arne: “The number of persons employed part time for economic reasons (sometimes referred to as involuntary part-time workers) was little changed in July at 6.3 million.”
Two things: first, you are looking only at “part-time for economic reasons” (a 180k drop), not at ALL part-time workers (that 180k plus another 589k for other reasons); and second, you are running into a significant-digit problem (a 180k drop does not show up is 6.3 million).
Please look at the bottom of Table A: http://www.bls.gov/news.release/archives/empsit_08072015.htm
You are no doubt correct that the feature is that people who are ready to retire should not have to work just to get insurance, but it should apply to people who are not as wealthy as your coworker. If your coworker had average retirement wealth then he would be getting a small subsidy. Is the fact that he would have an incentive to maximize the subsidy during transition to retirement a bug?
Arne I am thinking on that. But as of yet can see no particular reason to separate out that factor from all the other myriad factors that go into things like retirement planning. If your income between retirement and Medicare eligibility is less than 400% of FPL then you could get a subsidy. But the same would be true if you just ditched your job as a corporate attorney or accountant to hang your own shingle. There might be all kinds of considerations that would go into that, losing a company car or a dental plan (because routine dental is not a necessary coverage item under ACA) and all of that would go into the decision process. I don’t really see the difference between any of that and structuring withdrawals from my IRAs in a way that qualifies me for an ACA subsidy.
Almost anything can be gamed out and it is often a difficult call when someone gets right up to the bounds of a rule designed to ensure fair play. So I guess I would need to have a more specific case on which to pass judgement here. As stated I don’t feel like I can come up with a general and comprehensive answer.
Bruce, your story brings up another issue, why should everyone else pay for his insurance via “must-issue”? If he is a higher risk, he should be paying a higher premium.
At some point, he was diagnosed with this problem. The insurance policy in force at that time should be required to pay for any costs resulting from that problem. If I have an automobile accident and then change policies, the policy in force at the time of the accident is on the hook to pay the damages, even if those damages are not discovered until after I am on the new policy.
“[This] may be one reason employers are still resistant to single payer and committed to employer based insurance even though the former would taken on its own almost certainly pencil out better for them. Because the latter allows them to retain their most skilled and experienced employees without actually having to promote them or give them big pay raises. Because before ACA you could be fully vested in a pension and still handcuffed to your job by the benefits.”
A very interesting idea. Most big companies, however, are self-insured (although the insurance may be managed by one of the usual suspects). I wonder how the age of their workforce affects their costs. There is age discrimination in hiring — which is why it is difficult for those “seasoned saints” to get hired.
Warren so you are suggesting that if I am working for a small employer when I am diagnosed with cancer that all future medical costs should be billed back to that plan even if I have moved on to other employment?
What if this condition is congenital? What if my current employer’s insurance insists that this kind of cancer is slow developing but has side effects that should have been recognized by me or my doctor in my even earlier job? Or back when I was in college? or The Navy? Does the college health plan or the military automatically have to pick up the coverage? Or am I just out of luck because of a preexisting condition?
The ACA was designed so that insurance companies could no longer make money by denying care by shifting responsibility elsewhere or nowhere. Or of using an illness to jack up premiums so high that customers would be forced to drop coverage. Your plan would not only enshrine this but make the system even more complicated and expensive by putting every past insurer potentially on the hook even for customers who had not paid premiums or had premiums paid on their behalf for years or decades.
And the fact that large employers are self-insured doesn’t effect the argument at all, they are still bound by the same actuarial calculations, it is just that at some scale it pencils out to internalize the risk of outlier claims rather than insure them. And if anything your age discrimination argument parallels and strengthens mine. In fact I fail to see what point you are trying to make with either.
I am not interested in the stock markets.
I am intensely interested in the commodities markets.The Fed’s threat to raise interest rates is scaring commodity traders. That is a good thing.
Depressed wages deserve depressed prices.
JimH: “The Fed’s threat to raise interest rates is scaring commodity traders. That is a good thing. Depressed wages deserve depressed prices.”
I don’t invest in commodities, so I do not understand your statement.
My understanding was that raising interest rates increased fears of inflation, so people would buy gold and silver and other commodities and drive the prices up.
What am I missing?
Speculation with borrowed money.
Here is some historical data for oil prices versus the Fed Funds Rate. When the rates were low, the price of oil went up more rapidly and when rates went up the rate of change for the price of oil fell.
Year ———— Inflation adjusted ———— Percent oil ———————— Effective FED Funds Rate
——————— 2014 dollars——————— price increase ———————Percent, from monthly
2002 ———— $29.92 —————————————————————————1.667
2003 ———— $35.55 ————————-— 18.817 —————————— 1.128
2004 ———— $47.05 —————————- 32.349 ———————————— 1.349
2005 ———— $60.45 —————————- 28.480 ————————————3.213
2006 ———— $68.28 —————————- 12.953 —————————— 4.964
2007 ———— $72.99 ————-—————- 6.898———————————— 5.019
2008 ———— $100.01 ————————— 37.019 ———————————— 1.928
2009 ———— $58.76 ————————— -41.246 ———————————— 0.16
2010 ———— $77.11 ————————— 31.229 ———————————— 0.175
2011 ———— $91.39 ————————— 18.519 ———————————— 0.102
2012 ———— $88.95 ————————— -2.670 ———————————— 0.140
2013 ———— $92.41 ————————— 3.890 ———————————— 0.108
From 2002 to 2005 the economy was such a mess that the Fed kept interest rates low. During that time oil prices rapidly rose from $29.95 per barrel to $72.99 per barrel. Oil prices continued to go up in 2006 and 2007 but at a much slower pace.
After 2008, the world was a mess but in 2010 oil prices went up 31.229 percent and in 2011 they went up 18.519 percent. That took oil prices from $58.76 to $91.39 per barrel. And look at what the interest rates were then.
I doubt that oil was the only commodity in which they were speculating.
Cheap money is going to be used by speculators. That should be printed in stone.
Bruce, you have the right idea, but the wrong implementation.
The current plan would be not be able to deny care, but if they want to make a pre-existing condition claim, they have to take it up with the company whose policy was in effect at the time that condition was diagnosed. The insurance companies can work it out between them in court, or settle out of court. It’s up to them.
Thus, one cannot be denied insurance because of a pre-existing condition, because insurance companies would not be required to pay for pre-existing conditions. Furthermore, a company will not jack up your rates if you develop such a condition, because you would just buy another policy and the first would STILL be responsible, but would be getting no premiums from you.
As for my point about age discrimination, the same calculus would apply to keep a “seasoned” employee as would apply when looking to hire one. That is all.
Warren – I said the Jobs report was good – but I don’t share your enthusiasm.
U6 is still above 10%
In July those in the prime worker years of 25 -54 declined by 131,000.
93,8 m people in the workforce are not working. This makes workforce participation the lowest since 1977
Since 2007 1.7m manufacturing jobs have been lost. Since 2007 1.7m food service jobs have been created.
But, on balance, this was a good report.
You are wild eyed optimist. (Smiling here)
I would give the report a fair. For all the reasons which you mention, plus the low growth in wages.
And the Total Household Debt is a major drag on the economy. We are below the peak of $12.68Trillion in the 3rd quarter of 2008. But $11.85Trillion is nothing to brag about. And not retuning to the previous peak seems to indicate that consumers are maxed out.
This economy is performing a minor miracle by avoiding outright recession. I don’t understand it but I like it!
Bkrasting: “In July those in the prime worker years of 25 -54 declined by 131,000.”
True — but the young are getting work again.
“Since 2007 1.7m manufacturing jobs have been lost. Since 2007 1.7m food service jobs have been created.”
Now you’re just cherry-picking. You pick the peak just before the recession. Nonetheless, manufacturing output is actually higher now (122.217 for 2015Q1) than the the pre-recession peak (120.802 for 2007 Q4).
Bkrasting: “[The] workforce participation [rate is] the lowest since 1977.”
Yes, workforce participation is low. Is that necessarily a Bad Thing? If a parent can stay home with the kids, or an adult child can stay home with the elderly parents, is a 1977-level workforce participation rate a Bad Thing? Workforce participation is what people choose to do. If you are looking for work, you are considered to be participating.
JimH: “[The] Total Household Debt is a major drag on the economy. We are below the peak of $12.68Trillion in the 3rd quarter of 2008. But $11.85Trillion is nothing to brag about. And not retuning to the previous peak seems to indicate that consumers are maxed out.”
Or consumers wised up.
But actually, if you look a little more into those numbers, at the 2008Q3 peak, we had $2.69T in non-housing debt. But in 2014Q4, that was up to $3.15T. However, of that $460B increase in non-housing debt, $570B was in student loans. That means that things like credit card debt and car loans went down $110B.
So it could be that student loans are crowding out other consumer debt.
Warren – you say:
True — but the young are getting work again.
Actually, the number of 16-24 workers fell by 8,000 in July. Another example of why I say they July report was just so-so.
You seem happy with the low workforce participation. I don’t agree. I think we need more people in the workforce, not less.
Warren – Jason Furman (Council of Economic Advisers) did a blog on the Jobs numbers.
I think he agrees with both of us. He goes on about about the good side of the report, but also adds this:
For example, the long-term unemployment rate is 34 percent above its pre-recession average. The slower recovery in the long-term unemployment rate is offset by the short-term unemployment rate, which is now below its pre-recession average. More noticeably, the U-6 “underemployment rate”—a broader measure than headline unemployment that includes discouraged workers and those employed part time while preferring to work full time—remains 14 percent above its pre-recession average.
I get my Total Household Debt from this website:
Go to that page. Then in the 2015 table ,in the entries for Q1, click on “Data”.
This will download an xlxs file with the data back to Qtr 1 of 2003. That file has separate lines for Mortgage, HE Revolving, Auto Loan, Credit Card, Student Loan, Other, and last but not least the Total.
Household debt is household debt. It all has to be serviced and the household’s total debt will be a factor in qualifying for any new loan.
Consumers’ incomes are more or less stagnant and now they can not or will not increase their debt at the previously fast rates. Their spending makes up about 70% of US GDP.
Consumers can not spend what they do not have and producers will not produce what they can not sell.
Ya’ gotta love Krastings “thought” that somehow the threat of a FED rate raise in the fall had something to do with the 30% loss in the Chinese stock market.
That’s an 8000 mile stretch…….
EM – I’m stretching? Do you really believe that Fed policy has nothing to do with global capital markets?
From Reuters a month ago:
Concern the Fed could hike rates for the first time since 2006 as soon as September — triggered by forecast-beating jobs data last Friday — pushed U.S. stocks lower on Monday before spreading across the globe.
Earlier, Tokyo’s Nikkei index suffered its biggest fall in nearly a month, down 1.8 percent on U.S. rate worries
Or Bloomberg a few days ago:
Emerging-Market Selloff Accelerates on Fed Outlook
If you care, look up the FX rates for the A and C$s. Look at China’s and Japan’s currency while your at it. When your done take a look at what has happened to commodities the past few months. Oil, aluminum, steel. copper, – virtually all commodities – have been dumped on in a very big way.
It is rare for a single event to be the only factor influencing markets. This is true for China’s big blow out too. But the expectations that the Fed will move up % is part of the equation. If you deny that reality, then you don’t understand markets.
Bkrasting: “Actually, the number of 16-24 workers fell by 8,000 in July. Another example of why I say they July report was just so-so.”
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Well, you are both wrong and right!
Looking at Table A9, the 16-19 year olds saw an increase of 369k employed, while the 20-24 crowd saw a increase of 175k, for a net increase of 544k.
However, when “seasonally adjusted”, the 16-19 cohort only saw an increase of 4,000 employed, and the 20-24 cohort saw a decrease of 12,000.
So, you are wrong in terms of actual number of people employed, and right in terms of “seasonally adjusted numbers”.
Bkrasting: “If you deny that reality, then you don’t understand markets.”
Which I why I just put my money into assorted index funds and hang on for the long haul — because I do NOT understand the markets.
To my way of thinking, the market as a whole has two long-term forcing functions — inflation and growth. Those I understand. I do not understand what drives short-term fluctuation. So I invest long-term.
JimH: “Their spending makes up about 70% of US GDP.”
That is an unfortunate myth stemming from how the GDP is computed. GDP is Gross Domestic PRODUCT. That it is easier to compute spending than it is to compute produce we use domestic spending, plus change in inventory, plus exports, to estimate GDP.
But neither household spending nor government spending nor business spending make up ANY part of PRODUCTION. If there is not a domestic producer, then they will buy from another country.
JimH: “Consumers can not spend what they do not have and producers will not produce what they can not sell.”
While true, many produce for foreign markets. That fact is, however, that we have a trade deficit, which means we are buying more than we produce, and have for many years. How is this possible? How can we consistently buy more than we produce?
We go into debt.
Warren under your formulation ‘services’ wouldn’t be part of GDP. Because the value of a service is just and precisely what people pay for it.
And often enough the cost of production of producing that service is close to zero in material terms. At least the marginal cost of production because in a service business almost all costs are fixed. So unless you want to calculate the value of the product by some combined calculation of the per unit fixed costs and amortization of the education and training of the workers that supply it then you have no way of measuring it all.
Plus these days we have the problem of products like software licenses and streaming content where the marginal cost of production is near zero, just some aliquot share of the cost of maintaining a server somewhere. Is an Office 2016 license really a product as you are implicitly defining it here?
From what I see you are working from a very primitive identify of product with the physical output of field and workshop. Which even in the time of Adam Smith was kind of antiquated as a measure of national prosperity. Maybe if we swapped out ‘property’ for ‘prosperity’ in GDP and GNP it would make you happy.
Bruce: “Warren under your formulation ‘services’ wouldn’t be part of GDP. Because the value of a service is just and precisely what people pay for it.”
Not at all — it is just that the SERVICE is what is produced. Service has value whether one pays for it or not. My son just cut my lawn. One daughter just cleaned the kitchen. Another just cleaned the bathrooms, and I did laundry. I did not pay any of my children for their work, but it has value nonetheless. So although there is value to their work, there was no valuation made, and so that value is not counted to GDP.
Had I paid a landscaping company to cut my lawn, and maids to clean my house and do my laundry, then whatever I paid them would be counted to our GDP, because they “produced” that service and it could be counted. However, whatever I paid them I would not have to buy some other goods or services, or to save. By allowing me to spend my money elsewhere, such unpaid service does indirectly contribute to GDP.
Do not confuse value with valuation. Do not confuse spending with producing.
Warren uncompensated services such as your kid cutting your lawn don’t score for GDP purposes (which you note). That it frees up your money for other purchases doesn’t effect my argument. I was responding directly to your complaint as voiced here:
“That is an unfortunate myth stemming from how the GDP is computed. GDP is Gross Domestic PRODUCT”
It is still the case that if you used the value of the services provided by your son and daughter to buy other services or to save you would not have been contributing to national ‘product’ as you are trying to define and limit it.
Purchased services have the product value of what someone paid for them. As such it is a perfect proxy. And for calculation purposes as it relates to GDP the values of material products also depend on wholesale and retail purchase price and not the total cost of production.
That, Bruce, is why we use spending as a part of the proxy for production — because it is easier to put a monetary valuation on it.
Spending is a way to measure (part of) the production, but it is not the production itself.
Increased spending may or may not correspond to an increase in production. It may correspond to higher imports, lower exports, or reduced inventory.
The Soviet Union fixated on production and look where it got them. The be-all and end-all of an economy is consumption. Otherwise why produce?
Consumers can not spend what they do not have, and producers will not produce what they can not sell.
Deprive consumers of income, and the whole thing spirals into nothingness.
You remind me of PeakTrader’s economic mumbo jumbo.
JimH: “The be-all and end-all of an economy is consumption. Otherwise why produce?”
While that is correct, consumption is not the entirety of production, either. Let’s say consumer spending increases. Does that mean that production increased? No. Imports may increase, investments may decrease, inventory may decrease, or government spending might decrease. (Alright, government spending will never decrease, but you get my point.)
Consumer spending is one part of how we measure production, but spending is not, and never will be, production.
JimH: “Consumers can not spend what they do not have, and producers will not produce what they can not sell.”
But consumers can consume what they produce, and producers can produce what they consume.
“Deprive consumers of income, and the whole thing spirals into nothingness.”
That is an entirely different matter. I am only trying to get you to see the logical error. The Chalice Well produces about 25,000 gallons of water every day. We do not know the source of that production, but we can measure what is carried away and what flows into the creeks. Carrying more away will not increase the production of the well one iota.
Consumers must produce, or borrow what someone else produced, so that they can consume. The production is measure by the consumption, but the consumption is not the production.
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You really are clueless about the current problems in our economy.
Have a good day.
You really are clueless if you think that consumption is production.
Have a nice day.
Warren – All of the numbers that are consider as important are adjusted for seasonality. What point were you trying to make? That I was right? Why not just say that, or not make off the mark comments?
Oh, yes — you were right, if all you care about are the adjusted numbers.
When we see adjusted numbers that show more job creation than the unadjusted numbers, we will see which you choose to tout.
I choose to see this as a very good report.
Who said Fed rate had nothing to do with global markets?
I certainly did not.
I said it was silly to think the 30% loss in the Chinese stock market was caused by rumors of rate increases. Which of course you almost agreed with in your post, you snide little snot.
Just as an aside, there seemed to have been the smae potential rate increase news for the last several months, yet somehow the Chinese stock market exploded.