You know Vince, one of the greatest football coaches (American) ever? He was the guy caught on film yelling from the side (touch) line, "What the hell is going on out there?" I was channelling Vince a bit today so I called He Who Knows All Things and asked, "What the hell is going on out there?" He answered, "Who the hell knows." This did not make me feel good.
This morning, the GDP for the second quarter was announced as having grown 1.7% along with a reduction of the first quarter number. What was also announced by the Bureau of Economic Analysis was the manner in which something called comprehensive revision had been recalculated going back to 1925 in order to more accurately present economic growth which of course means that there isn't anybody out there who knows what the hell is going on in regard to the economy and that all numbers, including this morning's, are crap. Nice one guys. All I know is nobody here in the Fly-Over Zone can find 1.7% despite the best corn and soybean crop in recent memory. Deliberate? Welllllllll, not if you believe in the absolute honesty of this administration. Not many of those guys around this part of town either.
So while markets were trying to digest this bag of fertilizer, out comes the Fed to announce that while things didn't go all that well they didn't go all that badly, and there is optimism for the second half, and blah, blah, blah, and oh, by the by, we are going to keep liquidity running for a bit. Well of course you are guys (and girls--that's you Janet), because this tsunami of liquidity is the only thing holding this mess together and everybody with half a brain has figured that out. However, creeping into this picture is the fact that the 10 year has stayed right up there 100b.p. from a year ago and why the hell is that happening and for once, in addition to the admission that I was wrong in saying it was coming back down I can explain it. The market got head-faked by Bernanke, switched all the positions, got faked out again and now, pretty much convinced that the Fed doesn't know what the hell is going on out there either, is just going to sit tight with open books until Another Sure Thing appears on the horizon.
And speaking of Janet...This Chairmanship thing really got out of hand today with every talking head in the universe, including many Over There chipping in on the relative strengths--and especially weaknesses--of the two primary candidates. She could stop it any time she wants but she's running hard...perhaps too hard. The Leader could stop this anytime HE wants--after all he started it with the disgraceful interview in which he fired Bernanke. How? Simple, really. Choose a third party with whom no one would disagree. A guy with an Ivy League education, impeccable economic and public sector service credentials, nice guy by all accounts and who would be ready to serve. How about Roger Ferguson? Fills the bill completely. The perfect choice and huzzahs for the The Leader all around. The New York Times would be drooling to write that editorial once again praising his foresight. Most importantly the in-fighting and the critics would be silenced which for the new guy may not be a bad thing. Not a word would be raised in protest. Makes sense to me. Oh, did I mention that Mr. Ferguson is Black?
Showing posts with label Ferguson. Show all posts
Showing posts with label Ferguson. Show all posts
Wednesday, July 31, 2013
Tuesday, April 30, 2013
MOVING ON
Well, Monday came and went. The Leak created not a ripple in the otherwise placid pond of Euroland. The Italians formed a government which withstood its first no confidence test and promised that Italy would not die the slow death of austerity as the PM flew to Germany to express his desire to stick to the suggestions of Ms. Merkel and the requirements of the Troika. Now how that circle is going to be squared is anybody's guess but there you have it and so far the Germans have not said anything...well...Germanic.
I must admit that I was a bit skeptical about Massimo's outline of the last week despite his past record but almost as though on cue, the deputy PM, who as a member of the governing coalition while at the same time the head of the party of Berlusconi, immediately took credit for the tough talk against austerity and proclaimed his party's victory and of course by extension, the victory of the old reprobate. I was going to call Massimo today and congratulate him but then thought, hold on, let's see how this thing plays out...at least for a month. In the mean time, the focus may well be off Italy for a bit as the news out of Spain continues to worsen and while somewhat overlooked Over Here, all the talk Over There is is the utter collapse of Franco/Germanic relations at this point, they degenerating into ad hominem attacks on Ms. Merkel. The Hollande government's approval rating is somewhere in the middle 20 per cent and a bit of frustration and panic seems to be setting in. Funny. The French and the Germans used to have at it about every 40 years for God knows how long--I mean every generation in Alsace-Lorraine would have to learn a new language--and that was supposed to be ended by the EU. Well, old habits die hard and while I'm absolutely sure there will be no shooting, not much good is going to happen in the mean time.
The near future conversations will be dominated by thoughts as to the action of the ECB on Thursday. There is now an almost 100% agreement that Mr. Draghi will lower interest rates yet again from their massively high level of 0.75%. If that doesn't happen it's really going to be fun to watch...almost as much fun as observing people in belief that this action is going to make a difference.
Finally, today in a truly funny moment, Harvard historian Nigel Ferguson--who is a seriously smart guy--was commenting on the dust-up between his two Harvard colleagues, Rogoff and Reinhart and Little Paulie of Princeton residence. Deriding Krugman's assertion that he had won the argument, Ferguson proclaimed that he in fact was wrong and that was the kind of comments headline writers for a tabloid make up not someone who used to be an economist. Whoa! In academia that's akin to remarks about your mother. Can't wait for the next chapter in this soap opera.
I must admit that I was a bit skeptical about Massimo's outline of the last week despite his past record but almost as though on cue, the deputy PM, who as a member of the governing coalition while at the same time the head of the party of Berlusconi, immediately took credit for the tough talk against austerity and proclaimed his party's victory and of course by extension, the victory of the old reprobate. I was going to call Massimo today and congratulate him but then thought, hold on, let's see how this thing plays out...at least for a month. In the mean time, the focus may well be off Italy for a bit as the news out of Spain continues to worsen and while somewhat overlooked Over Here, all the talk Over There is is the utter collapse of Franco/Germanic relations at this point, they degenerating into ad hominem attacks on Ms. Merkel. The Hollande government's approval rating is somewhere in the middle 20 per cent and a bit of frustration and panic seems to be setting in. Funny. The French and the Germans used to have at it about every 40 years for God knows how long--I mean every generation in Alsace-Lorraine would have to learn a new language--and that was supposed to be ended by the EU. Well, old habits die hard and while I'm absolutely sure there will be no shooting, not much good is going to happen in the mean time.
The near future conversations will be dominated by thoughts as to the action of the ECB on Thursday. There is now an almost 100% agreement that Mr. Draghi will lower interest rates yet again from their massively high level of 0.75%. If that doesn't happen it's really going to be fun to watch...almost as much fun as observing people in belief that this action is going to make a difference.
Finally, today in a truly funny moment, Harvard historian Nigel Ferguson--who is a seriously smart guy--was commenting on the dust-up between his two Harvard colleagues, Rogoff and Reinhart and Little Paulie of Princeton residence. Deriding Krugman's assertion that he had won the argument, Ferguson proclaimed that he in fact was wrong and that was the kind of comments headline writers for a tabloid make up not someone who used to be an economist. Whoa! In academia that's akin to remarks about your mother. Can't wait for the next chapter in this soap opera.
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