We all try hard to make article headlines interesting. So do I. But I also like to be factual. That means, on average, my article titles are boring compared to others.
Consider this click bait title by Marketwatch: Yellen to say ‘ready’ for another rate hike in Jackson Hole.
The headline is purposely misleading. I expected the article to point to something Yellen did or said. Instead we see speculation by UBS converted to something concrete.
Yellen will speak Friday from the Fed’s summer retreat at 10 a.m. Eastern. The subject of her remarks is “The Federal Reserve’s Monetary Policy Toolkit.”
“We see Jackson Hole as the ‘ready’ warning and look for Chair Yellen to err on looking at the optimistic side” of the outlook,” said Drew Matus, senior U.S. economist at UBS.
To be fair, Matus thinks the U.S. central bank won’t issue the “set” warning until its September meeting policy statement and then “go” at the December meeting.
To Be Fair
By all means let’s be fair. The MarketWatch headline title is bullsheet.
Yellen may indeed signal for November or December, but if the data does not support a hike and the market doesn’t expect one the Fed is highly unlikely to hike.
There was nothing in the article other than speculation by UBS accompanied by a “to be fair” warning that admits the headline title is bullsheet.
Mike “Mish” Shedlock
Mish,
That is why I come to your blog. Honest titles, opinions and no bull shit.
I didn’t know anyone reads Marketwatch articles.
I listened to an interview with Edward Harrison whom I highly regard. He pointed out that so called bond vigilantes are nothing more than investors who wait till CBs have painted themselves into corners they cannot escape. This currently is not an opportunity for bond vigilantes because they appear to agree with CBs that the future is grim and we can expect prolonged stagnation and low growth. I agree. Steve Keen agrees. Prolonged stagnation seems assured until govt reduces total private debt somehow. Not likely given current policy options.
When the opposition finally gives in, the market is ready to go the other way very soon. Look for yields to head much higher in the near future.
And they wonder why fewer people trust the MSM.
I looked all over to see if there are any pictures of Newt Gingrich and Janet Yellen together in the same photo. There are not. Coincidence or is something else going on?
http://conservativeread.com/wp-content/uploads/2016/02/yellenbeard_small-1-370×208.jpg
That’s Bernanke’s beard.
Why I read your blog…No bull!
Remember the good ol’ days of Paul Volker as Fed Chairman? Bill Agee was the CEO at Bendix. He refused to invest in R&D for future product lines because the return was only 4% and he could get 18% investing the cash into bonds and other fairly liquid assets sparking a hostile take over effort by Martin Marietta Corporation. What a great show that was.
Betting on a rate increase would be as stupid as wagering $1000 on a 1 to 1 pony that’s limping into the starting gate.
The media is complicit. I have no idea how someone with the brains to click on the MarketWatch website would be so retarded to keep swallowing the fresh bait – hook, line and sinker, all the way down to the gut. Good Christ. How many times until they finally learn?
According to all principles of evolution the human being is designed to progress through the process of natural selection. I think the problem might be that modern medicine is keeping stupid people alive for too long.
Medicine, like the financial system, needs to get washed out then reinvented.
“To be fair, Matus thinks the U.S. central bank won’t issue the “set” warning until its September meeting policy statement and then “go” at the December meeting.”
Getting that right is reason enough for the article. Yellen gets past election on Hillary’s reward list and is celebrated for her rate hike chops in media special end of year (New Year) issues. I see the headlines: Women Lead USA into New Year (photos of Hillary, Neo-con Victoria Nuland, Yellen). Hopefully Trump will spoil that nightmare war party headline vision with Putin-Trump to Meet to Discuss World Peace (Gorbachev-Reagan shaking hands photo in background)..
(((Yellen)))
(((Matus)))
et. al.
These folks and their ilk have never done an honest day of work in their lives…but they sure know how to talk about stuff.
To be fair, we must recall that Bernanke had “the courage to act”.
LMAO!
Bernanke did act. He acted to support the other team, the one the 99% is NOT on. He also supported profligate deficit government spending via QE and artificially low rates.
You’re on the wrong team. He supports the other guys. He definitely had the courage to act.
You only think you’re on the same team as he is. He knows better and is laughing at you for being so naive.
The central banks often claim deflation drives or allows their QE policy to remain and is central to their ability to stimulate. The moment inflation begins to take root or becomes apparent much of their flexibility in policy is lost. The 2% inflation target central banks have deemed optimum is not valid.
In the past I have put forth the idea that inflation could rule the day even if central banks are unable to keep the wheels on the bus and the economy collapses. This powerful force also known as stagflation can devastate those improperly invested. The article below explores the basis of this theory.
http://brucewilds.blogspot.com/2016/03/inflation-or-deflation-debate-continues.html
Your statement “the data does not support a rate hike” is one of the phrases used to manipulate the Fed into keeping rates low. People such as yourself add pressure to the Fed’s decision. This is one of the reason the Fed will be unlikely to raise rates any time soon. If ever. (The current bogus R* theory is a fraud being concocted to provide cover for perpetually low rates.)
When I say the Fed is being manipulated into keeping rates low, you assume I imagine a group of shadowy people who sit them down and straighten them out every time they get uppity. That’s utterly ridiculous. That’s not how manipulation occurs. Keeping statement such as the one you made out in the open and always in the background is a manipulation technique. Only one, but an effective one. You’re helping them out without even realizing it.
If rates were normalized and Twist / QE were a memory, you would be absolutely correct. However, rates are not normal. The low rates cause uncountable problems. Assets are mispriced. Governments can and will continue to live far beyond their means. But most importantly, savings rates are too low to allow savers to live off interest. Insurance companies are in trouble because they can’t earn a decent safe return. The Fed has created a “Them vs Us” economy … people who depend on low rates for fast money and deficit spending vs people who need higher rates to live a decent life and firms that may ultimately fail without them.
Higher rates would give savers spending money. This cash would boost GDP. Borrowers would have to select projects that made economic sense. Jobs would be created as a result of these projects. Raising rates will eventually de-stratify the economy.
The process of rate normalization will cause lots of problems. The equity markets will fall far. Current holders of debt will see large capital losses unless they intended to hold until maturity. Governments will have to lower spending or raise taxes.
It will take years to sort out the problems the Fed created with low rates. The Fed knows this and knows they will be blamed … another manipulation technique … actually the closing of the loop. They’re constantly reminded about how badly they ill be blamed, I’m sure The manipulation is self-perpetuating now unless someone with the courage of Paul Volckers is put in charge of the Fed and raises rates to fix the economy.
http://www.frbsf.org/economic-research/publications/economic-letter/2016/august/monetary-policy-and-low-r-star-natural-rate-of-interest/
Evans and the R-Star.
Soft on specifics, long on essay and faux-intellectualizations.
The only way I can think of GDP targeting in the new low rate of interest world we now live in is via massive QE and direct cash distribution schemes yet to be designed or announced.
This is going to be the fodder of the next wave of ‘what everyone believes’.
Allowing rates to rise and perform the same function as GDP targeting appears to be a non-starter, as everyone knows you can’t raise rates in the current economic environment. Just ask Mish and lots of his friends. They all know it in their bones. This only leaves more fanciful forms of QE and/or hopium that the Bernanke policies will eventually work.
Re R-Star: Well. a Fed president said it. This must mean it’s true and we need it. Just as Draghi claims low rates and QE are only for inflation and not needed to subsidize the existence of the Eurozone. Or when Kuroda says “QE stops working when you stop believing in it” he did NOT mean QE stops working when you see all it does is subsidize government spending and a fortunate few who know how to make lots of money with low rates. Rather, he meant something mystical.
Whoops- My bad – Williams and the r-Star.
‘You can’t raise rates in the current economic environment’
So keep monetizing debt and socialising the currency and productivity, it will keep the system flowing slowly downhill until…?
Until we are all mindless, have lost all values, and someone trips the light switch on.
There are no rates, the currency is invented, and the economy is following suite, how can anyone expect more than a keyboard return?
Real returns mean productivity and development , placing your own for reward, not other people’s for access to the wealth of yet others.
Show me the plan before asking me to accept it.
Crysangle,
Show me the plan before asking me to accept it.
We don’t get to do that. Those decisions are made for us by others who have a self interest that far supersedes ours. Then there’s the layer that makes the deciders appear official. We’re further below that and assumed, rightly so, to be ineffectual and pesky. We’re the noise that nobody important really listens to.
“The only way I can think of GDP targeting in the new low rate of interest world we now live in is via massive QE and direct cash distribution schemes yet to be designed or announced.”
Won’t do a damn thing except a near term sugar rush.
Yet the new debt created will be there …. long long long after the sugar rush over.
….
Until the massive debt overhang addressed via paydown / writeoff ecconomy will stagger along … at best.
“Your statement “the data does not support a rate hike” is one of the phrases used to manipulate the Fed into keeping rates low. People such as yourself add pressure to the Fed’s decision. This is one of the reason the Fed will be unlikely to raise rates any time soon. If ever.”
Bernanke said many moons ago, that rates would not normalize in his lifetime. That is the key phrase of this whole era.
Mish said “if the data does not support a rate hike.” If, puts no pressure on the FED.
The FED talks out both sides of its mouth. The FED is playing games, doing so. A mouthpiece or two come out and warn the next meeting is live, then nothing happens and the FED says the data is uncertain, once again. Wash, rinse, repeat, for the next meeting.
The FED didn’t back off 3 or 4 rate hikes this year because of phrases, they backed off because the data doesn’t support it- and the market knows it.
The rate hike ship left long ago.
2017 will be the year NIRP bandied about. Our only hope is that NIRP failure in Europe / Japan will be obvious to even to the decision makers at Federal Reserve (I wouldn’t bet on it, though).
Agree. The ECB and BOJ won’t meet obvious failure for a few more years and not until the holes they dug are much deeper. The public appears oblivious to the obvious purpose of their programs. They will be ramped up a few more times in imaginative and aggressive ways. Printed money is free money in the short run. In the long run it’s somebody else’s problem to fix up the problems.
Ron, you miss the point. The data is irrelevant in this environment. The data will NEVER support a rate hike. NEVER. Low rates are the cause of the problem the data reflects as being insufficient for rates to rise.
Using it as an excuse is just a precursor to new bogus theories that institutionalize low rates, such as the Williams R-Star feeler, likely to be a centerpiece at Jackson Hole.
Ron, you also need to learn how carnival fraud works.
“Oh, you didn’t win this time. Well, you look lucky. Next time for sure. You just missed.”
The Fed’s game of punking out, then hinting that next time “for sure”, is the same thing.
They retain credibility. You assume it’s a fair game The stall continues with the support of all.
Carnival fraud: Which accurately describes the ECB and BOJ way of managing monetary policy. Also the Fed but for somewhat different purpose, a slightly different game. Same concept, different application. Excitement under the Big Tent. You look like a winner.
Seriously, there’s no new games under the sun, but there is an infinite way of playing the old ones. Imagine yourself walking down the Midway. The Fed game is over here. The BOJ game is over here. The ECB game is over there. No different. Just not playing for quarters or tickets.
At least MarketWatch could have ended the clickbait title with a question mark. Then we could have saved time reading it by applying Betteridge’s Law of Headlines.