I have uploaded a January 5th Update. Click here to go to the show archives page to listen or you can listen on the link below.
To download the podcast – Right mouse click here
– Three U.S. central bank leaders — current Federal Reserve Chairman Jerome Powell and his immediate past predecessors Janet Yellen and Ben Bernanke — spoke in a roundtable Friday morning in Atlanta at the American Economic Association’s annual meeting.
-The Fed is clearly adjusting their language to accommodate the increasing market volatility. Was Dow 22,000 low enough for them to act?
-The Fed was concerned that Jerome Powell’s presence would not be strong enough, so they added Yellen and Bernanke to the panel interview.
-The purpose of yesterday’s panel discussion of the Fed chiefs was to show a unified approach to monetary policy.
-Yesterday’s panel was there to help enhance the Fed reputation and that it knows it will get the blame if things roll over.
-We are not out of the woods, as credit market problems are persisting and growing. However, the drop in sovereign yields around the world are a direct reflection in the change in the Fed’s stance.
-On Thursday, the Brookings Institute released a Janet Yellen interview in which she reiterated her concerns over elevated asset prices.
-On two occasions yesterday, the panel (Bernanke) recognized the Fed’s need to look at what its policy was doing to the global economy. I think this is the first time they discussed this as an important concern.
-US unemployment numbers were much better than anticipated, but I have always stated that employment levels are a coincident indicator, at best.
-Guidance by AAPL is more of a forward or leading indicator, so we still may eventually have problems, regardless of Fed policy
–Mortgage rates dropping fast will lend support to real estate.
-Two recommendations going forward (working-class real estate and cash)