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In Tweedle Dum vs. Tweedle Dee; Does Janet Yellen Have What It Takes? I made the case it did not matter much whether Larry Summers of Janet Yellen was the next Fed chairperson.
Here is a recap:
Tweedle Dum vs. Tweedle DeeThe "Dums" Have It
The only candidate that makes sense is the candidate who will set a target date to end the Fed. Unfortunately, no such candidate is on the short list.
The choice is between Tweedle-Dee who rates to slosh money around even more than Bernanke in a futile effort to create jobs, and Tweedle-Dum who will do whatever Wall Street wants.
Practically speaking, is there really a difference?
Last week I thought it was something on the order of 50-50 (Tweedle-Dee heads we lose vs. Tweedle-Dum tails we lose) since both potential nominees are losers.
I now think it's more likely a case of Tweedle-Dum tails we lose, with Larry Summers playing the role of Tweedle-Dum.
I changed my 50-50 lose-lose stance to a 65-35 lose-lose stance after reading Obama Focuses on Risk of New Bubble Undermining Broad Recovery.
President Barack Obama, who took office amid the collapse of the last financial bubble, wants to make sure his economic recovery doesn’t generate the next one.Why the Odds Changed
Obama this month spoke four times in five days of the need to avoid what he called “artificial bubbles,” even in an economy that’s growing at just a 1.7 percent rate and where employment and factory usage remain below pre-recession highs.
“We have to turn the page on the bubble-and-bust mentality that created this mess,” he said in his Aug. 10 weekly radio address.
Yellen has all but guaranteed she will keep the money flowing faster than Bernanke, and coupled with the above warning from Obama about asset bubbles, the odds shift heavily towards Tweedle-Dum as Obama's choice.
Don't Fret, It Does Not Matter
Some will be delighted by this, others severely disappointed. But I am here to ease your mind. It does not matter. They will be equally horrendous.
The timing may change slightly , but the outcome won't.
“We have to turn the page on the bubble-and-bust mentality that created this mess” said Obama. Mish says "It's too late" the Fed has already re-blown bubbles in both stocks and bonds.
Mike "Mish" Shedlock