Financial Emergency!!!

(ht Pippa Malmgren)

Ben Bernanke Gives Out Janet Yellen's Working Email Address

In a positively bizarre performance last night at Nourse Theatre in San Francisco, in addition to providing mountains of disinformation on gold and monetary policy, former Federal Reserve chairman gave out current Federal Reserve chair Janet Yellen's working email address.

During the Q&A last night  at a Commonwealth Club of California event with questions by Michael Moritz, Managing Partner, Sequoia Capital, Moritz asked Bernanke why, as Fed chairman, he used the pseudonym Edward Quince in his email correspondence,

Bernanke defended the use by saying that he did not want to be inundated with emails.

He said the president also used a pseudonym.

He then went on to say publicly to the crowd of 1,200, "I'm not sure she would want me to reveal this but to Janet Yellen's credit she uses the email janet.yellen@frb.gov."

(Note: It's possible Bernanke said .org instead of ,gov, He said it fast, but I believe it would be .gov)

  -RW

Trump: The Little People Are Going to Get Wiped Out in the Stock Market (Thanks to Janet Yellen)

From Donald Trump a kind of pedestrian, somewhat mangled, version of Austrian School Business Cycle Theory.

The Hill reports that in an interview, Trump accused Federal Reserve Chairn Janet Yellen of keeping interest rates low in order to shield Obama from having to leave office during a recession.

“She’s keeping the economy going, barely,” Trump said. “The reason they’re keeping the interest rate down is Obama doesn’t want to have a recession-slash-depression during his administration.”

“You know who gets hurt the most? People who practice the American dream and did what should have been the right way — the people that went through 40 years of their life and saved a hundred dollars every week [in the bank],” Trump said.

He paused, shaking his head before adding: “They worked all their lives to save and now what happens is they’re being forced into an inflated stock market and at some point they’ll get wiped out.”

 -RW

Peter Klein Smacksdown Janet Yellen's Husband

The husband of Federal Reserve chair Janet Yellen is George Akerlof, who also happens to be a (terrible) economist. 

He is out with a terrible book with Robert Shiller that taken took its logical conclusion would result in us being corerced into living a modern day version of Mao's Revolution, including all of us being required to wear of Mao suits.

Peter Klein explains:

Robert Shiller's column in last Friday's New York Times illustrates the foolishness of the new "behavioral" approach to economic policy. Referring to his new book with George Akerlof, Phishing for Phools,Shiller recites a laundry list of standard (and trivial) business practices like putting candy bars at supermarket checkout lines, touting them as evidence that "manipulation and deception" pervades the market system. Obviously, the solution is government intervention, glibly described by Shiller as "common-sense regulation." 

Shiller's worldview features a caricature understanding of free markets along with a naive and uncomprehending model of government regulation. I suppose we can blame the Times's editorial team, not Shiller, for the headline "Faith in an Unregulated Free Market? Don’t Fall for It." But it nicely illustrates the Shiller crowd's view that support for free markets is based on faith, rather than two centuries of reason and evidence. You might think that Shiller's coauthor George Akerlof could walk down the hall and speak to his UC Berkeley colleague and fellow Nobel Laureate Oliver Williamson for a better understanding of how markets work. Williamson, of course, is famous for explaining how market actors protect themselves against opportunistic behavior from other market actors through contracts, joint ownership of assets, reputation, exchange of "hostages," and similar practices. It is markets, not government, that enable cooperation and joint production in the face of information and incentive problems. (I also wonder if Shiller and Akerlof have bothered to read Coase, Buchanan, or Ostrom; I won't even ask about Mises, Hayek, or Rothbard.) 

As is characteristic of the behavioral policy literature, Shiller is silent on the implications of behavioral economics for the analysis of government intervention. But thoughtful readers will find the basic premise of "Phishing for Phools" -- that firms systematically manipulate and deceive naive consumers, who should then turn to government regulators to protect them -- unintentionally hilarious. What is modern democracy, other than an attempt by candidates to manipulate and deceive voters, in hopes of winning the right to manipulate and deceive them as citizens? I'll take the market, candy bars and all, any day.

It is also noteworthy to keep in mind that the title of the Shiller-Akerloff book, Phishing for Phools, could also be considered "manipulation" from their perspective.

And what about the cover to their book? It sure looks manipulative to me:

Why didn't they title the book: "An Analysis of Business Paractices in the Consumer Marketing Sector" and wrap the book in a brown paper cover with just the title?

Looking at things from their perspective, the only thing I can conclude is that they are self-denying manipulators.


-RW

Janet Yellen Admits the Fed is Clueless When It Comes to Correct Economic Theory and Other Stunning Admissions

By Robert Wenzel

On Thursday, Federal Reserve chair Janet Yellen delivered a speech at the  International Symposium of the Banque de France in Paris, France.

The speech is quite noteworthy since she pretty much admitted in the speech that the economic data that the Fed watches did not offer any clue that the 2008 financial crisis was developing:

Bankster Meetings Revealed: Yellen's 2014 Calendar To Date

WSJ has posted the calendar of Fed Chair Janet Yellen, to date, that was obtained by a Freedom of Information request. It's here.

I think what is most notable about Yellen's schedule is how limited is the number of people she stays in contact with. It's pretty much other US government officials, global central bankers and typical lurkers near power, such as Alan Blinder and Jeffrey Sachs.

Outside of these tight communities, it seems the only people she has time for are the banksters.

On April 4, she met with Goldman Sachs CEO Lloyd Blankfein and she has a June 5 entry which is identified as a meeting with Blackrock, but lists no individuals.

‘Fear Gauge’ at Highest Level Since Eurozone Crisis

US stock market volatility has jumped to the highest since the eurozone debt crisis, according to a closely watched index, the the CBOE Vix index of implied US share price volatility.

It jumped to 24.6 late on Monday and is up again this morning. On Thursday, it was as low as 15.

That's a very strong move, but things have been much worse. At height of the recent financial crisis – the Vix index peaked at 80.1 in November 2008.

Could we get there again? Yeah.

I have been warning for some time in the EPJ Daily Alert that a crash event in the stock market is a very real possibility, given the erratic Federal Reserve monetary policy AND the fact that it appears no one among the Fed members is actually monitoring money supply growth, including Fed chair Janet Yellen! Money supply drives stock market activity when the Federal Reserve is manipulating the money supply. SEE: Austrian School Business Cycle Theory

In her speeches and press conferences since becoming Fed chair, Yellen has failed to even mention the words "money supply."