Yellen: ‘The recovery still feels like a recession’

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Official Portrait of new Fed Chair Janet Yellen.
Official Portrait of new Fed Chair Janet Yellen. (Federal Reserve OPA)

WASHINGTON, April 2, 2014 – New Fed Chair Janet Yellen has been trying to “humanize” the U.S. central bank’s message since she took over from former Chair Ben Bernanke. The Bernank himself tried to move the organization toward relative transparency during his term and away from its former Greenspanian opacity. Yellen, it seems, is trying to take it to the people, remarking that “The recovery still feels like a recession to many Americans.”

Well, hello Washington. Glad ya noticed your real constituency after six years of gifts to America’s reigning oligarchs.

Unfortunately, instead of responding positively to this kind of refreshing candor and always ready to pounce, the usual nitwits in the financial media have been quick to nitpick both the nuance and the nitty-gritty details of Yellen’s recent comments, just the way, BTW, that they harassed Bernanke in his first few Congressional and public outings. What a bunch of clowns, nitpicking a word choice here and there while neglecting the message.

The lapdog media are also, as usual, trying to cover for the disastrous failures of the most feckless Administration than that of James Buchanan. And we know how that one turned out.


It’s clear that, whatever surface hocus-pocus Fed watchers are paying attention to, the real action is going on in the Fed’s slightly less visible intention to shift its focus away from big banks and toward the beleaguered people who actually pay the government’s bills.

Traders and investors appear to be liking the Fed’s message, though, kicking stocks smartly upward for the third straight trading day on Tuesday, following a rare, robust and surprising Monday kick upstairs.

Whichever way the current FOMC voting bloc may lean, the Chair is indicating it’s high time, after six years of Obama-stagnation, for the bank to turn its attention now away from repairing the banking system—which, judging from banking bigwigs’ compensation packages, is now healthier than ever—and toward the real, pressing national problem: unemployment.

Yellen’s big departure from the old Fed message—and one we heartily approve—is her all-but-100-percent acknowledgment that the government’s official unemployment rate is a crock. She’s clearly opted to follow the direction we’ve preached here in this column for months if not years; namely, that the Fed should start paying closer attention to the more accurate U-6 unemployment stats—which include the underemployed, those who’ve dropped off the official rolls due to running out of unemployment comp, and those who’ve just plain thrown in the towel.

We wonder if the Fed oughtn’t to include the legion of Social Security Disability cheats in the U-6 calculation as well. Those are the folks who manage to persuade judges and/or Social Security reps that they need early retirement because of some phony disability or another. In the insurance industry, they’d call this “malingering.”

In reality, particularly for older, less skilled Americans who will never find another job, this is called the next best thing. Perhaps these Social Security Disability retirees will run into President Obama on the links sometime over the next couple of years. Or maybe they’ll get one of those poetry jobs the odious Nancy Pelosi was touting a few weeks ago when trying for the umpty-umpth time to explain away the latest in a series of running Obamacare disasters. But we digress.

In any event, Yellen is focusing on what the government oligarchs and elitists have not cared to look at for the past six years: the real, ongoing suffering of the average American worker. It’s remarkable that the constituency has not sacked their senators and representatives wholesale in the last few elections, the 2010 House turnover notwithstanding.

Either the average voter no longer feels his or her vote matters any more, just pulling the usual Democrat lever because…whatever. Or, perhaps more likely, the average voter has been indoctrinated with the Roosevelt-Kennedy-Johnson-Clinton myth for so many generations that this essentially mythological socialist nonsense has become the operational national story.

But since Congress has zero interest in dealing with these issues, it’s good to know that the Fed will at least take a shot at helping out the average citizen, worker, consumer and voter. What this will do for the markets, however, remains unclear.

Tuesday’s markets took a cue from Yellen’s comments and blasted skyward. Including Friday and a big window-dressing Monday, March 31—the final day for money managers’ first quarter window-dressing charade—making it three days in a row of seemingly irrational exuberance.

Today’s trading looks to be a bit more tepid. After three hot days in a row, it would actually be a good thing if stocks took a breather for a day or two before markets become overheated and go over the falls again. As of 10:30 a.m. today (Wednesday), the Dow is up roughly 10 points, while the more representative S&P 500 is up about 2. In other words, flat city for now.

More numbers will come out this week, like the official (and misleading) unemployment numbers, always touted as “improving” but never really doing that. We’re going to start reporting the U-6 numbers here so both you and the Maven have a better idea as to whether the real economy is improving.

Oh, you can be sure it’s improving for the 1%. It always does since they and the Democrats make sure of that. But we’re a lot more concerned with you and me here and collectively, we haven’t been doing that hot compared to Democrat underwriters like Warren Buffett and George Soros who together have more money in the bank than a dozen pairs of Koch Brothers.

Today’s Trades:

None. We’ll lean back today and watch the scenery. Stock rotation is starting to happen, but each move lasts so briefly we’re not really quite sure where it’s going. High-frequency machines likely do know this, but they’re not telling. Which brings us to a hot topic we’ll cover in another column.

So go and enjoy the day. Unless you have one of those boring nine-to-five jobs we hear some people actually have.

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Terry Ponick
Biographical Note: Dateline Award-winning music and theater critic for The Connection Newspapers and the Reston-Fairfax Times, Terry was the music critic for the Washington Times print edition (1994-2010) and online Communities (2010-2014). Since 2014, he has been the Business and Entertainment Editor for Communities Digital News (CDN). A former stockbroker and a writer and editor with many interests, he served as editor under contract from the White House Office of Science and Technology Policy (OSTP) and continues to write on science and business topics. He is a graduate of Georgetown University (BA, MA) and the University of South Carolina where he was awarded a Ph.D. in English and American Literature and co-founded one of the earliest Writing Labs in the country. Twitter: @terryp17
  • Advocate

    PHONE JAM BOEHNER

    Contact John Boehner’s office until the phones are unplugged:

    John Boehner says the re-implementation of benefits will be “difficult”? Is that really the attitude you want to have towards long-term unemployed seeking jobs? Its “difficult so give up, huh? ——- #SETEXAMPLE

    John Boehner
    Phone: (202) 225-0600

    Call Mr. Reid and tell him to get this done!
    Harry Reid
    Phone: (202) 224-3542

    *The number has been changed 3 times since the phone jam
    SPREAD THE WORD AND GET THIS OUT

  • RGZ_50

    Terry – excellent analysis. I’d be interested in knowing what you think will happen when the Fed raises interest rates and hits the brakes hard on the funny money. Asset balloons go boom?

    • Terry

      RGZ,

      Thanks! I’m working on scenarios that will hopefully answer your question at some point. But what’s been going on with the Feds and with Wall Street–including the clear manipulation of gold prices by parties unknown–is such an interrelated web of complexities that outcomes are damnably hard to predict with confidence. None of this is really capitalism as I thought I understood it.

      I read somewhere once that a scientist, a religious skeptic, finally decided that the universe was clearly created by an entity we usually refer to as God. But the scientist also concluded that at some point, God seems to have lost control of Creation. An interesting point. As the controlling force behind much of 20th century capitalism, I’m wondering if, like this scientist’s God, the U.S. hasn’t completely lost control of the once reasonably benevolent beast it largely created. A disturbing thought.

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