Tweakonomics: Thus spake Yellen

MANASI PHADKE Indian stock market crash | Updated on January 19, 2018

Janet Yellen

The real reason why the Sensex fell

It’s been a cold, cold winter in New York. So much snow, and no signs of abating. Add to that the dampness from China, the chills from Japan and the weakness from oil economies, and there is a case for the toughest economist to fall ill in the US. And so, Fed Chair Janet Yellen found herself quite unwell on the eve of a podcast, in which she was to talk about Fed strategies under uncertainty.

“Ma’am, the weather has created an issue. I’m not sure our international audience can hear us properly. Should we postpone this, Ma’am?” That was Fed’s tech support, looking anxious and worried. “Whad! No, no... lend us go aheand with the pnodcast... achooo!!” That was Yellen, determined to set a few things right on the global front.

“But the pnodcast, errr, the podcast, is having serious tech issues Ma’am...” Tech support faltered as the Fed eyes glinted dangerously at him. “Okay, Ma’am. Good luck!”

Back home in India, at a typical Bambaiyya broking firm on Dalal Street, Boss was talking to the novice employee, freshly graduated from Delhi School of Economics and enthusiastic about sharing his gyan with the mere mortals, the traders. “Boss, as per OECD as well as NBER forecasts, the best predicted value of global growth rates should be in the range of 1.3 per cent, with a standard deviation of 0.2 per cent. The contagion could spread to India. I can’t wait to hear Yellen speak!”

“Arre, talk English. This is a broking firm, not a some fancy think tank. Why can’t we receive the signal properly? What is she saying? Ssshhh! Listen”

JY: I stand here tonday, waning to snet things right, ndespite poor nealth and ndespite this nasty cnrough.

Novice: Sir! She is saying its rough! Yaay, I was right!

Boss: Arre Bhagwan! Punch the sell button, idiot. You got to punch it before others. Gawd, why don’t I get youngsters with nimble fingers?

JY: We need to ndo something ndifferent, to nflow on indeas...

Novice: Sir! Didn’t I tell you? She is saying go slow on India!

Boss: Punch sell! Don’t talk, just punch sell... gawd, they’re all selling! What are you waitin for? Sell!

JY: The cnurrent nituation on oil has ncaused a slowndown which is very nconplex, not seen in the pnast nfifty years...

Novice: She is now talking about the Sensex and the Nifty getting into a slowdown. ( Now with awe in his voice) I never thought a Fed governor would give so much importance to the Sensex!

Boss: Oye, give me your philosophy later. God, why did I hire an economist? Arre, punch sell. Oh my God, what was that? Was she saying something about who is a role model for the Fed?

JY ( suddenly racked by a coughing fit): Achroo, ichko, achkoraaaa!

Novice: She said Haruhiko Kuroda! America is going to go into negative interest rates, Sir! Global scene looks to be really bad!

Boss: Arre, main toh looti gayo! Market bhi gayo! What are you staring at me for, you nutcase? Punch sell!

JY: With Bank of NJapan going into negative nrates, narkets are talking of other bnanks mirroring that move. I am not ngonig to buy that indea…

Novice: What! She is not going to buy on India!

Boss ( in total despair): Market is totally down and we’ve lost so much money. What are you punching now, you idiot?

Novice: My resignation, Sir. The Sensex and Nifty are now both at 52-week lows. Hurrah! Time to join NDTV as an analyst!

The writer is a Pune-based economist

Published on February 11, 2016

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