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The Fed has released transcripts from 2006 meetings, today and we’ve been going through them, looking for choice quotes. Earlier we relayed a dismissive joke about the housing bubble.Here’s another great one from 2006, before the economy teetered over the brink, courtesy of Randall Kroszner, governor of the Federal Reserve System from March 2006 through January 2009.
The comment concerns Dave Stockton, former head of U.S. economic research and forecasting at the Federal Reserve, who during the 2006 meetings had to confront a number of changing data streams that rapidly impacted his forecasts.
Kroszner juxtaposes the economy with Stockton, personifying him as a schizophrenic now on his death bed.
“Last time several of us noted that there would be an avalanche of data between the last meeting and this one [laughter]—two employment reports, two rounds of ISM, GDP, ECI, compensation revisions, all of that,” Kroszner said. “But it seems from the discussion here that we’ve actually gotten very little new information, with one exception, and that relates to Dave Stockton. We heard that not long ago he was on the psychiatrist’s couch dealing with a schizophrenia issue of whether the economy is going up or going down. But now we know that he is on his death bed. [Laughter] I hope this does not bode ill for the economy going forward, but I did want to note that one very important change, Mr. Chairman.”
The joke, to say the least, was ill timed. Just a year later, the economy entered the deepest recession seen in generations.