White flag waved by White House ?
http://finance.yahoo.com/news/white-house-official-says-yellen-175511707.html
WASHINGTON (Reuters) - A White House official said on Wednesday that Federal Reserve Vice Chair Janet Yellen was front-runner for the top job at the U.S. central bank when Ben Bernanke steps down, a shift in strategy after former economic adviser Lawrence Summers withdrew from consideration.
With the end of Bernanke's term looming in January and a compressed congressional calendar through the end of the year, President Barack Obama is expected to move forward quickly with a nomination. White House spokesman Jay Carney said on Monday the announcement could come as soon as next week.
Although Yellen was initially handicapped as the favorite to replace Bernanke, whose second term expires on January 31, a series of news reports in recent months had made clear that Obama preferred Summers.
But Summers, a highly regarded but controversial figure, stirred a hornets' nest of opposition and on Sunday withdrew from consideration after widespread criticism of his candidacy from liberal Democrats.
Some Washington policy veterans said his decision opened the door to long-shot candidates, such as former Fed vice chairs Roger Ferguson and Donald Kohn. But the White House appears to be trying to quash that speculation.
LOOK FOR DECISION 'REASONABLY SOON'
Bernanke has never said he plans to step down although it had long been rumored that he wanted to leave after a grueling tenure battling the financial crisis and deep 2007-2009 recession.
In a television interview in June, President Barack Obama said the former Princeton professor had "stayed a lot longer than he wanted or he was supposed to," making it clear that Bernanke's second term would be his last.
Asked about his plans at a news conference on Wednesday, Bernanke said: "I'd prefer not to talk about my plans at this point. I hope to have more information for you at some reasonably soon date."
If nominated, Yellen, 67, would require Senate confirmation.
She has strong backing among Democrats, including a number of members of the Senate Banking Committee, which would need to clear the nomination before a final Senate vote.
Senator Charles Schumer, a member of both the committee and the Senate Democratic leadership, added his voice to the ranks of supporters. "I think the president should choose Yellen," he said.
A Senate Democratic aide said the White House was calling senators about the Fed and that Yellen's name was coming up in conversations, a further sign an announcement might come soon.
MORE THAN A DEPUTY
Yellen became the U.S. central bank's No. 2 in 2010.
Previously, she was president of the San Francisco Federal Reserve Bank, head of the White House Council of Economic Advisers under President Bill Clinton and a governor on the Fed Board. She has also taught economics at the University of California at Berkeley.
At the Fed, she has been a staunch supporter of Bernanke's super-easy monetary policy, earning a reputation of one of the most dovish officials at the central bank, but she has gone well beyond simply acting as Bernanke's deputy.
She led a panel of policymakers who rewrote the Fed's rules on communications, and she is widely credited with convincing her colleagues to adopt an explicit inflation target for the first time last year.
Much like her boss, she values consensus; she has never dissented on a Fed policy decision.
Somewhat controversially, she has embraced the view that the Fed should not balk at a bit of inflation if it comes as part of a policy that is bringing down too-high unemployment.
The Fed has held interest rates near zero since December 2008 and has more than tripled its balance sheet to about $3.6 trillion in a further effort to depress borrowing costs by buying government and mortgage-linked debt. On Wednesday, it said it would continue to purchase $85 billion in bonds per month.
Critics, including many Republicans have long worried that the Fed's extraordinary actions might spark inflation, and Yellen's tolerance for some level of inflation above the Fed's 2-percent target may draw fire from Senate Republicans.
Democrats control the Senate 54-46, but any nominee for the Fed is likely to need 60 votes to overcome procedural hurdles.
Anybody but Janet Yellen -a failure to nominate he will raise the heat on Obama that his refusal to do so is because she is a woman ? And then she probably leaves the Federal Reserve ....
http://www.businessinsider.com/ashworth-yellen-may-not-become-fed-chair-2013-9
Former Treasury Secretary Larry Summers has withdrawn his name from contention to succeed Ben Bernanke as Federal Reserve chairman.
Now, lots of people think President Obama will (or, in the case of our Josh Barro, as well as 200+ economists, should) pick current Vice Fed Chairwoman Janet Yellen.
But Capital Economics' Chief U.S. Economist Paul Ashworth thinks the administration may not end up doing so.
In a new note, he writes that the mechanics of getting Yellen through the Senate — as well as the president's own possible preference — does not bode well for her candidacy.
The Obama administration has shown little, if any, enthusiasm for Yellen ... so we're not convinced she will necessarily get the nod. Summers candidacy was sunk by the opposition of many Senate Democrats, which would have made it hard, if not impossible, to get his nomination confirmed. Nominating Yellen now could make Obama look weak, kowtowing to the Democrats who have been openly campaigning for her.
Instead, it now seems former Fed Vice Chairman Donald Kohn, Treasury Secretary Tim Geithner, or some as-yet-unknown candidate all arguably have an equal shot:
Instead, it's possible that there will now be a delay in the nomination process, while the administration seeks a new candidate. We know Obama has already interviewed Ex-Fed Vice Chair Donald Kohn and we wouldn't rule out the administration seeking to change Tim Geithner's mind. All things considered, Yellen is probably now the favourite, but not the near-certainty that many will proclaim her to be.
Bernanke steps down in January.
and....
http://www.zerohedge.com/news/2013-09-15/hilsenrath-confirms-summers-out-means-fed-business-usual
Hilsenrath Confirms Summers Out Means Fed Business-As-Usual
- Ben Bernanke
- Borrowing Costs
- Kohn
- None
- Real estate
- Recession
- Tim Geithner
- Timothy Geithner
- University of California
UPDATE: *GEITHNER STILL DOESN'T WANT TO BE CONSIDERED FOR FED CHIEF: WSJ
The next chairman's main job is going to be deciding how soon and how aggressively to pull back on Fed programs; and as none other than Fed whisperer John Hilsenrath notes, Larry Summers' withdrawal increases the likelihood of continuity in central-bank policy for the next few years - meaning any Fed wind-down of its easy-money programs will be slow and gradual. Of course he posits Yellen and Kohn as potential front-runners but throws Tim Geithner and Roger Ferguson back into the mix. Business-as-usual is back and the doves are in control - all the Fed needs now is bigger deficits to enable it to keep the pumps primed...
..."The range of uncertainty has narrowed," said Stephen Oliner, a former Fed economist and current senior fellow at the Ziman Center for Real Estate at the University of California, Los Angeles. "Summers was just a bit of an unknown because he hadn't really enunciated a lot of views on policy."...Ms. Yellen is seen by many investors as the most likely candidate to succeed Mr. Bernanke. She offers the most certainty of continuity because she has been at his side for the past three years and is a strong advocate of his policies. But she isn't a certainty to be nominated for the job, especially after a public campaign on her behalf by lawmakers appeared to have left Mr. Obama peeved about congressional interference in his decision.It is possible Mr. Obama could turn to a dark-horse candidate, such as former Treasury Secretary Timothy Geithner, former Fed Vice Chairman Roger Ferguson, or a number of others.The next chairman's main job is going to be deciding how soon and how aggressively to pull back on Fed programs....Still, it will be a challenging task. If the next Fed chairman pulls back too soon or too aggressively, borrowing costs could soar, cutting off consumer and business spending, and sending the economy back into recession. But if the Fed doesn't move fast enough, inflation or a new financial bubble could emerge.The Fed has already seen glimmers of both a boom in credit markets earlier this year and the worrying jump in long-term interest rates since Mr. Bernanke started talking about scaling back in May.
We can't help but wonder why Summers really stepped away - is it perhaps that he knows(deep in his cold bloodless heart) just what a disaster this is all going to be and prefers to keep his 'perceived' legacy in place?
http://www.zerohedge.com/news/2013-09-15/summers-withdraws-fed-chairman-race
( Not Obama's week as his chosen candidate withdraws .... serious case of Buzzard's luck .... Can't kill anything , can't find anything dead / nothing will just die ..... )
Larry Summers Withdraws From Fed Chairman Race
And just like that, the Summers of the democrats' discontent is gone (who for some reason saw Larry as the more hawkish of the two Fed candidates, when in reality it would have been Summers that would unleash Bernanke's money choppers), as are all those unbooked profits by Paddy Power betters who saw Summers as a 85% odds on favorite to become the next Fed chair, and are now left with nothing.
Full Summers letter:
Dear Mr. President,I am writing to withdraw my name for consideration to be Chairman of the Federal Reserve.It has been a privilege to work with you since the beginning of your Administration as you led the nation through a severe recession into a sustained economic recovery built on policies to promote employment and strengthen the middle class.This is a complex moment in our national life. I have reluctantly concluded that any possible confirmation process for me would be acrimonious and would not serve the interests of the Federal Reserve, the Administration, or ultimately, the interests of the nation’s ongoing economic recovery.I look forward to continuing to support your efforts to strengthen our national economy by creating a broad based prosperity and to reform our financial system so that no President ever again faces what you and your economic team faced upon taking office in 2009.Sincerely yours,Lawrence Summers
And the actual letter in its original, Harvard letterhead regalia:
So, with the favorite now gone, with Yellen solidly out of the running, with Geithner unwilling to acknowledge he would drop everything just to be able to leak Fed secrets to banks as a Chairman as he did when he was merely head of the NY Fed, is it time for the first Bill Dudley trial balloon?
And now whose name is floated as Obama pursues his apparent anyone but Janet Yellen quest for Fed Chair ..... Donald Kohn , Bill Dudley , Stanley Fischer ??????
http://www.businessinsider.com/larry-summers-withdraws-name-2013-9
REPORT: LARRY SUMMERS WITHDRAWS NAME FOR FED CHAIR
REUTERS
"I have reluctantly concluded that any possible confirmation process for me would be acrimonious and would not serve the interest of the Federal Reserve, the Administration or, ultimately, the interests of the nation's ongoing economic recovery," Summers wrote in a letter to President Obama, Wessel writes.
Summers was facing opposition from left-leaning pundits, as well as more than 200 economists who signed an open letter in support of current Fed Vice Chair Janet Yellen.
and that follows Dems pulling support from Larry Summers late last week !
Four Key Democrats Are Now Opposed To Larry Summers, And That Could Be Devastating For His Candidacy
AP
Sen. Jon Tester's (D-Mont.) office told Reuters that Tester plans to oppose Summers, who is widely considered the front-runner to be tapped by President Barack Obama in the coming weeks. His office didn't immediately respond to a request seeking confirmation.
President Obama is thought to prefer Summers over Fed Vice Chair Janet Yellen, who is the preferred candidate of many Democrats and many on the left.
The Senate Banking Committee must approve Summers' potential nomination before it goes to the Senate for full confirmation, something that looks increasingly unlikely. The Wall Street Journal reported last week that Democratic Sens. Elizabeth Warren (Mass.), Sherrod Brown (Ohio), and Jeff Merkley (Ore.) are expected to oppose Summers in committee.
Democrats hold a two-vote majority on the Banking Committee. If four Democrats vote against Summers, at least four Republicans will have to vote in favor for his nomination to get out of committee. That is unlikely, considering that no Republican on the committee besides Mike Johanns (R-Neb.) has expressed even cautious support of Summers.
Business Insider's Josh Barro reached out to other Democratic members of the Banking Committee last week, and besides Chairman Tim Johnson (S.D.), whom the Journal reports is supportive, only Sen. Chuck Schumer (N.Y.) was warm to the possibility of Summers as Fed Chair.
A breakdown:
- Schumer thinks both Summers and Yellen would be "very good choices," according to spokesman Matt House.
- Jack Reed (R.I.) "will consider any person the President chooses to nominate," per spokesman Chip Unruh.
- Heidi Heitkamp (N.D.) "is closely examining all individuals who have been mentioned as potential candidates," according to a spokesperson.
- Robert Menendez (N.J.): No comment.
- Mark Warner (Va.): No comment.
- Kay Hagan (N.C.) and Joe Manchin (W.Va.) did not respond to a request for comment.
In July, about one-third of Senate Democrats signed on to a letter circulated by Brown, urging Obama to appoint Yellen to the position.
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