Gomer to the Fed: “Surprise, Surprise, Surprise!”

From the wires:

Comments from Janet Yellen, the vice chairman of the Fed, Monday reined in the most exuberant hopes in the markets. In remarks to economists in Denver, Yellen warned that excessively easy monetary policy, involving ultra-low interest rates and an expansion in the Fed’s balance sheet, could create big problems down the line. “It is conceivable that accommodative monetary policy could provide tinder for a buildup of leverage and excessive risk-taking,” Yellen said.

Gomer responds:

Tagged with: , , , , , ,
Posted in Economics
4 comments on “Gomer to the Fed: “Surprise, Surprise, Surprise!”
  1. Trender says:

    The Fed’s action(or inaction) is perhaps just a reflection of our society’s loosey-goosey attitude towards risk. At least ancient man was well aware of the consequences of his actions. Intellectual hubris often leads one to believe one has more ‘control’ than he/she does.

    I like this part of Larry Hite’s quote:
    “Winning a bad bet can be the most dangerous outcome of all, because a success of that kind can encourage you to take more bad bets in the future.”

  2. Gene says:

    “At least ancient man was well aware of the consequences of his actions. ”

    Not arguing with you, but this is something I’m perplexed by. If genetically successful humans were those that could judge risk/reward properly, then where does the seemingly natural instinct to “average down” (averaging losses) come from?

  3. Trender says:

    I think that ancient man was much more open and responsive to “present evidence” than modern man. It looks to me like people instinctively average down because they are acting based on “future expectations”. I think for the most part our instincts no longer respond to direct experience out there but to thought process occurring inside our minds.

  4. DG Dye says:

    See Michael’s video from a couple months ago with the professor who created a market among monkeys using tokens…their behavior replicated human market behavior…and to a TF’er this is the competition so the odds are in our favor.

Table of Contents
Michael Covel Books

Underground Insights

Subscribe now to free email newsletter and get latest blog posts, podcast episodes and special offers delivered to your in box:

Pricing for trend following systems, risk management, trader psychology training and black swan strategies. Absolute return systems and education for new traders and established pros. Thousands of clients across 70+ countries. Client feedback.

The Trend Following™ podcast with Michael Covel. Listen now on iTunes and Android. Top minds and alternative commentary. 3M+ listens across 300+ episodes.

Free Video

A unique trend following experience on DVD sent to your home. Get your free DVD delivered.

Michael Covel Books