This Is What Janet Yellen Thinks Is The "Worst-Case Scenario" For The U.S.
One year ago, when the Fed released its 2009 transcript, we learned that after a terrible 2008, the Fed's sense of humor gradually returned and instances of the word "laughter" in declassified Fed transcripts rebounded in 2009.
As a reminder, the Fed's sense of humor as determined by recorded incidences of "laughter" at FOMC meetings hit their highest level on record in July 2007, which coincides exactly with the moment when the housing bubble finally burst (remember: they weren’t laughing at you, they were laughing with you). The laughter died down quickly after that.
Today, with the usual 5 year delay, the Fed released the transcripts from its 2010 meetings and telephonic conference calls. As the chart below shows, while laughter did pick up on several occasions, most notably in January and November, it was again a relatively subdued year as would be expected at a time when the Fed had to admit its first policy error, when a year after launching QE1, it proceeded with QE2 in late 2010.
Still, it's good to see that as the Fed was busy transferring wealth from unborn future generations and the middle class to the uber wealthy, it kept at least some sense of humor when doing so.
That said, it would not be fair to say that the Fed was only focusing on its erroneous models and undue optimism about a recovery that would never come for anyone except shareholders: according to the August 2010 transcript, here is what according to Janet Yellen was the biggest " a Japan-style deflation remains a relevant worst-case scenario for us going forward." Full quote:
I, too, hope that the long disinflationary trend of the past two years will end, and I think a further disinflation seems unlikely. However, the evidence suggests that prices and wages react with a considerable lag to shifts in output and employment, and Japan provides a useful cautionary example. Japan’s deflation didn’t begin until the mid-1990s, a half-decade after the collapse of Japanese real estate and equity prices. Furthermore, during the early years of deflation, Japanese long-run inflation expectations remained well anchored, averaging about 1½ percent as measured by consensus forecasts. So, unfortunately, a Japan-style deflation remains a relevant worst-case scenario for us going forward.
The irony, of course, is that while admitting this, Yellen never actually learned from the Japanese lesson. As we showed last August, Japan also tried to "escape" its deflation by hiking rates in August of 2000. The "success" of the rate hike lasted all of 7 months before Japan had to cut to zero.
One wonder after what is already the worst start to any year in US stock market history, whether the Fed's attempt to renormalize will be able to last even 7 months.
And here is where it gets even scarier, because if Ms. Yellen loses control of the stock market, then a "Japan-style deflation" will seem like a walk in the park compared to what is coming in the US...
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Yellen will just up the headcount of the Kevin's at the NYFed and BIS. All solved.
I have trust in Yellen, she's really smart. She went to an Ivy league school just like Obama, right? Look how well he has done!
These guys show up after the crash to say there might be a crash.
LOL wow. I can't wait until the Fed Laughter Index (FLI will be the ticker symbol) becomes a true economic indicator. It's like Roman emperors at the wheel. Mwwhhaaahahaha!
"a Japan-style deflation remains a relevant worst-case scenario for us going forward."
We'll all be begging for a Japan-style scenario when we see what the alternatives are.
"(remember: they weren’t laughing at you, they were laughing with you)."
I didn't know squids could laugh
Plus she adds diversity, and at the end of the day, what's more important than building an inclusive and tolerant society?
She sure did!
She read a book one time, about this guy who was very poor and lived in his uncles house. And when the roof started leaking, his uncle send him to the market to sell their cow so they could fix the roof with the money, and once he arrived at the market, this other smart honest guy sold him these beans for a fair price. And when they planted those beans.... well long story short, the guy found a goose that crapped golden eggs!!!! GOLDEN EGGS!!!
I've hear that at the FED, they read that story out loud during lunch every day!
And the moral of the story? Just sell your most priced possesion to the smartes guy in the market for a handfull of green beans and you'll find the goose that craps golden eggs!
I think she's turning Japanese
I think she's turning Japanese
I really think so.....
she sat upon a scarlet colored beast, full of names..., having seven heads and ten horns.
Old man Yellen is a Jewish polack, by way of Brooklyn. It cannot help where it sprang from- but the 'Whore of Brooklyn' just doesn't sound biblical!!
HAHAHAHA !!! The Whore of Brooklyn. LOL !! Isn't that Martin Scorsese's next film?
She wants senpai to notice her.
They say, that when she takes a dump, she starts to look like a Japanese!
Damn.....I can't unread that.....thanks a pant load.
From Bloomberg...
"Warmer than usual weather last month probably curtailed purchases of winter gear including clothing. This was the warmest December on record for the contiguous U.S., according to the National Oceanic and Atmospheric Administration."
Picking that shit outta pepper. So sad..
Gotta wonder how much time and energy spent analyzing the sale of winter clothes, real big-picture people we got there, lookin' out fer us. . .
Did you make that up? Most idiotic fucking thing I've heard in . . .last few minutes.
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She has an announcement to make, she just has to spit the puke out of her mouth first.
Fucking VooDoo economists.....
Toss a dart in the air you fuckers!! THATS HOW MUCH THEY KNOW!!...these are your experts...
prepare for MOAR pain....
Oh, they know.
Maybe they know, maybe they don't. It's irrelevant. The debt is calling the shots now.
The lack of being able to pay on the debt is what is calling the shots now.... Big difference. The fucknuts thought by printing 10 plus trillion we would be at 4-8 percent growth, and we would have grown our way out. Instead, we blew zerogrowth negative real growth equity bubbles.
The worst case for the "jew s a" is having you and your ilk on the fingers of ctrl p...
It's just hilarious that these tribal finance experts are worried about deflation when just about everything muppets buy costs a lot moar.
haha ha
Negative rates here we come. I can already see MSM going all out explaining how great they are, can't wait for the daily stories advocating taking on more debt because you will be getting paid to do so.
Where have I heard that before?
Standard Disclaimer: "The more you spend, the more you save..." Yes, that's it.
"Buy now and save" ~ US retail
Well... not you or me...
We'll be paying a shitload in interest if we want a loan but those who are already swimming in money will get it for free and be paid for loaning money and they'll get a shitload more if they loan it to us.
It's just normal. God told them they are his favorite and all the rest of us are dirt.
What is the point of recording the amount of laughter?
Funny how they hand over the wheel to a woman so she can complete the crash.
Did you just de-bone your bonus ?
Similar to the Bernank 2 years post nomination, she needs a roughly equivalent crisis in order to come in and be the superhero. Seriously, she'll be on the cover of Time POTY. Yellen will hit 2 years as chair in February.
I point out (for the Nth time) that JANET DOESN'T HAVE THE CHOPS. If we get a 2008-style crash she isn't up for it. She's going to be a deer in the headlights. Or a granny baking cookies in the kitchen while the living room is on fire.
Do you honestly think Grandma really has the wheel? Honestly? She Obozo, McConnell, pelosi, and the rest of the corrupt bunch are just puppets.
You call THAT a woman???
Part of the bigger plan. Probably has something to do with that divide and conquer thingy. Same goes for Obama
Just like Bernanke left his post early
Need someone to blame after the smoke clears
the freaking writing is all over hte wall .. deflation is guarenteed
Even the NORMAL writing is all over hte wall.
Are you a confident investor? https://www.youtube.com/watch?v=3V80zdn7oKY
http://www.wsj.com/articles/equities-policy-needs-surgery-not-band-aids-1452813172
Lest we forget, the SEC itself sowed the seeds of today’s distorted equity-market structure when it adopted Reg NMS in 2005 and began enforcing it in 2007. The regulation mandated that stock-market participants prioritize price and speed above all other considerations, regardless of the trader’s preference or other factors like convenience or whether the amount of stock was enough to satisfy the trader’s order.
No other market functions that way and in fast-moving stock markets, the price can change quickly, making it harder to get the stock at the price and quantity that a trader wants. Subsequent informal SEC attempts to fix the problems added to the complexity. Ultimately, the regulation caused the atomization of orders in the market through gamesmanship as small orders proliferated on a variety of exchanges.
Japan is the "worst case scenario"... MUHAHAHAHAHAHA! No.
Weimar Germany on a global scale is the worst case and likely scenario. That likelihood just keeps going up as the FED, BIS, IMF, ECB etc all go full retard.
Good job Old Yeller, Bernank, Greenspan. You've managed to destroy the entire world.
Where is John Galt when you need him? Milestones
it is all "contained" although quite the "conundrum"
I've had enough of this meme that this is all some tragic accident.
Nothing about our economic situation is accidental. Choices were made all along that have led us to where we are.
Congress spent more than we as a nation take in and they borrowed it from a private banking cartel that exists to sell debt. They exchange your promise to pay for some fiat money they create out of thin air, they charge you interest on top of this and when you don't pay they take your real shit back.
They become the air in the economy, on, off, on, off, and when it's on you do productive things and produce real value, when it's off you go under and the valuable pieces are scooped up in the con.
How hard is it to see this for the scam that it is?
That's why its called the New Feudal World Order. The only thing missing is the wars and security state crackdowns... but they are coming.
Has she gone full retard??!! Japanese style deflation would be the best case scenario for the US!! Japanese deflation can last that long because all there Japanese herd people buy soverign bonds to support the country, they are hard working people and they had strong exports in the 1990s, 2000s, 2010s.
Who do you think directed the Japanese central bank?
People like Greenspan and others at the Fed.
Japan is the fed's grand experiment,
So the Fed didn't really raise rates....
Fed’s Dudley gives no hint of market-induced rate pause
http://www.marketwatch.com/story/feds-dudley-gives-no-hint-of-market-ind...
Just wondering, where would the Market's had stopped, prior to the manipulation of march of 2008.
got the feeling we're going to find out soon