Team Yellen-Bernanke-Greenspan-Volcker Spells Trouble
Earlier this week, noting the recent public gathering of the last four Fed Chairmen/woman: Yellen, Bernanke, Greenspan, and Volcker, we suggested you not pay too much attention to such an obviously staged event:
Could this spell anything but trouble?
Of course, the entire tone of these recent events - big four meeting, secret meeting - was decidedly upbeat. Our favorite up-beat-ism was the one about the strength of the U.S economy. After pointing out "solid" job growth over the last year, which is leading us eventually full employment, and downplaying any talk of speculative bubbles in any area of the economy or financial markets, Yellen gushed:
But if the economy's on a solid course, what exactly is this chart from none other than the Atlanta Fed telling us? Well, as opposed to the consensus opinions out there (the shaded area), this regional Fed bank sees GDP growth heading solidly south.
In fact, south looks like it's somewhere near zero, doesn't it? And remember, this comes from the Fed, the organization headed by Yellen, who just said the economy's on a solid course. All we can ask, then, is if this is what a "solid course" looks like, what exactly would trouble look like?
*As it turns out, the initial announcement of a meeting on Monday morphed into not one but 3 meetings: Monday, Tuesday, and Wednesday. Reminds me of "Miracle on 34th Street" when Mr. Shellhammer prepares a "triple strength" martini to get his wife to agree to have Santa Claus stay at their place. Assuming our central bank officials will be making important decisions after their "extraordinary" gathering, let's hope the results of these "triple strength" meetings don't have the same effect on them as the martini did on Mrs. Shellhammer...
We really don't know what they really know. We do know, however what we know. Which is why watching and listening to every syllable of what the Fed Chair and her colleagues say turns out to be more a waste of time than an intelligent or profitable endeavor. Let them talk.While we normally would just move on and go about our business at that point, since then we learned that what was called an "extraordinary" meeting of the Fed took place on Monday, after which Yellen met with Obama.* What we didn't and don't know is the purpose of the meeting. There's nothing but media speculation on that, far as we can tell. Worth noting, though, is this: While what was discussed at the meeting is still a "secret," it was announced beforehand, as was the meeting with Obama after its conclusion. Lots of trumpet fanfare to call our attention to a meeting about which we know nothing? The Fed Chair then rushing out to meet the President immediately upon its conclusion?
Could this spell anything but trouble?
Of course, the entire tone of these recent events - big four meeting, secret meeting - was decidedly upbeat. Our favorite up-beat-ism was the one about the strength of the U.S economy. After pointing out "solid" job growth over the last year, which is leading us eventually full employment, and downplaying any talk of speculative bubbles in any area of the economy or financial markets, Yellen gushed:
This is an economy on a solid course - not a bubble economy.Sure doesn't sound like trouble, does it?
But if the economy's on a solid course, what exactly is this chart from none other than the Atlanta Fed telling us? Well, as opposed to the consensus opinions out there (the shaded area), this regional Fed bank sees GDP growth heading solidly south.
In fact, south looks like it's somewhere near zero, doesn't it? And remember, this comes from the Fed, the organization headed by Yellen, who just said the economy's on a solid course. All we can ask, then, is if this is what a "solid course" looks like, what exactly would trouble look like?
*As it turns out, the initial announcement of a meeting on Monday morphed into not one but 3 meetings: Monday, Tuesday, and Wednesday. Reminds me of "Miracle on 34th Street" when Mr. Shellhammer prepares a "triple strength" martini to get his wife to agree to have Santa Claus stay at their place. Assuming our central bank officials will be making important decisions after their "extraordinary" gathering, let's hope the results of these "triple strength" meetings don't have the same effect on them as the martini did on Mrs. Shellhammer...
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