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Look Out! The Retard Speaks

Apparent stroke victim Janet Yellen opens mouth to prove stupidity.

David Haggith

Oct 9, 2023

US Treasurer Janet Yellen may have just spoken the dumbest words she’s ever said. Yes, dumber than her clever quip back in 2017 that the Fed’s quantitative tightening would be “as boring as watching paint dry.” So creative with words that Janet. At least as dumb, if not dumber than her claim at the end of that failed QT that there would “never be another financial crisis in my lifetime.” I assumed by that she believed her death was imminent. Now I’m thinking maybe brain death actually did happen back then. Based on her words today, you’d think she was running to takes John Fetterman’s position in congress.

Yellen’s statements in today’s news leave only two possible conclusions: 1) She has the IQ of a clam, yet somehow rose to the top of of the ocean’s briny mud to head the US Treasury or 2) She will knowingly speak any outright lie with a smiling gramma grin to convince us all that the world is fine when we should most certainly thinks it is not. In which case, look out below! Because, with today’s lie being as transparent as any lie ever told by Representative George Santos, the outlook must be horrendous, or why tell such desperately outlandish lies?

Here we go:

Former US Treasury Secretary Janet Yellen has expressed confidence in the stability of the market amidst the ongoing US bond rout. In an interview with the Financial Times, Yellen downplayed concerns of any significant market disruption, stating that she sees no signs of dysfunction….
The US bond market has experienced a significant sell-off in recent weeks, with yields on the benchmark 10-year Treasury note rising to their highest level since early 2020. This surge in yields has sparked fears of potential market volatility and economic repercussions.

Indeed. Another article this morning states that “spiking bond yields are sowing PANIC on Wall Street.” That distress in Treasury auctions is, of course, the real reason the elder degenerate spokesperson of the US Treasury has opened her mouth in an apparent effort to prove how vacant her head is.

Yellen's comments come at a time when investors and analysts are closely monitoring the [TREASURY] bond market for any signs of distress. As the current US Treasury Secretary, Yellen's insights hold significant weight.

Talking about her weight adds nothing to the argument. Her weight may be significant, but her insights certainly are not and do not justify even being classified as “insights.”

Janet “let it all slide” Yellen. (Sorry about the eye damage.)

She had best stay with pretending she is a plumpish penguin.

Her thoughts should be reclassified as ribald ignorance or intentional disinformation, not as “insights.” You be the judge as to witch (oops) which it is. I have my own opinion, which is that it is both: She knows she’s lying through her smiling yellowed teeth but is ignorant enough to think no one will notice. Of course, she’s right, really, in thinking that most financial writers these days will gladly take her at face value, whatever she says, while the average American citizen will be glad for the raincheck on rainy days ahead, postponing those dour days for a little more summer sunshine right now.)

And now the part where the stupidity ignorometer needle spun like fan:

While acknowledging the recent rise in bond yields, Yellen emphasized that the increase is a reflection of the improving economic outlook. She believes that the rise in yields is a natural response to the prospect of a strong economic recovery and rising inflation expectations.

What? Bond yields rise in the immediate term because they are pricing inflation. Yes. They also rise in the short-term because they are pricing in a recession. We call that yield-curve inversion. While the long end of the yield curve has reverted slightly, the near-term end is still hugely inverted over longterm yields. Such a twisted yield curve has never been a sign of a “strong economic recovery.” And recovery from what? If we have not been in a recession already — given the National Bureau of Economic Research refused to declare one after two quarters of negative GDP growth last year while the Treasurer, herself, has been claiming relentlessly that the economy is resilient and robust — then what are we recovering from?

The US economy has been bolstered by substantial fiscal stimulus measures and progress in COVID-19 vaccinations.

OK. Double-puke on the last part, but sidestepping getting sidetracked …

However, some market participants remain cautious, pointing out that a rapid rise in yields could have adverse effects on borrowing costs for businesses and consumers. Additionally, concerns about inflation and the Federal Reserve's response to rising yields continue to linger.

Yathink?

You see, bonds typically aways price in inflation. I would say “always” without the “typically,” except that recently they were not doing so here in Wonderland. However, someone woke up at the switch recently and sent out an alarm to all the other bond buyers to wake them from their opium they had been smoking and now they are buzzing like angry hornets or, as Ed Yarding famously called them “bond vigilantes.” They are making up for lost time.

Yellen takes this rapid surge in her own Treasury yields as assured proof the economy is strong and not going to go into recession. Apparently her college courses in economics never mentioned another coined term, invented by one of her predecessors who headed the Treasury, Larry Summers — stagflation. That is where inflation rises, even though the economy sinks. It infamously happened in the seventies and early eighties before Paul Volcker went to work.

Her experience and expertise in economic matters make her a key figure in shaping market expectations.

OK. Bleck! Continuing …

In conclusion, Janet Yellen's dismissal of any market "dysfunction" amidst the US bond rout provides reassurance to investors.

If they are that dumb, they will believe anything that feeds their greedy hopes.

While concerns about rising yields persist, Yellen's confidence in the market's resilience may help alleviate some anxieties.

Cough and expectorate. Yes, of course, that is what her sanguinely vapid words are supposed to accomplish, and the writer of this article has apparently been vaping her hopium because it is doing its intended job on his simple mind.

Janet Yellen sees no market ‘dysfunction’ from US bond rout!

Yes, well she belongs to the same cloud of clowns who have run the Fed for decades who saw no signs of any recession before it was coming — though it is their assigned job to prevent them, their raison d'être. These red-nosed guardians of the gilts and gold particularly thought the skies were clear and blue in 2008, after one of the most destructive recessionary storms in history was fully underway, seeing no recession as far as the eye can see!

Their ability to see what’s coming reminds me of this guy:

As Yanet’s Jellin’ to her own calming muzak, let’s take a look at another story today regarding that guy who coined the term “bond vigilantes” to see how sanguinely he views the present bond massacre:

There’s some old-fashioned vigilante justice going on in the bond market right now, according to Ed Yardeni, a veteran investment strategist and former Fed economist….
On Wednesday, he warned that these bond vigilantes are now back in force. “Not only are they saddled up, but they’re on the move,” he said.
According to Yardeni, some bond market investors aren’t happy with the compensation they’re receiving for holding U.S. Treasuries owing to the increased risk of persistent inflation and the rising national deficit, so they’re selling them in droves and pushing yields higher.

They are, in other words, saying “Screw these current yields. It’s going to take a lot more than that to compensate me for the inflation I see coming!”

That does not mean they are saying that because they believe the economy is going to be strong. They simply believe inflation is not dying so easily under the Fed, so inflation is going to be strong. That means more Fed fighting, and my thesis is that means a stark recession before the battle is won — not because economic stats prove a recession now but because that is the kind of Fed fighting it will take to crush this now extremely sticky inflation. (See another article below about how strikes are emboldening more strikes in widening circles and significantly driving up labor costs with the UAW union boss wisely stating last week that the unions expect shareholders to take the money out of their stock buybacks funds, which can more than cover the raises, and not by raising prices, which to some extent the strikes are actually accomplishing … as well as last week’s article about the Fed’s Gordian knot in housing inflation.)

There are some serious troubles afoot that Old Yellen isn’t acknowledging regarding her own Treasuries:

To his point, the yield on the 10-year U.S. Treasury note has jumped from roughly 3.3% at the start of April to over 4.7% today. And this was not only the result of the Federal Reserve’s interest rate hikes, but also because many investors and banks have sold off or refrained from purchasing U.S. debt.

They don’t want the stinky stuff she is Yellen is sellin’, so she is talking her book to try to offload the stuff.

Treasury Secretary Janet Yellen pushed back against the idea that the bond vigilantes of the past have returned to the U.S. to influence fiscal or monetary policy.

Of course, she did, but you’d be a fool to believe the lies that are leaping off her lips.

The former Federal Reserve chair described how she first heard of the term bond vigilantes in the early 1990s, when inflation was relatively high and interest rates were rising.

Then she was a fool to have learned nothing from the experience because inflation soared, and the economy sunk into an infamous double-dip recession just before that. But why remember that part? After all, if today’s Treasury bond buyers believe the Fed is going higher for longer, then, even though today’s rates look way better than the prospect for stocks, these investors may want to hold out in mass for even higher rates, forcing the Treasury to pay more for all the debt it is forced to raise to fund Bidenomics as well as to cover all the past extravagant debt that the Fed is now refusing to roll over on its own balance sheet.

It was shortly after those days of her sublime ignorance under Paul Volcker’s school of hard-knocks inflation fighting during the Reagan days that President Bill Clinton, appointed Janet Yellen to a post on the Federal Reserve and to join his Council of Economic Advisors.

Peeshaw!

It was such an epochal moment for the rough riders of the bond market that Bill Clinton’s communications guru James Carville famously summed it up in a 1993 speech: “I used to think that if there was reincarnation, I wanted to come back as the president or the pope or as a .400 baseball hitter. But now I would want to come back as the bond market. You can intimidate everybody….”
As a mass of traders take matters into their own hands and push Treasury yields ever higher, the costs of borrowing for businesses and consumers alike increase, weighing on economic growth in a similar manner to rate hikes from the central bank.

So, yeah sure, the economy will remain resilient in all of this.

And in the climate of 2023, coming off the fastest series of rate hikes in over 40 years, rising bond yields are a double whammy for an economy that is still fighting off a long-predicted recession.
But Janet Yellen doesn’t think that’s what’s going on at all…. She emphasized that she doesn’t “honestly think that that’s the case” today.

She doesn’t honestly think anything. She thought she was going to die quickly back when she said somewhere around 2019 she wouldn’t live to see another economic crisis, and we have had two major economic crises since — the 2020 orchestrated Covidcrash that destroyed global economies, including the US economy to the point of requiring the most massive Fed money printing joined with the muscle of government money distribution in US history, and the recent brief financial crises that resulted in two of the top-three bank failures in US history (which certainly isn’t over, according even to Jamie Dimon), requiring the Fed to temporarily and instantaneously reverse it QT.

She argued that the bond market is reacting to strong consumer spending and a stabilizing housing market.

Seriously? A stabilizing housing market? Whatever she’s smoking, it produces a thick fog around her head. How is it even possible to be that stupid about finance and keep your top government job in finance with nearly everyone praising your insight or to lie that much and have almost no one in the world ever call you out on it?

“The economic resilience that they [bond investors] see may suggest higher for longer [interest rates],” she said, arguing that may be why the 10-year Treasury yield has surged this year. “But we’ll see.”
Ed Yardeni has a very different take on why bond vigilantes have returned this year.
“What the bond market is really concerned about—what the bond vigilantes are concerned about—is profligate fiscal policy,” he said. “It may very well be that the bond vigilantes are shouting to the fiscal authorities, ‘No más, no more. You gotta do something about these out of control deficits.’”

That seems a little more stable-minded than Yellen’s yammering claim that the all-out cavalcade of destruction in the bond market is due to bond investors rejoicing about the strength of the economy. After all, another story today is about the mass sovereign debt crisis that is storming over emerging markets where nation’s cannot repay their accumulating debt at higher interest because of Fed rate hikes that remain essential to fight inflation.

With US debt soaring beyond anything every seen and interest on that debt rising along one of the steepest spikes in US history, it is a little more than probable that some concern about out-of-control US debt might be pushing the drive for higher Treasury yields and that lying Yellen might just be trying to tamp down the vigilantes outrage. She’s stomping on the fire around her feet to try to put it out.

To his point, the U.S. national debt has soared 43% from $23.2 trillion in the first quarter of 2020 to over $33.4 trillion today owing to an unbalanced federal budget. And through the first nine months of this year alone, the national deficit reached $1.52 trillion.

The formerly absolutely massive US debt soared 43% higher in three years!

Yeah, that is probably more likely to have something to do with the current bond-yield stampede than ecstasy over the strong US economy; but another thing that likely has much to do with it is that fact that we all had a chance to see how inflation IS starting to rise again this year, as I believed it would, and that is making bond buyers more than a little concerned that the Fed, itself, might now know how much “higher for longer” means, especially since the Fed has been revising its “higher for longer” program upward for longerward for about a year already!

Yardeni, who remains steadfastly bullish about the future prospects of the economy and the stock market, warned that bond vigilantes are seeking to increase the yield of the 10-year Treasury to compensate for the now much greater risk of holding U.S. debt. But it’s not just these bond market leaders driving the 10-year yield higher—the Fed is also to blame.

Well, I’m not going to agree with him about the economy. He’s nuts for believing that the Fed’s fight against inflation isn’t going to be so relentless it will crush all life out of the economy before it is done. Inflation is the Fed’s Gaza Strip where the war is far from over just because some major initial retaliation salvos have been successful. The hard, long work comes in going in and rooting out the truly sticky evil stuff behind inflation.

Again, sidestepping the side trail to my own story that I just practically committed myself to, let’s get back to the key battle in this story, which is the role of the Fed’s QT in pushing bond yields up, something I’ve said from the beginning of this fight was an absolutely certain outcome:

The Fed is holding fewer Treasuries, which has increased their supply at a time when bond vigilantes are out in force, lowering demand for all U.S. government debt. As Yardeni explained, “The Fed isn’t helping” the supply and demand dynamics in the market.
“So I think what we’re seeing here is the bond vigilantes protesting profligate fiscal policy,” he said. “And the Fed is selling or letting mature its bond portfolio.”

Yes, it is both of those obvious forces. Bidenomics is driving inflation higher with all its demand for more labor and more resources to carry out more projects — a huge fiscal stimulus program that makes zero sense at a time when the labor market cannot fill all job roles that are already out there and when all the talking mediaheads are saying the economy is strong (so why does it need stimulus if that is strong?) and when gov’t projects drive up demand for supplies that are already teetering on being short, which will also drives up inflation.

It’s insane, just like the Fed’s relentlessly continued stimulus after the immediate shock of the Covid crash was insane when even the the Fed was saying the whole time, “the economy is strong; labor is resilient.”

And that’s the top economic news for today. My “Deeper Dive” is running a little late (usually coming out on the weekend about the week preceding) due in part to covering an Extra edition of The Daily Doom yesterday because of the war in Israel. It should be published later today for paying subscribers. As you might expect, given today’s editorial in The Daily Doom, it will dig deeper in America’s gaping debt crisis, Yawning Yellen not withstanding.

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