JANET YELLEN: proof at last that the US Fed is cooking the books

mesnip19916 The Fed’s narrative was never sublime. Now it’s just ridiculous. But Schadenfreude insists we laugh at the painful acrobatics of Chair Yellen

Along with millions of people around the Globe, I veer every eight weeks between finding Janet Yellen’s reports and Q&A sessions variously ludicrous, alarming and laugh-out-loud funny.

Yesterday, it seemed at times she was this ageing New York Jewish matriarch giving out the recipe for this, that and every other thing, the one commonality between all the recipes being that we never get a cake or a casserole or even some chicken soup. Ms Yellen cooks everything in  the airing cupboard, and it shows. Nothing is ever ready to eat; and this raises little beyond the level of professional doubt with every episode of her high-rating culinary show Valium-Slow Cooking with Grandma Janet. Pretty much everyone is now clear that the Fed is cooking books, not food.

The ludicrous element each time is the tedious use of phrases about what careful cooks she and her sous-chefs are. “I can assure you,” she says regularly, “Every passabiliddy is taken into account, every last figure is checked, we keep an eye on everything, and nothing is left to chance”. The one chance not taken into account at all by the Fed, however, is that its entire monetary policy is a failure morphing slowly into a deranged attempt to call the refusal of a soufflé to rise “a modestly accommodative pancake”.

This where, for me, things get downright alarming. My jaw hit the coffee table (and it’s a long way from stiff upper lip to coffee table at my house) when she somehow enunciated the words, “we don’t want the economy to overheat” and nobody in the room even groaned. Had a few journalists said “Are you for real?” I would’ve felt at least a degree of relief. But the insane observation was greeted with a pin-dropping moment of silence.

Imagine Janet’s sense of panic, on getting back to the Fed kitchen after a day in the Bubble below the Reserve Building, to note that some idiot has taken the Matzos out of the airing cupboard and put them on the window-ledge in full sun.

“You are maybe some kind of mashugunna?” she yells, “I leave you for a few hours and the bread is cooking already. We do recipes here, not meals, whaddarryoo – Krusty the f**kin’ clown?”

Meanwhile, back at the Q&A, someone asks gently whether there’s any heat at all in the economy, and the Fed chair relents a little.

“Sho!” she begins with her by now trademark squawk, “Taking all things into consideration and remembering the progress that has been made in the light of unexpected events, we would probably except that, right now at this point in time, the US economy is sub-dude”.

You see, that’s our problem right there: the economy hasn’t matured into a dude just yet. It’s still, you know, an acne-splattered adolsecent. Not quite a dude, more of a dud. But with a little more time and nurture in that airing cupboard, it’ll emerge as a real peach of a dude. It’ll still be sub-prime, true….but then it’ll be in its prime again. One day.

Corners are being turned, currently at the rate of one right turn a year. Then just before the next election, we’ll be back where we started. Maybe we’ll be 25% down on the wheelcount, but “we have many tools that can be employed and chosen to address such issues” as and when they arrive in due course, the fulness of time, at the end of the day and before the cows come home, having first jumped over the moon”.

The next Yellen Kitchen is in December. Failure to bring out a cooked Thanksgiving Turkey  on that occasion will put the Fed itself at the front of the queue to be the Christmas Turkey – and produce dangerously doubtful markets in the New Year.

But to my mind, another rate hike will crush the recovery of any emerging nation heavy with Dollar denominated debt.

Janet Yellen is in a hole, and it isn’t in Jackson. She’s damned whether she does or doesn’t, and it’ll be her own fault: she should have kept a more discreet counsel at the end of 2015: too bullish one year, daft cow the next. Harsh but fair.

Last week at The Slog: ‘No money left’ for Waspis is a silly argument, & the DWP should stop making it

25 thoughts on “JANET YELLEN: proof at last that the US Fed is cooking the books

  1. Dollars to doughnuts they raise rates in December and the markets then swoon into Obongo’s long farewell and Queen Hill’s (assuming she is still copus mentus) g’day on 20 Jan.
    The alternative scenario is that Julian Assange leaks something big enoughg to sink the good ship HMS Hitlery before 8 November and then the markets are Trumped by first the Donald and then crashed by Yellen’s rate increase.


    I think Trump to win without Assange. This gives Yellen the kopout to cite US “political instability” as the reason not to raise in Dec – “pouring petrol on a fire” & other bollocks.
    Then Yellen & her community blame everything that follows on the Donald…. he kind of becomes their Brexit.
    Then if that doesn’t destroy him, it’s grassy knoll time again.
    What fun we shall have. :-((


  2. Ah, so it’s jam tomorrow …. or the next day …. or the next.

    The hole that they’ve dug for us all really is now too deep to extricate us from by conventional means. It surely can’t be too long before the sides start crumbling.

    Liked by 1 person

  3. You have to admit JW that Fed policy is not influenced by politics! Only the data matters. It must be true, Chairman Yellen said it herself.
    I don’t know why everyone is waiting for a collapse. The rule books have been torn-up. If markets turn down, the Central Banks will step in to buy everything. The Japanese, European and Swiss Central Banks provide a good example.
    The world economy may become moribund but the data will look fantastic!

    Liked by 1 person

  4. Soothing Fed Sends Global Stocks, US Futures, Commodities Higher.

    Following the Fed’s “hawkish hold” and the BOJ’s “confused contradiction”, global risk (and non-risk) assets got the green light, and as a result stocks and bonds rallied in Asia and Europe, with US equity futures rising another 0.4%, advancing with oil and industrial metals, as iron surged in Chinese trading.



  5. Interesting article by AEP and a surprise. Sort of thing you expect from ZH – that predicts 10 out of 2 recessions. Though in my view we are overdue a big correction. Trouble with debt write off though is the borrowers are happy, but the lenders (ie investors) take a loss. Can’t square that circle. And you can bet the ultimate investors are you and me.

    Liked by 2 people

  6. @Harold Rosario – CB’s step in to buy everything.

    Even themselves … so what play can we decide. Well if Deutschbank tanks the BOE will step in with some of its freshly printed QE to buy their assets because “the ECB cannot bail them out, against the rules”. Greece will have more money like Draghi stipulated, but only for the creditors = Deutschbank.

    It is either that for the BOE or because it expects an imminent payout for gold kiting and all the discrepancies are revealed as the London gold market is wound up. I can’t quite make up my mind which either way the UK taxpayer pays for it BREXIT or not.


  7. Is this the most telling/chilling part of that article?
    ‘the last chance to start a war.
    This would allow them to postpone elections or force Trump, if he were to win, to begin his presidency in catastrophic conditions. Thus, the US neoconservatives and globalists need war. And fast, before it’s too late. If Trump gets into the White House when there will be peace, then there will be no such war, at least for the foreseeable future. And this would spell the end of the omnipotence of the maniacal globalist elites.


  8. Ok, well I was trying to respond to KFC with two basic points.
    1) The US will goad Vlad into war at the first opportunity.
    2) Hillary Clinton is dying and is quite prepared to spend her last few years in a bunker watching the rest of us burn, just like her idol.

    Liked by 2 people

  9. JW I just don’t see how Trump gets to the magic 270 electoral college votes. He is at 256 – 14 short- and hillary is at 281 according to Nate Silver. Only Pa is marginally in play with 19 votes but the Democratic machine means the dead vote early and often in Philly and pittsburg in such numbers to overwhelm the hill billy coal miners in the Appalachians on the Ohio and West Va borders.

    I hope we get an upset but I really don’t see it. Elections are fixed in the US to a greater extent than other developed countries.


    All good points made without rancour and received in the same spirit. The best hope is that some Collegiates decide the national interest is not best served by electing a potential corpse, and switch….or say they will, and voters act accordingly.

    As Dickens wrote, “It was the best of times, and the worst of times”.


  10. I have just read the link to the telegraph article posted by Kit Green. Dear me most of the UNCTAD’s report could have been lifted from The Slog. John the message is now being heard in high places, if a little late. Unfortunately this means that the globalist neocons and Shrillary are running out of any option but to forment a war.


  11. John
    London mayor Sadiq Khan says ..”Bombing part and parcel of (enriched) city life!”
    I think some primitives would take this as an encouragement to take short-cut to heaven !


  12. John,

    You have forgotten that in normal economies in mid-cycle interest rates are about 2-3% above the inflation rate. Underlying inflation in the US is currently around 2% meaning that interest rates should be around 4-5%. Give the Fed some credit. They at least remember what a normal economy looks like and are trying to move in the right direction towards one. They also acknowledge the possibility that the current era of ZIRP could end in rising inflation that forces a tightening of monetary policy. It is better to raise rates while the economy is still growing albeit slowly than when it is contracting.


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