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Pastimes : Clown-Free Zone... sorry, no clowns allowed
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To: Lucretius who started this subject9/10/2002 1:46:23 PM
From: stan_hughes  Read Replies (1) of 436258
 
Briefing.com a bit testy about the Beige Book tomorrow -

11:35 ET ******

Beige Book : We have said it before but it's worth saying again: ignore the Beige Book. The most damning critique of this compendium of economic anecdotes is this: the Fed ignores it.

The Beige Book is produced by the twelve regional Fed banks, which survey businesses in their region to get a flavor for current economic activity. Various government statistical agencies engage in similar surveys, with the difference being that they tend to sample tens of thousands of businesses to produce monthly economic statistics such as nonfarm payrolls and retail sales. Why we would rely on a minute sampling of anecdotes when we have available a massive sampling of numbers is perplexing, to put it mildly.

Full transcripts of Federal Reserve meetings are available with a 5-year lag, and we have occasionally looked back at these transcripts to see how often Fed members mention the Beige Book in their policy discussions. The answer? Not often.

Far more influential in the Fed's policy discussions are the Green and Blue Books. Both are put together by the Fed Board of Govenors' staff, with the Green Book providing an economic forecast and the Blue Book outlining policy options. If you had to have only one book, you would make it the Blue.

Unfortunately, you cannot have more than one book - you only get the Beige, because that is the only one made public. It's certainly no coincidence that the Book which offers the least insight into the economy and Fed policy is the Book that the Fed is willing to share. The market occasionally reacts to Beige Book headlines and may again tomorrow with its noon release, but be forewarned that this publication offers little of value. - Greg Jones, Briefing.com
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