Reader response: “Dave, you are right. I just turned on Bloomberg TV and every 2nd word is “patient”. What a joke! (Michael P); “This whole market is embarrassing”(Chris G)
I wonder if Grandma Yellen forgot her Depends today (play on an old undergrad economics class joke that the favorite phrase of economists in response to a question is, “well it depends”).
If measured in terms of manpower dollars/hour, the word “patient” is probably the most expensive word in history. Think about – in terms of dollars paid per hour – all the extraordinarily overpaid Wall Street analysts and buy-side fund managers who spent the better part of the last month talking about the word “patient.” How about the amount advertising dollars spent during the time used while idiots on financial tv blew hot air discussing the word “patient.”
And then there’s this (source: Marketwatch, edits are mine) – click to enlarge:
The above pic shows the 12 FOMC voting plus other sundry Fed “Einsteins.” Perhaps collectively they might have the brainpower of Shakespeare. 21 Fed officials – probably about $10 million combined in annual compensation. Think about, from a cost allocation standpoint, how many hours were spent by this brain trust determining whether or not to include the word “patient” in today’s FOMC policy statement and, if not, how to leave it out in a way which implies that we won’t raise rates any time soon.
And now the poor saps who have nothing better to do than watch CNBC, Bloomberg or Fox Business all day long are going to be subjected to another couple weeks of incessant squawking about what the removal of the word “patient” means and to grotesquely foolish forecasts for when the Fed might ever so slight nudge interest rates up one-quarter of one percent.
Here’s your answer – for free: NEVER. Not until the market forces the issue and by then the entire U.S. financial and political system will have collapsed.