Tapering's a temporary sideshow, expect more QE in 2014 not less

Dear All,

The full edited version incl. our own model prediction….

http://www.tradingfloor.com/posts/taperings-temporary-sideshow-expect-qe-2014-less-88981208

One of the major calls we have for the balance of 2013 is the dramatic change to employment. The combination of depressed participation rates and weak "real growth" plus Obamacare and bad jobs, leads our models to predict a big reversal on the recent trends with surprising implications for quantitative easing and new lows in yields.

QE's not dead
it may go against the grain but there is more QE coming in 2014, not less. Tapering is a temporary sideshow which will be replaced by disinflation and zero growth in 2014, a theme I will return to in greater depth next week.

This is our new predicted model which is based onEconomophysics done by a collaborator of mine. Note how the trend is almost exploding higher:

In the chart below, the link is Danish and  comes from one of the most respected cyclical analyst here, Svend Jørgen Jensen.

The top line refers to the Conference Board's 'Help wanted' online index' and below that are employment levels.

 

What point do the charts show? It is that the top leads and it has turned down.

http://www.conference-board.org/data/helpwantedonline.cfm 

http://www.demetra.dk/ugeoverblikket/usa-annoncering-efter-arbejdskraft/

 

http://www.demetra.dk/ugeoverblikket/usa-arbejdstid-pr-uge/

Pundits tend to forget that in an economy, it's not the amount of people working which makes up GDP but the amount of hours worked. Obama-care with its 30-hours rule is forcing the retail and service industry to reduce their employment contracts below 29 hours per worked to reduce the costs of Obamacare.

 

 

 

Med venlig hilsen  |  Best regards
Steen Jakobsen  |  Chief Economist

 

Saxo Bank A/S  |  Philip Heymans Allé 15  |  DK-2900 Hellerup
Phone: +45 39 77 40 00  |  Direct: +45 39 77 62 23  |  Mobile: +45 51 54 50 00

 

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