Economy | - Part 5

The Yellen Term at 18 Months

The body-less images at about the 30-second mark notwithstanding, this is a pretty good recap from the folks at Marketwatch of how the current and former Federal Reserve Chairs have fared during their first year-and-a-half on the job.

Interestingly, there’s the potential for the Presidential election cycle, Fed chairman cycle, and financial crisis cycle to line up again at the eight year mark. Recall that Bernanke was appointed in 2006 and had smooth sailing for a while, then the election cycled heated up in 2007, and then the wheels fell off of nearly everything in 2008.

Interregnums are particularly good times for financial crises…

GDPNow Now Higher for Q2

Not that a growth rate of 2.1 percent for the U.S. economy in the second quarter is anything to write home about (particularly after registering another negative result for the first quarter), but things appear to be looking up a bit here mid-way through 2015 per the latest update of the Atlanta Fed’s GDP Now real time economic forecast tool.

It was yesterday’s biggest monthly gain in consumer spending since 2009 that pushed GDPNow over the 2 percent mark for the first time this year. Recall that GDPNow nailed first quarter growth (or the lack thereof) earlier this year when most analysts were expecting a growth rate of somewhere around two percent. It should be interesting to see how this turns out late next month when the advance estimate for Q2 is reported.

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A Greater Depression in Greece

This morning’s headlines read “Tsipras slams creditors…”, “Tsipras flies to Brussels…”, and “Tsipras faces domestic revolt…” as the Greek debt tragedy continues to play out in the latest attempt to avert a “Graccident” resulting from a “Grexit”.

Fortunately for anyone who has already grown tired of Greek-related contractions, none is needed when combining the words “Greece” with “Great Depression”, which is what the Hellenic people are now enduring as illustrated below in this Bloomberg story.

Yes, the economic data from 80 years ago is sketchy, but, as detailed above, it’s actually been much worse in Greece than in the 1930s U.S., as hard as that might be to imagine.

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From the “pissed off, disillusioned, ex-Wall Street,  independent, intentionally-unnamed, now permanently ex-pat bloggers” who offer up fare at the NotQuant blog comes the image below, prompted by a paper(.pdf) from the Philadelphia Federal Reserve about the supposedly unintended consequences of monetary policy.

Interestingly (but not surprisingly, given the dismal set’s detachment from the real world in cases such as this), economist Makoto Nakjima doesn’t even question whether this particular unintended consequence is really unintended, stating unequivocally:

Monetary policy currently implemented by the Federal Reserve and other major central banks is not intended to benefit one segment of the population at the expense of another by redistributing income and wealth. Any decisions regarding redistribution are considered to be the province of fiscal policy…

Yeah, right.

Rising Inequality and Lost Decades

I don’t think this video is new (it was stumbled upon at this story at Vox about how bankers actually went to jail in Iceland after the financial crisis), but with the stock market rebounding sharply and set for new all-time highs, it’s worth another look.

Also see How Will the Economy’s “Lost Decade” Play Out in 2016? by John Cassidy at The New Yorker. It will surely be interesting to see how this all plays out between now and the election next November (I’m not hopeful, just curious).

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