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Janet Yellen On The Outlook For The US Economy And Community Banks
San Fran Fed's Janet Yellen presenting before the Oregon Bankers Association Annual Convention
On reality:
"Financial trauma of this magnitude could have nothing but the direst effects on economic activity. As we all know, the financial earthquake of the summer and fall was quickly followed by aftershocks that rocked the broader economy, intensifying a credit crunch, and producing precipitous drops in employment and economic output. The interaction between the economy and the credit crunch—often described as an adverse feedback loop—led to what could become the most severe recession since the Great Depression."
On myth:
"The fiscal stimulus program passed by Congress in February provides tax cuts that have raised household income. In addition, government spending is directly adding to payrolls and boosting demand. More stimulus will come on line as the year proceeds. This program wasn’t designed to produce an economic recovery by itself, but rather to cushion our fall. In that sense, it’s doing its job. Looking forward, the demand for houses and durables should also eventually revive as old and broken-down goods need to be replaced. The resulting demand will help the economy recover."
On systemic risk:
"We need a better way to manage systemic risk. By that I mean improved oversight of the financial system as a whole. Focusing on systemic risk is different than our traditional institution-oriented approach to supervision. It has become painfully clear that when regulators focus exclusively on individual institutions, they can miss broader risks building in the system. In particular, we need to do a better job of assessing how the practices of large institutions may affect their counterparties and the system as a whole."
On community banks:
"Now let me turn to the business environment facing banks. The industry is going through one of the most difficult periods in modern times. First-quarter data show that the 12th District has been hit harder than any other area of the country. Bank profits are down, loan delinquencies are up, and failures are climbing. To date, the community banks under greatest financial stress are those with high real estate concentrations in construction and land development lending. Banks that liberally funded speculative housing and condominium construction, and those that funded land acquisition and development, have been hardest hit."
On CRE exposure:
"The next area of significant vulnerability for the banking system, particularly for community and regional banks with real estate concentrations, is income-producing office, warehouse, and retail commercial property. Market fundamentals in most western states are deteriorating. Vacancy rates are rising and rent pressures are hurting property cash flows. Office vacancy rates in both Boise and Portland are expected to reach or exceed 20 percent over the next year or two, the highest rates these cities have seen in many years. Retail shopping centers are struggling with falling occupancy rates and pressures to grant rent concessions. Property values are falling sharply across wide areas of the country, including the Pacific Northwest. Some analysts forecast that commercial property values could experience falls similar to housing of 30 to 40 percent."
On reconciling facts with hope:
"I know this sounds woeful, but my advice is to hope for the best and plan for the worst. That means anticipating a range of bad and worst-case scenarios that reflect local economic conditions and a bank’s particular risk profile. It can be helpful to perform stress tests based on these scenarios to assess potential effects on earnings and capital, and to develop appropriate contingency plans. The commercial real estate guidance that I mentioned earlier emphasizes the importance of stress tests. The testing that the largest 19 banks recently conducted offers examples of techniques that community banks can adopt, such as two-year portfolio loss estimates and methods of estimating revenue. Appropriately designed stress tests can help bank managements and boards make decisions about loan-loss provisioning, capital planning, and strategic initiatives."
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"Banks that liberally funded speculative housing and condominium construction, and those that funded land acquisition and development, have been hardest hit."
Unless of course you are one of the big 5 banks. Obama et. al. will gladly cover your fuck ups.
The only thing growing Janet is the federal deficit:-)
Amex seeks way to coax growth out of frugal public
http://www.reuters.com/article/ousiv/idUSTRE56R51220090728
I cut my card up after 20 years of never missing as payment and told these bailed out asshats to kiss my ass. Wonder if that helped.
Screw'em
This woman is the biggest shill since Yun of the NAR. She's thoroughly corrupt and, like the other SF idiot Tyson, a very ignorant, stupid person. Don't believe a word she says. She was gungho on the economy when everyone in the Bay Area knew there were deep problems. She simply mimics the latest positive headlines. A real nasty dog. Ignore her. Why on earth are you writing about this flake?
"The interaction between the economy and the credit crunch—often described as an adverse feedback loop—led to what could become the most severe recession since the Great Depression."
Wrong. The problem stems from pure theft by friends of Janet Yellen. You should hear what they say about this monster in San Francisco.
"More stimulus will come on line as the year proceeds. This program wasn’t designed to produce an economic recovery by itself, but rather to cushion our fall. In that sense, it’s doing its job."
Wrong. The money is simply being used to prop up state and local governments.
"Looking forward, the demand for houses and durables should also eventually revive as old and broken-down goods need to be replaced. The resulting demand will help the economy recover."
Grapes of Wrath claptrap from this gross shill. Consumer credit is contracting severely. This demand is not happening and will not happen. This is Janet's plea for a reprieve of the death sentence for her bankster backers.
"We need a better way to manage systemic risk. By that I mean improved oversight of the financial system as a whole. Focusing on systemic risk is different than our traditional institution-oriented approach to supervision. It has become painfully clear that when regulators focus exclusively on individual institutions, they can miss broader risks building in the system. In particular, we need to do a better job of assessing how the practices of large institutions may affect their counterparties and the system as a whole."
Translation: we need to officially ordain Goldman Sachs as the United States Government. When will this monster Yellen be arrested?
"The next area of significant vulnerability for the banking system, particularly for community and regional banks with real estate concentrations, is income-producing office, warehouse, and retail commercial property. Market fundamentals in most western states are deteriorating. Vacancy rates are rising and rent pressures are hurting property cash flows. Office vacancy rates in both Boise and Portland are expected to reach or exceed 20 percent over the next year or two, the highest rates these cities have seen in many years. Retail shopping centers are struggling with falling occupancy rates and pressures to grant rent concessions. Property values are falling sharply across wide areas of the country, including the Pacific Northwest. Some analysts forecast that commercial property values could experience falls similar to housing of 30 to 40 percent."
This is preparing the ground for a bailout of CRE. Next hear Janet on the systemic risk of a massive failure of CRE.
"I know this sounds woeful, but my advice is to hope for the best and plan for the worst."
That wasn't her advice in 2005. She didn't HAVE any advice in 2005. Everything was fine then because her bankster backers were looting the country and nothing was being done to stop it.
Guess what? Nothing is being done to stop it now. And Janet is still being a shill.
When will this AWFUL person be arrested for her economic crimes?
"Wrong. The money is simply being used to prop up state and local governments. "
Thanks you Anon. Exactly! Stimulus money is only paying off state debts. It's not creating jobs, rather it's an attempt to keep the bloated state/local governments afloat.
Their bloat is a result of huge increases of revenue from property taxes during the residential and commercial property bubble.
As well as sprucing up big bank balance sheets as
best they can for the pain to come. I've got somewhat
substantial means and MY lines are being cut by the
too big to fail banks."Credit will expand"????
Sure thing, Janet baby.
No mention of the to big to failed banks that started all the implosions--
As for banks making loans and (without them the system collapse's)--gee has anyone even thought about the reality in which consumers DO NOT WANT ANY MORE CREDIT or TAKE OUT ANY MORE LOANS---let the collapse continue;
How deep is that hole Janet--I dont know but I cant see the bottom--get a little closure to the edge---oops sorry about that little push--dont forget to count on your way down.
VORTEX wwhhooooosh
Reminds one of Ross Perot except it's a different kind of "sucking sound."
"I know this sounds woeful, but my advice is to hope for the best and plan for the worst"
Uh, no, you never ever have planned for the worst... how come we are in this mess! Cos you kept hoping it would get better and stuck your head in the sand.
The banks stress tests were not good enough, stress isn't a word you should use for those tests!
If i recall, this person also coined the phrase that subprime was "well contained" which Benrnanke and Paulson took and used in testimony. In early 2007. Well contained.
Personally, i'm amped she thinks its over. let them start to raise rates, see what happens. it'd be comical to watch this happen if it werent a) killing me slowly and b) destroying the chances of my children to ever experience the same prosperity their grandparents had the chance at.
Sounds like a lot of baloney to me.
Janet Yellen is the economic criminal par excellence. If you wanted to do an anthropological study using one example--if you wanted an example to put in a zoo or the Smithsonian--she is exactly the person you want. Her criminality defines the word, "criminality." She is the quintessential sociopath. An utter lunatic.
She's what you want revolutions for--so the harshest justice is meted out to her.
But also, don't forget the puppeteers behind this puppet. Don't forget those who pushed her career forward. She's an evil idiot. The evil geniuses are behind her. That is, of course you want Gavin Newsom's head on a pikestaff--but you also want Gordon Getty's head next to his.
Ahhhh, just another sane man trapped in OZ (SF).
One of few.
Wait, according to Bloomberg's breaking news:
"Fed’s Yellen Sees ‘First Solid Signs’ of End to U.S. Recession"
http://www.bloomberg.com/apps/news?pid=20601087&sid=aaWJRspXIplA
I know TD likes Bloomberg and I have always watched (listened and read) them over CNBC, but recently I have found them to be heading down the cheerleading path and "bimbofication" of business news.
Am I just being too skeptical?
High atop a castle, they see green shoots with telescopes.
None of these goddamn MFers know anything. Why are we listening to them like they have some divine capacity to predict shit ?
Too skeptical!? HA!
You're testing your beliefs. Good, good.....
Your next step maybe "doubt", even "agnostic", and finally "apathy".
Some people call it a disorder. I call it a step towards freedom.
Well, hadn't they heard that douchebag Kneale called
the end of the recession 2 weeks ago ?
She must be taking seriously some of the jabber that she is on the list to replace Ben B.
Yellen = NEWSPEAK
No, Yellen = BIG SISTER.
Tip of the hat to Wigan Pier.
>>
None of these goddamn MFers know anything. Why are we listening to them like they have some divine capacity to predict shit ?
>>
Check to see if there was a speaking fee for this speech.
Gates probably charges to speak, but donates to charity. Let's find out if Yellen collected and pocketed, because if she did, she knows jack. If she knew jack shit, she would have been short from Oct 2007. She could have done that without conflict of interest. She could have gone long oil in January without conflict of interest.
She and all the rest of them know NOTHING. They read the same economics textbooks that taught nothing. It's a science absolutely no more dignified than astrology.
YES, YES, YES!!!!
BRAVO!
No. Check to see how many party members were face down
in their bowls of borscht !!!
Wasn't she speaking at the Trough for Fascist Morons, aka The Commonwealth Club?