Correlation or Causation: Federal Reserve Humor

by Elaine Schwartz    •    Jan 19, 2013    •    1017 Views

I can remember a combination of euphoria and uneasiness as we we had some early signs of the credit crisis during 2007, the stock market peaked in October, and then in December the recession began. With a typical 5-year lag, the transcripts of the 2007 Federal Open Market Committee (FOMC) meetings were just released. Reflecting either correlation or causation, FOMC laughter “outbreaks” hit highs during the summer but quickly plunged with the economy.

2007 FOMC Laughter Chart

In its humor chart, the National Journal doubled the laughter incidents from single day meetings so they could be compared more accurately to 2 day meeting.

In its  2007 FOMC humor chart, the National Journal doubled the number of laughter incidents for one day meetings to  more accurately compare them to 2 day meetings.

Two examples of Fed humor:

  • Dallas Fed President Richard Fisher (referring to firms that had stopped buying securities they did not understand) “…If you will forgive me, you might say we have gone from the ridiculous to the subprime.”
  • Richmond Fed President Jeffrey Lacker: “Let the transcript say ‘groan.”[Laughter]


  • NY Fed President Timothy Geithner: I just want to start by saying in defense of the Empire  State that there is no way– the only way that Richmond could be bigger than New York and  Philadelphia is if you don’t count the substantial business we have in the manufacturing of financial  products.
  • Fed Vice Chairman Donald Kohn: It’s a lot smaller business than it used to be. [Laughter]


As the transcripts reflect, the Federal Reserve was slow to recognize the severity of the downturn. So, to conclude, here is some humor from Fed Chair Ben Bernanke, expressed last week, at the University of Michigan.

Question: “Now that you have actually lived through a major global crisis, I wonder if you could tell us what surprised you most?”

Dr. Bernanke: “The crisis.”

Sources and Resources: As always, Comedy Central’s  Indecision was a perfect source of humor, this time for the 2007 FOMC transcripts, while my graph was from a National Journal article. For the serious side, this NY Times article has excerpts from the FOMC meetings and here is Chairman Bernanke at the University of Michigan’s Ford School.

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