Oh well that’s grand, the Fed is predicting it will hold rates low for another two to three years. What a novel bit of statistical modeling that took. I wonder: what methods does one use to forecast one’s own choices? Did they use their prior data to calculate the expected outcome?
“Why I do believe I will hold rates low until 2013,” says Bernanke.
“Wait a second there, sir. I see that from past statements you’ve made, you’re a chronic liar, and your’ forecasting has an error rate of one standard deviation, usually to the high side,” Janet Yellen quips in.
Elizabeth Duke leans over. “Yeah, she’s right. You’d better tack on a solid year, just because you seem to contradict yourself so much.”
“Damn, didn’t realize I was such a hypocrite. Okay, 2014 it is. Well that’s a useful insight; I had no idea what I was going to do. Now at least I can know what I expect I know what I’ll do.”
Fucking. Useless. Drivel.
What point is there to this? You want to know what it tells me? It tells me Bernanke & Co. are stuck with their hands tied behind their backs. It tells me there is actually nothing better they could be doing right now, than restating their “commitment to low interest rates” because the economy cannot withstand more money printing.
It tells me they are boxed in with nowhere to go.
I am not at all afraid of a Fed announcement ushering in new easing, because I don’t think these people believe it will actually help. Even the likes of Duke have to be questioning the faith, after a half trillion of purchases forcing treasury rates lower managed to accomplish nothing.
Oh, wait, I guess it did circulate a half trillion additional dollars through the economy, forcing oil prices higher and putting the squeeze on the poor. That it did very well…
Let me elucidate this point again. If Bernanke is going to ease, he needs room in prices to do so. We don’t have that now. People can’t stomach another $20 on the price of oil, rolling inflation targets be damned. That oil prices are this high is alone enough to stay his hand. So if you’re projecting Fed intervention coming this year, you’d better be rooting for my oil shorts to take me back to break even from last year, because shy of that, you aren’t getting a penny.
But don’t worry, you’ll keep getting these “clarifications,” “clarity statements,” and my favorite, “clarifying statements of clear clarity.”
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what it really tells me, is that the unemployment #’s are twice as high as they are letting on,and dont foresee the economy or employment getting better between now and the next 3-4 years.
Well said Sir.
I do think Bernanke & Co. know they are in a box that only time will heal, but they can’t really say that.
So hold on.
Bernanke says, “I’m targeting 2% inflation”
If the markets then get bid up by 2%, does that mean the Fed does nothing? And if markets bid up prices by 2%, how does that help?
I guess if you’re holding equities, it gives you a pretty sweet “You Never Lose” card, but if you have a dual mandate to target employment and inflation, last I checked that’s counter productive.
And what if inflation is over 2%. Does that mean Bernanke reigns the system in? Everyone right now seems to be taking this as a >2% growth mandate, but what happens if we get 7% inflation? Will Bernanke be cool with that? Because he hasn’t explicitly said.
Bernanke Bio:
Awards and honors
Fellow of the Econometric Society (1997)
Fellow of the American Academy of Arts and Sciences (2001)[60]
Distinguished Leadership in Government Award, Columbia Business School (2008)[61]
Bernanke achieved an SAT score of 1590 out of 1600.[18][20] Bernanke attended Harvard University, where he lived in Winthrop House with the future CEO of Goldman Sachs, Lloyd Blankfein, and graduated with a Bachelor of Arts in economics summa cum laude in 1975. He received his Doctor of Philosophy in economics from the Massachusetts Institute of Technology in 1979. His thesis was named Long-Term Commitments, Dynamic Optimization, and the Business Cycle; his thesis adviser was Stanley Fischer, and his readers included Irwin S. Bernstein, Rudiger Dornbusch, and Robert Solow of MIT, as well as Peter Diamond and Dale Jorgenson of Harvard.[21]
Cain Thaler: Jackhole who has been on the wrong side of every index and market for at least 7 mos. and has exactly 3 people who read his posts! Nice Work Failer I mean Jack Hole!
Pretty sure you just committed a common logical fallacy.
…and the Goldman bit made me “lol” a little. Cause we all know they’re reputable, right?
Personally, I don’t think Bernanke deserves ALL the shit he gets. That said, it’s hard not to laugh at some of the shit they predicted today. I guess you just have l acknowledge that the FOMC statement itself is a tool, just like the figures it contains.
(1) you’re far too taken in by false prestige. Some of the world’s most foolish people have long lists of letters after their names. SAT scores mean you have learned everything within the system; the vast majority of knowledge rests without it.
(2) when Bernanke was sitting in a meeting talking about the housing crisis as it was getting started, he predicted we would totally avoid the consequences of the fallout because of “all we had learned.”. That worked out…
(3) you know nothing about me as I am an anonymous figure. “Some Jackhole” is a dangerous fellow to throw your lot against. My thesis was on multimodal distributions in statistics and their impact on financial modeling…so pardon me if I don’t take your off hand remarks too seriously. Bernanke’s titles don’t impress me by themselves.
(4) I have not been wrong for 7 months. I’ve lost on net over that time period because of essentially 3 trades that I made too large. Over the same period, I called the blood letting in the euro, the collapse of European bonds, the resurgence of multifamily units, and the fall of European manufacturing. I stand where I do because I think these things funnel through (not that you’ll ever apologize should they). I focus on my losses, not mentioning these other things, because oil was where I lost the most and because I have a self deprecating personality. But let’s not kid ourselves; I’ve actually been right about a ton, it just hasn’t made me money yet, which is what investing is all about.
Also seeing he was involved with econometrics makes me laugh. Sincerely, thanks for posting that. His first award is essentially a failed field of study. Are you trying to support my reputation, or harm it?