Jackson hole did little more than make Fed Chair Janet Yellen look like a blithering fool.
Her chart of confidence levels on interest rates was just one of many silly things.
Here’s a roundup of tweets and posts that shows what I mean.
Proof Economists’ Style
Proof looks like this at #JacksonHole. No empirical evidence needed.
Investigating the Crisis
Pre-crisis look at gap Fed has created between financial valuations and economic activity.
Can It Be a Bubble If Everyone Thinks So?
Jackson Hole Postmortem
ZeroHedge provides a summary of quotes in his Jackson Hole postmortem: “It May Take A Massive Program, Large Enough To Shock Taxpayers”
And once again here’s a chart from Yellen’s own presentation.
Fed Confidence Levels
- Yellen Discusses “Tools”: She’s 70% Confident That Rates will Be between 0 and 4.5% in 2018
- Rate Hike Odds Soar Following Yellen’s Speech: Before and After Snapshots vs. Yesterday
- Fed’s Bullard Warns Yellen on Credibility, Sticks with Forecast “1 Hike in Next 2.5 Years”
- Confidence in the Fed Sinking Fast from Greenspan to Bernanke to Yellen: How Much Confidence Do You Have?
Mike “Mish” Shedlock
We also learned that the Non-Main Street Fed can vacation with the best of them. At a place (like Aspen) where cost of living (largely shelter) is SOOO expensive that the locals and help are priced out of the market.
The Fed carries on in an Alt-Reality.
Trader Joe said:
And yet Janet is still not nearly as bad as Hillary. If anyone tells you that the Clinton Foundation corruption cannot be proven, consider this:
Janet is the Hillary campaign. If markets would be allowed to find price, politicians would be looking for their bunker.
Macon Richardson said:
Mish, you say that “Jackson hole did little more than make Fed Chair Janet Yellen look like a blithering fool.” How hard is that to do?
Reed Bates said:
And look at the cost of making Janet Yellen look like a blithering fool this way! Give me a week to prepare and I could do it for half that amount of money!
Diogenes of Sinope said:
“It’s ONLY a bubble when everyone thinks it is”
That’s Felder’s point and I think that sounds right but only if people act against their beliefs. If you truly believe it’s a bubble, you should act to get out. Hedge funds have been witnessing such action as their redemption requests keep on piling up.
Janet Yellin' and Yellin' said:
If you don’t know what you are doing, how do you know when you’re done?
With a name like Smucker’s, it has to be good!
With equations like that, they must know what they’re doing!
Or so goes the deepest throughts of a politician’s mind.
Sgt Milstar said:
Here in Southern California we are experiencing layoffs in the manufacturing and warehouse industries.
CzarChasm Reigns said:
Test (not typing a bunch just to watch it disappear again).
CzarChasm Reigns said:
This concludes my test of the comment system.
If this had been an actual comment, you would have been inclined to snicker.
But for now, like the Fed, I got nothing.
One Orthodoxy does not invalidate another. The integration of a new economic and monetary paradigm is necessary to resolve all of the theoretical “missing of the mark” on both and all sides.
Jackson Hole? Perhaps these Fed critters should be called J-holes from now on? A more advanced version of the better-known critters, the common A-holes 🙂
Sgt Milstar said:
We are having bubbles here in Southern California. They are called jobs. The bubbles are bursting.
All we need to know is “How much liquidity will the Fed dump into the system over the next year?”
That’s it,,,that’s all.
The graph is correct. It looks exactly as a graph would if derived by market implied volatility around a forward curve. Essentially expanding straddles. It is actually the correct way to look at ANY market.
Actually the blue line is high, but conceptually I would use a graph like this as a litmus test to see how deep someones understanding of markets are. Conceptually it is quite mature.
Historically true hyperinflation is the result of deliberate fiscal policy, no? Sounds like that policy is under active consideration.
Jon Sellers said:
Weimar Germany used hyper-inflation to devalue the mark in order to make reparation payments for WWI cheaper.
Zimbabwe used hyper-inflation to devalue their currency in the purchase and redistribution of white-owned land.
So yes, it is always on purpose. The United States doesn’t have these kinds of issues. So I can’t see a hyper-inflation scenario.
The A-holes meet inn J-hole.
I’ve got a Master’s in Electrical Engineering concentrating in control systems, which involves solving systems of differential equations. Even I can’t understand what the FED is trying to communicate. My cynicism interprets the message as a deliberate attempt to obfuscate and bluff their way through complete ignorance. There may even be a secret message embedded in the choice of symbols.
“There may even be a secret message embedded in the choice of symbols”
That would be a very smart way of communicating their planned actions to a few hundred associates around the world , people they trust completely but do not want to risk making a communication with each time, and the minutes guaranteeing authenticity as well as equal opportunity of access .
Far fetched , I know , but not beyond possible .
Based on the speech excerpts (I have little stomach for more at the moment), I thought the writers and policy people who put together Yellen’s speech did a superb job. The cited reactions, especially the negative (with their focus on interest rates) are proof of “Mission Accomplished.” Yellen on interest rates was like a magician diverting audience attention from the real sleight of hand; opaque speech jargon building a consensus for fait accompli quack economic remedies like a wealth tax without a Congressional vote, negative rates, helicopter money, etc. Jackson Hole coverage was: Yellen and the FED 98, Clueless and Inept, self-congratulating Media 2.
IMO, the Jackson Hole also showed that negative rates could be in the offing and so they had Marvin Goodfriend providing academic cover…
If you can produce s*** then book yourself a place at Jackson Hole for a presentation.
I heard the visibility in Jackson’s Hole is poor this time of year. Janet probably can’t see beyond the tip of her nose. Nothing new.
Check this from the MSM shit-show machine:
Calls grow for U.S. government to spend more:
“Larry Summers, the U.S. Treasury Secretary under President Bill Clinton, has been calling for more government spending for months. He thinks it’s the best solution to get the economy out of what he calls “secular stagnation.” Ahhh, didn’t we try that before?
Well, it’s not like it’s REAL money anyway.
I think we’ve finally gotten to the point where when they propose nonsense like this, it is implied that everyone understands the nature of “the money” they will be spending.
As Micheal Gayed put it, we learnt that the Fed should learn to STFU!
What is the Fed supposed to do – admit they are wrong, and allow the Keynesian bubble to burst? https://www.armstrongeconomics.com/world-news/banking-crisis/are-central-bankers-coming-to-a-bitter-end/
Hopefully it will be forced on them soon – Hobson’s choice if you will. Imagine how big a problem this has become (The big 5 – US, UK, Europe, Japan, China – all hanging by the central bank thread) just by not allowing a purge earlier-may be after stabilising the system. Now just imagine a few years down the line continuing in this manner – the problem will not go away – if you feel today is unmanageable I am sure we will be searching for a word to describe it a few years hence). Look at it like an infection – what happens if you allow it to grow – earlier you would have to amputate only the feet – now who knows — arms, legs and more. IMHO, the time was 2010 after bailing out the system and putting the system on its feet, the companies and regulators responsible should have been weeded out.
Anyway the Fed will do all it can to postpone the inevitable…
I am reminded of my all-time Washington insider movie, the Coen Brothers’ “Burn After Reading.” At the close, the baffled CIA director asks his equally baffled aide, “What did we learn here?”
Washington (and the Fed) in microcosm.
I learned I need to speed up my purchases of silver because the end cannot be that far away.
There’s nothing to learn from what they say but perhaps much to learn from how people react to it.
We learned Jackson Hole is a lovely place to vacation at this time of year. Especially if you’re on the taxpayers dime and can afford the champagne, caviar and five star dining lifestyle.