Why Janet Yellen Is Hoping California Chrome Wins The Triple Crown
With The Fed tapering proceeding as scheduled and complacency having reached 11 on the Spinal Tap amplifier of over-confidence, Janet Yellen and her fellow PhDs have one last best hope... a second-half pick up to magically confirm escape velocity and 'prove' monetary policy is not simply the enrich-the-rich scheme we all know it is. For that reason, we suspect Yellen, Lew, Obama, and every bull out there will be screaming "move yr arse" to California Chrome in The Belmont on Saturday...During years when there is a Triple Crown winner, the U.S. economy has averaged 4.85% growth in real GDP.
As Bloomberg notes,
Winning horse racing’s Triple Crown (Kentucky Derby, the Preakness, and Belmont States in the same year) is no easy feat. It’s only been accomplished 11 times in history. On June 7, California Chrome will have a chance to join this elite crowd. During years when there is a Triple Crown winner, the U.S. economy has averaged 4.85 percent growth in real GDP, an elevated 8.1 percent unemployment rate, and a 6 percent pace of inflation.
There were 19 occasions when a horse won the first two legs of the Crown, but failed to capture the victory in the Belmont – this excludes those races where the horse did not compete in the Belmont. During those periods, the economy fared worse with an average 3.6 percent pace of real output, though milder unemployment (5.2 percent) and a considerably less daunting inflation rate of 3.7 percent.
When it comes to rooting for a victor, essentially it comes down to choosing between stronger growth or a less encumbering set of the twin evils of unemployment and inflation.
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