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Fed's Williams: "We Got It Wrong"

Discussion in 'Central Banking & Fed Reserve' started by Ahillock, Jan 10, 2016.



  1. Ahillock

    Ahillock A nobody Mother Lode

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    I'd argue the Fed "didn't get it wrong" as this was planned all along. Interesting that Fischer and Williams both come out within days of each other, basically saying the same thing. Things that make you go......


     
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  2. Ahillock

    Ahillock A nobody Mother Lode

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    Fed's Williams: "We Got It Wrong"
    Submitted by Tyler Durden on 01/10/2016 19:57 -0500

    In late 2014 and early 2015, we tried to warn anyone who cared to listen time and time and time again that crashing crude prices are unambiguously bad for the economy and the market, contrary to what every Keynesian hack, tenured economist, Larry Kudlow and, naturally, central banker repeated - like a broken - record day after day: that the glorious benefits of the "gas savings tax cut" would unveil themselves any minute now, and unleash a new golden ago economic prosperity and push the US economy into 3%+ growth.

    Indeed, it was less than a year ago, on January 30 2015, when St. Louis Fed president Jim Bullard told Bloomberg TV that the oil price drop is unambiguously positive for the US.

    It wasn't, and the predicted spending surge never happened.

    However, while that outcome was not surprising at all, what we were shocked by is that on Friday, following a speech to the California Bankers Association in Santa Barbara, during the subsequent Q&A, San Fran Fed president John Williams actually admitted the truth.

    The Fed got it wrong when it predicted a drop in oil prices would be a big boon for the economy. It turned out the world had changed; the US has a lot of jobs connected to the oil industry.

    And there you have it: these are the people micromanaging not only the S&P500 but the US, and thus, the global economy - by implication they have to be the smartest people not only in the room, but in the world. As it turns out, they are about as clueless as it gets because the single biggest alleged positive driver of the US economy, as defined by the Fed, ended up being the single biggest drag to the economy, as a "doom and gloomish conspiracy blog" repeatedly said, and as the Fed subsequently admitted.

    At this point we would have been the first to give Williams, and the Fed, props for admitting what in retrospect amounts to an epic mistake, and perhaps cheer a Fed which has changed its mind as the facts changed... and then we listened a little further into the interview only to find that not only has the Fed not learned anything at all, but is now openly lying to justify its mistake. To wit:

    I would argue that we are seeing [the benefits of lower oil]. We are seeing them where we would expect to see them: consumer spending has been growing faster than you would otherwise expect.

    Actually John, no, you are not seeing consumer spending growing faster at all; you are seeing consumer spending collapse as a cursory 5 second check at your very own St. Louis Fed chart depository will reveal:

    [​IMG]

    But the absolute cherry on top proving once and for all just how clueless the Fed remains despite its alleged epiphany, was Wiliams "conclusion" that consumers will finally change their behavior because having expected the gas drop to be temporary, now that gas prices have been low for "over a year" when responding to surveys, US consumers now expect oil to remain here, and as a result will splurge. So what Williams is saying is... short every energy company and prepare for mass defaults because oil will not rebound contrary to what the equity market is discounting.

    We can't wait for Williams to explain in January 2017 how he was wrong - again - that a tsunami of energy defaults would be "unambiguously good" for the US economy.


    http://www.zerohedge.com/news/2016-01-10/feds-williams-we-got-it-wrong
     
  3. skychief

    skychief enthusiastic stacker Silver Miner

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    Submitted by Tyler Durden on 01/15/2016 09:43 -0500

    Remember when the Fed’s dots – less than a month ago – suggested there would be 4 rate hikes in 2016? Ah, the memories. Well, you can not only forget that (now that the market is estimating the next rate hike will come in October if ever), but it appears that the Fed will follow Kocherlakota’s advice after all and not only cut rates (the possibility of a January rate cut now is 10%), but will pass go, and collect negative rates:

    • DUDLEY: IF ECONOMY WEAKENED, WOULD CONSIDER NEGATIVE RATES

    After today’s atrocious, recessionary data, one can be certain that the Fed is furiously considering negative rates.

    While the comment came from the Dudley Q&A, his full speech can be found here.

    And just to add confusion, here is a spurious Bloomberg headline which will hardly aid matters:

    • YELLEN SAID IN 2010 JAPAN-STYLE DEFLATION `WORST-CASE SCENARIO’
    So both NIRP and more QE, just as anyone who is not a tenured economist or drama major predicted.

    http://www.zerohedge.com/news/2016-...ys-if-economy-weakens-further-would-consider-
     
  4. michael59

    michael59 heads up-butts down Platinum Bling

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    lower oil? Prices? When you have trucking outfits locked into 2 year contracts for oil then where is the splurge in 'consumerism?' And, the truckers are not the only ones.

    Every one who commercially traffics on the highways and byways as a substantial corporation has their profits locked into contracts.....and then we have our gumbyment leaders who want to throw a wrench into russia while knowing they are going to let iran loose with their oil.... Then we have these butt seks guys saying 'Oh its getting better with these lower oil prices.'

    There is a great disparity here in the knowledge of what it, what should be and what actually happens and yet we as a people with a few pennies in our pockets are deemed as waste to be filter feeders of their effluence as opposed to influence.

    thake you O'Stupid this one is on you and your goat sexing iranians and your whole administrations hatred of christains especially of the russian kind.

    I raise my middle fingers to you O'Stupid as symbols of what you should do....hint; just do it yourself...they are called kickstands....go ahead and rest ur head stupid as you have done enough to F this world, you and your CIA.
     
  5. solarion

    solarion Gold Member Gold Chaser

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    All these guys do is lie lie and lie some more. I'm so tired of this "duh, we're just incompetent idiots" defense. They're not that dumb or incompetent, they're corrupt dishonest psychopaths.
     
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  6. FunnyMoney

    FunnyMoney Silver Member Silver Miner

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    Pick-pocket posing as a drunk, works every time.
     
  7. historyrepete

    historyrepete Silver Member Silver Miner

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    If it were only a petty pick pocket. It's a leviathan to enslave
     
  8. FunnyMoney

    FunnyMoney Silver Member Silver Miner

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    Yeah, just an analogy of the deception tactic. They make you think they're there to serve you or that they're trying but that things aren't working out because of some excuse, like their incompetence or bad luck or whatever. The truth is that they're there not to serve you but to rob you blind and to make it so you won't recognize it for what it is.
     
  9. southfork

    southfork Mother Lode Found Mother Lode

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    The only reason lower oil prices are bad have to do with the greedy market makers pumping oil to 3 digits, allowing them to stay there so everyone drilled and drilled, they issued bonds and debt instruments that required 3 digit oil prices to pay on these loans and debt, now that all the hedges are running out and the debt cant be paid the shits hitting the fan, probably well north of a trillion in debt just in the US will be defaulted on, all the high paying oil jobs are going windy too, this will pale the 2008 collapse by far.
     

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