Yellen Has Anton Chigurh’s Haircut…And Mentality

So the other night I’m watching ‘No Country for Old Men,’ and all of sudden a bizarre yet accurate thought comes to my mind: Janet Yellen has the same haircut as Anton Chigurh.

This is an admittedly strange realization but with all this Fed rate hike talk, her psychopathic hairdo   must have jumped, straight Freud-style, smack dab into my conscious stream.

As a side note, if you haven’t seen this, do yourselves a favor and stop reading this post so you can view this Academy Award winning film (come back after you watch it though so add revenue gets boosted!).

But the more I listened to Anton’s forewarning and ominous drivel, the similarities between him and Yellen do not end at their odd side parted coiffure.

These two have the same mentality, logic, and thought process. Below are some quotes by Anton, as well as lines from other characters who are speaking about him. After the quote, I will show you how it is an absolute parallel to Grandma Yellen’s forgone actions tomorrow (source of quotes from IMDB).

Exhibit A

Carla Jean Moss: You don’t have to do this.

Anton Chigurh: [smiles] People always say the same thing.

This is what a ton of fund managers, institutional investors, economists, world leaders, politicians, executives, commodity companies, and Gundlach have been saying. Raising interest rates in this environment is not a good idea.

They have extremely persuasive and sound reasoning. Oil, natural gas, and basically all other commodities are in a price free fall; the U.S. Dollar flexing its mighty strength; credit spreads are higher than the norm; and we’re entering tightening monetary conditions.

However, all Yellen does is sit there and smile, sort of like an aging geriatric who can’t hear you but still pretends to listen.

Exhibit B

Anton Chigurh: [Chuckles] Alright. Let me ask you something. If the rule you followed brought you to this, of what use was the rule?

Carson Wells: Do you have any idea how crazy you are?

Anton Chigurh: You mean the nature of this conversation?

Carson Wells: I mean the nature of you.

Like Anton, who views established rules as arbitrary and capricious, Yellen has been completely ignoring the Fed’s dual mandate of strong employment and controlling inflation.

An argument can be made that the country is close to full employment, with the most recent unemployment rate at 5% and in a downward trajectory. The U-6, aka The Real Unemployment rate, had been falling for the most part, but it actually had a 0.1% uptick in November.

But on the other side of the coin (movie pun intended), the Labor-Force Participation rate is at levels last seen in the late 70’s. Also, wages are barely increasing, a sign that there is still a large amount of weakness.

As for the second mandate, controlling inflation, no one, not even the Fed themselves, have said that there’s signs of rising inflation.

My only possible explanation is that Yellen and her crew must’ve forgotten about it or were in too big of hurry to catch the early bird special at Cracker Barrel.

Exhibit C

 Anton Chigurh: Is that what you’re asking me? Is there something wrong with anything?

This sort of confounding answer in the form of a question (which is the worst way to answer a question) is what traders, investors, and market participants have come to expect. Classic deflection statement when you know you’re wrong or have no rational reason for the actions you’re taking.

Exhibit D

Manager: That’s a dead dog.

Anton Chigurh: Yes it is.

Again, you get nonsense and malarkey speak from her. The dead dog represents the upcoming state in economic conditions that underlie the surface above. Yes, there are industries that are doing well.

However, the oil and gas industry, which as a sector had the largest factor in creating jobs and leading our economy back from the grave, is starting to bleed out slowly thanks to those lovely Saudi fellows.

And this isn’t just isolated to the energy industry; there are a ton of derivative industries that will get hit (housing, chemicals, infrastructure, entertainment, etc.).

Please tell me an industry that will bring us back to pre-recession prosperity, or how about merely supporting the current economic conditions.

Combine this with the fact that S&P earnings have been declining (not slowing in growth) and a recent ISM reading of below 50, this is truly a “Country for Old Ladies.”

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