Posts Tagged ‘Michael Woodford’

Notes From Underground: The FED Goes From Quantitative to Qualitative … You Do the Math

December 13, 2012

Well, the famed modeler from M.I.T. has finally admitted that he has been an avid reader of Notes From Underground and in the world of global macro finance, 2+2=5. The FOMC statement was a surrender to the work of Michael Woodford as was pre-released in a Janet Yellen speech a few weeks ago. The FED will give great credence to a 6.5% unemployment and a 2% inflation threshold, give or take a 0.5%  discretionary prerogative. The 6.5% unemployment threshold is also subject to FED discretion for it seems to depend on whether or not the labor participation rate is increasing while the unemployment rate declines.


Notes From Underground: Jackson Hole is Running on Empty (REISSUE)

December 12, 2012

Before we get into what the FED announced today, it is imperative to revisit the Jackson Hole Symposium and reexamine at the Woodford research paper  that was delivered. It seems that Michael Woodford is the main economist behind current FED policy and that was revealed by Janet Yellen in a speech a few weeks ago. Vice Chair Yellen put the 6.5% threshold out there in the public domain so it must be time for Jon Hilsenrath to go the way of previous FED mouthpieces. The FED has certainly enhanced its communication skills by indicating policy through the speeches of certain FED Governors. Ms. Yellen, you are the anointed one. (Click on link below to read post.)


Notes From Underground: Jackson Hole is Running on Empty



September 13, 2012

First, as I read the FOMC statement, it was painfully obvious that the impact of the Michael Woodford piece found willing adherents in the bowels of the Board of Governors of the Federal Reserve. The FED’s language: “IF THE OUTLOOK FOR THE LABOR MARKET DOES NOT IMPROVE SUBSTANTIALLY, the committee will continue its purchases of agency mortgage-backed securities …” Further, in a direct BOW to Woodford: “The committee expects that a HIGHLY ACCOMMODATIVE STANCE OF MONETARY POLICY WILL REMAIN APPROPRIATE FOR A CONSIDERABLE TIME AFTER THE ECONOMIC RECOVERY STRENGTHENS.”


Notes From Underground: JACKSON HOLE is RUNNING ON EMPTY

September 3, 2012

The Bernanke speech did not surprise readers of NOTES FROM UNDERGROUND as Bernanke did not promise any new stimulus plan but spent most of the speech recalling the successes of the FED’S extraordinary efforts to stimulate the economy and prevent a disastorous deflationary period from gaining traction in a debt-ladened financial system. The initial market response was a selloff in the precious metals as the ALGOS reacted to a no new stimulus headline with, “risk off” and after reading that the headlines were cursory and misleading, reversed and the GOLD AND OTHER RISK ON ASSETS WENT INTO FULL RALLY MODE.


Notes From Underground: Old Faithful Is In Yellowstone, Not the Grand Tetons

August 27, 2012

For the record, the Jackson Hole meeting actually takes place in the lodge at Grand Teton National Park. Again, the Ben Bernanke of QE fame WILL NOT OFFER UP ANOTHER ROUND OF QE AT THE JACKSON HOLE SYMPOSIUM. To do so would let the scallywags that OCCUPY WASHINGTON TO FINISH ANOTHER YEAR IN OFFICE WITH A GOLD MEDAL FOR IRRESPONSIBILITY. Chairman Bernanke, the WALL STREET MACHINE is hoping that you provide another dose of LIQUIDITY. Do not perform as OLD FAITHFUL and deliver. Force the hand of ELECTED OFFICIALS to actually make a serious attempt to deal with their constitutionally prescribed responsibility, FISCAL POLICY.