Monday, September 16, 2013


Got back Friday evening late and spent the weekend recovering from a week of Grandchild-sitting.  Trouble and Strife has a bit of a cold but this time they didn't try to kill us with out-of-school pathogens.  Grateful for that.  I was busily composing this day's piece about which I really felt good having been soooo prescient last week but have just now discovered that Wednesday's and Thursday's chronicles, composed and supposedly posted via iPad never got into print.  I hate the iPad probably because I never figured out how to use the damn thing due to the fact the from the moment I got it as a birthday gift, T & S decided it was perfect for her and requisitioned it.  I'm allowed 2 hours a day usage.  It's a fine relationship we have.

Anyway, what I said was that my prediction as to The Leader's speech on Syria was spot on: I could have written the damn thing.  I also said that contrary to popular belief, Summers was not going to get the job.  Of course I've been saying that for months and Voila, poor Larry is forced to back off or endure the embarrassment of having The Leader or one of mouthpieces announce that Larry, in the mind of The Leader, doesn't have what it takes.  Mr Summer's monumental ego would not allow that to happen; ergo, he resigns from the job he never had.  Such are the ways of the District.

Of course, the markets loved it.  Ms. Yellen is as soft money as can be causing stocks to rise and yields to decline.  Expect an announcement on Thursday that the Fed will begin a modest tapering but don't be fooled; Miss Janet ain't going to let go of this wonderful piece of academic nonsense that has been tried out for the past three years and to anyone without skin in the game and a brain in their head has been proven to be just about useless.  They'll ride this horse 'till it drops, but actually this is the least of the worries that emerges from L'affaire Summers...the very least.

The mischief has always been in the Fed's dual mandate;  inflation and full employment.  We have been fond of speaking of "our independent central bank," but as of today that has become impossible.  All pretense has been dropped.  The Fed is now a purely political creature and in the worst possible way.  Because of an impossibly dysfunctional and incompetent White House, Congress has learned that it can control the process when one has a Chief Executive to whom politics is the only thing that counts as it is the only thing that conserve his well-being.  This coming on the heals of the Syrian debacle makes it certain that no Fed decision in the future will be made without input and direction from Capitol Hill which means that most monetary decisions will, in regard to the good of the country stink.  Further, while American influence will remain, albeit on a reduced scale due too our sheer size, our leadership will decline a great deal in international markets simply because everyone now realizes that it is merely the political party in power that is speaking.  No longer will the private discussions between central bankers occur with the same degree of trust and confidentially;  Washington is a sieve and everyone knows it.  My opinion on the front page of the Post or Times within 24 hours?  I don't think so Janet ol' girl.  I think we have just lost something something that has been cherished and incredibly useful over many, many years.  Then again, in the new world order I guess I'm just a Luddite---I wear the title proudly.

So we wait until Wednesday to see what the immediate future holds, while Over There the German elections are a day closer and things are looking rather good for Angie & Co., good enough that Angie's guys were quite prepared to jump all over Sr. Draghi in his comments regarding a single regulator for all of Euroland's banks.  Confidence abounds--except in regard to the southern tier where things are going to get a bit ugly I think as we get further into the fall.  I must admit I didn't think we would make it this far without the storm clouds forming again and maybe my skepticism will continued to be proven incorrect as we proceed but I don't think so.  Anyway there is going to be enough to worry about Over Here to keep us busy.  Good to be back and I am terribly sorry for the missed posts

1 comment:

  1. The question for me is does Janet HEART Danny T, or given the fact he hasn't gotten the VC chair do we get back to something more reasonable.