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Larry Summers: Use The Rising Market As An Indicator Of Our Success, But Ignore It When It Is Going Down Please

Tyler Durden's picture




 

Larry is asked on his view of the ever escalating war with Wall Street
and its implications: "If you do the right things for the fundamentals
and for soundness, over time markets tend to work out. And if you let
your policies be guided by day to day market movements, that's what
tends to be the problem.
If you ask yourself 'how did we get here?' one
central part of how we got there, one central part was all those people
who believed all those prices, believed all those credit spreads, who
let day to day market levels be their guide through 2006 through the early part of 2007." Wow, Larry - maybe Obama's speechwriter should tone down the constant reference to the "Dow Jones" in that case to highlight just what a great job the increasingly clueless president is doing.

As the administration's every TV appearance is predicated first and foremost by indicating just how high the market has "risen" in the past x minutes, hours, days, and months, Larry's statement that it is perfectly ok to use the market response when things are going ok, but to ignore it when its says the administration has fucked up beyond compare, is the supreme epitome of hypocrisy. Then again, with his imminent forced departure, we are confident he has other things to worry about.

Some more disclosure: it turns out the ban "memo" had been written just "after the first of the year, long before the events in Massachusetts." Presumably it was also written also long-after Geithner claimed in Congressional testimony, that prop trading was perfectly normal.

Also Larry Summers now apparently has a vendetta with Larry Kudlow. When asked if the economic team for President Obama is in disarray, Summers replies: "I guess I would suggest that his sources are probably about as good as his sources who were saying that given the imminent sale of NBC to Comcast, there is vast disarray in CNBC."

Well, uh, so it is true then?

 

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Fri, 01/22/2010 - 11:16 | 202126 lsbumblebee
lsbumblebee's picture

Sounds like the Larrys are having a cat fight. You would think those two pampered pussies would have nothing to disagree about. 

Fri, 01/22/2010 - 12:25 | 202228 Anonymous
Anonymous's picture

The whole logic reminds me of some other issue...oh yes!
When the temperatures are high, it is global warming.
When temps go low, it's climate change.

Heads I'm right, tails I'm right.

Fri, 01/22/2010 - 12:44 | 202250 SilverIsKing
SilverIsKing's picture

It's "heads I'm right, tails I'm not wrong."

Fri, 01/22/2010 - 14:11 | 202443 phaesed
phaesed's picture

God... how can people still argue there is no global warming when summers are hotter and winters are colder.... extremes of one produce extremes of another.

Rain has now become acidic in some regions, but STILL there's no effect from Carbon. Christ, look over L.A. and tell me if you don't think shit goes up to the sky?

What about the increasing severity of Hurricanes in the Gulf area? Like that isn't a consequence of the large amounts of oil being withdrawn from the ground affecting the water temperature?

This argument is so funny because the people who argue against it only look one move forward. Seriously, consider a chain of events, not a single event. It's all chess people.

Fri, 01/22/2010 - 23:59 | 203425 Clinteastwood
Clinteastwood's picture

This entire interview was carefully scripted from question to bullet point 1 then 2, then 3. It's disgusting. John Harwood is a propaganda tool of the administration.  Larry Summers would never agree to go on camera unless the political impact of his "interview" wasn't first carefully calculated. Things are really bad.

So try this for a change:

http://www.youtube.com/watch?v=ocfR3CIPFJo

 

Things are so bad when I went in to McDonald's today and ordered a Big Mac, the guy asked me if I could afford to have fries with that.

 

Things are so bad Dick Cheney took his stockbroker hunting.

 

Things are so bad I started feeling suicidal.  So I phoned the suicide hotline......someone in Pakistan answered.  I told him I was feeling suicidal and he got all excited and asked me if I know how to drive a truck.

Fri, 01/22/2010 - 11:16 | 202127 TraderMark
TraderMark's picture

If one listens to the railroads rather then "message" of a liquidity morphine filled market, or disjointed US economic reports massaged by years of politicial influence - you get a different story on the US economy.

http://www.fundmymutualfund.com/2010/01/railroads-copper-signal-limp-us-economy.html

Fri, 01/22/2010 - 11:28 | 202142 Anonymous
Anonymous's picture

if larry summers took just one small half dose of
ex-lax he would disappear down a toilet flush
into eternal oblivion....

Fri, 01/22/2010 - 12:47 | 202260 Anonymous
Anonymous's picture

Hysterical. LMAO.

Fri, 01/22/2010 - 13:15 | 202308 Assetman
Assetman's picture

Better yet... if you gave him an Alka-Seltzer after his steady stream of morning Diet Cokes, you would have one heck of an explosion.

Fri, 01/22/2010 - 13:37 | 202376 Hephasteus
Hephasteus's picture

Today after being offered a mentos larry summers launched 30,000 feet into the air before banging his head on the underbelly of TWA flight 69. When questioned the CIA had no response but were seen ordering mentos through their security enhanced Iphones.

Fri, 01/22/2010 - 11:28 | 202144 Jim in MN
Jim in MN's picture

"Supreme epitome?"  Now, I have seen some excesses on this blog, and that's OK, but this is going too far.  If something is the epitome, there is no other, and therefore no comparison.  So there can be no supreme epitome. 

On the plus side, those two words together make it sound like you're spitting.  Which is entirely appropriate for this situation.

Fri, 01/22/2010 - 11:37 | 202158 Anonymous
Anonymous's picture

while we are bitching about ignorant grammar my
all time favorite is the way lesser is used....

more ignorant statements have been used with that
word than all others combined...except for hopefully

Fri, 01/22/2010 - 11:48 | 202170 Anonymous
Anonymous's picture

There is a long list of Fat Ass economic idiots that should be jailed. Larry Summers is on that list. Time will tell. But, if I were to guess you belong on that list too, Jimbo.

Fri, 01/22/2010 - 13:14 | 202319 obewon
obewon's picture

This is a great site! Thanks, Tyler. (Yeah, I know, I'm late for the party!)

Larry Summers is the quintessential ego-maniac. He has never made a mistake in his entire life (if you doubt this, just ask him), and condemns anyone who has the slightest disagreement with him. On matters related to public policy and financial "reform", his decisions and recommendations over the past 15 years have done significant harm to the US economy. A few examples here:

- The driving force behind the repeal of Glass-Steagall

- "Strong" US dollar policy fiasco (Clinton Admin.) and “Bubble Creator”; his infamous speech in 1995 ("We cannot and will not accept any speed limit on American growth")

- Strangely, he was clueless about "what went wrong" during the meltdown in 2000

- Manipulation of gold and silver markets (Clinton Admin.)

- Manipulation of interest rates; go here for an interesting paper by Summers on "Gibson's Paradox":

http://www.goldensextant.com/Gibson%27sParadox.html

- A total disaster during his tenure at Harvard; he singlehandedly ruined a great university, which has yet to recover its derivative losses from Summers strong recommendations

- Manipulation of all markets (Obama Admin: stocks, bonds, precious metals, currencies, etc.). Go here for an interesting read:

http://www.baltimorechronicle.com/2009/052909Lendman.shtml

 

The man deserves a life sentence in jail!

 

 

 

 

Fri, 01/22/2010 - 13:50 | 202402 Hephasteus
Hephasteus's picture

You're guides worked diligently and tirelessly to get you to the point where you could be led by this fine arrogant wrong stupid man and you go and shit on their breakfast. What can we do here. You're just going to have to redouble you effort to learn how to get along with this becuase the universe is intent on having all the sociopathic lying manipulative piece of crap abusive people in charge.

Fri, 01/22/2010 - 21:46 | 202793 Jim in MN
Jim in MN's picture

By the way you are a piss-poor guesser.  I hope you're not in the financial business.

Fri, 01/22/2010 - 11:54 | 202181 IE
IE's picture

I agree - 110% ...  ;-)

Fri, 01/22/2010 - 11:29 | 202145 ChickenTeriyakiBoy
ChickenTeriyakiBoy's picture

There once was a man named Larry,

Who gave prophecies to Barry,

Repealed Glass-Steagall

Looked at price of silv'eagle

And gave the bill back, now it's scary

Fri, 01/22/2010 - 11:31 | 202149 digalert
digalert's picture

Arrogant ignorant slob.

Fri, 01/22/2010 - 11:32 | 202150 Oso
Oso's picture

Larry Summers - thy name is R-tard.

Fri, 01/22/2010 - 11:34 | 202155 Jim in MN
Jim in MN's picture

 

By the way Tyler, Naked Capitalism this morning has an original and very hard-hitting analysis of the AIG CDOs, Maiden Lane III, and related discussion of the Fed coverup in progress.  Worthy of highlighting here?

http://www.nakedcapitalism.com/2010/01/fed-secrecy-claims-bogus.html

and

http://www.nakedcapitalism.com/2010/01/further-discussion-of-maiden-lane-iii-analysis-and-implications.html

Fri, 01/22/2010 - 11:40 | 202160 Bearish Spirits
Bearish Spirits's picture

Unfortunately, both sides of the political spectrum are playing the "stock market indicator" game.  The administration refers to the movements of the market when it goes up and right-wing mouthpieces refer to market movements whenever there's a dip.  Both are playing the propaganda game.

Limbaugh will often track the market on down days and blame the fall on Obama's policies.  Up days will pass without a mention of the market.  Glenn Beck actually tried to draw an inverse correlation between Obama's approval rating and the performance of the S&P 500 on Wednesday's show.  I couldn't believe it was the same guy who did the segments on the Fed monetizing debt. 

We keep hearing that corporate taxes should be lowered to stimulate job growth, but I haven't heard a word in the MSM about how taxes have already been lowered.  ZH had an illustration of the cratering in business tax withholdings a couple months ago.  Homebuilders, Intel, Alcoa, GE, and other large companies have benefited from tax breaks in the last two quarters which allowed them to beat low earnings estimates.  Many of these companies are still laying off people to keep their earnings above estimates.  Why don't we hear about the large bonuses Intel is paying out AFTER they sent so many people to the unemployment line?

We already know about much of the BS from the left, but it's been awfully interesting to watch Fox News play defense for the banks this week.  If either side sees an opportunity to exploit a weakness of the other, it will be taken.  I pay attention to the MSM for info and roll my eyes at the spin.

 

Fri, 01/22/2010 - 13:18 | 202335 Master Bates
Master Bates's picture

You disagreed with right wing zealots, which is why one of their flunkies flagged your post as junk.  When I think of people who believe in the Republican talking points, I just imagine them plugging their ears and going "nananana" the whole time Bush was president, but finding fault with everything Obama did the day he was elected. 
Another interesting point is that these pundits blamed Clinton for every bad thing that happened during the Bush years, but now they say "isn't it time we stop bashing Bush and blame the man who's in the White House now?"

Blatant hypocrisy.  To list it all, I could go on for days.

With that said, when will people learn that the markets' recent action have nothing to do with the day to day news.
The bounce since March was predicated on extremely oversold technicals and a correction from the violent and vicious drop that the market took before.
Now, the drop in the market results from the culmination of a rising wedge on the charts that has been forming for months now.  I even predicted this week's fall to one of my friends last Friday.  NOW she believes me...

Still, to suggest that the day to day fluctuations and even longer term trends relies on news is totally BS.  While there is some correlation between the markets and the fundamentals, news is something else altogether.
There has been bad news throughout much of the rally, but NOW all the sudden the news is making an impact?  I just don't buy it.

There are pure technical reasons for this pullback, just like there were pure technical reasons for the rally (and government interference to keep it going).

With all of that said, the people who watch and believe Faux News as if it's gospel are some of the slower people on the planet.  Fair and balanced my ass.

Fri, 01/22/2010 - 15:11 | 202596 Bearish Spirits
Bearish Spirits's picture

Good points, Bates.  And thanks for backing me up on the right to question both sides at the same time. 

Once the prevalence of technical influence on the markets during this rally became apparent(such as upward channels, preordained or not), I was able to eliminate a lot of day-to-day frustration over market performance in relation to the news. 

As for your comments about "Bush supporters," I know exactly what you mean.  Before the TARP fiasco and before I discovered outlets such as ZH, I was one of the hardcore "conservative Republicans" who made excuses for the wars and expenditures.  I still consider myself to be conservative, but not in the way mouthpieces attempt to define the term.

People need to question media figures.  It's irresponsible to say, "That host agrees with me on 'x' and 'y,' so what he has to say on 'z' must be so."  There is nothing wrong with paying attention to the media, but some people look to reporters or hosts as infallible.  That becomes dangerous.

Fri, 01/22/2010 - 11:40 | 202161 Anonymous
Anonymous's picture

Nothing like Constitutional protection to create corporate untouchables.

Summers needs to go eat a bullet for his country.

Fri, 01/22/2010 - 12:45 | 202254 Miles Kendig
Miles Kendig's picture

Then send the bill to his survivors and scatter his ashes.

Fri, 01/22/2010 - 11:42 | 202164 Anonymous
Anonymous's picture

Summers: "Can't let policies be guided by day to day market movements"

BULLSHIT!!! WHAT THE FUCK DID THE FED DO WHEN LEHMAN CRASH!?

Must have been two days.

What a crock of shit this guy is.

Fri, 01/22/2010 - 11:44 | 202165 Gimp
Gimp's picture

Summers is a self-righteous pig. Spent to much time in the ivory towers looking down on us peasants.

Now where is my Bob Marley Exodus album so I can pretend I am somewhere else.

 

Fri, 01/22/2010 - 11:47 | 202168 Anonymous
Anonymous's picture

If the market was jacked up by lax regulation,crony politics, lax accounting standards, etc what does everyone expect?....when you come off heroin do you think it doesn't hurt?...since it hurts should you just keep feeding the addict heroin? The market and the bankers want its heroin...too bad

Warren, a Harvard professor and the chief of the TARP Congressional Oversight Panel, told Maddow that she's encouraged not only by the new proposals to limit banks, but also by the president's renewed commitment to an independent consumer financial protection agency. Warren:

"I feel better than I've felt in a long time. Because what I've heard the president saying on the Consumer Financial Protection Agency is, 'It's not going down. I'm here, I'm not giving up on it. There is not going to be a compromise to cave in on it.' I heard him say that we're going to tax those large financial institutions, and we're going to make them pay back all of the money under TARP. And then today, I heard him say we're gonna break apart too-big-to-fail. And we're going to have an answer, so that every financial institution, if it makes big enough mistakes, if it takes big enough risks and loses, every one of them, can in the end, die.... And what I hear in that is that... the financial institutions have pushed him hard... [Obama] is pushing right back."

http://www.msnbc.msn.com/id/21134540/vp/34985877#34985877

Fri, 01/22/2010 - 11:50 | 202175 A Man without Q...
A Man without Qualities's picture

"You're not wrong Larry, you're just an asshole."

Fri, 01/22/2010 - 11:51 | 202178 buzzsaw99
buzzsaw99's picture

Scum buckets like him have the president's ear. It's hopeless.

Sat, 01/23/2010 - 00:03 | 203441 Clinteastwood
Clinteastwood's picture

Scum buckets match this president's ear.

Fri, 01/22/2010 - 11:55 | 202184 Anonymous
Anonymous's picture

This fat pos summers is beyond belief. When he is opening his mouth its either to lie or to confuse. I love this recent claim that he and timmy wrote this reimplementation of glass-steagall after it was him who worked so hard to destroy it in the first place in the 90s under that piece-of-work Clinton. All these bastards are slime and should be lined up and shot.

Fri, 01/22/2010 - 12:13 | 202214 Anonymous
Anonymous's picture

I still love the fact that Obama proudly exclaimed some months ago that he doesn't read the "blogs". Of course, that doesn't stop me from emailing relevant posts (such as this one) to the White House. The longer it takes Mr. Change to get a frickin' clue and start reading some people who aren't kissing his ass (or whose ass he's kissing), the sooner he'll bumble into irrelevancy -- assuming he's not already there.

Fri, 01/22/2010 - 12:16 | 202218 Ripped Chunk
Ripped Chunk's picture

Larry should go on "This Week" or "Meet the Press" this Sunday and avoid answering EVERY SINGLE FUCKING QUESTION. Like he did the last time he was on.

Somebody bury this useless tool please.

 

Fri, 01/22/2010 - 12:16 | 202219 deadhead
deadhead's picture

Perhaps I should remind all that Larry Summers is "...the smartest guy in the room."

the headline on this post is in my top 10 for ZH.

I'm also reminded of the classic axiom, 'live by the sword, die by the sword.'

 

Fri, 01/22/2010 - 12:17 | 202220 Anonymous
Anonymous's picture

Front Running the Fed

Attached is some information from a reader. I cannot assess its validity, not being in the bond trading business. But it does sound like someone has tapped into the Fed's buying plans to monetize the public debt and is front running those buys, essentially 'stealing' money from the public. Its what they call 'a sure thing.'

To try and figure out who might be doing it, I would look for some big player who is showing extraordinary returns on their trading, with consistent profit that is not statistically 'normal,' too consistently good. The problem with cheaters is that they sometimes get greedy and call attention to themselves.

In Las Vegas the bigger cheats were often taken out into the desert for further inquiry and final disposition. On Wall Street they are somewhat more arrogant and persistent, defying resolution with that ultimate defiance, "We'll just find other ways to cheat again."

Time for a trip to the desert?
http://jessescrossroadscafe.blogspot.com/2010/01/is-big-player-front-run...

Fri, 01/22/2010 - 12:20 | 202223 Anonymous
Anonymous's picture

Larry Summers is America's ultimate douche bag...just ask the folks at the country's top university. Change will only begin when the three stooges (Summers, Geithner and Bernanke) are tossed out of the White House; short of that, Obama is simply playing politics.

Fri, 01/22/2010 - 12:23 | 202224 glenlloyd
glenlloyd's picture

He isn't trustworthy and I don't believe a word he says. These new rules are a reaction to something more problematic, like federal debt issuance and the need to find buyers, otherwise why would it have been shelved for so long?

I'd like to see TTT and LS get walking papers but that wouldn't look good for the administration now would it.

Fri, 01/22/2010 - 12:26 | 202229 Astute Investor
Astute Investor's picture

Stock prices are outputs not inputs.  Stop asking what you need to do to make stock prices increase.  If you implement sound economic, fiscal and monetary policies, the equity markets will take care of themselves.

Fri, 01/22/2010 - 12:33 | 202241 Anonymous
Anonymous's picture

"Larry's statement that it is perfectly ok to use the market response when things are going ok, but to ignore it when its says the administration has fucked up beyond compare, is the supreme epitome of hypocrisy."

Is it hypocrisy, or is it, "amabocrisy," which is my second favorite new word, after, "prestidigiflation."

...unexpectedly...

Fri, 01/22/2010 - 12:50 | 202265 BigBagHolder
BigBagHolder's picture

So... we're off ~4% and now the market is "down"?

Hmm... but gold is just "consolidating".

Fri, 01/22/2010 - 13:40 | 202381 lsbumblebee
lsbumblebee's picture

I've consulted with the usual experts who contribute the current dive in gold to such things as "the flight to the dollar safehaven".

They said that the reason gold is "consolidating" is because it's a solid. Con-solid-ating.

Fri, 01/22/2010 - 12:57 | 202283 Anonymous
Anonymous's picture

Ya gotta admit, Summers can take it to another level, really an art form, talk on and on without really saying a fecking thing. What has this guy done, other than take up space?

Fri, 01/22/2010 - 13:22 | 202340 Anonymous
Anonymous's picture

Show Bernanke and Geithner the Door

What has the financial crisis taught us? Among other things, we should show Bernanke and Geithner, enablers from the previous administration, the door. Paul Volcker is right to ask for a return to Glass-Steagall. It worked until it was eroded over several decades by bank lobbying. Banking and speculative trading activities--even when done for "customers"--don't mix.

"Financial innovation" must be limited, since much of it in recent years was the financial equivalent of card cheating. Banks should not be allowed to sponsor hedge funds and private equity funds, and furthermore, they should not be allowed to lend to them through prime brokerage units or other means. Financial institutions must be allowed to fail. Hedge funds require regulation. Malfeasance should be investigated and prosecuted. Credit derivatives should be traded and cleared through exchanges and made transparent. Compensation and financial incentives at banks must change. Bank employees cannot continue to reap huge rewards at no personal risk while shoving risk into the global financial system.

President Obama promised us change, and he should seize this opportunity to demand sweeping financial reform.

http://www.huffingtonpost.com/janet-tavakoli/show-bernanke-and-geithne_b...

Sat, 01/23/2010 - 00:33 | 203462 Clinteastwood
Clinteastwood's picture

When Obama promised "change," what he meant was that people of color would have the power for a change.  He had no idea that being president might involve work for all of the American people.  He knew absolutely nothing about banking, derivatives, or the Federal Reserve, and couldn't have cared less.  He wanted to ride on Air Force One.

 

I'm pretty tired of hearing how now he's going to get on the ball and change things so the economy will get better.  He has absolutely no idea about the economy. Unfortunately, political events have forced his nose into the middle of it.  Now he's trying to figure out if Summers or Volker have the right idea.  Unforunately for him, these guys are has beens and have no clue. Things will keep drifting, deteriorating, deleveraging. That's good. It's about time this whole fractional Federal Reserve house of cards debt comes crashing down.  Can you get your head around how far down we may have to go to get back to sound money? What was the Dow in 1972 when we went off the gold standard?  What was it in 1913?

 

Things are bad.  Things are so bad that if the bank returns your check marked "insufficient funds" you better call them and ask if the mean you or them.

The mafia is laying off judges.

Exxon Mobil is laying off congressmen.

Things are really bad, so........try this:

http://www.youtube.com/watch?v=ylr2D4Pwn58&feature=PlayList&p=939B19CFEE...

Fri, 01/22/2010 - 14:02 | 202430 frank
frank's picture

Will the new regulations apply to FRAM, federal reserve asset management?

Fri, 01/22/2010 - 14:03 | 202431 Gimp
Gimp's picture

Obama promised change but once he got into the White House he found out the President has limited power and the banksters hold all the cards.  Political inexperience for Mr Hope and Change. Seems like a nice guy.

Fri, 01/22/2010 - 14:07 | 202441 DavidC
DavidC's picture

Larry Summers is one of the prime examples of how one can receive a first class 'education' and still be a first class idiot.

My Mother had no option when she was young but to leave school at the age of 14 - she displays more intelligence, insight and common sense than Summers, Rubin, Bernanke, Greenspan, Paulson et al.

DavidC

Fri, 01/22/2010 - 14:07 | 202442 DavidC
DavidC's picture

Larry Summers is one of the prime examples of how one can receive a first class 'education' and still be a first class idiot.

My Mother had no option when she was young but to leave school at the age of 14 - she displays more intelligence, insight and common sense than Summers, Rubin, Bernanke, Greenspan, Paulson et al.

DavidC

Fri, 01/22/2010 - 14:23 | 202470 frank
frank's picture

Funny that Summers is taking this stance. He must have missed this (probably feel asleep?): http://www.pbs.org/wgbh/pages/frontline/warning/view/

Do NOT follow this link or you will be banned from the site!