Liesman Asks Yellen: "Is The Fed Worried By The Market Going Up Triple Digits Every Day?"

CNBC's Steve Liesman: "Every day it seems the stock market goes up triple digits... is it now, or will it soon become a worry for the central bank that valuations are this high?"

Yellen's response appeared very similar to Bernanke's "contained" moment:

'"The stock market has gone up a great deal this year,'' and asset valuations are "elevated."

 

"We see ratios in the high end of historical ranges," but "Economists are not great at knowing what the right valuations are...we don't have a terrific track record."

 

"Low interest rates support higher valuations."

 

''The risks in the global economy look more balanced than they have in recent years.''

 

''There is nothing flashing red there or possibly even orange,'' on asset valuations...

So this is not even flashing orange?

And this is not flashing red?

And none of this worries you?

Then Yellen turned to Bitcoin:

"Bitcoin, at this time, plays a very small role in the payments system.

 

It is not a stable store of value and it doesn't constitute legal tender. It is a highly speculative asset."

 

"The Fed doesn't really play any regulatory role with respect with Bitcoin, other than ensuring banks are being prudent. "

Yellenb also said that creating a cryptocurrency "is not something the Federal Reserve is seriously considering at this stage.... There are limited benefits and a limited need for it.''

Finaly she summed up: "There's less to lose sleep about now than in a long time"

Comments

MagicMoney Dec 13, 2017 11:28 PM Permalink

Of course, the Fed is not going to admit there is a stock market bubble because they created it on purpose and they don't want the market to panic. They will downplay it. Don't expect the truth to come out from the Federal Reserve on the potential consequences of their own policy.

asscannon101 Dec 13, 2017 11:03 PM Permalink

The Tylers should start an independent, monthly feature entitled the FOMA (Fucking Obvious Monthly Analysis) and it should be published two days before the FOMC meeting. It could cite actual unemployment rates, inflation stats, housing costs, ObmlamaWhoCares rates, etc and might serve as a springboard of talking points for upcoming FED press conferences.

any_mouse Dec 13, 2017 8:24 PM Permalink

My question is why did they have Liesman ask that question? Liesman is not known for deviating from the script. They wanted Yellen's response on the record.

There is that guy that got banned from Fed press conferences. Now he asked the questions the Fed did not want to answer or have raised at all.

Toshie Dec 13, 2017 7:21 PM Permalink

LiesMan ;-

Let's make a new year resolution thing and somehow change this last name?

How about TrueMan? Gotta come clean though !!!!

Let it Go Dec 13, 2017 6:42 PM Permalink

I feel we are in uncharted waters and should take nothing for nothing for granted. To assume we will move forward without a glitch is  extremely optimistic. With the passage of time, things change and evolve. This transformation can be seen in both society and the economy. A question we must ask is just how relevant today's comparisons are with prior economic cycles?The situation today is in many ways "historically unique" due to the rampant expansion of credit in recent decades. Recently  I found myself pondering the line, "outwit and outlast" that is often used during the popular hit television show Survivor. It occurred to me the winners in both life and investing often reflect these qualities and that this game is far from over. More on this train of thought in the article below. http://Economic Evolution Renders Many Comparisons Obsolete.html

SuperCycleBear Dec 13, 2017 6:31 PM Permalink

It is all about real rates of return and the CBs of the world screwing savers (the guys that actually delay consumption for capitalism to work). They have made a mockery of true markets and now we get the end game where evrybody wants something for nothing. This cannot end well. Measured in Bitcoin, all markets have just crashed. The sinkhole that will consume the credit bubble has started and hodlers of fiat are in for a hell of a shock.

Herdee Dec 13, 2017 6:29 PM Permalink

Nothing's flashing red because government's have to run a lot higher deficits in order to keep up even more printing at exponential levels. Stimualtion of the economy by direct government intervention in order to get people to borrow and spend. Never let a good crisis go to waste. We need printing on a massive scale along with government spending at mind boggling projects in order to embarass China. You know, the Japan syndrome - You have to get over this fear, you're not printing enough! Free government cheques with lots of zeroes on them for everybody. You'll be taxed,only if you keep the money in the bank. That's what it will take to generate the inflation.

SummerSausage Dec 13, 2017 5:12 PM Permalink

Yellen kept made a point of the Fed doing everything possible to get 2% inflation and NOBODY said the taxpayers would be better off with NO inflation.  It's only politicans who want inflation so their excess spending today doesn't look as bad tomorrow. 

SummerSausage Dec 13, 2017 5:09 PM Permalink

Lies - man is well named.  Pretends to know something about the economy and how markets work but all he knows is to read what his masters put in front of him.

TabakLover Dec 13, 2017 4:59 PM Permalink

Why, in God's name, would Yellen make such a potential reputaion destroying comment?  I guess she figured Greensham and Bershankie got away with it............... 

proper1 Dec 13, 2017 4:44 PM Permalink

Another bloviating hack, water carrier for obozo he would have never asked the question if the clown of clowns were still at the helm...

economessed Dec 13, 2017 4:36 PM Permalink

"creating a cryptocurrency "is not something the Federal Reserve is seriously considering at this stage.... There are limited benefits and a limited need for it.''

This is such a profoundly disengenous statement - Janet Yellen should be ground-up, mixed with nitrogen and spread over a field to enrich the soil.Of course the Fed sees limited benefit to crytocurrency, because they can not print unlimited supplies of it to drive inflation (and water-down debt).  Of course the Fed sees a limited need for it, because as demand for it grows, it will render their (abusive) function in the economy completely irrelevant.END THE FUCKING FED!!!!!

rf80412 Dec 13, 2017 4:24 PM Permalink

The Fed interprets their own mandate as flattening the business cycle in favor of steady growth: crush volatility and reduce everything to the trend.  By that standard, Yellen is an unqualified success, even if she just got lucky.This may be because the Fed might well interpret price stability differently.  Price stability in the sense of prices remaining unchanged over arbitrarily long periods of time is impossible unless the economy is neither growing nor shrinking, especially if the supply of money is largely fixed.  Nominal prices going up and down in response to the buying power of an essentially fixed supply of money relative to demand for goods and services is not price stability either, even if real prices (adjusted for the buying power of the currency: i.e. inflation/deflation) remain more or less constant over decades and even centuries.

John Law Lives rf80412 Dec 13, 2017 10:00 PM Permalink

"This may be because the Fed might well interpret price stability differently." - rf80412I would love to know in what universe (i.e. aside from being inside the mind of a central banker) the term, stability, could be appropriately applied to risk assets, real estate, rent, health care costs, tuition costs etc. over the past ~8 years.  Meanwhile, good luck to those central banks who inflated their balance sheets into the stratosphere.  Then again, maybe they have something cooking that none of us are privy to yet.  I am apprehensive re. what lies ahead.  

In reply to by rf80412

John Law Lives Dec 13, 2017 4:25 PM Permalink

''There is nothing flashing red there or possibly even orange,'' on asset valuations... - YodaI guess I could buy that it if I wore blinders and I was trying to protect my soon-to-be legacy...Yoda_FUBAR

SDShack Dec 13, 2017 4:36 PM Permalink

"...ensuring banks are being prudent."

LOL! I missed where Old Yeller said Glass-Steagall was being re-implemented. I can't wait until the term "unexpected" is unleashed by them. Tylers, get the Deer in Headlights cued up.

moneybots Dec 13, 2017 4:00 PM Permalink

 ''There is nothing flashing red there or possibly even orange,'' on asset valuations... Yellen said she didn't see the 2008 crisis coming--------- UNTIL IT HIT.

moneybots Dec 13, 2017 3:57 PM Permalink

 "Low interest rates support higher valuations." So why did the Nasdaq fall 76% when Greenspan dropped the rate from 6.5 to 1%?So why did the S&P drop 57% when Bernanke dropped the rate from 5.5 to ZIRP?

gcjohns1971 Dec 13, 2017 3:54 PM Permalink

They had to implement a command economy to implement a global economy.The problem is that markeys are about human needs, and command economies are about control.Whwn enough people's needs do not coincide with elitist desires then markets blow up.

rf80412 gcjohns1971 Dec 13, 2017 4:09 PM Permalink

Free markets are about profit first, last, and always.  If what people need and want is not profitable to produce, then it doesn't get produced.  If what is profitable to produce isn't what people need and want, then it gets subsidized.Does unmet demand constitute market failure?  Or is unmet demand held to be impossible?  Since in the end you still "voluntarily" bought X even though you wanted Y, or else you "voluntarily" kept your money and went home.

In reply to by gcjohns1971

insanelysane Dec 13, 2017 3:44 PM Permalink

Liesman?  I thought he crawled into some hole after the election?  He was never worried about soaring markets when the Dems were in office.  He figured that was how they would keep electing Dems.  We can see now that the market will continue to soar regardless of what happens including nuclear war.  The minute the music stops, we will be triggering circuit breakers for months as the market evaporates.