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« Weighing the Week Ahead: Will Yellen Signal a Policy Change? | Main | Mean Reversion: The misunderstood “mystery method” behind big market blunders »

February 15, 2014


Guruprasad V

The honest answer would be none of the above given explanation. It is raising because its simply going up for the past 4 years and trend has been up. Trends are powerful than imagination and time and again markets are proving it and there is nothing surprising in it. X and Y is happening as a result X+Y=Z. All these could be treated as an intelligent discourse only at TV and not in reality. Markets are going up because it has been going up and it has not shown big weakness other than small hiccups. This is the fact and everything else is a story.


Looking over monthly seasonally adjusted figures on FRED, using 2009 chained prices shows real disposable income ahead of real PCE. However, starting 2000-01-01 at 100, as the chart puts real PCE ahead. I think that the latter method is not a good proxy for "consumer deficit spending" as it shows the historical growth rates from the benchmark date.


Why do real PCE outsize real disposable income when nominal disposable income outsizes nominal PCE?

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