Tracking the Fed’s Integrity

Preamble

By now every financial market participant and pundit with a pulse expects the FOMC to raise interest rates at its meeting on March 15th, 2017. The FOMC is finally executing on a plan for gradually normalizing interest rates that was outlined and initiated in December 2015, then promptly abandoned. Whether the FOMC was suffering from a collective form of economic attention deficit disorder, paralyzed into inaction by the potential impact of political events in Europe and the US, or simply nodding off at the rate switch, the dithering badly eroded their credibility. The conveniently hawkish reversal post-election has now cast doubt on their integrity. 

Here we provide a backwards prospective of FOMC decisions, from Dec 2015 through Dec 2016, as reasoned in the FOMC press conference transcripts. The progression from "we're finally ready to do this, baby steps!" to the FOMCs attempt at a Jedi mind-trick, "monetary policy magically tightens because we lowered our pretend target" is worth the review. Unfortunately, it calls into question the monetary policy objectivity of this FOMC, which continues to emphasize political or financial market gyrations ahead of its mandate. 

Why We Focus on FOMC Meetings with Press Conferences

There are eight regularly scheduled FOMC meetings per year (FOMC meeting calendars, statements and minutes ) spaced approximately six weeks apart. In March 2011, then-Chair Ben Bernanke announced that he would begin holding quarterly press conferences after FOMC meetings, in order to “further enhance the clarity and timeliness of the Federal Reserve’s monetary policy communication.” In theory, the press conferences - which occur every other meeting - should impact neither the timing or pace of FOMC decisions to raise or lower rates. In reality, financial market participants and Fed watchers quickly presumed any substantive shift in the stance of monetary policy would only occur at “live” meetings, when the Chair has the opportunity to elaborate on (or perhaps justify) the FOMC’s decision during the press conference. Although FOMC members have murmured from time to time that meetings without press conferences scheduled should still be considered “live”, in fact no significant change or communication regarding monetary policy or the FOMC’s economic outlook has since occurred at a meeting which is not followed by a press conference.

The FOMC also releases an updated version of its Summary of Economic Projections (SEP) at each regularly scheduled meeting which is followed by a press conference. The SEP contains summary data of FOMC members economic forecasts, including:

·        Changes in real economic growth (GDP);

·        The unemployment rate;

·        Inflation, as measured by personal consumption expenditures (PCE) and core PCE; and

·        Projections for the appropriate path of monetary policy - the level of the fed funds target rate –consistent with their economic outlook. 

Objectives of Monetary Policy

Excerpts from a Federal Reserve Board FAQ titled, What are the Federal Reserve's Objectives in Conducting Monetary Policy? (edited for brevity):

The Congress established the statutory objectives for monetary policy--maximum employment, stable prices, and moderate long-term interest rates--in the Federal Reserve Act.

The FOMC judges that inflation at the rate of 2 percent (as measured by the annual change in the price index for personal consumption expenditures, or PCE) is most consistent over the longer run with the Federal Reserve's statutory mandate.

The maximum level of employment is largely determined by nonmonetary factors that affect the structure and dynamics of the job market. These factors may change over time and may not be directly measurable. In the FOMC's December 2016 Summary of Economic Projections, Committee participants’ estimates of the longer-run normal rate of unemployment ranged from 4.5 to 5.0 percent and had a median value of 4.8 percent.

Two objectives of monetary policy: The Fed has long interpreted its statutory objectives for monetary policy as a dual mandate for (1) maximum employment and (2) low inflation ( = stable prices + moderate long-term interest rates).  

Not an objective of monetary policy: Everything else. That includes stoking or impeding US economic growth, global economic growth, fiscal policy, tax policy, the integrity or stability of the financial markets (which arguably falls under the Fed’s regulatory objectives and mandate, but not its monetary policy objectives), fretting about the Brexit vote, the Greek debt crisis, performance of the equity markets, or the volatility of the foreign exchange markets. Just to name a few.

FOMC Meeting of December 16, 2015 – liftoff.

The FOMC finally begins what is billed as a gradual tightening of monetary policy, and raises interest rates from the “zero lower bound.” The FOMC increases the target fed funds rate from a range of 0% to 0.25%, to a range of 0.25% to 0.50%, and the IOR rate in tandem from 0.25% to 0.50%. The median forecast of FOMC members, as released in the Dec 16 2015 SEP , projects the appropriate path of monetary policy would lift the upper bound of the fed funds target range by 100 bps, to 1.50% by year-end 2016 and 2.50% by year-end 2017, assuming their economic forecasts are achieved.

Throughout this piece the indented text are excerpts from Chair Yellen’s remarks from various FOMC press conference transcripts (edited for brevity, formatting and subheadings added for clarity, emphasis mine):

Overview

This action marks the end of an extraordinary seven-year period during which the federal funds rate was held near zero to support the recovery of the economy from the worst financial crisis and recession since the Great Depression. It reflects the Committee’s confidence that the economy will continue to strengthen.

Room for further improvement in the labor market remains, and inflation continues to run below our longer-run objective.

The process of normalizing interest rates is likely to proceed gradually, although future policy actions will obviously depend on how the economy evolves relative to our objectives of maximum employment and 2 percent inflation.

Unemployment and GDP

The unemployment rate, at 5 percent in November, is down 0.6 percentage point from the end of last year and is close to the median of FOMC participants’ estimates of its longer-run normal level.

The improvement in employment conditions this year has occurred amid continued expansion in economic activity. U.S. real gross domestic product is estimated to have increased at an average pace of 2¼ percent over the first three quarters of the year.

Inflation

Overall consumer price inflation— as measured by the price index for personal consumption expenditures—was only ¼ percent over the 12 months ending in October.

However, much of the shortfall from our 2 percent objective reflected the sharp declines in energy prices since the middle of last year, and the effects of these declines should dissipate over time.

The appreciation of the dollar has also weighed on inflation by holding down import prices. As these transitory influences fade and as the labor market strengthens further, the Committee expects inflation to rise to 2 percent over the medium term.

Rationale for Raising Interest Rates

With inflation currently still low, why is the Committee raising the federal funds rate target?

Much of the recent softness in inflation is due to transitory factors that we expect to abate over time, and diminishing slack in labor and product markets should put upward pressure on inflation as well.

In addition, we recognize that it takes time for monetary policy actions to affect future economic outcomes. Were the FOMC to delay the start of policy normalization for too long, we would likely end up having to tighten policy relatively abruptly at some point to keep the economy from overheating and inflation from significantly overshooting our objective. Such an abrupt tightening could increase the risk of pushing the economy into recession.

Fed Funds Forecast

The median projection for the federal funds rate rises gradually to nearly 1½ percent in late 2016 and 2½ percent in late 2017.

As the factors restraining economic growth continue to fade over time, the median rate rises to 3¼ percent by the end of 2018, close to its longer-run normal level.

The Committee currently expects that, with gradual adjustments in the stance of monetary policy, economic activity will continue to expand at a moderate pace and labor market indicators will continue to strengthen. Although developments abroad still pose risks to U.S. economic growth, these risks appear to have lessened since last summer. Overall, the Committee sees the risks to the outlook for both economic activity and the labor market as balanced.

So on December 16^th, 2015, the FOMC itself projected they would raise the target rate 4 times in 2016, or approximately at every other meeting (presumably at the “live” meetings). Instead they raised interest rates once - a year later at the December 2016 meeting. What the hell happened?

FOMC Meeting of March 16, 2016 – the FOMC immediately gets cold feet, and pauses the rate hikes.

Excerpts from Chair Yellen’s remarks at the press conference (edited for brevity, formatting and subheadings added for clarity):

            Overview

Today the Federal Open Market Committee decided to maintain the target range for the federal funds rate at ¼ to ½ percent. Our decision to keep this accommodative policy stance reflects both our assessment of the economic outlook and the risks associated with that outlook. The Committee’s baseline expectations for economic activity, the labor market, and inflation have not changed much since December: With appropriate monetary policy, we continue to expect moderate economic growth, further labor market improvement, and a return of inflation to our 2 percent objective in two to three years. However, global economic and financial developments continue to pose risks. Against this backdrop, the Committee judged it prudent to maintain the current policy stance at today’s meeting.

Unemployment

The labor market continues to strengthen. Over the most recent three months, job gains averaged nearly 230,000 per month, similar to the pace experienced over the past year.

The unemployment rate was 4.9 percent in the first two months of the year, about in line with the median of FOMC participants’ estimates of its longer-run normal level.

A broader measure of unemployment that includes individuals who want and are available to work but have not actively searched recently and people who are working part time but would rather work full time has continued to improve.

Of note, the labor force participation rate has turned up noticeably since the fall, with more people working or actively looking for work as the prospects for finding jobs have improved.

But there is still room for improvement: Involuntary part-time employment remains somewhat elevated, and wage growth has yet to show a sustained pickup.

Inflation

Overall consumer price inflation—as measured by the price index for personal consumption expenditures—stepped up to 1¼ percent over the 12 months ending in January, as the sharp decline in energy prices around the end of 2014 dropped out of the year-over-year figures.

Core inflation, which excludes energy and food prices, has also picked up, although it remains to be seen if this firming will be sustained. In particular, the earlier declines in energy prices and appreciation of the dollar could well continue to weigh on overall consumer prices.

But once these transitory influences fade and as the labor market strengthens further, the Committee expects inflation to rise to 2 percent over the next two to three years.

Economic Outlook

The median growth projection edges down from 2.2 percent this year to 2 percent in 2018, in line with its estimated longer-run rate.

The median projection for the unemployment rate falls from 4.7 at the end of this year to 4.5 percent at the end of 2018, somewhat below the median assessment of the longer-run normal unemployment rate.

The median inflation projection rises from 1.2 percent this year to 1.9 percent next year and 2 percent in 2018.

Rationale for Not Raising Interest Rates

Since the turn of the year, concerns about global economic prospects have led to increased financial market volatility and somewhat tighter financial conditions in the United States, although financial conditions have improved notably more recently.

Economic growth abroad appears to be running at a somewhat softer pace than previously expected.

These unanticipated developments, however, have not resulted in material changes to the Committee’s baseline outlook (because):

·       Market expectations for the path of policy interest rates have moved down, and

·       The accompanying decline in longer-term interest rates should help cushion any possible adverse effects on domestic economic activity.

Indeed, while stock prices have fallen slightly since the December meeting and spreads of investment-grade corporate bond yields over those on comparable-maturity Treasury securities have risen, mortgage rates and corporate borrowing costs have moved lower.

The Committee will continue to monitor these developments closely and will adjust the stance of monetary policy as needed to foster our goals of maximum employment and 2 percent inflation.

Fed Funds Forecast

Compared with the projections made in December (editor: only 3 months ago) the median path is about ½ percentage point lower this year and next; the median longer-run normal federal funds rate has been revised down as well.

Most Committee participants now expect that achieving economic outcomes similar to those anticipated in December will likely require a somewhat lower path for policy interest rates than foreseen at that time.

Followed by two paragraphs of why the FOMC member’s projections for the fed funds rate are individual forecasts, but not “plans” for future policy, because the future is uncertain and unexpected things happen and don’t ever hold us to a decision or an outlook. God forbid anyone need to make investment decisions or recommend a trading strategy based upon future interest rates.

First question out of the gate (from my hero, Steve Liesman):

Madam Chair, as you know, inflation has gone up the last two months. We had another strong jobs report, the tracking forecasts for GDP have returned to 2 percent, and yet the Fed stands pat while it’s in a process of what it said it launched in December was a “process of normalization.” So I have two questions about this:

1.     Does the Fed have a credibility problem, in the sense that it says it will do one thing under certain conditions but doesn’t end up doing it?

2.     And then, frankly, if the current conditions are not sufficient for the Fed to raise rates, well, what would those conditions ever look like?

I will spare you Chair Yellen’s answer, but it boils down to the following:

·        The “median forecast” for the appropriate path of monetary policy is meaningless, because the FOMC is ruled by the doves, and I am their queen.

·        Global growth outside the United States is slowing and there has been some widening of credit spreads (the spread between US Treasuries and investment grade or high yield bonds). Despite the fact that these events have at best tertiary impact on our mandate, we are still collating.

·        So when we said we were going to gradually raise rates, we meant at the pace of a tortoise, because we prefer to make no decision at all than to make a decision which might, you know, have consequences.

FOMC Meeting of June 15^th, 2016 - wherein the FOMC enters the Twilight Zone.

I can’t with this meeting. Here’s the synopsis:

·        The economic data was mixed. It vexes us.

·        GDP growth in late 2015 / early 2016 was “lackluster,” though they expected it to improve.

·        Job market gains averaged 200k per month - though April and May were weaker at 80k per month - and the unemployment rate fell to 4.7% in May.

·        Yellen (roughly paraphrased): “yabbut, that’s because more people dropped out of the labor force (they’re called boomer retirees, Janet), and besides, there are still too many people working part-time who want full-time jobs.” Editor’s note: Not Your Problem.

·        The year-end median forecast for the unemployment rate – which has been revised lower to 4.6% - is now below the FOMC’s assessment of the longer-run normal unemployment rate.

·        Average hourly earnings increased 2.5% over the prior 12 months, a “welcome indication that wage growth may finally be picking up.” Grammar and thought police: Wage growth, in fact, picked up. For a whole year. Remember, it’s historical data.

·        Inflation rose to 1% for the 12 months ending in April. Core inflation (ex food and energy) was running closer to 1.5% over the same period. Both moving higher towards the stated target.

            Rationale for Still Not Raising Interest Rates

This decision (not to raise interest rates) reflects the Committee’s careful approach in setting monetary policy, particularly in light of the mixed readings on the labor market and economic growth that I have discussed, as well as continuing below-target inflation.

Although the financial market stresses that emanated from abroad at the start of this year have eased, vulnerabilities in the global economy remain.

In the current environment of sluggish global growth, low inflation, and already very accommodative monetary policy in many advanced economies, investor perceptions of, and appetite for, risk can change abruptly.

We continue to expect that the evolution of the economy will warrant only gradual increases in the federal funds rate. We expect the rate to remain below levels that are anticipated to prevail in the longer run because headwinds weighing on the economy mean that the interest rate needed to keep the economy operating near its potential is low by historical standards. These headwinds—which include developments abroad, subdued household formation, and meager productivity growth—could persist for some time.

Editor’s note: The “vulnerabilities in the global economy” and “developments abroad” that Yellen is alluding to is a feared reaction to the UK’s Brexit vote, which is mere days out from this meeting (it took place on June 23^rd, 2016). She is asked about it during the Q&A, but we don’t rehash it since:

a)     It has so far not turned out to be some huge global disaster; and

b)     Even the most bearish economists did not expect it to – nor has it had - a big impact on the US economy.

On a closing note, the FOMC reports that its (completely meaningless and laughably wrong) median forecast / projection for the fed funds rate for year-end 2017 is now 1.50%, rising to 2.50% for year-end 2018.

FOMC Meeting of September 21, 2016 – the one where the FOMC actually said “instead of raising rates we lowered our forecast.”

In a nutshell:

o   Economic growth had substantially improved. The drivers were higher household spending, based on solid increases in household incomes, consumer sentiment and wealth.

o   Job gains rebounded to average ~180k per month over the preceding 4 months, and the unemployment rate was stable at 4.9%.

o   Inflation was just below 1%, with the shortfall again attributed to the transitory factors of low energy and import prices. Core inflation was 1.5%.

  

In fact, the economy was doing so well, that the focus of the Yellen’s remarks revolved around a laborious attempt to justify not raising rates.

The “Neutral Fed Funds Rate” Gets a Promotion

The recent pickup in economic growth and continued progress in the labor market have strengthened the case for an increase in the federal funds rate. Moreover, the Committee judges the risks to the outlook to be roughly balanced. So why didn’t we raise the federal funds rate at today’s meeting? Our decision does not reflect a lack of confidence in the economy.

(blah blah nothing to see here blah)

We continue to expect that the evolution of the economy will warrant only gradual increases in the federal funds rate over time to achieve and maintain our objectives. That’s based on our view that the neutral nominal federal funds rate—that is, the interest rate that is neither expansionary nor contractionary and keeps the economy operating on an even keel—is currently quite low by historical standards. With the federal funds rate modestly below the neutral rate, the current stance of monetary policy should be viewed as modestly accommodative, which is appropriate to foster further progress toward our objectives. But since monetary policy is only modestly accommodative, there appears little risk of falling behind the curve in the near future, and gradual increases in the federal funds rate will likely be sufficient to get to a neutral policy stance over the next few years.

So this economic construct – this fictitious rate that the FOMC made up – moves around based on their projections for some future state of the economy. Now instead of raising interest rates congruent with: their monetary policy objectives, and the plan outlined nine months prior (and almost immediately abandoned), the FOMC claims that the target fed funds rate at a whopping 0.50% is now only “modestly accommodative” because it’s long term neutral level is lower than previously guesstimated. Three months prior in June the FOMC characterized the same fed funds rate as "very accommodative". 

Can someone design an index out of this rate? I know some former Libor traders who would love to make a market in it.

First ball, fast ball hitter Steve Liesman:

Madam Chair, critics of the Federal Reserve have said that you look for any excuse not to hike, that the goalposts constantly move. And it looks, indeed, like there are new goalposts now when you say looking for “further evidence” and—and you suggest that it’s evidence that labor—labor market slack is “being taken up.” Could you explain what “for the time being” means, in terms of a time frame, and what that further evidence you would look for in order to hike interest rates? And also, this notion that the goalposts seem to move, and that you’ve indeed introduced a new goalpost with this statement.

I think you had to be there to truly appreciate the obfuscation in her answer. If you’re interested, it is in the transcript (starting on page 5 of 24).

Tuesday, November 8, 2016 - Donald Trump wins the presidential election and Republicans take a majority of seats in both chambers of Congress.

Over time: Legislation dating back to 2008 to “audit the Fed” is revived. Pressure on Yellen to resign as Fed Chair increases. Yellen states publicly and candidly that she intends to complete her term as Chair, which ends in January of 2018. Fed Governor Daniel Tarullo – architect of an enormous amount of banking and financial markets regulation phased in following the financial crisis – announces his resignation, effective April 2017. Trump and the Republicans begin planning legislation to scale back parts of Dodd-Frank, to repeal or reconstruct pieces of Obamacare, to implement fiscal stimulus, to revamp and simplify tax policy. The equity markets tear higher.

FOMC Meeting of December 14^th, 2016 – the FOMC raises the target fed funds rate and nudges their economic projections higher.

The economic growth picture and employment data was roughly in-line with where it had been in September, though the unemployment rate hit a post-crisis low of 4.6% in November, the lowest level since 2007. Inflation ticked higher to 1.5%, as expected due to the rebound in energy prices. Core inflation rose to 1.75%.

The more meaningful change was the shift in tone in Yellen’s prepared remarks for the press conference. Gone were several of the dovish explanations for why the FOMC was effectively discounting good data by emphasizing lingering areas of weakness.

Some excerpts:

Today the Federal Open Market Committee decided to raise the target range for the federal funds rate by ¼ percentage point, bringing it to ½ to ¾ percent. In doing so, my colleagues and I are recognizing the considerable progress the economy has made toward our dual objectives of maximum employment and price stability. Over the past year, 2¼ million net new jobs have been created, unemployment has fallen further, and inflation has moved closer to our longer-run goal of 2 percent. We expect the economy will continue to perform well, with the job market strengthening further and inflation rising to 2 percent over the next couple of years.

Job gains averaged nearly 180,000 per month over the past three months, maintaining the solid pace that we’ve seen since the beginning of the year. Over the past seven years, since the depths of the Great Recession, more than 15 million jobs have been added to the U.S. economy. The unemployment rate fell to 4.6 percent in November, the lowest level since 2007, prior to the recession. Broader measures of labor market slack have also moved lower, and participation in the labor force has been little changed, on net, for about two years now, a further sign of improved conditions in the labor market given the underlying downward trend in participation stemming largely from the aging of the U.S. population.

Recall the transcript for the June 2016 meeting, where the drop in the unemployment rate in April to 4.7% was written off by the FOMC because it was driven by a drop in labor force participation, in favor of focusing on a measure of labor market slack – the number of part-time workers who want full-time jobs. These two metrics, which were worrisome enough in June and September to contribute to the FOMC deciding not to raise rates, are suddenly improving if understood in the context of a long-term trend. No kidding.

The more disturbing theme is that the FOMC press conference remarks seem to have taken on the tone of a campaign speech. It could be a campaign for Yellen to keep her job, for the Federal Reserve to avoid additional scrutiny of their regulatory and policy decisions, or a long overdue recognition that eight years post-crisis the economy has recovered and it may continue to improve if the FOMC gets its fanny off the yield curve.

FOMC Meeting of Tuesday, March 15^th, 2017 – if you don’t believe the Fed is going to raise rates and come out sounding like a bunch of hawks, you clearly haven’t been paying attention.

If you’re still reading, I applaud you. I am genuinely, deeply grateful.

Westminster Part II: Fashion Police Edition

Apologies for the delay in recapping the grand finale of the 2017 Westminster Dog Show. I was hoping to locate an online version of the telecast so I could re-watch it, in order to repeat verbatim some of the comments made by the announcers. Because I, ah, want to make fun of them and “generally speaking” feel it’s inappropriate to do so unless I can be precise about what was said.

Since there is apparently no accessible online version, I have resorted to paraphrasing some of the remarks from memory. Two caveats before we begin:

a)      Sincere apologies for any comments that I misconstrue; and

b)     Fair warning that I may have inflected some of the reported commentary with my own biases.

Not Burying the Lede

Winner of the 2017 Westminster Dog Show: Rumor, the German shepherd!

A bridesmaid to the winner in 2016 (CJ, a handsome German shorthaired pointer) the 5 year old female, described by the best in show judge as “magnificent,” came back this year and took top honors. Rumor claims a prize of zero dollars, but instant fame among the dog cognoscenti – you know, those snappily dressed people that you see toting around bags of their dog’s poop.

Honorable mention: to Devlin, the female boxer and her handler, Diego Garcia. They shared a snuggle after she won the working group. I almost teared up.

Bowing to the Breeders

What’s in a name: I mentioned in the recap of night 1 that it was refreshing to have the commentators and onscreen text finally drop the cumbersome and at times ridiculous AKC registered names of the dogs, e.g. Ch. K-Run’s Park Me In First, in favor of using their everyday or call names, e.g. Uno.

Apparently someone (most likely the breeders, whose names are typically incorporated into the registered names) also noticed that the registered names had been dropped, and must have thrown a hissy fit between nights 1 and 2. Sure enough, by night 2 the registered names not only made a reappearance in the onscreen text, but also were being used (grudgingly) by the announcers. You could hear the annoyance in commentator Gail Miller Bisher’s voice as she snapped through the registered names, saying them as if a water gun were pointed at her head, until she could get to “Charlie!”

Shifting the Focus

Speaking of changes between nights 1 and 2: Gail Miller Bisher is the new commentator, who has replaced “the voice of Westminster,” David Frei. Frei was extremely knowledgeable about the breeds, well known for injecting humor and warmth into the telecast. He also owns a Brittany, which makes him a kindred spirit of mine, and would unabashedly root for the breed to win the sporting group (which they never did during his 27 year reign).

Gail, taking over as Fox replaced USA Networks, once won second place at Westminster in the Junior Showmanship competition, and is an AKC-licensed conformation judge.

“I grew up breeding, showing and training,” Bisher told USA TODAY Sports during Saturday’s “Meet the Breeds” event on the West Side of Manhattan. “I was paid by owners to show their dogs.”

The award for self-promotion: Gail is knowledgeable about the breeds too, but focused much of her commentary throughout the night (at times to the point of overshadowing the dogs) about how difficult and exacting it is to be a dog handler. During the best in show judging, as the top dogs from each group were taking a final trot around the ring for the judge to declare a winner, her co-host asked her “at this point, how much of it is the dog and how much is the handler?” “Oh, it’s 100% the handler.” *ahem*

Fashion Police

A note about footwear: I realize handlers probably require flat, well soled shoes to run with the dogs around the ring. I am not suggesting anyone run in heels (though the judge who was wearing them looked spectacular). But you are on national TV, in a premiere event, and the camera is going to focus on that dog at your feet. Bypass the sparkly ballet flats from Payless. Take a cue from the male dog handlers - spring for a nice leather loafer. The female handlers wearing flat knee high boots: rocked it.

What’s with the boobs? Pardon me for being catty, but on night 1, Gail was wearing a dress that was so low cut the cameramen were clearly getting distracted by her cleavage. I get that we are now in an era where the chicks on the weather channel are dressed to go out clubbing as soon as they walk off the set. But this is a dog show. You are not impressing the dogs. I think Gail may have gotten a tap on the shoulder, because by the second night she was sporting much more modest attire.

For the Love of Shelter Dogs

This will be my last time covering the Westminster Dog Show. The more I have learned about breeding show dogs – which is almost entirely to achieve a rather dated and random physical “standard”, not for health, physical well-being or stable temperament – the more I have come to despise the practice. Many breeds have been nearly ruined due to overbreeding, and suffer debilitating health problems and hereditary illnesses because e.g. people think its cute for dogs to have short turned up noses, elongated necks or small faces. Ironically, veterinarians and animal scientists point out that the German shepherd breed has perhaps suffered some of the worst health and emotional consequences as a result of this type of breeding. Please adopt from a shelter or a responsible, non-show dog breeder. Dogs rule. 

Cats at Westminster. (Dogs protest. Plot to resist.)

Recap of night 1 below. 

For the first time ever - and god only knows why - the American Kennel Club added cats to its “Meet the Breeds” event at the Javits Center leading up to the 141^st Westminster Dog Show. I can only imagine the backstage commentary when the show’s raison d’etre became aware of this development.

                Boston terrier: Does anyone smell a cat? I swear I smell a cat.

                The entire hound group: 127 cats. Caught their scents on the train when we were still in New Jersey. 38 long-haired, 70 short-haired, 19 hairless.

                Miniature poodle: Hairless? Hairless cats?! Boy, those must be dumb looking.   

    Labrador retriever: *rolls eyes*

    Affenpinscher: Why are they here? I can take ‘em! … Are any of them bigger than me? I can take ‘em!

    Mastiff: It’s part of the AKC’s diversity and inclusion initiative.

                Border collie: Let’s herd the cats! Let’s herd the cats!

                Clumber spaniel: I will pretend I did not just hear you say that. Smartest dog breed. Psssh.

Media coverage for the show has moved from longtime broadcaster USA Network (owned by NBC) to Fox Sports. This has produced a variety of changes.

In the plus column:

·         Mary Carillo is gone. Most consider her a legend in sports broadcasting, particularly in tennis. I thought she made Brent Musburger sound articulate and elegant by comparison. (Yeah, I know. We’re having a “shoot the pink elephants day” here in North Carolina.)

·         The onscreen text has finally quit identifying the dogs by their AKC registered names, e.g. GCH CH Cottage Lake’s Our Lady of Fatima (I did not make that up). I get that those names are useful to identify the breeder and can apparently reference the bitch or sire, but:

a)      No one calls their dog by that name; and

b)      Dog attention spans for complex sentence structure range from “toddler” to “are you still talking?”

Happily, both the text and the announcers now refer to the dogs by their everyday call names, e.g. Boozer.

In the still needs improvement column:

·         Fox has added a backstage reporter, whose functions seem to include (a) cutesy to the point of cringe-inducing gushing over the dogs; and (b) service of the peculiarly millennial need to be updated while watching the dog show on the social media activity of other people watching the dog show.

·         Over the years there has been breed inflation at Westminster, with 202 breeds now eligible to compete in 7 groups for best in show (kind of like the Winter Olympics adding events from the X Games). Six hours of primetime TV coverage over two days is trying for even the most shameless of dog lovers (raises hand). Take a lesson from the flagging viewership of the Grammy’s and Oscars. Please shorten it.

Hound Group

Motto (and fair warning): “You can take the dog out of the hunt, but you can’t take the hunt out of the dog.”

Celebrity member: The Irish Wolfhound - the breed you often see strolling through the background in BBC miniseries. Imposing and regal, they were favorites of Irish monarchs and English nobility.

The “don’t try to upstage the dog” award goes to: the (professional) handler for the Basenji, who was wearing a navy blue and white, multi-pattern plaid suit. Looked like the mobster in a Bugs Bunny cartoon. You could almost hear the dog mumbling, “Don’t run next to me. It’s too embarrassing.”

Winner: Duffy, the Norwegian Elkhound, who barked happily at the crowd after being awarded the group ribbon.

Toy Group

*Sigh* Centuries of breeding to be companion dogs has bred most of the classic “dog” characteristics out of them. Cute and cuddly, they tend to sport expensive hairdos and have owners who dress them in actual clothes. The genuinely good, humorous and loving nature of these dogs means they tolerate – perhaps even appreciate – such indulgence.

Seriously, just get a cat: The commentators describe several of the breeds as having a “cat like nature” because they are fastidious, licking and grooming themselves to keep clean. Owners of Labrador Retrievers everywhere laugh hysterically.

Oooh, awkward: In front of a (not even close to) capacity crowd at Madison Square Garden, and perhaps tens of thousands of TV viewers watching from home, the handler for the Brussels Griffon tripped and face planted on the astro turf as they were entering the ring. Narrowly avoiding squashing the dog. Maybe you want to try handling Great Danes, who would at least laugh that off?

And then this happened: After being removed from the podium, the toy fox terrier was to begin his star turn around the ring. The dog abruptly stopped, and began to hunch down into a squat (recognized by every dog owner on the planet), refusing to be budged despite several nervous jerks on his lead. Gail, the color commentator, tried to cover: “Oh, ha ha. The dog is being stubborn. Typical for the breed.” The handler – no doubt in a blind panic - tugged again. The dog looked annoyed, but gamely resumed its trot around the ring. Pandemonium avoided. (He did not make the finals.)

Winner: Chuckie the Pekingese. Looks like a dog made out of dryer lint.

Non-Sporting Group

20 breeds; 10 best in show winners, almost all of which have been poodles.

The miniature and standard poodle are in this group. The national dog of the French. Thus, the stupid looking haircut.

No, really: Poodles are tremendously smart and loyal dogs. Bred to hunt as water retrievers by the Germans, their heavy, curly coats were trimmed close to the body to be manageable when wet, with the full coat left around the joints for insulation. The dogs became popular in France, and by the early 18^th century the previously utilitarian cut had evolved into an elaborate pompadour on the head (mimicking the style popular at the time of Louis XVI) with fur bracelets on the legs and a pompom on the tail.

Winner: A miniature poodle named Aftin. Qu’elle surprise.

Overplaying the role: “Handlers develop a special bond with the dogs. They become so close that they can read each others minds.” I can read my dogs minds too. “Give me your cheeseburger.” “Quit hogging the couch.” “I don’t know who chewed the fringe off that rug.” It’s not like they do vector calculus in their heads.

Herding Group

Even the announcers were beginning to get tired by the time the herding group took the ring. Several of the dogs were visibly agitated during the judging.

Winner: Rumor, the spectacular German Shepherd, wins the herding group for the second year in a row.

Best dog names of the night:

Pixie Dust

Wink

Slick

Lazarus

            Cat

More to follow, as night 2 kicks off.