Previewing Yellen's Jackon Hole "Gobbledygook": Not One Analyst Thinks Yellen Will Say Anything Remotely HawkishSubmitted by Tyler Durden on 08/21/2014 13:55 -0400
Ahead of Yellen's Jackson Hole speech tomorrow, the sell-side, hypnotized by 6 years of Fed bubble-inflating generosity, refuses to even consider the possibility that the Fed could possibly pull the punch bowl away, and the absolutely unanimous consensus is that despite yesterday's minutes (or perhaps due to, because as the Chinese Department of Truth has taught us, one must first and foremost baffle with BS), Yellen will go uber-dove. So without further ado, here is what the Penguins expect Yellen's "gobbledygook" will reveal tomorrow, and as a reminder, yesterday Citi warned that there is "tremendous" downside risk if Yellen doesn't go "full-dovish".
Snowden Is a Good Guy ... But There's a LOT that He Doesn't Know
In addition to our recent discussion of the macro-economic data in the US rolling over, and the epic proportions of net risk-taking longs, Credit Suisse outlines ten further indications that equities might be due for a 'consolidation'. Translating from sell-side research gobbledygook into reality, equity bulls are merely demonstrating the traditional phases of momentum-inspired euphoria in the face of ongoing fundamental contraction (not to mention a decline in consumption and marginal US purchasing power) - and earnings expectations, US fiscal tightening, and a modest rise in deficit-increasing real bond yields will not help.
Politics and economics, or the better term, political economics, for the most part rules our lives: the political activity of the nation as a collective of economic groups and super- wealthy individuals, whatever the defining orthodoxy turns out to be. As the United States enters the final days in the much-hoped resolution of its “fiscal cliff,” there are a number of prominent individuals from both present and past – politicians, economists and business leaders – who regale us with their two-cent worth of admonition and advice. For the most part, that’s what the value is really worth. Meantime, here is the American citizenry reverting to their pre-recession days, with the highest confidence level in four and a half years, starting to spend beyond their capacity to produce thanks to that misplaced confidence, the resurgence of home equity loans, and the promise of governing politicians that things are on the mend... when they really are not, and the job market continues to decay for jobs with a living wage.
If you live long enough—knock on wood—pretty soon it’ll add up to real money.
But those Shanghai office towers across the river in Pudong were already standing empty a decade ago – not that you would know from any contemporary reporting. Former Prime Minister Rhu Rongji publicly pleaded with provincial bureaucrats to stop fabricating figures because it made it impossible for him to know what was going on.
If the pundits are counting on the US to be the engine that drives Global growth - it's going to be a very slow year indeed!
On the right hand side of the Treasury Department website homepage, under the subheading Wall Street Reform, is the following lofty statement: "It is time to restore responsibility and accountability to our financial system." That's the spin. Now, it's been spinning there awhile, so it's not exactly news. But today, in complete contrast to the meaning of that statement, Geithner suggested backing a 'risk-retention' proposal that excludes banks that meet high underwriting standards (probably those that got high marks on the latest Fed stress tests for which the Fed isn't releasing any details) from having to retain portions of the deals they securitize, you know, of having to maintain a stake in the outcome of those deals and the performance and integrity of their underlying loans. To recap, as a result of the 2008 debacle, banks that passed their stress tests, effectively borrow money at next to zero percent. The aftermath of the financial crisis is the loosest monetary policy in our nation's history. Even with all that help, banks don't want to be bothered holding anything that could screw around with their capital ratios. Of course.