Zzzzzzz

Well, it all played out pretty much as expected.  The best you can say for yesterday's Fedapalooza is that Janet Yellen has clearly had some coaching on her presentation; while it's far too late to do anything about that screeching Estelle Costanza accent, she was clearly more deft at answering questions without really answering them.  If you looked closely, moreover, you could see the infamous dot distributions for 2015, 2016, and the long run clearly printed on her jacket.  A gift from Professor Woodford, perhaps?

 In terms of the substance of the announcement, we duly got a downtick in growth and unemployment forecasts, the faintest increase in the inflation forecast, and an upward shift in the 2015-16 dot medians.   That the long-run median declined slightly was not altogether a surprise given the way the wind was blowing, either.   This was generally the expectation sketched out in this space yesterday, and markets duly took the lack of surprise in stride, increasing the price of seemingly every financial asset but puts.

Macro Man half suspects that Ms. Yellen harbors a secret admiration reggae artist Shaggy; given her disavowal that the Fed is responsible for any misallocation of capital or repression of volatility, he can only assume that "It Wasn't Me" features prominently on her iTunes Favourties playlist.  One wonder if she'll still be listening when it all goes a little Boombastic.

And make no mistake, things eventually will go boom.  It might be a few years away, but given the contortions (mental, of course) that Ms. Yellen appears willing to undergo to rubbish any notion that data is less supportive of Zirp, it's close to impossible to see this ending well.  Of course, there will be mini-episodes in the interim as markets try to come to grips with an eventual normalization.   Sadly, though, it looks like for the next few weeks/months those thoughts might need to stay on the backburner.  Or, as a commenter yesterday put it somewhat less charitably, best to act like "28-year old brainless muppets, permanently fixated on the 'buy all' button."

With the World Cup on, there are worse times to not have to think too hard...well, unless you're Spanish.   Even there, though, the news isn't all bad.  Decades of footballing under-performance finally ended in 2008, just as the economy imploded.   The three tournaments of dominance coincided with fairly execrable economic conditions.   This year's return to footballing disappointment clearly marks the country's official exodus from crisis.  Mucho gracias, Roja!