Wednesday, March 18, 2015


Well, well, well.  No more "patient."  So rates are going up, right?  Wrong.  Janet will find a way and the ways (excuses) are actually pretty accurate.

Turns out job growth didn't turn out to be that important after all.  Or maybe, as she tended to phrase it, the good job numbers weren't quite so good...or good enough.  Thinks she knows something we don't?  The economy, according to Janet, is not only not that hot but looking a bit dodgy, growth is below plan, inflation is not there to her liking (blame it on the dollar and whose fault is that) and things are getting less efficient out there which eats into earnings (?) the result of all of this being no rate increase in April AND in so far as the street is concerned, not for a while.

Everything went through the roof; stocks, bonds, futures. oil...everything.  I keep telling ya.  This girl ain't gonna raise rates until forced to do so or until Il Duce's mob gives her a heads up.  This is about appearances gang, and the stock market is the greatest appearance maker for this now-totally politicized Fed.  I'm sorry, but that is what I believe.  Ms. Yellen has played it beautifully and most people have fallen for it but she has no intention of rocking the boat coming into the big election year and a rate rise would kill this market stone dead.  Let's everybody rest easy until the fourth quarter and even then I suspect we will be right where we are today, save something unforeseen on the horizon.  Dance when the music's playing as the former CEO of Citigroup once said...just before the music stopped leaving he without a chair...or a job.

But to be honest, Janet may also be in the "bugger thy neighbor's currency" camp along with the rest of the central bankers in the world.  A rate rise slaughters the Euro  and the Yen but goodie, goodie for EU and Japanese exports but bad for us Over Here.  Needless to say there is more than a little politics involved in such a decision as well as such an action having the result of  holding inflation down.  Voters like that. I'm not saying this is altogether a bad thing but we now have the central bank running all aspects of the economy while none of the things that should be done in the fiscal or political sectors get done.   I guess I'm getting just too damn old and crotchety.  Or maybe I'm more like the little kid yelling "wolf."   I like the little kid image better.

Greece on tap tomorrow.  Things are getting stranger and stranger.

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