5 Things To Ponder: Yellin' About Yellen

Tyler Durden's picture

Submitted by Lance Roberts of STA Wealth Management,

The biggest news this past week was Janet Yellen's first post-FOMC meeting speech and press conference as the Federal Reserve Chairwoman.  While I have the utmost respect for her accomplishments, every time I hear her speak all I can think of is my white haired, 75-year old grandmother baking cookies in her kitchen.  This week's "Things To Ponder" covers several disparate takes on what she said, didn't say and the direction of the Federal Reserve from here.

In order to give these views context, I have included Yellen's post-meeting news conference.  This is best viewed with a glass of milk and some warm, fresh chocolate-chip cookies...."just like Grandma used to make."


Quote Of The Day:  "Bull Markets Are Just Like Sex, It Feels Best Just Before It Ends."  by Barton Biggs

1) Dropping The 6.5% Unemployment Target by Howard Gold via MarketWatch

I have written many times in the past, most recently here, that the 6.5% unemployment target for the Federal Reserve was not a good measure of the true state of employment in the U.S.  Specifically I stated:

"The difference between today, and 1978, is that in 1978 the LFPR was on the rise versus a sharp decline today.  However, as I stated previously in 'Fed's Economic Projections - Myth vs Reality' this leaves the Federal Reserve in a bit of a predicament.


'The problem that the Fed will eventually face, with respect to their monetary policy decisions, is that effectively the economy could be running at 'full rates' of employment but with a very large pool of individuals excluded from the labor force.  Of course, this also explains the continued rise in the number of individuals claiming disability and participating in the nutritional assistance programs.   While the Fed could very well achieve its goal of fostering a 'full employment' rate of 6.5%, it certainly does not mean that 93.5% of working age Americans will be gainfully employed.  It could well just be a victory in name only"


This is particularly the case when roughly 1 out of 3 people are no longer counted as part of the work force, 1-out-of-3 individuals are dependent on some sort of social support program, and over 17% of personal incomes are comprised of government transfers."

Howard points to the Federal Open Market Committee dropping its 6.5% unemployment rate threshold for raising the federal funds rate, a target originally set in December 2012.

"Instead it would look at some 'qualitative' measures, 'including measures of labor market conditions, indicators of inflation pressures and inflation expectations, and readings on financial developments,' the FOMC’s statement said."


This move shouldn’t have surprised anyone. The official unemployment rate was 6.7% in February and keeping that 6.5% target would have tied the Fed’s hands before it’s even finished tapering.


Yellen must deal with an economy that’s slowly recovering, but leaving a lot of people behind."

2) Yellen And The Fed Go Dark by Matthew Klein via Bloomberg

This is a very interesting take on a change in how the Fed presents its decisions and is worth reading in its entirety.

"Unless you have a crystal ball that tells you what will happen with wages, this possible new target tells you almost nothing about when rates will be raised.


These developments suggest a desire to turn the clock back to a time when traders had to make bets without Fed hand-holding -- even if the Fed still does release its economic projections. A shift toward opacity might be wise. The economy is a complex system that no one fully understands, so it would be foolish to commit to any unbending numerical rule that limits policy makers’ flexibility to react to unforeseen events. That was why former Chairman Alan Greenspan was opposed to formal inflation targets.


An additional benefit of opacity is reduced predictability. Scholars have found that financiers take too much risk when they think they know what will happen in the future, so muddying the waters may be just what’s needed to promote a safer financial system."

3) Why The Fed Will Stop Tapering by Peter Schiff

"In reality, the Fed will keep manufacturing excuses as to why rates can't be raised. Whether it's a cold winter or a hot summer, a geopolitical crisis, or an unexpected sell off in stocks or real estate, the Fed will always find a convenient excuse to postpone tightening. That's because it has built an economy completely dependent on zero % interest rates. Even the smallest rate shock could be enough to push us into recession. The Fed knows that, and it is hoping to keep the ugly truth hidden.


Although Yellen followed the script on the QE tapering, by decreasing monthly purchases by an additional $10 billion to $55 billion, look for her to abandon her commitment to wind it down to zero just as easily as she has walked back the Fed's commitment to raise rates once unemployment hits 6.5%. Any additional weaknesses in economic data, or dips in stock or real estate prices, will cause the Fed to call a time out on its tapering plan."

4) Rising Risks To Fed's Policy Change By Mohamed El-Erian via CNBC

"Higher uncertainty premiums: The Fed is in the midst of not one but two policy transitions. It is pivoting from reliance on a direct instrument (QE purchases of securities in the marketplace) to an indirect one (forward policy guidance to convince others to devote their balance sheets) — thereby raising effectiveness questions. It is also moving from a readily-observable unemployment threshold to a set of indicators that include qualitative judgments — thereby raising less predictable interpretation questions.


Technical market conditions: Given the impressive multi-year rally, it doesn't take much these days to convince equity traders to book profits (and it hasn't taken long for buyers to buy on the dip). Similarly, over-extended front end rates positions can be destabilized in the immediate term even if the Fed is committed to maintaining low rates for long.


Reaction to the interest-rate selloff: With a significant part of the economy sensitive to short and intermediate interest rates, including housing, and with the economic recovery yet to broaden sufficiently, it is not surprising that the stock market would be concerned with a sharp selloff in the shorter-dated rates.


What about the longer-term?


Here, much depends on your assessment of the first factor — namely, Fed policy effectiveness during its policy transition. Unfortunately, there are no tested models, policy playbooks or historical data to confidently guide investors. What is clear, however, is that they will require quite a bit of evidence of ineffectiveness before abandoning their faith in an institution that has significantly supported markets in recent years."


5) Inside The Madness Of The Stock Market by Jason Zweig

Jason's articles are always worth reading and this is no exception.  The "madness of crowds" is always relevant and prevalent.  With the financial markets tied to the Federal Reserve, like a "fetus to its mother," these words of wisdom are worth remembering.

"In a guest essay published in the New York Times on Oct. 29, 1989, called 'Fear of a Crash Caused the Crash,' future Nobel Prize-winning economist Robert Shiller described a survey he had done of 101 market professionals the Monday and Tuesday after the tumble. Asked whether the drop was driven by 'a change in the stock market fundamentals' or 'psychology and emotion,' only 19% cited fundamentals; 77% blamed psychology and emotion. Shiller and his colleague William Feltus also asked the professionals if they thought the latest drop could turn into a replay of the 1987 crash; 35% thought it could, while 41% thought other investors thought so.

So, when KAL poked fun at traders overreacting to what others say, he was right on the money.


To this day, says KAL, brokers buying copies of the cartoon (featured above) 'inevitably' tell him, 'It was so funny because it was so true.'"

EXTRA!  The Mysterious Disappearance Of Aircraft Since 1948 via Zero Hedge

The ongoing search for Malaysian Airline Flight 370 has the conspiracy world abuzz with theories ranging from terrorism, government experiments, black holes to alien abduction.  However, what is interesting is that this is not the first time a plane has mysteriously disappeared.  The following info graphic details the last known position of lost large aircraft since 1948. 


Have a great weekend.

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ebworthen's picture

Whenever I hear Yellen's name I get a vision in my head of a cross between Stephen Hawking, the Elephant Man, and Jabba the Hut mumbling nonsense.

Inthemix96's picture

Fuck me Ebworthen,

At least old Stevie Hawkins can blame Cerebral Palsy.

Whats his excuse?  Sorry hers, sorry its, sorry whats, oh fuck off......


john39's picture

so they put a goofy old lady with her own little shticky mannerisms...  supposed to make the sheeple not see that the FED and the real bankers behind it are not a bunch of psychopathic theiving vampires.   like everything else these days... fake.

Inthemix96's picture

Unless youre being snarky John,

Look at the wink at the end of what I wrote, and by the way, I nigh on always up vote you.  You talk the truth mate.




john39's picture

Sorry man, my comment was just my off the cuff observation, and not actually a direct response to your comment.  certainly wasn't me that hit you with downvote.  totally agree with you said.  just adding my two cents.  not that it apparently accomplishes much, but at least i had my say.


Inthemix96's picture


No problem my friend,

Keep doing what you do though.  It will, get through.  We are making genuine progress thanks to people like you.


john39's picture

Same to you.  and yes, things are happening.  pretty soon i think, real change will arrive.

Inthemix96's picture


Lets give these cunts war, OUR war.  I might be a cunt and use swear words, but by fucking Dog himself, people listen.

Keep doing what you do.  You are one of the best on here mate.


Johnny Cocknballs's picture

Get a room you two.

{winky face}

john39's picture

ever hear of the 100th monkey effect?  the is a reason tptb seek total control of mass media:


because in reality, it takes only a very small number of individuals to see through the matrix for the other monkeys to catch on.  tptb fear this more than anything...  and it happens slowly at first, until it seeminly happens all at once.  they are losing their grip, and you can smell the fear.  it won't be long.

Inthemix96's picture

I have mate,

And if I have, Dog fucking help the bosses.

I'm a window cleaner John.  Think about that.  Not that I'm saying window cleaners are thick, but its about the exponential function isnt it.

Its coming alright.

Take care John, I mean that.

Johnny Cocknballs's picture

unfortunately, the 100th monkey effect is just a myth.  It simply isn't true.



TPTB not only control mass media, but apparently lots of "alternative" media.  I don't know if Alex Jones is a knowing "disinfo agent" but he clearly seems to be a gatekeeper for the usual suspects... who happen to own his home radio station, terrestrial network, and of course, the satellite network. 

Both the "mastermind" of 9/11 and bin Laden explicitly cited American support of Israel as primary reason for 9/11.  Apparently, explicitly mentioned by both.  Yet this was nowhere in the media, and when it did appear, it was loudly decried as 'anti-semitic' - meaning that while you must believe that bin Laden and Khalid Sheikh Mohammed did 9/11, you must also not believe that they did it for one of the major reasons they said they did it.

THAT.... is power to control the narrative.  Just think about how much social, political and media power is required to blame two guys, but completely dismiss their stated rationale. 





john39's picture

in my experience... a lot of things that science says are hoaxes, or myths, are anything but...   there are scientific principles behind that 100th monkey effect, and they are real.   As is the war to keep the masses from figuring it out.   Of course, you have to test this yourself to see that its a hoax.   ever hear of a morphic field?  But back to the point, there is a war going on out there, and there has been for a very long time.  but its not just a war for physical control over you, its a war to control your very consciousness.    This video gives some very tantalizing clues to those with an open mind and 20 minutes to kill:

Graham Hancock, the war on human consciousness:


ebworthen's picture

Hawking has a slow moving form of ALS or Lou Gherig's disease.

It took my Dad in a tidy two years; but he didn't want "heroic" measures like feeding tubes and oxygen to end a near lifeless lump only able to move his eyes - not a life.  I pity Hawking as it is a horrible disease, but he strikes me as selfish and arrogant and the fawning he receives unwarranted and more akin to an ASPCA commercial.

Yellen is an academic shill, a blathering thesis dissertation in corpus, an economic alchemist from a quasi-religious cult of sophistic thieves, and a poorly spoken blob of perfidious chicanery employed as a mouthpiece by psychopathic money-changers.  Other than that she is probably a great gal.

Love your stuff Inthemix96, especially your surgical usage of "fuck".

Inthemix96's picture

All joking aside Ebworthen my friend,

I am sorry for your father, I still know mine and I love him, as I presume you did yours.  We will all get it in the end my friend no matter what.

As for the disgrace of the half-man half-human thing sent to destroy us, thats a different matter.

Its not right is it mate?  It shouldnt be like this.  Inthemixes thoughts are with you now Ebworthen, I see you post, I like you, and I agree with most what you say.


Inthemix96's picture

What do I say now?

Thank you my friend, we are all the same you know, doesnt matter where we be from.

I wish you nothing but the best Ebworthen.  You are quite plainly a good man.

Clueless Economist's picture

good god, i like you blokes, but get a room


ebworthen's picture

LOL.  Okay, back to bashing the feckless FED, and the harpies and warlocks of Wall Street.

End the FED!!!

prains's picture

Does she have a head or is that a face transplant on a giant Q-tip?

drendebe10's picture

"There ain't nothing uglier than an old white woman."  Fred Sanford

socalbeach's picture

In the future, please don't use the words "Janet Yellen" and "sex" in the same article.

Thanks in advance.

Cattender's picture

she's going to regret taking the job..

McMolotov's picture

Ben got out just in time. She'll be the fall-hobbit.

Nick Jihad's picture

Hah - that's what Greenspan thought when he handed off to Bennie. That printer still has plenty of ink.

spastic_colon's picture

dont worry the world won't realize she is a hawk in dove's clothing until its too late....by the world i mean retail.

Inthemix96's picture

I have never been snarky here on ZH, or condescending, or out right nasty, I think, but this fucking inhuman looking fucker should have been shot at birth.

If the midwife didnt slap her mother I would be very suprised.

Is this filth of a stain upon humanity even human?

For fucking Dogs sake, you cant even tell if its a real man...

Eurghhhhh.........  Ugly Hitchez, Bitchez...


Jack Sheet's picture

he/she/it is in truth uglier than a hatful of arseholes....

Nick Jihad's picture

This is outright nasty. Have you been drinking?  If being incompetent and dowdy makes someone a "filth of a stain upon humanity", I'd be really curious to know how you describe someone who's actually committed an evil crime, like fraud, embezzlement, much less murder, mass or otherwise.

Briefly, you're sounding like twit.

Dr. Richard Head's picture

When will we finally see the chart for the Mysterious Disappearance of Central Banks? 

fooshorter's picture

Just don't call Mr. yellan bossy... 

HardlyZero's picture

Is Yellen, Fisher's Boss...then definitely boss man.   Or since it is not realy 'hip'...err 'hip' non-sexual, its ok to say Bossy Yellen...she tell Fisher were to put rates (where to put it non-sexual). 

If Dallas FED Richard Fisher is going "full-out" Austrian now that he is at big show and might need to counter the other Stanley 'Fischer',...should see sparks coming off the USD very soon.  If fiat currencies collapse will the US stawks double higher since it takes more mullah to purchase the intrisic value of the stawks (e.g. Zimbabwe stock market when Trillion dolla no-tes were printed there).

Might be interesting to see new Stanley Fischer (70 yrs old and Bernanke's thesis advisor ?) opionion.

There may be a Fisher/Fischer fracture formation or fracas in the near future ? 

We will need to keep track of which fish is the 'big fish'.  Yellen may need to yell and boss some.

Get physical (metals in a non-sexual context) ?

blindman's picture

3-20-2014 Voice of Russia w/ Field McConnell - Flight MH370
she never mentions the other fed purchasing, liquefying
or otherwise stealing and theft. good for her!

Tinky's picture

Slightly off-topic, but I can't help wondering whether it was nocturnal?

ExxonMobil Beumont refinery reports emissions event

Cacete de Ouro's picture

Here's more off topic goodies

The Diego Garcia passenger terminal on Facebook
It shows departure schedules for the last few weeks and more.
Funny, no scheduled flights for 72 hours over 8th-10th March
Then lots of flights this week to various destinations


And lots of photos taken inside the terminal

ILikeBoats's picture

"Utmost respect"?  For what accomplishments, exactly?  All modern day economics theorizers are little more than pimps for the government line.

Boomberg's picture

Yellen is a real life Dr. Evil, in appearance, mannerisms, and well, evil. 

nakki's picture

They can't find a better talking head than this. How, after listening to her, can anyone take her seriously. Its insulting enough that they've given us drooling Al and quivering lip Ben, now we have a high functioning autistic grandmother. The people that own the world are clearly giving us the bird and laughing their asses of.

Philalethian's picture

All together now...follow the bouncing mouse~ .:.


wmbz's picture

Jack Yellen & his conspritors could say they wound down the taper to zero, how would you know? Behind the curtains it's a different scene. The masses as always are told one thing while another is being done. Not that they care. Lies, bullshit they don't give a damn they are not just above the law, they are the law.

Duke Dog's picture

That's what the vast majority on ZH miss.

Yen Cross's picture

   The mystery is solved regarding who ate Hansel & Gretel

Rainman's picture

Fuckin Berkeley horseshit

Rehab Willie's picture

they didn't start calling her calamity janet for nothing.

HardlyZero's picture

OK i'm being resonable here.  Has anyone checked her out lately for a baby bump?   It could be the Kraken ?

Berspankme's picture

Fuck Her- she's a statist cunt. Fuck all of them.

QQQBall's picture

what is with the missing aircraft tangent?

fijisailor's picture

What about this small detail that tapering is a lie.


FED's balance sheet expands by $104.8 billion in Feb

Tylers should pick up this story