What To Expect From Bernanke At J-Hole

Tyler Durden's picture

Expectations for tomorrow's J-Hole speech by the venerable Ben Bernanke vary from the mundane "things-we-can-still-do; monitoring-situation" to the exuberant "we'll-print-our-way-out-of-this-mess-no-matter-what-and-I've-got-your-back-for-anything-more-than-a-1%-drop-in-the-Russell". We suspect, like Morgan Stanley's Vince Reinhart that a lot of people are going to be grossly disappointed  as the FOMC (C for Committee) meeting is so close and the election being just around the corner means playing-down any miracle-making. Instead we suspect it will be more of the same - disappointment in economic performance, could do better, closely monitoring, Fed-has-tools; i.e. a replay of most of his recent speeches in tone. Reinhart does see some room for surprise though - especially on conditional policy rules (and the potential problems with over-reaching their mandate).

 

Vincent Reinhart, Morgan Stanley: The Message from the Mountains

We have had low expectations for significant news from Chairman Bernanke’s Jackson Hole address for some time for two reasons.

  • First, he respects that the Federal Open Market Committee is a committee.  That is, monetary policy actions are group decisions and it is inappropriate to front run the outcome of a democratic process. 
  • Second, he wants to keep a relatively low profile during an election year when the Federal Reserve is already a hot-button campaign issue.  His speeches and testimonies over the past few months—even his semi-annual report on monetary policy—have been short, factual, and uneventful.

What does he have to do?  He has to convey that the Fed has been disappointed in the economy’s performance, that policymakers are inclined to provide additional accommodation soon unless there is a significant and sustained improvement, and that they will closely monitor the situation.  Essentially, all he needs to do is repeat portions of the statement and minutes from the July-August meeting.  Along the way, he will highlight that it is a beautiful venue for a conference, that they are about to hear interesting papers, and that many fiscal challenge remain unanswered.

The main possibility for surprise is if he addresses the ongoing work within the Fed on conditional policy rules.  The last set of minutes referred several times to discussions of rules and more open-end policy commitments.  Up to now, the Fed has been using its policy instruments in an unconditional way, in that it announces a program of fixed duration and fixed amount.  Most academic work, as will be discussed in the formal program at Jackson Hole, suggests that a rule linking the policy instrument to economic outcomes or the outlook performs better.  

The idea is that the Fed could agree, for instance, to keep the funds rate target at zero as long as they have an economic forecast that is short of their missionThe problem is that the mission at the heart of Fed policy-making is ambiguous.  In the Federal Reserve Act, the Congress tells the Fed to foster maximum employment and stable prices but is silent on how to weigh deviations from the two objectives or how quickly those deviations should be eliminated.  The monetary policymakers at the Fed are a diverse group of people who disagree on how to fill this silence.  If they can come to terms with this issue, then they can offer more open-ended assurance to financial market participants and the public at large. 

Chairman Bernanke is unlikely to offer a Solomonic solution, but his speech would be more interesting if he relayed where they are in the process.

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Precious's picture

Speech?  Irrelevant.  

Bernanke is simply checking in with the puppemasters for further instructions on Obama, who is unelectable without them.

On the same trip, the puppetmasters will sign and mail their Wyoming tax returns.

Slack Jack's picture

Bernanke will have to deal with this;

BREAKING NEWS:

China and Germany will no longer do business in USD, Euros and Yuan preferred;

http://www.cnbc.com/id/48838061

tahoebumsmith's picture

Say it isn't soooooo. There have been many of us pointing out the real crisis for some time now. The games have begun, for those of you doomers out there waiting for the breaking point? SNAP!

 

AGuy's picture

Ben is going to make a big announcement: "A little blue pill" that will correct economic disfunctionally: the new pill is called e-congra.

[Secret] Shh! Actually it's just a placebo, but the public won't know!

[e-congra side affects] May cause the value of your currency to devalve. May cause stagflation, and cause swelling of the federal gov't. Use caution before starting a daily e-congra regimen,  and discuss this with non-keysian economist first.

Comay Mierda's picture

BREAKING NEWS:

China and Germany will no longer do business in USD, Euros and Yuan preferred;

forget about QE, this story and others like it are the reason behind gold's continued strength

Atomizer's picture

It's amazing! It's extraordinary! It's stupendous! Yes folks, it's the Jackson Hole Circus..

 

Step right up, step right up, times a wastin’ folks. Tell ya what I’m gonna do! You don’t hafta knock’em off. Tip’em flat. Four flat gets you choice. One win’s all it takes. Biggest prizes on the Jackson Hole carny conference circuit..

StychoKiller's picture

"Hey you, with the face, step right this way..." -- Cyclone Pinball Machine

PlausibleDenial's picture

It is irrelevant.  In fact, it so irrelevant that I am boycotting the whole fucking deal.  I am going to get up and go to the beach take a stroll get some fucking bad ass breakfast with every lipitor piece of meat available.  Then, I am going to do a pool day with Margs, 420, and my girlfriend half ass naked.  If I have time, I am going to install the SSAR on my M4.

Check back in on Monday night.  Have a great weekend.

 

 

machineh's picture

What if the Bernank gave a speech and nobody came?

Non-news from a nonentity common counterfeiter ...

THECOMINGDEPRESSION's picture

Since it will be the same speech as last time..It has now been cancelled. Reruns of last episode is on channel 16.

Antifaschistische's picture

YOU GOT IT MACHINEH...

My hypothesis is that the OB ADMIN has spent so much time/influence hiding true economic statistics to keep voter sentiment high, that the chairsatan can't act.   Satan knows that if the true stats were being publicized that he's have the green light....but then, POTUS would lose his job.   So to keep POTUS on his thrown, the spin is on like never before...and Satan is sterilized.

Bay of Pigs's picture

All Hail Uncle Shalom the Bearded Clam...

ZIRP FOREVER! We're doing it!

tocointhephrase's picture

THERE WILL BE NO "PEACE" AS LONG AS THESE FUKWITS ARE RUNNING THE SHOW.

 

 

lewy14's picture

Any intervention sufficient to forstall asset deflation stokes commodity inflation. Game over QED.

azzhatter's picture

The A-hole from J-Hole. Is Liesman blowing him tonite

Dr Benway's picture

And they are deep in the K-hole of dissassociative Keynesianism

Vet4RonPaul's picture

Yea, Liesman cleans up after WSJ Jon Hackinonit

LetThemEatRand's picture

"Is Liesman blowing him tonite"

Liesman once had a full head of hair, but he got tired of constantly walking around with Bernanke spooge all over it so he shaved it off and left Ben a clean landing strip.

yogibear's picture

It did look like Liesman had his kneepads on. 

StychoKiller's picture

Probably yer most coherent post ever!

ar01's picture

So if BB doesn't print, is that just a future indicator of QE3, meaning the market will remain 'priced in'? 

max2205's picture

he wants to keep a relatively low profile during an election year '

What a joke

XitSam's picture

"He has to convey that the Fed has been disappointed in the economy’s performance, and since the Federal Reserve has no idea why the economy is broken or what to do, the Federal Reserve should be abolished."

StychoKiller's picture

Man, you high on somethin'! :>D

vast-dom's picture

" He has to convey that the Fed has been disappointed in the economy’s performance" but the MOTHERFUCKING S$P is at ALL TIME MOTHERFUCKING HIGHS! So it follows you are NOT SATISFIED WITH THE PONZI, BUT YOU MS, GS, JPM DOUCHEBAGS do REALIZE that even in a PONZI or especially precisely because it is a fraudulent counterfeiting system, there is a definite definitive PONZI ENDGAME! And more so, you FUCKING CAN'T HAVE AN ECONOMY EXCLUSIVELY PREDICATED ON QE!!! SORRY YOU CAN'T!!! IT IS UNNATURAL UNGODLY AND PERVERTS EVERYTHING ON THiS STINKING EARTH! 

 

Someone please print this and shove it up Bernanks J-Hole!

poor fella's picture

Wrap it nicely in Fed script and he'll put it in his man-Jyna-Hole himself, he loves the stuff so much. 

 

max2205's picture

Stfu, congress has more front running to do

reader2010's picture

What a great picuture. looks like a guilty motherf**ker right there.

toomanyfakeconservatives's picture

Agreed... guilty of pissing on the Constitution. After the MASS ARRESTS occur, the trials will be speedy and public... http://tinyurl.com/cd5cyjo/

nmewn's picture

Federal Reserve Notes.

Print my bitch, its all you have.

silverserfer's picture

fuck the FED and what they do or dont do or say. Invest in 90% silver coinage and ignore the bullshit. Regardless of what they do you will preserve your families wealth. Get back to the old school of savers. Quit trying to make a quick easy buck investing. This market is booby-trapped.  

foagettaboutit!

economicfreefall's picture
It feels like Jackson Hole is set up for disappointment to drive the metals down one last time before launching QE3 Sept. 13.

"Gold was trapped in a tight range on Thursday ahead of a speech from Federal Reserve Chairman Ben Bernanke on Friday that could stoke expectations for a third round of quantitative easing to stimulate the U.S. economy.

But gold is also vulnerable to a selloff if the address turns out to be a disappointment after the U.S. economy fared slightly better than initially thought in the second quarter and the Fed Beige Book report showed the economy continued to grow gradually in July and early August." https://miningstockvaluator.com/news.php?id=33

My bet is that gold will touch $1620 by early next week and then climb steadily from there until it goes crazy mid September :)

SheepDog-One's picture

They forgot the devil horns and goatee on the Bernank picture.

P.S.- Fuck off Margin Stanley 

The Alarmist's picture

One word: Disappointment.

The Shootist's picture

Dissapointments are actually positve for wall st. Everything is really, that's why they're on so many meds like Cramer.

buzzsaw99's picture

venerable bernank? venal bernank yes, venerable, not so much.

asteroids's picture

Please Ben: Make a neutral comment about the weather and SIT DOWN!

buzzsaw99's picture

ben you commie bastard!

flaunt's picture

Zerohedge?  More like Zerohope.  

This website is best taken in small sips lest you decide to toss yourself off the balcony.