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Janet Yellen's Blood-Splattered Face Keeps SocGen's Albert Edwards Awake At Night

How Tuesday's Humphrey-Hawkins hearing could become a St. Valentine's Day Massacre.
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As the most well-known dictum in journalism goes, “If it bleeds, it leads”: The more bodily fluids a story contains, the more eyeballs it'll attract. Société Générale's Albert Edwards apparently knows the trick. In his latest letter, the strategist wondered whether Fed Chair Janet Yellen will trigger a “St Valentine's Day Massacre” when she addresses the Senate Banking Committee Tuesday on the state of the economy.


About the actual St. Valentine's Day Massacre: On the morning of February 14, 1929, four gangsters under the employ of Al Capone lured seven members of a rival organization into a garage on the North Side of the Chicago, then opened fire with a shotgun and two Tommy guns, unleashing a hail of bullets that eviscerated their victims in a matter of seconds.

This gory image is what Edwards wants you to imagine as people sell lots of bonds in the event of hawkish Yellen comments on Tuesday triggering a bond selloff. Each basis point uptick in the 10-year Treasury bond yield represents another bullet screaming through the flesh of Peter “Goosey” Gusenberg or Albert “Gorilla Al” Weinshank.

You can't blame Edwards for reaching for the red paint to illustrate his hypothetical. If the 35-year secular bond bubble does indeed burst, as Edwards has imagined, you're going to want to use language that really turns some heads. But the business press already uses words like “beating,” “pounding” and even “bloodbath” with such regularity that they've lost all ability to shock.

So props to Edwards for the novel idea of attaching his thesis to the anniversary of an actual historical event gruesome enough to be lodged in the national memory. And if that analogy somehow didn't hook you, here's another grisly image:

“The hawk may yet swoop down, talons at the ready, and devour that cooing, market-friendly dove,” Edwards said in his note.

Stay safe out there, folks.

Bond traders fear Janet Yellen is planning a ‘St. Valentine’s Day Massacre’ [Marketwatch]



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