Hosting Varney & Co This Morning Fox Business 9:15
The notion of see no evil, hear no evil and speak no evil dates back to the 2nd century from the Code of Conduct written by Confucius.
By the 12th century the philosophy was rooted in the Japanese folk religion of Koshin and represented in various art forms in many areas including shrines.
In fact, it is a rendering from 12th century Japanese panels that gives us the famous three wise monkeys that are in the second of eight panels and represent The Golden Rule:
Miraru - "see"
I can think of several places where people need to be reminded of the golden rule, but few need to be reminded as urgently as the folks at the Federal Reserve. For their very mission goes counter to everything the golden rule expresses. I won't get into whether they're trying to be altruistic or not but will say the very existence of the central bank does more harm than good. It's nice to have a place where money can come out of thin air as any parent knows when confronted with endless demands and requests from children.
It is knowing this money can come out of thin air that contributes to behavior that even unlimited money printing cannot cure-hence the conundrum. Banks understand they can go buck wild, throwing caution to the wind with respect to pushing the envelope. The bailout, secret Fed lending program and low interest rates underscore this fact, but layer on the Fed buying garbage assets. The big problem is acknowledging Main Street from the Fed's perspective. This is where they don't see, hear or speak.
Nonstop Chatter ... Saying Nothing
Talking about speaking no evil ... folks from the Fed wouldn't shut up last week. I get they've been trying to "walk back" comments from chairman Bernanke in May that sent bond yields soaring and stocks plummeting. For a split second it looked like they might have been neutralized on Friday, but a late selloff pointed out a simple fact.
Fed underlings tried hard but in the end they're full of sound and fury but signified nothing.
There's one monkey that's never depicted with the others in Koshin art and it's the monkey with its arms crossed sending the message of "do no evil." I guess when it comes to Ben Bernanke it's a little late to talk about doing no evil, but how do you unwind a cure that was worse than the disease?
Very carefully would be the first thought, but I think very deliberately is the real answer. The code of conduct is clear in my mind, stop kowtowing to Wall Street. Don't taper only to gun the printing presses later as the paper-thin credibility would go out the window. For now the Federal Reserve has boxed itself into a corner. It feels more like visits from the Grim Reaper when one of them opens their mouths these days. Why these guys and gals can't get their act together is confusing. But they should be singing from the same hymn sheet when it comes to policy action.
Last week we saw the market up on good news and down on good news.
Last week we saw the market down on bad news and up on bad news.
All of this makes Friday's jobs report even more important than usual. Once again are we rooting for a good number or a bad number or a Goldilocks number - whatever that is these days? Somehow the market has to get away from all the nonsense. The best thing that could have happened is everyone at the Fed, beginning with Big Ben would have said data determines policy and one day data will be good. Moreover, once we reverse policy, don't expect us to change again even if stocks plunge. Closing the spigot is the lesser of evils and only option left.