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Cygnets DAVID ROSENBERG: Janet Yellen's use of one word tells us something has gone wrong David Rosenberg, Contributor In a truly seminal speech on March 29th, Janet Yellen used the title, The Outlook, Uncertainty, and Monetary Policy.
I have been in this business for 30 years and have never seen a central bank chief slip the word “uncertainty” into the headline.
Not just that, but she invoked the term no fewer than 10 times to describe the domestic and global macro and market backdrop — this even as we pass seven years since the worst point of the Great Recession and seven years into the most radical easing of monetary policy in recorded history.
It begs the question: what has gone wrong?
David Rosenberg Mr. Rosenberg is Gluskin Sheff's Chief Economist & Strategist with a focus on providing a top-down perspective http://www.businessinsider.com/david-rosenberg-says-janet-yellen-use-of-uncertainty-shows-something-has-gone-wrong-2016-4-17 Excerprts Germany is following a policy of austerity to the detriment of its Eurozone allies.. The Brexit vote on June 23rd is a classic fork in the road for the European Union, and the 64% vote (non-binding) in the Netherlands against the treaty with Ukraine (for greater economic ties) underscores the contempt that many in the region have towards the union.... Spain’s coalition government is about to fall. Italy’s banks are in disarray. Prime Minister Hollande has backed down on French reforms. Greece is at risk of defaulting again this summer. So it is clear the European Union is splintering.
The big story is how the U.S. has shot itself in the foot many times over
Obamacare....Fiscal policy was never loosened enough....the Republican who shut down the government four years ago is now in second spot ...The tax code has not undergone a face-lift in three decades...a White House now making it up as it goes along when it comes to merger activity...impaired productivity growth....birth and fertility rates that have gone in reverse... a decline in immigration (to an extent that would most assuredly bring a smile to The Donald’s face)....the rapid growth in two-income families that helped juice up the spending power of cycles gone by, is long over.....what woman wants to date, let alone marry, a guy who’s still living with mom and dad? Indeed, an unheard-of 35% of males aged between 18 and 34 live at home.... dramatic surge in student debt, now equivalent to $100,000 per college grad..kiss your FICO score goodbye and kiss your ability to secure a mortgage goodbye, too....the household sector, at the margin, continues to focus on repairing balance sheets as opposed to embarking on a spending binge.....boomer hitting 60 ..sees he or she has 25 years left on earth and the dread realization sets in that they haven’t come close to preparing financially....There is this other little matter called income inequality..anti-establishment feel to the primaries, whether it is in the Trump or Sanders camp, certainly does resonate...nothing wrong with building wealth..but too many trailing behind history shows us time after time that this triggers discontent among the masses, instability and inevitably, upheaval... near eradication of the middle class ....A rising savings rate amidst lingering high excess capacity in a global basis means that deflationary pressures are not going to go away...ongoing monetary accommodation, though as we are seeing with quantitative easing and negative rates in the euro area and Japan, central banks are losing their effectiveness...So all this means lower for a lot longer — low growth, low inflation, and low interest rates — from an investment strategy standpoint, it is all about.....................
"The real trouble with this world of ours is not that it is an unreasonable world, nor even that it is a reasonable one. The commonest kind of trouble is that it is nearly reasonable, but not quite. Life is not an illogicality; yet it is a trap for logicians. It looks just a little more mathematical and regular than it is; its exactitude is obvious, but its inexactitude is hidden; its wildness lies in wait". -Chesterton Risk is plentiful in this world God created. Walk through nature and you see it everywhere. Who we are today is the sum of all the decisions both good and bad we have made in our lives. Behavioral economics is rarely discussed. Many decisions have dimensions and impact our lives and others around us for years down the road. IMHO, Taleb is a hero. A holy man in a cave. You may not agree with him, but you have to give him credit for framing out thoughts to broaden our understanding of risk.
Comments
DAVID ROSENBERG: Janet Yellen's use of one word tells us something has gone wrong
David Rosenberg, Contributor
In a truly seminal speech on March 29th, Janet Yellen used the title, The Outlook, Uncertainty, and Monetary Policy.
I have been in this business for 30 years and have never seen a central bank chief slip the word “uncertainty” into the headline.
Not just that, but she invoked the term no fewer than 10 times to describe the domestic and global macro and market backdrop — this even as we pass seven years since the worst point of the Great Recession and seven years into the most radical easing of monetary policy in recorded history.
It begs the question: what has gone wrong?
David Rosenberg
Mr. Rosenberg is Gluskin Sheff's Chief Economist & Strategist with a focus on providing a top-down perspective http://www.businessinsider.com/david-rosenberg-says-janet-yellen-use-of-uncertainty-shows-something-has-gone-wrong-2016-4-17
Excerprts
Germany is following a policy of austerity to the detriment of its Eurozone allies..
The Brexit vote on June 23rd is a classic fork in the road for the European Union, and the 64% vote (non-binding) in the Netherlands against the treaty with Ukraine (for greater economic ties) underscores the contempt that many in the region have towards the union....
Spain’s coalition government is about to fall. Italy’s banks are in disarray. Prime Minister Hollande has backed down on French reforms. Greece is at risk of defaulting again this summer.
So it is clear the European Union is splintering.
The big story is how the U.S. has shot itself in the foot many times over
Obamacare....Fiscal policy was never loosened enough....the Republican who shut down the government four years ago is now in second spot ...The tax code has not undergone a face-lift in three decades...a White House now making it up as it goes along when it comes to merger activity...impaired productivity growth....birth and fertility rates that have gone in reverse...
a decline in immigration (to an extent that would most assuredly bring a smile to The Donald’s face)....the rapid growth in two-income families that helped juice up the spending power of cycles gone by, is long over.....what woman wants to date, let alone marry, a guy who’s still living with mom and dad? Indeed, an unheard-of 35% of males aged between 18 and 34 live at home.... dramatic surge in student debt, now equivalent to $100,000 per college grad..kiss your FICO score goodbye and kiss your ability to secure a mortgage goodbye, too....the household sector, at the margin, continues to focus on repairing balance sheets as opposed to embarking on a spending binge.....boomer hitting 60 ..sees he or she has 25 years left on earth and the dread realization sets in that they haven’t come close to preparing financially....There is this other little matter called income inequality..anti-establishment feel to the primaries, whether it is in the Trump or Sanders camp, certainly does resonate...nothing wrong with building wealth..but too many trailing behind history shows us time after time that this triggers discontent among the masses, instability and inevitably, upheaval... near eradication of the middle class ....A rising savings rate amidst lingering high excess capacity in a global basis means that deflationary pressures are not going to go away...ongoing monetary accommodation, though as we are seeing with quantitative easing and negative rates in the euro area and Japan, central banks are losing their effectiveness...So all this means lower for a lot longer — low growth, low inflation, and low interest rates — from an investment strategy standpoint, it is all about.....................
Risk is plentiful in this world God created. Walk through nature and you see it everywhere. Who we are today is the sum of all the decisions both good and bad we have made in our lives. Behavioral economics is rarely discussed. Many decisions have dimensions and impact our lives and others around us for years down the road. IMHO, Taleb is a hero. A holy man in a cave. You may not agree with him, but you have to give him credit for framing out thoughts to broaden our understanding of risk.