Nah, of course she is. She just doesn't have anything left to say.
As predicted, Janet Yellen told the Senate today that the Fed has looked at negative interest rates and continues to look at the concept. Everything else they have tried has failed so there is nothing left but this. The equity market immediately traded down 400 points led by the banks which are slowly being destroyed by the Administration, the Congress and now the Fed. At the close we had an "encouraging rally" as one talking head put it as the DOW closed down only 255 points and the ten year was at 1.64% against a mid-morning trade at 1.52%.
I'm going to make this short because I have little to add over what I have been repeating for the past couple of weeks. The global economy is heading into recession and the U.S,. economy is heading in that direction as well. The job numbers are rubbish; GDP is awful; consumers are NOT spending the "gasoline tax cut;" oil prices will be at $20 before they are at $40 and the engine that could turn things around--the providers of credit--is being systematically destroyed. And that is exactly what the markets are telling us.
The governments are really the ones to blame with the U.S. earning more than its share but the world's central banks have made such a hash out of this for the last 8 years that it is inconceivable that they will be allowed to continue in this manner for much longer. The problem is, I think, that it may get a lot worse before it gets better. I'm still upset over the woman's testimony today: it was patently dishonest, but she and her colleagues could begin to get this global mess back on track by simply saying: "We got it wrong." The markets might then begin to believe and perhaps trust once more. Belief, after today, is gone.
No comments:
Post a Comment