Authored by Steve Keen via Forbes.com,
Janet Yellen has been reported by Reuters as saying in London yesterday that “she does not believe that there will be a run on the banking system at least as long as she lives”:
Throughout the first half of the year, as stocks kept grinding ever higher and Goldman issued one after another bearish equity strategy note, the bank's chief equity analyst David Kostin stubbornly kept Goldman's S&P price target at 2,300. Now, "unexpectedly" with stocks finally cracking with some violent moves in the tech sector after repeated warnings by top Fed bankers that stock "valuations are too rich", moments ago Kostin just raised Goldman's year end price target from 2,300 to 2,400. "reflecting a 1% decline over the next six months."
Authored by James Rickards via The Daily Reckoning,
John Maynard Keynes once wrote, “Practical men who believe themselves to be quite exempt from any intellectual influence, are usually the slaves of some defunct economist.”
Truer words were never spoken, although if you updated Keynes today, the quote would begin with “practical women” to take account of Fed Chair Janet Yellen. The “defunct economist” in question would be William Phillips, inventor of the Phillips curve, who died in 1975.
Confused by Yellen's direction? You're not alone.
It's not just a state of mind, that's the name of the latest slideshow by the economics team at ING bank...
Over the last two months, the Fed has tried to continue to communicate
that they plan on raising rates up to at least 3% and reduce their balance
sheet by trillions. They just raised the
Fed Funds rate by 25 bps to 1.25%. However, long term rates rallied by 50 bps! And the
short end of the interest rate curve is priced with yields on top of the Fed
Funds rate. This implies that either the
Fed is lying and does not plan to raise rates again (or even lower rates), or
something is broken in the bond market.