The trading world was taken aback for several moments yesterday when Jefferies’ QE-fanboy David Zervos tweeted an instagram photo that showed what Cloud 9 surely looks like for Fed sycophants:
Besides a promo shot for a new “Lord of the Rings” movie, many were left wondering what exactly was going on here.
As it turns out, this was Janet Yellen merely doing what all of her predecessors had – lucratively – done in the past with her inaugural paid dinner appearance before a wealthy Wall Street crowd of 40, two months after stepping down as Fed chair, in which she discussed the economy and interest rates at an event hosted by investment bank Jefferies.
Speaking to Reuters, Yellen said she revealed no confidential information at Monday’s gathering, put on by Jefferies CEO Richard Handler, although there is clearly no way to check just what transpired at this “off the record” gathering where 40 people paid tens thousands of dollars, either hard or soft, to hear the former Fed chair speak. According to Reuters, it was her first such engagement since leaving the Fed.
“I talked about the economy and general perspectives on monetary policy,” Yellen said late on Wednesday.
Yellen also “expressed the view that three or four rate rises were likely this year, and that recent U.S. tax cuts and a boost in government spending posed at least some risk of running the economy hot.”
Separately, Yellen told Reuters she was paid but declined to say how much, and did not provide details.
In addition to the romantic dinner for 40, the event included a question-and-answer session with more than 100 Jefferies clients, where she reportedly stuck close to the gradual rate-hike message that has since been adopted by her replacement, Jerome Powell.
Later, over dinner at the Manhattan penthouse of Jefferies’ chief executive Dick Handler, Yellen told executives from hedge funds, private equity firms and other companies that she considered inflation to be in check and unlikely to spike, so rates would stay relatively low, a Reuters source said.
Which, of course, sounds like each and every press conference and testimony Yellen had given. The economy must truly be recovering if there are those who would pay thousands of dollars to hear what most chugged elephant doses of Redbull just to stay awake through.
That said, one can’t blame Yellen who is doing precisely what everyone said she would: cashing in after years in public service is a well-trodden path for policymakers and regulators, highlighting the demand among investors for any exclusive insights they can offer.
As a reminder, Yellen’s predecessor Ben Bernanke waited just over a month after leaving the Fed in 2014 before earning some $250,000 for a private talk in Abu Dhabi. He followed that up with similarly-priced private dinners with investors in New York, at which he predicted rates would remain low for a long time.
In the case of former Fed chiefs, who can earn an annual salary in one night and have no constraints on expressing their views provided they do not broach confidential matters, those insights could potentially move markets.
Although, in the case of Yellen – who just last year said there would not be another major financial crisis “in our lifetimes”, probably not.
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As for Zervos shown in the pic above, Reuters was not able to him; the only trace was his Tuesday tweet which said “an amazing evening last night hosting Janet Yellen for our clients in NY.”
— David Zervos (@zervoscorfu) April 4, 2018
In addition to his well-known pro-Fed bias, Zervos is also known for his jolly, partying ways, and is not shy about it: here is an instagram photo of him on Halloween 2017, dressed as, quite literally, a dickhead.