‘Jay And I Could Never Be Made’

‘Jay And I Could Never Be Made’

Since the day she was tipped as Joe Biden's Treasury Secretary, I've joked (or not) that Janet Yellen was de facto Fed Chair. She lost the job only because Donald Trump wanted "his own" Chair, a decision which backfired in rather spectacular fashion in 2018, a year which began with an equity market melt-up predicated (in part anyway) on tax cut euphoria, quickly went awry when Yellen's short vol bubble imploded on the very day Jerome Powell assumed her role and ended with the worst December for
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5 thoughts on “‘Jay And I Could Never Be Made’

  1. Isn’t the risk of inflation due more to Trump’s China policy- supply chain issues- causing scarcity and delays in deliveries of goods as well as the pandemic’s effect on workers being laid off as demand for some goods declined. Seems like corporations were tightening their belts over the last year and are now trying to gear up.

      1. I’m not a pro but from what I know about typical strategic management practices, I’d be surprised the problem is fully resolved for Christmas. Getting the whole pipeline refilled, containerized and shipped with everything needed will be tough. It also seems like labor, especially for low skill services, may stay tight (look at signs on storefronts not public data). Everything I’ve been trying to buy is delayed, in short supply, backordered or just plain canceled. I just ordered something from a brand new late spring catalog and got a note I can look for the item in August if I still want it. Keeping inventory to reduce the bottlenecks of disrupted JIT supply chains costs a firm 20-25% in direct and opportunity costs from the capital needed to support that inventory. So, every extra million kept in inventory for the year (not that old but the balance is always there) takes 200k out of profits. When that backup disappears it can take a long time to put it back, especially if the revenue flow required to support it is uncertain and even one key supplier fails to commit. A supplier holding back one or two chips can stop the whole auto industry.

  2. Yellen was just stating what everyone already knows. Unless, of course, Wall Street is betting on the U.S. racing Japan to the ZIRP singularity.

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