The futures are down another 429 points following a 530 point drop in the Dow on Friday and 350 points down on Thursday.
As Jim Cramer noted on Twitter you wonder how sanguine Bulliard is now-he was sanguine on Friday.
https://twitter.com/jimcramer
I'm tempted to say let's give the Devil-that is to say, Scott Sumner-his due. I mean aren't we all in a sense Sumnerians now?
http://www.themoneyillusion.com/?p=30165
I mean who at this point can deny that the Fed is bankrupt and needs to change something? Whether you prefer an NGDP target or raising the inflation rate to 4 percent-though the Fed won't even meet it's 2 percent target under the happy fiction that low inflation is all about an efficacious drop in commodities.
I don't want to give with one hand and take back with the other but I will say calling Scott the Devil would be giving him a little too much credit.
The consensus seems to be that this is about China. But what I think you have to at least be concerned about is whether the US economy is having some problems or will soon. Certainly a Fed hike is the wrong way to go at this point.
What you can guarantee is that if the US economy has any sings of trouble at all the media will have something else to talk about besides Hillary's emails-they'll be going on about how she's never going to win with the economy slowing down.
According to political scientists the economy is the biggest factor in who wins elections.
http://www.amazon.com/Gamble-Choice-Chance-Presidential-Election/dp/0691163634/ref=sr_1_1?ie=UTF8&qid=1440417218&sr=8-1&keywords=john+sides&pebp=1440417220885&perid=0EEJV4H3YGR106SVC9S5
What's more according to Sides linked above, Democrats tend to be relatively unlucky on the economy-the Jimmy Carter syndrome where the average rate growth and income for the economy during the Democratic administration may be fairly robust, but in the final year-which is what voters focus on, things slow down.
http://www.amazon.com/Message-Matters-Economy-Presidential-Campaigns/dp/0691139636/ref=sr_1_1?ie=UTF8&qid=1440417451&sr=8-1&keywords=the+message+matters+the+economy+and+presidential+campaigns
http://lastmenandovermen.blogspot.com/2015/08/reconsidering-jimmy-carter.html
I'm not a pessimistic guy-there is so much pessimism elsewhere that I figure even if my relative optimism isn't wholly right at least it's a corrective-but this would be the real worst case scenario not the lurid fictions of emailgate.
Krugman wonders what's going on at the Fed.
"What’s odd about this debate is that it’s not like debating monetary policy with the seventeen stooges conservatives whose doctrine tells them that fiat money will turn us into Zimbabwe any day now, and are impervious to evidence. The Fed chair is Janet Yellen; the vice chair is Stan Fischer; both are, as Brad DeLong emphasizes, salt-water economists whose underlying macro worldview is surely very much like Larry’s, or mine, not least because we studied under Stan himself. So why the difference on policy?"
http://krugman.blogs.nytimes.com/2015/08/24/rate-hike-fever/?module=BlogPost-Title&version=Blog%20Main&contentCollection=Opinion&action=Click&pgtype=Blogs®ion=Body
Well the Fed is always run by New Keynesian types not John Cochrane and Stephen Williamson. But the Spirit of Neo-Fisherians seems to have taken over the Fed anyway.
Pressure from the usual suspects — the constant sniping against easy money — may play a role. But I also suspect that a lot has to do with the urge to resume a conventional central-banker role. The whole culture of central banks involves saying no to stuff people want, taking away the punch bowl as the party gets going, having the courage to do unpopular things; everyone wants to be Paul Volcker. The Fed is really, really eager to return to that position — and is, I fear, engaging in wishful thinking, believing much too readily that a return to normalcy is appropriate.
It’s not. I’m with Larry here: this attitude has the makings of a big mistake. Think Japan 2000; think ECB 2011; think Sweden. Don’t do it."
As Jim Cramer noted on Twitter you wonder how sanguine Bulliard is now-he was sanguine on Friday.
https://twitter.com/jimcramer
I'm tempted to say let's give the Devil-that is to say, Scott Sumner-his due. I mean aren't we all in a sense Sumnerians now?
http://www.themoneyillusion.com/?p=30165
I mean who at this point can deny that the Fed is bankrupt and needs to change something? Whether you prefer an NGDP target or raising the inflation rate to 4 percent-though the Fed won't even meet it's 2 percent target under the happy fiction that low inflation is all about an efficacious drop in commodities.
I don't want to give with one hand and take back with the other but I will say calling Scott the Devil would be giving him a little too much credit.
The consensus seems to be that this is about China. But what I think you have to at least be concerned about is whether the US economy is having some problems or will soon. Certainly a Fed hike is the wrong way to go at this point.
What you can guarantee is that if the US economy has any sings of trouble at all the media will have something else to talk about besides Hillary's emails-they'll be going on about how she's never going to win with the economy slowing down.
According to political scientists the economy is the biggest factor in who wins elections.
http://www.amazon.com/Gamble-Choice-Chance-Presidential-Election/dp/0691163634/ref=sr_1_1?ie=UTF8&qid=1440417218&sr=8-1&keywords=john+sides&pebp=1440417220885&perid=0EEJV4H3YGR106SVC9S5
What's more according to Sides linked above, Democrats tend to be relatively unlucky on the economy-the Jimmy Carter syndrome where the average rate growth and income for the economy during the Democratic administration may be fairly robust, but in the final year-which is what voters focus on, things slow down.
http://www.amazon.com/Message-Matters-Economy-Presidential-Campaigns/dp/0691139636/ref=sr_1_1?ie=UTF8&qid=1440417451&sr=8-1&keywords=the+message+matters+the+economy+and+presidential+campaigns
http://lastmenandovermen.blogspot.com/2015/08/reconsidering-jimmy-carter.html
I'm not a pessimistic guy-there is so much pessimism elsewhere that I figure even if my relative optimism isn't wholly right at least it's a corrective-but this would be the real worst case scenario not the lurid fictions of emailgate.
Krugman wonders what's going on at the Fed.
"What’s odd about this debate is that it’s not like debating monetary policy with the seventeen stooges conservatives whose doctrine tells them that fiat money will turn us into Zimbabwe any day now, and are impervious to evidence. The Fed chair is Janet Yellen; the vice chair is Stan Fischer; both are, as Brad DeLong emphasizes, salt-water economists whose underlying macro worldview is surely very much like Larry’s, or mine, not least because we studied under Stan himself. So why the difference on policy?"
http://krugman.blogs.nytimes.com/2015/08/24/rate-hike-fever/?module=BlogPost-Title&version=Blog%20Main&contentCollection=Opinion&action=Click&pgtype=Blogs®ion=Body
Well the Fed is always run by New Keynesian types not John Cochrane and Stephen Williamson. But the Spirit of Neo-Fisherians seems to have taken over the Fed anyway.
Pressure from the usual suspects — the constant sniping against easy money — may play a role. But I also suspect that a lot has to do with the urge to resume a conventional central-banker role. The whole culture of central banks involves saying no to stuff people want, taking away the punch bowl as the party gets going, having the courage to do unpopular things; everyone wants to be Paul Volcker. The Fed is really, really eager to return to that position — and is, I fear, engaging in wishful thinking, believing much too readily that a return to normalcy is appropriate.
It’s not. I’m with Larry here: this attitude has the makings of a big mistake. Think Japan 2000; think ECB 2011; think Sweden. Don’t do it."
It's hard to believe this morning's futures-which are now down another 60 points from when I started this post won't give Yellen and company any pause whatsoever, though certainly not Williamson or Cochrane.
P.S. I just glanced again and now the Dow is down another 40 points pushing 600 down.
UPDATE: It's now down 70 points since I wrote P.S.
UPDATE: It's now down 70 points since I wrote P.S.
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