Stocks | - Part 2

Confidence is High

Hoisting up this photo of Federal Reserve Chair Janet Yellen from this Fortune story today about how the central bank is, basically, flying blind when it comes to inflation since the Phillips Curve stopped working … well, it just seemed like a good idea this morning in advance of today’s expected non-action on interest rates from the Fed.

Here’s a simple suggestion – since it is now clear that newly created money from the Fed goes exclusively into financial instruments rather than anything that factors into consumer prices and, certainly, not workers’ wages (and “trickle-down” appears to be broken too), maybe the braintrust in the Eccles building should look more at stock prices (way up), bond prices (way up), home prices (way up), etc. to gauge whether or not they’ve done enough.

There’s also this rather embarrassing graphic via Marketwatch today:

Financial Markets and the Fed

After the financial market turmoil of recent months, the response of the Federal Reserve to said turmoil, and then the reaction of markets to yesterday’s dovish September Fed meeting minutes, it’s not at all clear that this cartoon accurately characterizes the relationship between Wall Street and the nation’s central bank.

Lately, it looks like markets are telling the Fed what to do and, in the process, making them look foolish as a result (either that or Fed economists just don’t have a clue about anything).

From the cartoon archive of Daryl Cagle.

Yellen: Agonizing to Watch

In a speech at the University of Massachesetts last night, Federal Reserve Chair Janet Yellen said that the prospects for the U.S. economy “generally remain solid” and that the central bank is “on track” to raise interest rates in the months ahead.

Then dehydration is said to have caught up with her and she cut her speech short:

She received medical attention then resumed her schedule as the stock market ripped higher, traders concluding that she was just fake vomiting, something that Stephen Colbert popularized on his Comedy Central show and brought to CBS with Emily Blunt the other day.

Shkreli Makes a Splash

Hedge fund manager turned pharmaceutical company wunderkind Martin Shkreli made a grand entrance onto the national stage yesterday by defending his company’s decision to raise the price of an AIDs related drug from $13.50 per pill to $750.

His actions prompted a tweet from Hillary Clinton that sent Biotech stocks plunging (no doubt endearing himself to other Biotech CEOs) while generating headlines like these:

Not sure if that old saying “any publicity is good publicity” applies in this case.

Investors Hate Stocks?

According to the graphic below from this Bloomberg story, investor sentiment has recently plunged along with stock prices, but, “fret not” they say, as big gains normally await those who dare to invest money after such an historic loss of confidence.


It’s hard to know what the correct price of anything is these days, what with the central banks of the world having their heavy thumbs on the scale and investors never knowing if or when they’ll relent, last week’s Fed no-decision being the latest example of such.

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