The thinking is that this rise will cause inflation, which will then deteriorate the value of money.

If there's one thing competent neoclassicals, neo-Keynesians, and post-Keynesians wouildn agree on, it's that "deterioration in the value of money" implies an increase in the nominal values of everything else -- including stock prices.

Today's stock tumble may stem from the expected increased nominal returns on debt securiites -- which makes bonds relatively attractive compared to stocks.

It may stem from the unwinding of complex derivative trades by a few big players with big egos.

It may be something else entirely.

And it may be here today, gone tomorrow. Or it may not.

Try again—
https://www.marketwatch.com/story/jim-cr…

Obama's Fed kept interest rates at zero to subsidize Obama's nine trillion dollar debt habit, Yellin was his dealer feeding his debt addiction.
The effect was to steal from every hardworking American who saved for their retirement and, back in the day, could have received 5% interest on their savings in a bank account.
It is the greatest heist in the history of mankind, er...peoplekind.
He should be in prison.

The big drop will come when the Chinese pull the debt plug, the Feds juice the currency to dilute the ovehanging deficit and the rest pull out of the treasuries because we won’t protect the underlying value of the dollar.

But before then we’ll have a Constituiiomal crisis, as Illinois turns to the country to save its ass..... so, bring on the conflict!

Do not give Trump any credit for the stock market this will come back to be an inconvenient post before its over

#6 Will not give #45 any credit for anything except a really stupid haircut.

Yellen's departure, sure. The ridiculous preceding run-up, too, surely. But don't discount how much Big Capital hates paying workers! It's very real.

It's not just the money they hate losing, it's the 'flexibility', meaning any slackening of control over working arrangements -- the ability to shift workers like checkers, dictate 'dynamic' schedules, etc.

"In the world that ought to be, Yellen's mind would have been put to good use." Ah, yes, that lovely land of Might Have Been ... https://www.youtube.com/watch?v=0YaXx6Tn…

Unless Cadet Bone Spurs aka the Marmalade Chicken can come up with some innovative, fabulously Great way of screwing America's Working People (from what I gather, he's an Expert in that field), he may hafta take Drastic Measures.
Hang onto you hairpieces, folks. Shit just might get Real...

A good way to tell if someone is dumb, or at least using dumb logic is when they try to ascribe one reason for extremely intricate and complex events.

This is essentially the same logic used by religious thinkers, and other true believers in whatever cause. The goal is to shut down thought and inquiry, not sustain it.

Neo-Keynesians and Post-Keynesians are not the same people, and they do not have the same ideas. The two terms are not interchangeable.

Neokeynsians are mainstream, or "orthodox" economists. Their work attempts to unify or incorporate neoclassical ideas (think "marginal revolution") with Keynes's theories.

Postkeynsians are non-mainstream, or "heterodox" economists. They can be thought of as Keynesian fundamentalists, rejecting the marginal revolution and neoclassical ideas entirely in favor of extending and extrapolating the ideas Keynes developed.

This is very basic stuff, any ordinary little person could internet-search the two terms and get it all straight in fifteen minutes. Naturally, Charles Mudede can not be bothered with such things. He is a Big Man with Big Ideas, and when he has something to say these puny little facts need to get out of the way.

@12m you are stupid and should learn how to read.

@13: Readers welcomes your discourse, but please don't directly insult them.

15) sorry about that. really, sorry. and 14 made my point.

@16 No, Charles, you didn't (directly) insult @15; you insulted @12m -- That's where the apology goes. Way to go, Rainy! @15

And while he was pretty hard on you, I'm not seeing a lot of 'stupid' @12 --
perhaps you meant ignorant, and not stupid -- ignorance can be cured.

@13

Perhaps.

But you yourself need very much to learn a very basic level of mathematical literacy-- your inability to comprehend and then use even the simplest equations in your thinking renders you incapable of applying any of the actual theories you have skimmed past in your rapid intake of economics texts. For you, and other Big Man Thinkers like you, economics is no more than a matter of figuring out which clique is which, and which clique you want to be part of, and then attacking its enemies.

In other words, you are not really capable of thinking about economics at all.

Contemporary economics has been rightly criticized for neglecting the "political" part of "political economy", but it is even worse to neglect your understanding of the "economy" part-- we all need that more than we need a puffed-up Big Man yelling his politics at us again.

@12 you have a reading comprehension problem, and the insult to charles at the end was unnecessary. Especially since he did not say nor imply that Neo-Keynesians and Post-Keynesians were the same. I understood it the first time and I'm not an economist. If you don't like Charles' posts, don't read them.

#13, best post ever.

These are not the largest drops. And it’s silly to say they are. It’s like saying our current federal minimum wage is the highest ever so why are people complaining.

Thank you for finally pointing out the incorrect underlying assumption -- that full employment creates inflation and labor is responsible for rising costs. Of course, that never has been the case. Rising wages enable increased productivity; see over 1,000 years of medieval economic history (that no one studies these days lest they should alienate industrial donors to large universities).

Janet Yellen is like many women who have excelled intellectually: she still has knowledge, acumen, experience, and great intellectual, emotional, and social maturity to offer our country and the world. Of course, Trump and his fellows chose not to respect her accomplishment. Instead, they now claim credit daily for the prosperity that has resulted from her and others' hard work. Neoclassical economics protects only the vested interests of those whose primary goal is to amass personal wealth, and it too often does so at great cost to others.

Classical/neoclassical economics reduces complex systems to magical thinking, i.e., that everyone working generates scarcity, "too much demand," and therefore inflation and that God or they (the gods?) know and care what's best for a reductive, fiction called "the marketplace." Over the past 50 years, each time the American people have listened to an industry blame labor or U.S. policymakers for high prices, we hear at year end it has been that industry's its most profitable year in history.

The American people have insufficient criminal law and too many rich white men in Congress to address the crimes of personal and corporate wealth. We just admire wealth too much! (Mr. Smith goes to Washington, after all...)

Advocates and promulgators of neoclassical economics aren't really economists anymore, either. They're businessmen and salesmen. They gain ascendancy by opposing intellectual, moral, social, and creative progress in order to own it themselves. Ask Mark Zuckerberg about that. (You could have asked Steve Jobs, but he's left us behind now. You could ask Bill Gates, but he knows better than to answer publicly.)

Such leaders say what they say only to instill fear in the public and thus achieve their goals. Such so-called business leaders don't honor their words, nor do they generate engines of progress. They appear to invest in us, but they merely appropriate others' creativity, hard work, land, water, air, and once consumed, run with the profits ("relocate their headquarters"), and leave the clean-up to others. When they are challenged, they use their wealth and influence to threaten and manipulate media, lobbyists, and lackey politicians into frightening the American public.

I am not an "ideologue," by the way; I just have a long memory -- for others' lies. When I was very young, people were afraid to speak up about it for fear of being called a "Communist" and losing their jobs. When I was a teen, people who talked that way were called "dirty hippies" and "drug addicts" and told to "leave it ['America'] (as if the US owned all of America). Then those people were "bleeding heart liberals," and "traitors" because they questioned Reagan's secretive revamping of "trickle-down economics." Such piracy marauded Africa, alienated west and east Asia, isolated Lenin, colluded with Hitler, promulgated the Red Scare, and closed off China to U.S. citizens so that we experienced scarcity, conflict, intellectual aridity. All that aside, so long as we allow morally and socially irresponsible industries and irresponsible husbands to use women's labors and contributions at a cut rate or free of charge and not to admit that into their fiscal calculations, neoclassical economics is a complete farce.

In the interests of full disclosure, I'm a conservative. I believe in moral, social, intellectual, economic, and natural conservation of the best in human culture. I'm also a woman. I do not believe that the current way business and politics have been conducted for much of human history is some sort of inevitable reality, nor is it necessary to human life. In fact, much of it has been opposed to it.

Karen Platt