While I was away, Mr. 37 revealed that he is a 37er so the markets OUGHT to take very seriously Ben Bernanke’s PROMISE to Milton Friedman that the FED will not make the mistakes of 1937 again. In the interview with Diane Sawyer and the speech delivered at The National Association For Business Economics on Monday, the Fed chairman displayed his 37er credentials in full force.
Posts Tagged ‘extended period’
Notes From Underground: WAS BERNANKE HAWKING A HAWKISH OUTLOOK???
June 22, 2011I feel like I’m the odd analyst out in that Bernanke failed to impress upon me that he is a DOVE in HAWKS’ feathers. Reading the FOMC statement over and over leaves me wondering just what made the statement so strong an anti-inflation stance. The FOMC release reiterated that the FED is relying on closing the output gaps, “including low rates of resource utilization and a subdued outlook for inflation over the medium run–are likely to warrant exceptionally low levels for the federal funds rate for an extended period.” This is not the musings of an inflation HAWK.
Notes From Underground: Bernanke’s Suatainable Trajectory
June 8, 2011The FED chairman delivers a major address on the economy at the International Monetary Conference hosted by the Atlanta Fed. It seems that the FED is content to stand behind the veil of its dual mandate. Bernanke did a great deal to explain away the transitory nature of commodity price increases, while maintaining that the economy recovery is too fragile and unemployment too lackluster to begin removing the language of … “economic conditions are likely to warrant exceptionally low levels for the federal funds rate for an extended period.” This is very consistent language and unlike the way the S&Ps reacted to the chairman’s speech, I believe that Bernanke’s language was very soft.
Notes From Underground: Remember, Ben Bernanke is a ’37er and he Promised MIlton Friedman
June 2, 2011Tomorrow comes the most important data point for the markets as the BLS releases the monthly unemployment report. Yesterday, the market was abused by the ADP employment info, which was much weaker than expected and lead to a selloff in all asset classes. A quick gaze upon the closing CQG quote board lent credence to the line from Apocalypse Now: “I love the smell of deflation in the morning.” Of course, I jest as I substitute DEFLATION for NAPALM but the use of either causes major destruction. The ADP data was able to cause so much angst because it followed very weak housing and manufacturing numbers released during the previous week. The CONSENSUS for Friday’s UNEMPLOYMENT REPORT is for: NONFARM PAYROLLS of 155,000; the jobless rate to hold at 9.0%; and average hourly earnings to show a gain of 0.2%.
Notes From Underground: Sovereign Wealth Funds aren’t like you and me (they have OPM-Other Peoples Money)
March 14, 2011The news for most of the day was about Japan and the continuing despair as a result of Friday’s earthquake and tsunami. Markets were fixated on the problems of the nuclear reactors that were severely damaged by the tsunami and whether or not there was going to be a meltdown of the core. The talking heads were dragging out the experts from central casting. Each had an axe to grind on whether they were pro- or anti-nuclear energy. I am certainly no nuclear expert but the best research that was sent my way focused on the importance of the 72-hour period as being the most critical. Hopefully, those nuclear experts are correct and the most significant danger has passed. Many pundits offered opinions that this was the end of the nuclear energy debate for no citizens would want the reactors built in their areas.
Notes From Underground: CNBC-CME Trader Sounds Off
June 24, 2010
Click on the image to watch me discuss Wednesday’s FOMC statement and the never-ending tennis match.