Sept 1 - it's a new month

"... in an information-rich world, the wealth of information means a dearth of something else: a scarcity of whatever it is that information consumes. What information consumes is rather obvious: it consumes the attention of its recipients. Hence a wealth of information creates a poverty of attention and a need to allocate that attention efficiently among the overabundance of information sources that might consume it."

Herbert Simon

bounded rationality: individuals are only partially rational and their rationality is bound by the information they consume, the complexity and abundance of the information available to them and the finite amount of time they have to make decisions




start of a new month -- risk on: stocks up, bonds down; and that was even before the surprisingly strong ISM! U.S. 10-yrs up over 12bps to yield of 2.59%; stocks up about 2.5%; C$ up over a $1


data:
China's PMI bumped up a touch, to 51.7 from 51.2
MBA Refi Apps, unsurprisingly, given the low level of mortgage rates, increased again
Purchase Apps also increased the last two weeks; but Michael Fratantoni, MBA's Vice President of Research and Economics, points out that the recent increases are off of very low levels, and says "Despite the slight increase in purchase activity in the past week, the continued low level of purchase applications indicates we are unlikely to see an increase in new home sales reported for August or existing home sales reported for September"
ADP, for what its worth, came in weaker than expected, at -10k, with past month revised down modestly to +37k
construction spending was down 1% in July, worse than forecasted, and June was revised down to -0.8% from +0.1%
I said on August 26 that "regional manufacturing surveys give us a good idea of what to expect for the ISM"; guess what? not so much! I guess what happens in Dallas, Kansas City, Milwaukee, Chicago, Richmond, Philadelphia; and what capital goods orders, x-def, aircraft did are not indicative of what will happen in ISM; ISM was up to 56.3 from 55.5 in July, easily surpassing the expected # of 52.7; production, employment, inventories and prices were all up; new orders were down


other fare:
John Lanchester on Understanding High Finance, Gary Gorton on Financial Crises, and Charles Morris on Crashes. all at FiveBooks.