If I was forced to use only one word to describe most that is wrong in the world today it would be ‘economists.’ The global economy is stuck in a depression that has already lasted ten years. Because of it, the world’s social and political order has frayed around the edges and threatens to do much more than that (in some places already in progress). Meanwhile, economists who are no experts in anything other than statistics and regressions have all this time stuck with their statistics and regressions.
ZeroHedge reports this morning on some (more) interior confusion by economists at one of the big banks. The Fed has ‘raised rates’ and yet according to their calculations, all their calculations, financial conditions are for them paradoxically easier.
The supportive trend in financial conditions evident in our FCI is not dependent on the methodology we use to construct our index. Indeed, the signals from various alternative FCIs – including from Bloomberg and the Chicago, Kansas City and St. Louis Federal Reserve Banks – are similar: financial conditions have eased materially in recent months even as the Fed has raised rates.
It’s almost as if the Fed doesn’t really matter, which for economists at this one bank as well as everywhere else just cannot be. Therefore, these same people will spend hours upon hours upon hours trying to unravel what for them is a mystery. The system is supposed to work how the system is supposed to work, where the central bank is the center point of everything.
This post was published at Wall Street Examiner on June 6, 2017.
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