Tuesday, June 2, 2015


Now I know it's a little strange out there sometimes, but there must be a full moon or something going on  because with just two days gone in this week,  things are nuts all around the world.

Yesterday, Stan Fisher made a speech up in Canada.  Stan makes Alan Greenspan look like a writer of children's books..."See Spot run...run, run, run."  No one understood what he was saying.   Now I knew what he wanted to say (I think).  He wanted to say that things weren't looking so bad so it was time to get on with the business of normalizing rates but he couldn't.  He wanted to say that Dodd/Frank was a pain in the ass but he couldn't.  He wanted to say that the less-than-sterling economic recovery was perhaps more of a structural problem than a financial one, but he couldn't.  In fact what he supposedly did say was the opposite of all the things that I think he wanted to say...or so it was reported...but he didn't.  One thing he was serious about was the almost off-hand remark that financial crises are not a thing of the past and the Fed doesn't have all the answers to prevent the next on, so let's stay on guard.

 One would think that a speech like this by the Vice Chairman of the Board would be widely reported in today's press...but it wasn't.  The press figured out that they didn't know what he said either.

So today we get Lael Brainard of the Fed telling us that the dollar and weather was the cause of the lousy first quarter numbers but not to expect a strong rebound in the second quarter.  Huh?  The weather's fine and the dollar has weakened so why not?  Well I guess that means no rate hikes, eh?  Not so fast says she, we may have to move after carefully considering all the data.  Translation: don't hold your breath.  Now Ms. Brainard is a serious political player and if she believes (which she does) that to get anywhere near the  Administration's touted 3% growth rate coming into an election year with a middling second quarter after a -0.7% first quarter, we gotta keep pumpin' it out, baby, we have a real split on this Board.  Stanley Fisher against probably everyone else.  In matters of intelligence and economics, Stanley wins but not politics.

Were the openly contrasting views widely noted in today's press?  I guess I missed it.

Finally, Over There, the Euros presented the Greeks with a series to requirements (none dare call them demands) and the Greeks presented the Euros with a plan of their own.  A real love story: two ships that pass in the night.  It reminds me of the battle between two cities in New Jersey many years ago over water rights.  Jersey City sued Hoboken and won and promptly sent Hoboken a bill for somewhere in the neighborhood of $2,000,000.  Hoboken had a checking balance at the time of about $16.53.  A very good friend of mine, then the assistant corporation counsel for the then-blighted city was asked what he was going to do with the bill.  His response?  "I'm going to mark it, 'Deceased, return to sender.'"

The Euros had better decide whether they want the Greeks in or out.  The Greeks have to decide the same thing.  "Deceased, return to sender," seems to me to be an elegant solution for either side.

Oh, one more piece of craziness.  Whilst Chrissy was trying to figure out how to get 1.8 billion Euros back from the Greeks, the geniuses in her wholly-owned economic think tank published a study (they are very good at studies) proving without a doubt that nations should simply forget about paying back their debts and just keep pumping it up to stimulate growth.  Hell, who needed a study!  The Greeks have been saying this all along!  Once again, you can't make this stuff up.   Look for Little Paulie Krugman to be all over this one in the Times ASAP proclaiming vindication and agreement with the mighty IMF!   I just wonder how Angie is going to explain this one to Das Volk...especially as you can bet your boots in any plan the IMF gets paid first.

Its gotta be more than a full moon.

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