When Doves Cry

How to begin?   When TMM took over from the original Macro Man (TOMM?), they pretty much jumped right in without much by way of introduction.  I can only hope, incidentally, that they didn’t labour over their prose for as long as I’ve spent composing this meagre triad of sentences.

I have chosen the name Represso, and I’m going to be helping to look after the place now that the previous tenants have fled.  I am a long time reader of this space, and have known a few of the previous scribes personally and/or professionally.  I cannot promise to match what TMM or TOMM did before me, or even, if I’m honest, to try.   Nevertheless, I plan to offer the occasional scribbling as part of Macro Man mk. III.

Fortunately, there’s plenty to write about these days; ‘tis a pity that TMM aren’t around to share their insights.   Nevertheless, the show must go on, even if it bombs on opening night.  And how else to describe Janet Yellen’s inaugural performance?  From her initial appearances a few months ago, my untrained ear associated her accent with George’s mother from Seinfeld.  Based on her performance last night, I'm not sure if the substance was far off from what Estelle Costanza could have managed.   

‘Twas bad enough that the text of the statement reached a record length and exhumed the corpse of Greenspan’s policies by reviving the “considerable period” low-rate promise.   But to then a) send markets a-flutter by ratcheting the dots higher, and then b) breezily wave off the significance of the shift by saying "sometimes they go up, sometimes they go down" can be described most charitably as "confusing."   The coup de grace, of course, came when Yellen helpfully clarified "considerable period" as "six months, that type of thing."

There you have it, ladies and gentlemen:  the head of the Federal Reserve (and prior head of the communications committee) has shows us the future of forward guidance: Six Months, That Type of Thing.

Now, it seemed quite clear that she was somewhat flustered by the question and made up the answer on the fly.   This of course raises the question of what sort of preparation she did before the presser:  H?    Anyhow, it was a pretty appalling performance, as it seemed like she wanted to be dovish but ended up sending the greens down 20+ ticks.  She sounded less like Chair than a Stool.  (She's going to have to earn that fourth leg in the future if she wants to regain Chair status- in this space at least.)

As I watched US yields rise across the board, I confess that I could not resist the temptation to thrown Prince onto Last FM.    Sure enough, before too long one of my favourite tunes came on.  Strangely, however, the lyrics seem to have changed.   See if you can spot the difference:

Take if you will a picture
Of forecast dots to one-six
The sweat on my forehead covers me
Can my Yellen
Can you picture this?
Dream if you can a trade-floor
An ocean of losses in bloom
Punters strike curious poses
They feel the hate
The hate between me and you

How can you just leave me standing
Long in  a world that's so cold
Maybe I'm just too demanding
To think that you're just like Bernanke, twofold
Maybe you're just like Paul Volcker
He made sure inflation died  
Why do I feel so much older?
This is what it sounds like 
When doves cry 

Check if you will the green pack
It's been on a nasty ride
You've got the guidance all effed up
Don't make me beg you
Even doves have pride

How can you just leave me standing
Long in  a world that's so cold
Maybe I'm just too demanding
To think that you're just like Bernanke, twofold
Maybe you're just like Paul Volcker
He made sure inflation died  
Why do I feel so much older?
This is what it sounds like 
When doves cry 

When doves cry
Etc etc