Treasuries Up, Jobs Seen Restraining Fed

[RedEarth]

I hope we're not facing another bout of stagflation....I lived through that once and it's not pretty..


NEW YORK (Reuters) - Treasury prices surged on Friday after a stunningly weak reading on U.S. jobs challenged official optimism that the economy would bounce back strongly after a slowdown last quarter.


The market is still pricing in a quarter point hike from the Federal Reserve (news - web sites) at its meeting next week but now sees rates rising less than first thought by the end of the year. The benchmark 10-year note leaped 1-25/32 in price, lowering yields to 4.19 percent from 4.41 percent late Thursday. Two-year yields dived to 2.35 percent from 2.62 percent.


Non-farm payrolls rose just 32,000 in July, when median forecasts were for a 228,000 gain. June's rise was revised down to 78,000 from the original 112,000. The unemployment rate did dip to 5.5 percent from 5.6 percent, but was overshadowed by the payrolls figures.

http://story.news.yahoo.com/news?tmpl=story&cid=580&ncid=580&e=11&u=/nm/20040806/bs_nm/markets_bonds_payrolls_dc

[wishlist]

1. Sure looks like stagflation with incomes not keeping up with rising prices

Economy is in the tank if gas prices shoot back up again in a few weeks. No question high heating fuel costs will hurt this fall and winter. People with limited finances are still trying to recover from last winter's high heating costs in the Northeast.

Gas just fell unexpectedly yesterday in my area by up to 7 cents but I wonder how long it can stay down.

[bemildred]

2. It's gonna get worse than stagflation.

We were not asshole deep in debt back in the 70s.
We still had a (more or less) intact manufacturing base.
We were not as heavily committed to the cheap oil economy.
We did not have all these MBA half-wits running everything.

4. Exactly

And interest rates were not running this low back in the 70s!

You have to look back to the boom before the Depression to find such loose credit as we have now.

[whistle]

3. Correct, the direct consequence of fighting a war, any war....

...is major dislocations in economic stability, with the resulting waste of resources, price instability, job loses, redistribution of capital and wealth and a small number of rich and powerful becoming even richer and more powerful. This administration allowed this war drama to unfold, thinking itself smart enough to keep the genie in the bottle. Great empires have crumbled thinking they too were invincible against the inevitable consequences of using war to justify their superiority, just cause, arrogance and belligerence.

The real purpose of Bush's actions and irresponsible tax cuts for the wealthy in time of war are now becoming apparent. He and his small group of rich pals reap tremendous wealth while the rest of the country is left with the unavoidable obligation to pay the bills. Are we really any safer now? Are we poorer? Are we more peaceful? Are their really unlimited opportunties for everyone? It isn't too late if the country just wakes up and chooses Kerry/Edwards in November and also begins to sift out the bad eggs from congress.