Anyone else watching Yellen’s testimony? Pass the popcorn! “We’re not going to raise rates if we think it will tip the economy into recession.” -JY You know, these FOMCers seem really worried that if they pull the props out from under the jacked up economy/market, it’s all going to come crashing down. Hmm but I thought the economy was doing so totally awesome? But it is simultaneously so fragile that coming off zero will send it into a recession? All the recent talk about China propping up their stock market, cmon that’s nothing compared to this FOMC show.
I watched it. Rep. Duffy gave her an earfull about having no legal authority to withhold information pertaining to their congressional investigation. JY was flustered and stalled. Seems that she or the Fed is hiding something.
Weird nerds are awkward in public? Is this a surprise?
Yeah, she has some moments of flusterment.
The point that “if we do go into recession, we have no tools left to address that” was good.
“But when rates rise, won’t that increase our interest burden??”.
Yeah, it’s called being screwed! The questions are great, she of course just babbles non-answers.
It’s very unfortunate that these topics are above most people’s level of understanding. The average Joe can watch and only understand a small fraction of the discussion. Of course, when it comes to wanting to have low taxes while at the same time receiving large handouts from the govt, the Average Joe is most certainly on board. But what this gov’t policies are doing to our economy is really frightening.
Listening to her speak is like watching a youtube clip on a bad internet connection of a Robot talking.
Seriously I just can’t listen to any more of her indecisiveness. “Well you see, we are studying the data, we are data dependent, it’s all very official yet subjective you see, it’s a science you see, and yet an art.”
No, I don’t see. Just raise rates. If they don’t do it in Sept, they have zero credibility.
I thought this was going to be a GILF thread.
If we say our goal is to prevent bubbles and subsequent global meltdowns…someone needs to question the econ nerds making up these wacky monetary policies.
Fed’s Independence Is Under Attack…
“It’s been understood since the 1970s that independent central banks produce more stable growth, partly because they don’t overstimulate the economy to please politicians (comment: instead they overstimulate to please Wall Street). Members of Congress taking aim at the Fed say they intend to preserve its independence; they just want it to stick to a plan and explain itself. The Fed “continues to communicate monetary policy by picking words out of a thesaurus,” says J.W. Verret, a George Mason University School of Law professor who helped craft a Fed transparency bill…”
I can tell you with a great deal of certainty that all the major US banks will make more money if rates were higher. At these low interest rate levels, credit becomes interchangeable and spreads become lower. In fact, someone posted some article about this a while ago, and this was the topic of Bill Gross’ annual letter (which I suppose you can view using your own evaluation of Gross’ current lucidity).
Do not mistake asset price appreciation as necessarily being positive to “Wall Street”. Banks do not hold a bunch of long equity positions, nor can they legally do do. It is true that banks own stocks to sell equity swaps to customers, but in this case, all returns go through the bank, and swap demand would most likely increase if customer borrowing costs increased.
As far as general Fed accountability is concerned, I agree that this is a problem to be solved. However, I am not sure if it would help anything for the Fed to just have to report their decisions to Congress, which has proven repeatedly to be economically illiterate and competent only in their ability to bankrupt all of our social programs. I would rather trust these “Econ nerds” with worrisome degrees of responsibility than further entrust our economic interests to intellectually bankrupt politicians who do not even want the economy to do well half the time.
Well said ohai.
I don’t think it was the Fed that decided to bail out GS through AIG, it was the Treasury. I do count it as an unforgiveable act of partiality to political donors. Emperor Naren would have let the strong (Wells fargo, JPM Chase, maybe US Bank) feast on the weak, let IBs wipe their shareholders out and protected the individual depositors and insurance policy holders.
A lot of Secretaries of Treasury talk rubbish and apparently believe it too - on the left and the right, including but not limited to Rubin, Summers, Geithner, Paulsen.
So guys, why doesn’t Yellen just come out and announce this morning “go check your terminal, we just raised rates, it happened”.
I mean who cares, everyone is sick of this silly game that has gone on for years, apparently it’s never quite the right time. Is the US economy is so weak it can’t withstand a 25bps rate increase? Even the market has started saying “Christ, just raise rates already!”. Also, these known dates when they can make a move allow other market participants to beat them to action, and change the economic situation (China). Either rates up or QE4 please, show us your balls Yellen.
We are a week away from the next episode of the Yellen show! Excited everyone? Feeling like you have seen this show before perhaps?
She should just hike while the market is down, people are already depressed, so just give them all the bad news at once. What she’ll actually do though…probably nuffin.
So the market backed Yellen into a corner “just raise rates or we sell, we’re sick of it already granny”.
Today “coincidentally” we see a bad job report, and they revise down the last two job reports. Yes, I’m saying they are making up numbers to justify not raising rates, and have been making up numbers for years. Some poor chump at FOMC backoffice was up late every night this week cranking in Excel and shredding evidence.
I know a bunch of people at different companies that just got laid off last month, and things seemed fairly promising up to then. It might be coincidence, but it sure seems to make a lot more sense when you note big misses to the downside on the jobs report.
It’s almost QE4 time guys!
lol is everything a conspiracy? We got ourselves another Mark Gorton, please send us another classic essay
Well, 99% of everything in the USA is made up. That shouldn’t really be news?
Oh, Matt Miller on Bloomberg TV, calling for more QE!
They’ve got to do it once things get bad right? I mean Abe is “do whatever it takes”, Draghi is “do whatever it takes”, Yellen can’t be outdone by those clowns. Reputations are at stake here!