SF Fedhead Yellen: "Keep That Stimulus Coming, Doctor Bernanke!!"
Pssst, Reuters, you failed on that article below. Lacker doesn't belong to the Atlanta Fed. Seriously? How do you confuse Richmond and Atlanta? If you guys need a new Fedwatcher to do some rudimentary write ups on Fedhead speeches, um, I may have an hour or two I can spare a week.
Anyway, I gave Richmond Fed President Jeffrey Lacker's Monday speech a good once over and didn't even use any F words. I probably won't use any in this post on San Francisco Fed President Janet Yellen's speech the same day simply because I'm not going to slog through the entire thing just to snicker and chortle through it. Pfft, what's the point?
Comments from two senior Federal Reserve officials on Monday touched on what could become a struggle in the coming months and years over how and when to unwind the bank's dramatically accommodative policy.
The line between policy hawks and doves on the Federal Open Market Committee on the inflation outlook will likely become more pointed now that the U.S. recession appears to be over and the world's largest economy embarks on a tentative recovery.
"In my career, I have never witnessed a situation like the one that exists now, when views about inflation risks have coalesced into two diametrically opposed camps," said Janet Yellen, San Francisco Fed President.
Speaking in San Francisco, the 2009 FOMC voter put herself in the ranks of those still worried about disinflation or outright deflation in the U.S. economy as high unemployment looks set to drag on for years.
"Our foot is down on the pedal of stimulus as far as we can possibly go," Yellen said after a speech to the San Francisco Society of Certified Financial Analysts and that stance is still right for now, she added.
"The destruction of their nest eggs caused by falling house and stock prices is prompting them to rebuild savings," said Yellen.
Yellen acknowledged, but downplayed, current worries that vast expansion in the Fed's balance sheet could fuel rising inflation over the long haul.
"My personal belief is that the more significant threat to price stability over the next several years stems from the disinflationary forces unleashed by the enormous slack in the economy," she said.
"It seems likely that core inflation will move even lower ... we need to defend our price stability goal on the low side, and promote full employment."
Editorial mishaps aside, this is a pretty decent summation of Yellen's thoughts today.
Some other gems include Janet's unwavering faith in government intervention. Does she sit on some PPT supervisory Board or what?
I am hugely relieved that our financial system appears to have survived this near-death experience. And, as painful as this recession has been, I believe that we succeeded in avoiding the second Great Depression that seemed to be a real possibility. Much of the recent economic data suggest that the economy has bottomed out and that the worst risks are behind us. The economy seems to be brushing itself off and beginning its climb out of the deep hole it’s been in.
Oh, Janet. Denial is not just a river in Egypt for my poor poor hometown Fedhead.
Does she honestly believe that asset losses in the tens of trillions and double-digit unemployment are not a repeat of the Great Depression? Please, Janet, you should know better than that. I know you're used to seeing the homeless in San Francisco so you probably don't realize that things are as bad as they are since things always look bad here in SF but just because we don't have breadlines doesn't mean this isn't a repeat of the 1930s. Again, Janet is a loyal subject, rubbing Bernanke's balls to say "we saved the world!" when it comes time to consider where the Fed went wrong in handling this crisis. Asshat.
As I noted, we’ve come a long way since last year when the financial system was teetering on the edge of collapse. To me, it’s plain that the extraordinary and aggressive response of governments and central banks around the world saved the day—heading off the kind of financial meltdown that would have inflicted catastrophic damage on the economy. Some are skeptical about the effectiveness of emergency programs such as TARP, TAF, and TALF. But, in my view, these programs staved off disaster. And they have been keeping the patient on essential life support as little by little it begins to breathe again on its own.
WE SAVED THE WORLD!!!!
STFU already, dear sweet naive Janet. At least she recognizes that the American financial system is essentially a vegetable plugged into the stimulus breathing machine. PULL THE PLUG!
I’m happy to report that the downturn has probably now run its course. This summer likely marked the end of the recession and the economy should expand in the second half of this year. A wide array of data supports this view.
Someone please write this down so we can rub it in her face later when the W-shaped recession turns into a WTF-shaped recession and all hell truly breaks loose around here.
Psst, Janet, the Chinese declared economic war. That might be an important detail in this little scenario worth paying attention to.
Then, when hopeful naivety doesn't do the trick, Janet busts out the pure, unadulterated lies. Good move.
I’d like to pause for a moment to make a few observations about the Bay Area economy. The recession has been felt keenly here. Employment is down about 6 percentage points from its peak in late 2007. The unemployment rate has risen by more than 6 percentage points to just over 10 percent from its low point in late 2006, outstripping the national increase.
A harsh slump in information technology, due to plunging business spending on tech equipment and services, has prompted extensive job cuts and been a key factor driving down the area economy. Employment has fallen especially steeply on the hardware side, although IT service providers have cut back as well.
This is absolutely false. The Bay Area economy is in shambles. Only a handful of my friends remain employed and there was a time there not so long ago when I would get several "I've been laid off, now what?" texts, sometimes one after another. Should Janet care to see more on this topic, I point her to the BLS report. Just because the San Francisco Bay Area is better off than, say, Bend, OR does not mean we're kicking ass when it comes to job numbers.
Case in point:
Despite an infusion of money and workers in recent months, the phone number that most out-of-work Californians rely on for questions about their unemployment benefits or missing checks remains swamped by millions of calls.
Officials say it still takes about 17 tries before a live operator is reached at the state Employment Development Department and that nearly two-thirds of the 18.9 million calls received last month were rejected because the phone service was too busy.
Troubled by those long odds? Then consider this: Before some 1,650 new workers came on this spring, callers needed to dial the department a whopping 42 times to get through. And of the 50 million calls that came in during January, more than 85 percent were turned away.
Gov. Arnold Schwarzenegger's office last week praised the improvements — many of which followed strong words by the governor this spring when the problem was at its worst. But even so, department officials say, more work remains, and the demand for state assistance doesn't appear to be softening any time soon.
Yeah so um, I'm done giving Janet any more precious real estate, as this post has already gone on for far too long.