“Every cycle in human history has ultimately come to an end,”Tad
Rivelle, who helps oversee $195 billion
for TCW, said in a Bloomberg Television interview Friday. “Credit-enhanced
cycles come to worse ends than the normal kind.”
The Fedster’s big day came and passed into
history as a great non event. The more the talking chair talked, the more
obvious was the befuddled nature of the Fedster’s in August 2016. On the one
hand, the Fed’s talking chair droned on, completely out of her depth, while on
the other hand doing something might make matters worse, we just don’t know. Enjoy
the Korbel and the canapés.
Below, what passes for grown up economic
thought in the 21st century. Hayek and Schumpeter it aint.
Give
me a one-handed economist! All my economists say, ''On the one hand? on the
other.''
Harry
S. Truman
Yellen Imagines a Future Where Fed Tinkers With Inflation Target
August 26, 2016 — 5:51 PM BST
Federal
Reserve Chair Janet Yellen raised the possibility that future policy makers
might increase their inflation target and broaden the types of assets they can
buy to enhance their ability to counteract a severe recession.
While
stressing that the central bank was “not actively considering” such steps, she
told a Fed symposium in Jackson Hole, Wyoming, on Friday that “they are
important subjects for research.”
Yellen
said monetary policy makers currently have sufficient tools to handle economic
downturns “under most conditions.” Those tools include asset purchases and
so-called forward guidance in which the central bank promises to keep interest
rates low.
“That
said, these tools are not a panacea, and future policy makers could find that
they are not adequate to deal with deep and prolonged economic downturns,” she
told the conference sponsored by the Kansas City Fed.
More
Fed’s Fischer: Yellen’s speech consistent with possibility of 2 interest-rate hikes this year
Published: Aug 26, 2016 4:07 p.m. ET
Federal Reserve Chairwoman Janet Yellen’s speech to the Jackson Hole summer
retreat was “consistent” with a possible two rate hikes this year, her top
deputy said Friday.Asked during an interview on CNBC if investors should be on the edge of their seats for a rate hike as soon as September and for more than one rate hike this year, Fed Vice Chairman Stanley Fischer replied: “I think what [Yellen] said today was consistent with answering yes to both your questions, but these are not things we know until we see the data.”
Stocks SPX, -0.16% turned negative and bond yields TMUBMUSD10Y, +0.00% rose after Fischer’s comments.
Earlier, Atlanta Fed President Dennis Lockhart said on Bloomberg Television that the Fed could hike rates possibly twice this year.
And, Cleveland Fed head Loretta Mester, speaking on the sidelines of the event, said “it makes sense” to start moving interest rates higher.
The St. Louis branch’s James Bullard, meanwhile, stuck with his forecast of one rate hike over the next two-and-a-half years.
More
Gross Says Yellen’s Economy ‘May Never Walk Normally Again’
August
26, 2016 — 5:58 PM BST Updated on August 26, 2016 — 7:52 PM BST
Bill Gross, the billionaire Janus Capital Group Inc.
money manager, criticized Fed Chair Janet Yellen’s suggestion that she could consider
further asset purchases as the equivalent of “providing a walker or a
wheelchair for an ailing economy.”
Yellen, speaking Friday at a conference of central bankers and economists in Jackson Hole, Wyoming, said while the U.S. economy has strengthened to the point that interest rate hikes are possible, further asset purchases must remain part of the Fed’s toolkit. Gross, who runs the $1.5 billion Janus Global
Unconstrained Bond Fund, has long criticized central bankers in the U.S., Europe and Japan for keeping interest rates ultra-low and artificially inflating asset prices without adding sustainable economic growth.
“She is opening the door to creating even greater asset bubbles as have the BOJ and ECB and SNB by purchasing corporate bonds and stocks,” Gross wrote Friday in an e-mail response to questions. “This is not capitalism. This is providing a walker or a wheelchair for an ailing economy. It may never walk normally again if monetary policy continues in this direction.”
Gross said Yellen’s comments didn’t take a September rate hike off the table, especially if job growth is healthy. The Labor Department reports August employment data on Sept. 2. The probability of a hike at the Sept. 21 Fed meeting has risen to 38 percent from 15 percent two weeks ago, according to data compiled by Bloomberg.
“To the extent that next month we see a decent job growth number, then I think for sure or close to for sure, you know, in September we’re going to see a Fed hike of 25 basis points,” Gross said in an interview on CNBC. “The market hadn’t expected that.”
More
In central banking as in diplomacy,
style, conservative tailoring, and an easy association with the affluent count
greatly and results far much less.
John Kenneth Galbraith.
Fed’s Bullard Warns Yellen on Credibility, Sticks with Forecast “1 Hike in Next 2.5 Years”
August 26, 2016 4:00:58
Today has certainly been entertaining.First, Janet Yellen came out with a chart showing there was a 70% chance that rates would be between 0% and 4.5% in 2018. Is the 90% confidence level -1.0 to 6?
This was followed up by a blast from St. Louis Fed president and FOMC voting member James Bullard that the Fed’s Forecast of Gradual Rate Hikes is Damaging its Credibility and the Economy.
The
Federal Reserve’s forecast of gradual rate hikes is damaging the economy and
the central bank’s credibility, said St. Louis Fed President James Bullard on
Friday.
In an
interview on CNBC, Bullard stuck to his forecast of one rate hike over the next
two-and-a-half years.
Bullard,
who is a voting member on the Fed’s policy committee this year, said he was
“agnostic” about exactly when the Fed should take that one step but did not
seem eager to move at the September meeting.
Bullard
said he thought it would be best to raise interest rates after there had been
some “good news about the economy.” While there has been two good jobs reports,
“year-over-year GDP growth rate is very low,” he noted.
The St.
Louis Fed head said he was trying to “break down” the Fed’s
“on-the-cusp-of-200-basis- points story” for interest rates over the same
forecast horizon.
Asked if
he believed the Fed’s forecast was damaging the economy, Bullard replied, yes.
'Pink slime' has never
been used in McDonald's beef patties in the UK and Ireland which source their
meat from farmers within the two countries. So that’s alright then. This bank
holiday weekend in the UK, that’ll be burgers all round, I suppose.
‘People of the same trade seldom meet together, even for merriment and diversion, but the conversation ends in a conspiracy against the public, or in some contrivance to raise prices.’
Adam Smith. The
Wealth Of Nations
'Pink slime' maker drops targets in defamation case against ABC
Meat
processor Beef Products Inc has dropped more than half the defendants from a
lawsuit over its allegations that TV network
ABC and others defamed a meat filler critics have dubbed "pink
slime."
The
company, known as BPI, removed ABC's news division, reporter David Kerley, two
former U.S. Department of Agriculture scientists and a former BPI employee from
the lawsuit, according to documents signed by a South Dakota Circuit Court
judge on Wednesday.
The ABC
network, its former news anchor Diane Sawyer and reporter Jim Avila remain in
the case.
Family-owned
BPI sued in 2012 over news reports about its "lean finely textured
beef" product, a meat filler made from fatty trimmings sprayed with
ammonia to kill bacteria.
The
lawsuit said they falsely told viewers the product was not safe, not healthy
and not even meat, causing BPI to lose hundreds of millions of dollars in profits and roughly half its employees.
A trial
on the lawsuit is scheduled to begin in June 2017. Beef Products Inc is seeking
$1.2 billion in damages.
Representatives
of Walt Disney Co, which owns ABC, could not immediately be reached for
comment. Lawyers for ABC, Sawyer, Avila and Kerley also could not immediately
be reached.
ABC has
previously said the lawsuit is without merit.
More
Victory for Jamie Oliver in the U.S. as McDonald’s is forced to stop using ‘pink slime’ in its burger recipe
· TV chef was disgusted to discover ammonium hydroxide was being used by McDonald's to convert fatty beef offcuts into a beef filler for burgers'Why would any sensible human being want to put ammonia-filled meat into their children's mouths? asked Jamie Oliver
McDonald's denies its hand had been forced by TV campaign
----'Pink slime' has never been used in
McDonald's beef patties in the UK and Ireland which source their meat from
farmers within the two countries.
----McDonald's denied its hand had been forced by Jamie's campaign.
Todd Bacon, Senior Director of U.S. Quality Systems and Supply Chain with the fast food chain, said: 'At McDonald's food safety has been and will continue to be a top priority.
'The decision to remove BPI products from the McDonald's system was not related to any particular event but rather to support our effort to align our global beef raw material standards.
----Two other chains Burger King and Taco Bell have
earlier bowed to pressure and removed ammonium hydroxide processed ingredients
from their products.
No update this weekend from young Mr. Jason Jencka in California.
He is recovering in hospital from an infection until Sunday. We wish him a full
and speedy recovery.
Economics
is extremely useful as a form of employment for economists.
John
Kenneth Galbraith.
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