Posts filed under “Economy”

Astounding Incompetance at the Federal Reserve

The Fed inadvertently left a sentence out of the FOMC:

(Dow Jones)–The Federal Reserve said Tuesday it inadvertently left out one sentence from its statement for Tuesday’s Federal Open Market Committee meeting, referring to still "well contained" inflation expectations.  "Longer-term inflation expectations remain well contained," reads the sentence added to the second paragraph of the FOMC statement.

The Fed explained its mistake in a release of the revised FOMC statement about one-and-a-half hours after initial release of the post-meeting statement. The statement was otherwise unchanged.  The Fed acknowledged Tuesday the U.S. economic recovery has lost some steam but said it remains worried about inflation and opted to persist with its campaign of gradual interest-rate increases.

Would someone please explain to me how the most important document from the Central Bank of the most economically significant country in the world — goes out missing a sentence?

That is truly astonishing to me. If there is a goddamned document in the whole planet that needs to be proofed before going out, ITS THAT ONE.

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Meanwhile, I have people taking 500 words in the comments section complaining that I used "it’s" instead of "its."


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May 4, 2005 10:12 am
Yesterday, the Fed omission apparently led me to "fume."  (I’m glad they didn’t use some of my dumber quotes) . . .

Sources:
Minimalist message leaves Fed a bit red
Seattle Times
http://seattletimes.nwsource.com/html/businesstechnology/2002261971_fedwords04.html

Fed’s slip-up shakes market
Baltimore Sun
http://www.baltimoresun.com/business/bal-bz.fed04may04,1,4264341.story?coll=bal-business-headlines&ctrack=1&cset=true

Category: Economy

Parsing the Fed

Category: Economy

Twas brillig, and the slithy toves . . .

Category: Economy

Is the Fed a Leading or Lagging Indicator?

Category: Economy, Markets

Anti-Bubble or Anti-Inflation?

Category: Economy, Real Estate

Chart of the Week: China M2 Money Supply vs. Chinese GDP

Category: Economy, Markets, Technical Analysis

A few items worth reviewing

Category: Commodities, Economy, Markets, Weblogs

Understanding the Post-Bubble Economy

"Economists set themselves too easy, too useless a task if in tempestuous seasons they can only tell us that when the storm is long past the ocean is flat again."

– John Maynard Keynes, Tract on Monetary Reform


Overview:

- Economists and fundamental analysts often miss cycle turns.
- There’s always another recession — and expansion — coming (eventually).
- Learn to separate hand-wringing permabears from credible commentators.

If you have been listening to the financial press recently, you might be shocked (shocked!) to learn that inflation has been increasing and the economy is slowing.

You don’t say?

Of course, readers aren’t just now discovering that this economy has been suffering from inflationary pressures for more than two years, as a chart of the CRB shows.

It’s the same with GDP. Follow the numbers: The third-quarter 2003 number was 7.8% (originally reported as almost 9%), the next quarter’s was 4.2% (originally 6%+) and 2004′s quarterly data came in at 4.5%, 3.3%, 4.0% and 3.8%.

This week, we learned the first quarter of 2005′s number of 3.1% was way below consensus expectations. While some will tell you that 3%+ GDP growth is pretty decent, it’s the trend of waning momentum that is the issue. An early mentor of mine used to admonish traders to not look at the photo, but to watch the full movie instead.

So much for the idea of kinda-sorta-eventually-efficient markets hypothesis.

Slowing GDP and rising inflation have been discussed on this site for over a year now. The investing issue with macroeconomic concerns is not the actual data, but how — and when — that data affects psychology. It’s a question of timing. The commentators who are first now discovering weak GDP and inflationary pressures are not much help to you once the ocean is flat again.

Read More

Category: Economy, Markets

New Column up at Real Money (04/29/05)

Category: Economy

Most Have Poor Grasp of Economics

Category: Economy