Today’s violent rejection of FOMC policy is consistent with the sweeping change of mkt-crowd view regarding the Fed, first highlighted in our sketch, Renaissance, then Tuesday’s Crisis at the Fed.
Today the Fed warns the economy is slowing but resorts to gimmickry as a solution.
The media had today’s equity drop tagged to the Fed’s view that there are "significant downside risks." Instead, never before has the mkt crowd felt so entitled to sit as judge and jury. This is simply stunning.
The Fed is needed as lender of last resort. They did a commendable job, Q4 ‘08. Perfect. We could not praise them enough. But Bernanke's fatal error was in believing that experience was an anointing. Comanche medicine man Isa - tai claimed he had learned in a vision to make bulletproof body paint. Thus equipped, Comanche warriors mounted an attack on white buffalo hunters in 1874. It did not go well for the warriors.
Similarly painted, Bernanke extended his planning exercise, making a series of mistakes (the fate of all planners). Now he and the rest are profoundly out of their league.
Flip side: Just as the mkt crowd has rejected FOMC policy, next target will be that of the administration.
This development will be a major positive for this economy.
Robert Craven
Today the Fed warns the economy is slowing but resorts to gimmickry as a solution.
The media had today’s equity drop tagged to the Fed’s view that there are "significant downside risks." Instead, never before has the mkt crowd felt so entitled to sit as judge and jury. This is simply stunning.
The Fed is needed as lender of last resort. They did a commendable job, Q4 ‘08. Perfect. We could not praise them enough. But Bernanke's fatal error was in believing that experience was an anointing. Comanche medicine man Isa - tai claimed he had learned in a vision to make bulletproof body paint. Thus equipped, Comanche warriors mounted an attack on white buffalo hunters in 1874. It did not go well for the warriors.
Similarly painted, Bernanke extended his planning exercise, making a series of mistakes (the fate of all planners). Now he and the rest are profoundly out of their league.
Flip side: Just as the mkt crowd has rejected FOMC policy, next target will be that of the administration.
This development will be a major positive for this economy.
Robert Craven
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