Source: Elliot-today

 

 

Earlier this week, we discussed the amount of laughter in FOMC meetings as a sign that the Fed was not fully cognizant of the coming financial storm.

Today’s chart adds another component to this, overlaying Fed laughs with Case Shiller residential real estate price index, via Elliot-today. Perhaps the best way to consider this is as a function of mass psychology: The Fed appears to have become complacent, apparently relaxed and self satisfied with their handling of the collapsing of the DotCom/Tech/Telecom bubble after 2,000.

Sure, there is some form fitting here as the chart is adjusted 6 months to make them correlate. Regardless, it is the sort of coincidence that would rarely be noticed in real time, and is terribly significant in hindsight.

I wonder what the Fed is laughing about now . . .

Continues here

Category: Federal Reserve, Real Estate, Research

Please use the comments to demonstrate your own ignorance, unfamiliarity with empirical data and lack of respect for scientific knowledge. Be sure to create straw men and argue against things I have neither said nor implied. If you could repeat previously discredited memes or steer the conversation into irrelevant, off topic discussions, it would be appreciated. Lastly, kindly forgo all civility in your discourse . . . you are, after all, anonymous.

6 Responses to “Fed Laughter and Housing Prices”

  1. pekoe says:

    Finally, how to quantify the Zeitgeist. GIve the man a prize!

  2. rd says:

    The Fed dosn’t need to issue its minutes before the 5-year embargo. But they could publish the metric of laughs per meeting in their Beige Book.

  3. BennyProfane says:

    “I wonder what the Fed is laughing about now . . .”

    Congress, of course.

  4. ch says:

    They’re laughing about gold. See if you can catch the difference in Ben Bernanke’s comments on gold, 11 years apart…he must be going senile b/c if he doesn’t understand gold now, he sure did 11 years ago:

    2013: “Nobody really understands gold prices and I don’t pretend to understand them either,” Federal Reserve chief Ben Bernanke told the Senate Banking Committee on Thursday in response to a question on why gold prices have been volatile.

    2002 (in the famous “Deflation” speech): “Although a policy of intervening to affect the exchange value of the dollar is nowhere on the horizon today, it’s worth noting that there have been times when exchange rate policy has been an effective weapon against deflation. A striking example from U.S. history is Franklin Roosevelt’s 40% devaluation of the dollar against gold in 1933-34, enforced by a program of gold purchases and domestic money creation. The devaluation and the rapid increase in money supply it permitted ended the U.S. deflation remarkably quickly. Indeed, consumer price inflation in the United States, year on year, went from -10.3% in 1932 to -5.1% in 1933 to 3.4% in 1934.

    The economy grew strongly, and by the way, 1934 was one of the best years of the century for the stock market. If nothing else, the episode illustrates that monetary actions can have powerful effects on the economy, even when the nominal interest rate is at or near zero, as was the case at the time of Roosevelt’s devaluation.

  5. MayorQuimby says:

    Barry- This could make a decent post:

    2011:

    http://www.foreclosure-response.org/assets/maps&data/Serious%20Delinquency%206-11.jpg

    2013:

    http://www.foreclosure-response.org/assets/maps&data/SeriousDelinquency_Sept2013.jpg

    Think insanely high taxes and cost of living don’t matter in NJ? I say think again.

  6. [...] Reminiscent of the Greenspan briefcase indicator comes THIS chart of the Fed laugh indicator and how it correlates with housing [...]