Wednesday, April 13, 2011
There Will Be A Brief Horrified Blogging Pause
I had stared solemnly at Yellen's recent public ravings and concluded that the speech was so self-contradictory that it was intended to be so; that the only market message was that the Fed is determined to keep the stock market rally going, and will do whatever it needs to do to keep it going, and that intellectual coherence was sacrificed to insist that the Fed also intended to control inflation as a means of controlling one portion of inflation only - the sexpectation part.
But CF says no; he says that Yellen meant it, which raises specters and zombies to walk the earth and eat the living. If Yellen doesn't understand how future prices are set, then it's logical to assume that the rest of the Fed doesn't either. The funniest part of Yellen's speech is the discussion of US wages and the belief that US wages will constrain inflation. It is, of course, external wages that are controlling inflation, and since external wages are not controlled....
In any case, we have poetry courtesy David and CF:
"DEATH AND HIS BROTHER SLEEP."The above poem is in an issue of Punch from 1890. All too apposite. The Panic of 1890. The Panic of 1893.
[Major MARINDIN, in his Report to the Board of Trade on
the railway collision at Eastleigh, attributes it to the
engine-driver and stoker having "failed to keep a proper
look-out." His opinion is, that both men were "asleep, or
nearly so," owing to having been on duty for sixteen hours
and a-half. "He expresses himself in very strong terms on
the great danger to the public of working engine-drivers and
firemen for too great a number of hours."--_Daily Chronicle_.]
_Who_ is in charge of the clattering train?
The axles creak, and the couplings strain.
Ten minutes behind at the Junction. Yes!
And we're twenty now to the bad--no less!
We must make it up on our flight to town.
Clatter and crash! That's the last train down,
Flashing by with a steamy trail.
Pile on the fuel! We must not fail.
At every mile we a minute must gain!
_Who_ is in charge of the clattering train?
Why, flesh and blood, as a matter of course!
You may talk of iron, and prate of force;
But, after all, and do what you can,
The best--and cheapest--machine is Man!
Wealth knows it well, and the hucksters feel
'Tis safer to trust them to sinew than steel.
With a bit of brain, and a conscience, behind,
Muscle works better than steam or wind.
Better, and longer, and harder all round;
And cheap, so cheap! Men superabound
Men stalwart, vigilant, patient, bold;
The stokehole's heat and the crow's-nest's cold,
The choking dusk of the noisome mine,
The northern blast o'er the beating brine,
With dogged valour they coolly brave;
So on rattling rail, or on wind-scourged wave,
At engine lever, at furnace front,
Or steersman's wheel, _they_ must bear the brunt
Of lonely vigil or lengthened strain.
_Man_ is in charge of the thundering train!
Man, in the shape of a modest chap
In fustian trousers and greasy cap;
A trifle stolid, and something gruff,
Yet, though unpolished, of sturdy stuff.
With grave grey eyes, and a knitted brow,
The glare of sun and the gleam of snow
Those eyes have stared on this many a year.
The crow's-feet gather in mazes queer
About their corners most apt to choke
With grime of fuel and fume of smoke.
Little to tickle the artist taste--
An oil-can, a fist-full of "cotton waste,"
The lever's click and the furnace gleam,
And the mingled odour of oil and steam;
These are the matters that fill the brain
Of the Man in charge of the clattering train.
Only a Man, but away at his back,
In a dozen ears, on the steely track,
A hundred passengers place their trust
In this fellow of fustian, grease, and dust.
They cheerily chat, or they calmly sleep,
Sure that the driver _his_ watch will keep
On the night-dark track, that he will not fail.
So the thud, thud, thud of wheel upon rail
The hiss of steam-spurts athwart the dark.
Lull them to confident drowsiness. Hark!
What is that sound? 'Tis the stertorous breath
Of a slumbering man,--and it smacks of death!
Full sixteen hours of continuous toil
Midst the fume of sulphur, the reek of oil,
Have told their tale on the man's tired brain,
And Death is in charge of the clattering train!
Sleep--Death's brother, as poets deem,
Stealeth soft to his side; a dream
Of home and rest on his spirit creeps,
That wearied man, as the engine leaps,
Throbbing, swaying along the line;
Those poppy-fingers his head incline
Lower, lower, in slumber's trance;
The shadows fleet, and the gas-gleams dance
Faster, faster in mazy flight,
As the engine flashes across the night.
Mortal muscle and human nerve
Cheap to purchase, and stout to serve.
Strained _too_ fiercely will faint and swerve.
Over-weighted, and underpaid,
This human tool of exploiting Trade,
Though tougher than leather, tenser than steel.
Fails at last, for his senses reel,
His nerves collapse, and, with sleep-sealed eyes,
Prone and helpless a log he lies!
A hundred hearts beat placidly on,
Unwitting they that their warder's gone;
A hundred lips are babbling blithe,
Some seconds hence they in pain may writhe.
For the pace is hot, and the points are near,
And Sleep hath deadened the driver's ear;
And signals flash through the night in vain.
Death is in charge of the clattering train!
Should you be in an inquiring, if unhappy turn of mind, it turns out that the accident reports have been duly archived but the Eastleigh report is missing.
It's like Obama saying he's got a fail safe trigger for the deficit, but SS and Medicare are off limits from any spending cuts imposed a result. The fiscal fantasies continue.
( several lines later )
"Because the US could face a future like Ireland's or Greece's if we don't stop playing with the funny money" MOM
Please could you clarify your thinking here, MOM?
Why are you over your grief when the future, if unaltered, leads to Greece, for the US? Are a few ok quarters enough to offset your concern for the future? If so, why do you suggest a contractionary policy that would cause more economic pain?
Now we have a shot at building again. We can avoid being Greece. It's the difference between being diagnosed with chemo and being told
A) You're going to have to go through chemo and radiation, but we've caught it early, it's quite treatable and most people do survive, and
B) Do you have a will? There is some palliative treatment that can help your discomfort and there is some excellent information in this folder about hospices.
There's quite a difference!
Any country can destroy its finances at any time by mismanaging them. It appears that Yellen is shooting for the Acropolois and burning bank buildings.
Maybe sanity will prevail, maybe not.
to pay our debts and goose our exports. Of course
I bike to work.
As to whether she's a woman - I don't know. It's rare to find a woman that disengaged from reality.
My sister-in-law, who certainly has never studied economics and who is very busy, noticed that the Entenmann's baked goods are now always on sale and drew her own conclusions.
If Yellen wanted to be more officially economic about it, she could read the latest NFIB survey, note the declining earnings, collapsing expectations for real sales and the economy, the beginnings of an employment slide, and plans to raise prices, and draw some conclusions about diffusion. But no, instead she talks about a model which is apparently insulated from evidence.
The damned yeomanry is surly and disgruntled anyway! They need to be disciplined until they learn to talk nicely to their betters.
Still, I'm wondering to what extent Ms. Yellen is voicing the Fed consensus. Clearly she can say these things and not get laughed out of any meetings...
As the astute John Hussman has pointed out, excess stock returns in a given time period simply represent "borrowing" from *future* stock returns. It's amazing how many people do not grasp this point.
But then, so is juicing the economy overly in any way, whether it is boosting credit or sending everyone checks to spend. That's really what got us into this mess in the first place.
You can never push out of the active range. You can only push to the top of that range. If you push past, you are just building up an explosive head. The Fed's problem is that it will not recognize current limitations.
I don't think the Fed has the ability to accrue such a huge payback again. However if Congress and the Fed keep working on it together, they could create a situation that would make the Late Great Recession look like a Sunday amble at the park.
There was a pretty strong class division along the coasts, especially the East Coast in the US, but first the GD and then WWII knocked it out. Especially the common experience of serving in the military. For about 30 years, the mindset of the average professor/journalist/politician was greatly leavened by those experiences.
But now we are more than 55 years out from WWII, and the average journalist/professor/politician has no sympathy and no understanding of the average citizen. Unfortunately, on the left side a culture of contempt for the average citizen has emerged, and it makes the symptoms of the disease much worse.
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