Thursday, January 10, 2008
Understatement of the Day
On the whole, despite improvements in some areas, the financial situation remains fragile, and many funding markets remain impaired.
Impaired, my Aunt Fanny! They're on oxygen.
Here are a few more gems I've extracted from the crude ore of Bernanke's financialese—
- More expensive and less available credit seems likely to impose a measure of financial restraint on economic growth.
It never seems to restrain me when I have a credit card.
- The recent developments in U.S. and foreign financial markets will stimulate considerable review and analysis in the months and years to come.
As did the market crash of 1929.
- Adverse economic or financial news has the potential to increase financial strains and to lead to further constraints on the supply of credit to households and businesses.
Keep the conversation light and the tone cheerful. That's the way I talk to the credit card company when I'm trying to raise my limit.
- Last week's report on labor-market conditions in December was disappointing, as it showed an increase of 0.3 percentage point in the unemployment rate and a decline in private payroll employment.... It would be a mistake to read too much into any one report. However, should the labor market deteriorate, the risks to consumer spending would rise.
I won't let it stop me. I promise.
- Thus far, inflation expectations appear to have remained reasonably well anchored, and pressures on resource utilization have diminished a bit. However, any tendency of inflation expectations to become unmoored or for the Fed's inflation-fighting credibility to be eroded could greatly complicate the task of sustaining price stability and reduce the central bank's policy flexibility to counter shortfalls in growth in the future.
Like the Wizard of Oz, the Fed's power over the economy appears to depend upon our belief in it. Why, I wouldn't have considered the possibility that lowering the interest rate on money might usher in inflation ("stagflation," to be more exact) if Bernanke hadn't mentioned it. Who would be so irresponsible as to run around talking such nonsense? Oh. Ron Paul, you say?
- The Committee1 will, of course, be carefully evaluating incoming information bearing on the economic outlook. Based on that evaluation, and consistent with our dual mandate, we stand ready to take substantive additional action as needed to support growth and to provide adequate insurance against downside risks.
I feel better already. More confident. No downside risks. I think I'll go shopping—or maybe buy some bank stock.