Skip to comments.On Janet Yellen's (In)Ability At Foreseeing The Financial Crisis
Posted on 09/16/2013 1:58:15 PM PDT by Perdogg
When we first posted this article a month ago, few paid attention as the entire world was gripped in Summer-mania. Now that Summers is out of the picture, and the monetary policy acumen of the former San Fran Fed president are under the spotlight, it is probably an opportune time to recall Janet Yellen's ability to foresee the future heading into the great financial crisis whose five year anniversary took place this weekend. Or rather lack thereof, because as the following excerpt from a 2010 FCIC hearing, noticed first by the NYT, demonstrates, if this is the best Fed head replacement we can do then we may as well fast forward to the Great Financial Crisis ver 2.0:
Ms. Yellen told the Financial Crisis Inquiry Commission in 2010 that she and other San Francisco Fed officials pressed Washington for new guidance, sharing the problems they were seeing. But Ms. Yellen did not raise those concerns publicly, and she said that she had not explored the San Francisco Feds ability to act unilaterally, taking the view that it had to do what Washington said.
For my own part, Ms. Yellen said, I did not see and did not appreciate what the risks were with securitization, the credit ratings agencies, the shadow banking system, the S.I.V.s I didnt see any of that coming until it happened. Her startled interviewers noted that almost none of the officials who testified had offered a similar acknowledgment of an almost universal failure.
And that is the opinion of the person that the investing community is largely convinced will be the new head of the Federal Reserve. But, as we said last time, at least she is honest. Which, however, does not explain why the second time around her only solution to the first crisis that she failed to foresee completely... is doing more of the same.
If the standard is foresight into the depth an breadth of the financial crisis before it happened then virtually nobody is qualified.
A nationed ruled by women and homosexuals - ans moslems.
That’s true, although her district encompassed Arizona, Southern Cal, and Las Vegas, meaning the worst of the crisis, ex-Florida, was in her district, and she was pretty long in rejecting the idea that there was a bubble, even when it was bursting.
Still, at least she’s better than Summers
In what possible way?
In what possible way?
Well they are both crony capitalist mega-Keynesians.
But Summers is one of those uniquely noxious folks who makes your skin crawl just seeing him on tv, like Shuck Chumer or Tony Weiner LOL.
Yellen is the affirmative action candidate.
For one thing, she’s not a partisan political hack
Sure the real estate issue was big but the real issue was several levels removed from a white hot real estate market. It was the derivative leverage of the underlying real estate market that was the house of cards. Very few understood that.
Yelled is closest to Bernanke in monetary philosophy and I think Bernanke has done a hell of a job.
And she is much better than Summers. Then again that’s a low bar :-)
I will grant you that. And it's a good point.