10 year US treasury yield jinx

News is awash on the rise of the 10 year US treasuries to around 5% for the first time in 16 years, the first time since the global financial crisis. Check the intros of the stories in the links below.

A relentless global bond rout is piling pain on to investors who loaded up on fixed-income assets this year as they spied the end of central banks’ cycle of interest rate rises. The yield on 10-year US Treasuries climbed to around 5% — a level not seen since before the global financial crisis — on Thursday, capping a rise from around 3.5% at the start of the year that goes hand in hand with a sharp decline in prices. Full story here: https://on.ft.com/46Yzj4Q

Treasury yields have jumped today as stronger-than-expected US retail sales data breathed new life into a global bond rout. Investors are worried this latest sign of US consumers' resilience could mean the Federal Reserve might lift borrowing costs further in its fight against inflation. Get the full story here: https://on.ft.com/3rRErZB

Bond yields have been pushed to a 16-year high after data showed the US added 336,000 new jobs in September, far more than expected. The figures have also fuelled investor anxieties that interest rates will stay higher for longer.

Get the full story here: https://on.ft.com/45k26zt?segmentid=b118df58-92c2-d0b5-68bb-3059fe9219fa

Bond yields on both sides of the Atlantic have hit their highest levels for more than a decade today as a sell-off in global fixed income continues. Read the full story here: https://on.ft.com/45n8Nk5

The 10-year Treasury yield rose above 5% today for the first time in 16 years, extending a multi-week rout in bonds as investors bet that the US Federal Reserve would keep interest rates at their current high levels for longer. Read more: https://on.ft.com/3S6NiBn

A New Season Beckons II

Hello everyone. I hope everything is ok.

The ideas in my previous article
A New Season Beckons still apply.

The picture is becoming more clearer as the days go by.

As the world goes through some tumultuous transition, mixed market signals will be received. As always these signals will become clearer in hindsight. For some that can be a bit too late hence the quest to make out the information at hand. I will she'd more light in future posts.

Cheers.

A New Season Beckons

It's been a while since my last post. A lot has been happening out there and in my life. In the part of the world where I live, this time of the year signifies the transition from the cold season to a warm season (and then hot season). It's a time of reinvigoration, refocusing and introspection on the purpose of life icluding what should drive us and the teleological objectives which position ourselves within the reality around us.

As a new season beckons us, we should not lose sight of what is required of us notwithstanding the vagaries of life which might push us towards unexpected and unpleasant stations in life.

Locally, (in Zimbabwe) the introduction of gold coins has created a buzz. I will touch on it soon. I had done some research on these matters as an independent scholar. I will explain in this issue soon. The local macroeconomic instability in prices, exchange rates and money supply growth is touching a raw nerve within households, firms, the government and individuals alike. The stability in these macroeconomic variables is something the authorities are sweating over in light of the various macroeconomic policy interventions. I will touch on that soon.

Internationally, the war in Ukraine has created global imbalances in the international goods and financial markets which has translated into food shortages and price inflation. If not attended to, the price inflation would translate into stagflation, something the world economies are not yet ready to grasp with (considering the available policy tools in existence). I will also touch on this soon.

22022022

Interesting note concerning today, that is, 22022022. I found this on social media.

Biden 2020 Part II

 Here is a previous post from 2016 concerning Joe Biden reminiscing about about a missed opportunity to campaign for the US presidency in 2016 and a possible 2020 run. In a few hours the polls open in America with more than half of the expected votes already been cast in early voting (more than 93 million by 2 November). The outcome of the polls are uncertain with Biden leading in most opinion polls. As we know already, opinion polls can be misleading in the context of these kind of polls.

Fiscal Policy and Economics and Financial Literacy

Here is a paper for which the working paper I once referred to before.

The title of the paper is THE IMPACT OF ECONOMICS AND FINANCIAL LITERACY IN HOW PEOPLE PERCEIVE THE EFFECTIVENESS OF THE FISCAL POLICY OF ZIMBABWE: CASE STUDY OF HARARE.

The citation for the paper is:

Ngonidzashe Mukwepa (2020). The Impact of Economics and Financial Literacy in How People Perceive the Effectiveness of the Fiscal Policy of Zimbabwe: Case Study of Harare. Review of Knowledge Economy, 7(1): 31-42. DOI: 10.18488/journal.67.2020.71.31.42

The major objectives of the paper are:

1 To investigate how people understand and respond to Fiscal Policy (FP) actions. 

2 To investigate the influence of financial and economics literacy on how people understand and respond to FP actions.

3 To investigate how confident people are about the institutional frameworks in charge of formulating and implementing FP actions.

In summary this paper investigates the relationship between the perceived Zimbabwean Fiscal Policy outcomes and the preferences of the people of Zimbabwe, resident in the city of Harare in the context of the Fiscal Policy Framework of Zimbabwe. It looks at how people are aware and confident about the FP actions and institutional frameworks in charge of formulating and implementing FP actions and also how the activities of people complement the FP actions. It looks at the influence of financial and economics literacy on how people understand and respond to FP actions. To make the investigation robust, data was obtained from across different occupations. Governments get elected to a large extent on the basis of their FP. The nature of FP is political on its own. Hence it is important gauge what areas of the FP process need to be adjusted to ensure that the people become positive about those in charge of the FP formulation and implementation together with the FP tools being used. Results obtained from the investigation showed areas where there is rent seeking and time inconsistency showing that serious reforms of the FPF of Zimbabwe are needed to ensure that optimal macroeconomic outcomes are achieved. A serious lack of awareness of the setup of the FP framework of Zimbabwe showed that there must be widespread and effective communication by the authorities on the nature of the FP operations being implemented to ensure that people on the ground complement government efforts to improve the economic performance of Zimbabwe.

This paper is an important component in the literature of the economics and financial literacy of the FP of Zimbabwe.

Econometric History important

The following quote from Dave Giles is insightful.

If you follow this blog (or if you look at the "History of Econometrics" label in the word cloud in the right side-bar), you'll know that I have more than a passing interest in the history of our discipline. There's so much to be learned from this history. Among other things, we can gain insights into why certain methods became popular, and we can reduce the risk of repeating earlier mistake!

Econometrics and Mathematical Economics is very important in providing rigour to empirical undertakings. What's important is to ensure that the methods employed don't bring a disconnect between reality and the conclusions from the investigation. Many at times model over or under specifications do occur resulting in spurious conclusions. The emerging econometrics imperialism in scholastic output is a major contribution to such realisations.

Therefore innovations in research methods will provide proper balance in the future regarding the place of Econometrics and Mathematical Economics in credible research scholarship.