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David Callaway
Aug. 26, 2010, 12:01 a.m. EDT · Recommend · Post:
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By David Callaway, MarketWatch
SAN FRANCISCO (MarketWatch) -- Anyone hoping the Federal Reserve's annual hoedown of global central bankers this weekend in Jackson Hole, Wyo. might be the Bretton Woods of our time is in for a disappointment.
There's never a good time, publicity-wise, for a group of elite bankers and economists to be seen gathering at a famous resort, even if some of them do bother to wear sport coats with their cowboy boots and spend the weekend prattling about things like quantitative easing and desired amounts of fiscal stimulus.
But this year the meeting, hosted by the Kansas City Federal Reserve, seems especially ill-timed. Disagreements among each other about the need for more spending among governments to prop up the major economies has surged into the headlines in recent weeks, shaking investor confidence in banking policymakers worldwide. If this group can't tell whether we're headed for Japanese-style deflation or German style hyper-inflation, then investors certainly don't want to be in the game at all.
As the economic recovery showed signs of sputtering, at least seven of 17 Fed officials spoke against or expressed reservations about a plan to alter the way the Fed manages its huge portfolio of securities before the move was approved on Aug. 10.
The result is that the markets in the past few weeks have turned into a financial goat rodeo, as an old Canadian buddy of mine used to term anything that was screwed up beyond repair. The world is flocking to the bond markets for safety and any type of corporate yield it can find in this non-interest rate environment, causing rifts in every other asset class, from equities to commodities to currencies.
Europe is shaking again now that its holiday season is over, and Japan's economic regulators seem frozen by the relentless rise of the yen against the dollar. Best photo caption of the week goes to Web site Zerohedge.com, which had a photo of a deer caught in headlights, with the caption "Central banker in Tokyo."
Of course, the media is playing up the conference big time, sending their best and brightest to Jackson Hole to chase bankers in the sun. In years gone by, the conference was really a wonkfest, with only the most dedicated scholars attending to debate the pros and cons of Keynesian, flood-the-zone, economics vs. supply side.
Jackson Lake Lodge, Jackson Hole, Wyo.
Now it's more like Davos without the tech guys. Everyone wants to be there, to the point where the Fed reportedly had to disinvite many B-list attendees from years past to make room at the posh Jackson Lake Lodge.
Bernanke's speech Friday morning will be the highlight of the event, and markets around the world will be parsing the language for any sign as to which direction he'll take the Fed. That's exactly why he won't give any clues whatsoever. And the proceedings will quickly dissolve into TV cameras chasing bankers in front of breathtaking mountain backdrops to see how they interpreted his remarks. See preview of Bernanke speech.
Of course, it is possible Quickdraw Bernanke could take some time between his speech, and the usual hikes and rafting trips in Jackson Hole, to engineer a more coordinated central banking response to the world's ills. It would be great to see some actual work get done to take advantage of many of these folks being together. The Bretton Wood conference in New Hampshire in July 1944 ended up creating a monetary exchange system that helped the world recover from World War II and lasted three decades.
But it's more likely that this conference is just an inconvenient, glad-handing tradition in front of cameras that needs to be endured before Bernanke and his cronies can get back to the real work of protecting their economies from another, more insidious financial crisis than the one just two years ago next month.
After all, if they're going to spend the next 10 weekends in emergency sessions, like they did during the Lehman crisis, then they probably need a bit of a summer break. If only the millions of jobless had the same luxury.
David Callaway is editor-in-chief of MarketWatch.
David Callaway is editor-in-chief of MarketWatch, responsible for the global news coverage of 100 journalists in 12 bureaus in the U.S., Europe and Asia. A financial journalist for more than 20 years, Callaway has worked for Bloomberg News, the Boston Herald, and assorted television and cable stations as a reporter, columnist and commentator.
Institutional shareholders. It's hard to think of a more powerful interest in the corporate landscape. Unfortunately, it's also hard to think of an industry more impotent when it comes to change, writes David Weidner.
11:46 a.m. Aug. 25, 2010 | Comments: 11
- Nonsequitor | 2:30 a.m. Today2:30 a.m. Aug. 26, 2010
"Jackson Hole more goat rodeo than Bretton Woods: Anyone hoping the Federal Reserve's annual hoedown of global... http://on.mktw.net/cNacqE" 11:33 p.m. EDT, Aug. 25, 2010 from dcallaway
"There goes 10,000 on the Dow........gonna be a scary few weeks" 8:51 a.m. EDT, Aug. 25, 2010 from dcallaway
"Ireland just downgraded by S&P...just what Europe needs right now......http://bit.ly/djaqCp" 4:20 p.m. EDT, Aug. 24, 2010 from dcallaway
"If the market can't get excited about a flurry of takeover bids, what can it get excited about? Watch the commodities." 3:29 p.m. EDT, Aug. 23, 2010 from dcallaway
"Stocks working their way back, and volumes not horrible for a summer friday....but no real conviction. Next week could be tough." 2:14 p.m. EDT, Aug. 20, 2010 from dcallaway
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