December 15-16, 2008 FOMC Minutes
The Fed seems a bit concerned about the horse now that its out of the barn . . .
“The information reviewed at the December meeting pointed to a significant contraction in economic activity in the fourth quarter. Conditions in the labor market deteriorated considerably in recent months as most major industry groups shed jobs.
Private payrolls continued to fall at a faster pace than earlier in the year, and the unemployment rate rose to 6.7 percent…The housing market weakened again as construction activity, new home sales, and home prices declined further. In the business sector, investment in equipment and software appeared to continue to contract.
Industrial production fell markedly in November after sizable declines in the preceding two months. The recent contraction in industrial output was broadly based…
Real personal consumption expenditures (PCE) fell for the fifth straight month in October, with the slowdown evident in nearly all broad spending categories.
Sales of light motor vehicles, which slumped in October, fell further in November, but the available information on retail sales suggested a small increase in real outlays for other consumer goods…
Real construction activity continued to decline in November. Single-family housing starts and permit issuance fell further…
In the business sector, investment in equipment and software appeared to be contracting at a faster rate in the fourth quarter than during the third quarter…
As financial market conditions worsened over the intermeeting period, investors seemed to become more concerned about the likelihood of a deep and prolonged recession…
Source:
Minutes of the Federal Open Market Committee
December 15-16, 2008
http://www.federalreserve.gov/newsevents/press/monetary/fomcminutes20081216.pdf
January 6th, 2009 at 3:06 pm
Apart from the fact that the Federal Reserve has written this,
there is really no news in the text.
It is so typical central bank stuff : coincident, reporting the data
These guys don’t have any clue about the future, no vision.
This would not be important, but for the fact that they are conducting an active monetary policy.
It is liking driving a car by looking through the rear mirror. Great, until the first turn in the road.
January 6th, 2009 at 3:15 pm
GDP is expected to contract for 2009 as a whole…..
I suppose that about sums it up.
January 6th, 2009 at 3:39 pm
Good thing for us there will be a 2009 second half turnaround - the 2008 second half turnaround pretty much sucked.
January 6th, 2009 at 3:54 pm
Winston Munn:
Second half turnaround? Says who? What is going to grow the economy?
January 6th, 2009 at 3:58 pm
noels has got it right. No one needs central banker types to know which way the wind is blowing. Their guesses as to what the future holds are as good, and only as good, as anyone else’s. Even though they hold power to influence the course of events, they have no idea what to do about our current predicament. That they are highly compensated for their “expertise” borders on criminality.
January 6th, 2009 at 4:12 pm
Marcus Aurelius:
What is sad is that BR and Roubini could do a better job than “B-52″ Ben & Co. Yet neither could ever hope to get a Fed president job. To show you how messed up it is, Kudlow or Cramer probably has a better shot at getting that type of gig.
January 6th, 2009 at 4:15 pm
Hang the bastards! We will all take turns pulling on the rope. Too many times they get it dead wrong and this time is going to be the most wrong of all. By the second half of this year it will be shown that the FED does not have a fricken clue as to what is going on?
January 6th, 2009 at 4:16 pm
Why so few comments recently? Is this relentless rally sucking the enthusiasm out of TBP’s readers? Or is it just me?
January 6th, 2009 at 4:21 pm
@Calvin Jones,
Just a little New Year’s snark.
January 6th, 2009 at 4:37 pm
@ Winston Munn — I enjoyed the snark, was thinking “wait’ll he sees the 2010 second half turnaround…”
We need more snark on this blog — too many serious folks
January 6th, 2009 at 4:44 pm
I will volunteer to be Barry’s snark advisor…for a small fee. (I’d even be willing to take money from TARP funds, if Barry will agree to be a bank…a snarky bank.)
January 6th, 2009 at 4:55 pm
Marcus Aurelius @ 3:58
“That they are highly compensated for their ‘expertise’ borders on criminality”.
I don’t think that their salaries are particularly high, at least while on the government payroll. However, they can get high paying jobs at investment banks if they want to. Bernanke himself will probably get a multi-million dollar book advance (like Greenspan did).
Besides, the cardinal rule of employment applies: it’s not what you know, it’s who you know.
January 6th, 2009 at 5:13 pm
Relentless rally- I’ll take as sarcasm. Less enthusiasm- how many ways can you spell disaster? We all knew it was coming and now it is here. It still sort of boggles the mind.
The news is unremittingly terrible and will be so for a long time- anywhere from 10 to 20 years. We are drowning in debt - a vortex with enormous energy. Don’t pay any attentin to the markets- they reflect a daydream.
January 6th, 2009 at 5:15 pm
I doubt central bankers are that stupid. Indeed, I suspect they stay mum for fear of inducing a self-fulfilling prophesy.
January 6th, 2009 at 5:18 pm
Or for political reasons. (Personal politics or public politics.) Or another reason. But, I do suspect they know more than they let on. I doubt they’re clueless.
January 6th, 2009 at 5:27 pm
Well said, Zell
January 6th, 2009 at 5:28 pm
wunsacon @ 5:18
Right.
Do we really expect Bernanke to say publicly that the banks are insolvent, that an “inflation holocaust” is coming, that the USD is going down the toilet, or that the national debt is going to double…?
I think not.
January 6th, 2009 at 6:55 pm
No inflation?? Checking for new vehicle incentives at Honda shows that yesterday’s 1.9% to 3.9% financing offer has morphed to today’s 7% offer. To me, it tends to illustrate where they think the cost of money is heading.
January 6th, 2009 at 8:54 pm
Seems like a slow night for commentary …perhaps another sign of complacency setting it. Barry, how are the daily page views going? Seen any huge drops since the market started rallying? Any contra-indicators showing up?
It’s funny how the MSM talks about the VIX falling being a good sign for the market. As someone looking for another big leg down in 2009, I see the falling VIX as a confirmation of that bearish view. The market will not be able to take that next leg down UNTIL we see a lower VIX. All the schmucks who bot the 60-90% Vol on the Puts need to get wiped out first.
Always remember that the “market follows the path of greatest pain for all.” Accordingly, anyone who “took out protection” and spent a ton of money on puts must lose all that money. And then, when the masses decide that “things look calmer, we bottomed in November,” BAMMO! That’s when we will descend in that final fifth wave lower.
I’m very bullish the S&P500 at 600 later this summer.
- AT
January 7th, 2009 at 6:08 am
NYS unemployment system buckles under surge in applications. Doble digit unemployment here we come.Thanks for the Depression George, you’ve done to the country the same as you did to your businesses!
http://www.nytimes.com/2009/01/07/nyregion/07unemployment.html?th&emc=th
January 7th, 2009 at 10:13 am
Pat G. Says:
January 6th, 2009 at 6:55 pm
No inflation?? Checking for new vehicle incentives at Honda shows that yesterday’s 1.9% to 3.9% financing offer has morphed to today’s 7% offer. To me, it tends to illustrate where they think the cost of money is heading.
————————
I sell commercial trucks and the mfg finance company went from 2.9 for 36mo jumped to 7.10%