1. “What the Fed did — and I was part of that group — is we front-loaded a tremendous market rally, starting in 2009.”
  2. “I’m not surprised that almost every index you can look at … was down significantly.” [Referring to the results in the stock market after the Fed raised rates in December.]
  3. “We front-loaded at the Federal Reserve an enormous rally in order to accomplish a wealth effect.”
  4. “The values are very richly priced here, so I could see significant downside.”
  5. “I wouldn’t blame [what is happening in the market’s now] on China. We’re always looking for excuses.”
  6. “You have to be careful here and frank about what drove the markets…. It was, the Fed, the Fed, the Fed, the European Central Bank, the Japanese Central bank … all quantitatively driven by central bank activity. That’s not the way markets should be working…. They were juiced up by central banks, including the Federal Reserve…. So, I think you have to acknowledge reality.”
  1. What stands out is the failure of economics, as an intellectual discipline, to come to grips with the real world.
  2. After all, whether an item of expenditure is to be classed as consumption or investment is, to an unsettling degree, a matter of convention. [read my article on CPI measurementfor more about this]
  3. Virtually all central banks now subscribe to the frankly weird view that economies cannot grow satisfactorily unless they maintain a 2% rate of arbitrarily- defined consumer price inflation.

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Kyla Scanlon

Kyla Scanlon

115 Followers

Thinking. Los Angeles transplant via Kentucky. Passionate about educational equality, data science, and quantitative finance.