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Goldman's Cohn On The Fed's One Way Con

Tyler Durden's picture




 

While stating the somewhat obvious - that the Fed's actions will cause 'pain' when they (try to) stop QE - when it comes from a high-ranking officer of the establishment elite (as opposed to a tin-foil-hat-wearing, BLS-exposing, HFT-undermining, fringe blog) such as Goldman Sachs' President Gary Cohn, perhaps more mainstream will begin to question the path we are on. Cohn's interview on Bloomberg TV ranged from his reading habits (Greg Smith's tell-all) to the world's central bank printfest and how "we will have to go through the pains of stopping QE" and from his views of the election status quo to the global economic malaise, he does so well on the reality front - until he shovels undying praise on Mario Draghi's back for his "spectacular job" - though admits he has not solved Europe's real problems.

 

 

Cohn on whether he'll read Greg Smith's book:

"Is it coming out next week?  I probably will read it."

On Federal Reserve stimulus:

"I worry about everything. My job is to worry. It's something that you have to worry about. The Fed has pretty good information what's going on in the economy. They've got pretty information what's going on with employment. We know that the Fed wants to create job growth. We know the Fed wants to create asset appreciation. I understand what they are trying to do, whether I agree with it or disagree with it. I understand what they are trying to do and I will tell you this is going to be difficult to stop or to exit. There will be an end of quantitative easing. We will have to go through the pains of stopping quantitative easing."

 

"I don't know if I disagree or agree. Right now based upon our economic cycle I understand what the fed is doing I understand what the ECB is doing I understand what the bank of England is doing and I understand what the bank of Japan is doing. Unfortunately they are all kind of doing the same thing so it has less impact than it might if the others were on the sideline. But I understand in this globalized economy where we've got free movement of currency, where we've got free movement of risk assets and everything is relatively fungible that the Fed is trying to do what they think is in the best interest of the U.S. economy."

On the importance of November's election:

"We will see what happens about the election. I don't know more than anybody else does…It looks like to me the Republicans will maintain the House, it looks like to me the Democrats will retain the Senate. And I don't know what's going on in the presidential race and I think all of us are operating under those assumptions, but I can guarantee you this: we've got other plans with other assumptions if the world were to change."

On the global economy:

"The global economy is in a tough place, and the reason it's in a tough place is that we're in a unique period of history where all of the major global players in the economy are going through a relatively tough period of time.  If you look at what's going on in the euro zone and what's going on in the United States, you look at what's going on here in Japan, and you even look at what's going on in China today, you've got a lot of anxiety in the system to where were going and how we're going to get the global economy growing. The world that we live in today also has a linkage between all of these major economies around the world and what we're really looking for is one of these countries, or some of these countries to show some leadership in growing their economy where other economies can grow with them at the same time. At this point we're really lacking some leadership."

On whether Goldman Sachs is at a funding disadvantage compared to the bigger banks:

"There's this common view that we're at a funding disadvantage because of the deposits. We have a fairly large deposit network right now, close to $60 billion of deposits out there. The reality is that you can only use deposits for a very specific part of your business. There's a couple rules called 23A and 23B that do not allow you to take retail deposits and move them into your investment banking business. So our investment banking business is on equal footing with everyone else's investment banking business when it comes to financing that business. For the businesses where you can use deposit funding, they clearly have an advantage, but their books are so much bigger to our books relative to their advantage. We don't need more deposit funds to fund our business, in fact, of the $60B in deposits we have today we don't even have use for that entire $60B in deposits."

On whether he still believes that Europe needs a Lehman-type moment:

"I still really do believe it needs a moment. Remember this is politics, this is economics, this is balance of payments, there are a lot of factors at play here.  I'm not sure if Spain's going to be one of those moments, I'm not sure that Greece still might not be one of those moments. I'm not sure what the moment will be, but I do believe there's going to be a moment where everyone takes a deep breath and says we've got to fix this situation."

On Draghi:

"I think Mario Draghi has done a spectacular job he really has.  Since Mario Draghi took office as the head of the ECB, he came in and showed really leadership, lowered interest rates has done out and done all of the other things that you would want a dynamic central bank leader to do. He has removed a lot of the risk off the table, but he hasn't dealt with and he can't deal with the real long term problem of Europe which is economic growth."

 

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Thu, 10/11/2012 - 15:34 | 2878607 Jason T
Jason T's picture

good CEO's read a book a week I was once told.  

Thu, 10/11/2012 - 15:36 | 2878620 redpill
redpill's picture

I honestly don't care what this squidfuck has to say.

Thu, 10/11/2012 - 15:37 | 2878621 NewThor
NewThor's picture

Ponzi + Con = Conzi

Which is the oppositte of the Fonzi,

really.

Thu, 10/11/2012 - 15:43 | 2878636 Zer0head
Zer0head's picture

Just before 8am today on Bloomberg TV Sara Eisen in Tokyo and Tom Keene in NY were discussing Nextel and SoftBank and Tommy boy started blurting something about how Goldman new this with the implication that Sara and he knew this as well vis a vis her schmoozing with the likes of Kohn. Sara glared at him and he shut up  (sadly no video clip of that intercourse)

Thu, 10/11/2012 - 15:48 | 2878671 MillionDollarBonus_
MillionDollarBonus_'s picture

Guys, it’s just scary how right I am about the markets and the economy. I bought S&P futures on the first weekly close above 1400 during this summer rally in line with my bullish view of the economy, and my position was literally moving my direction within days. Haha ... It’s surreal how smart I can be sometimes. It’s like I can just see the future; it’s just there in front of me, and I’m surfing the markets like perfect wave on a clear day. 

Thu, 10/11/2012 - 15:50 | 2878681 Sock Puppet
Sock Puppet's picture

Cohn is the man.

Thu, 10/11/2012 - 16:58 | 2878874 Peter Pan
Peter Pan's picture

Not very cohnvincing as far as I am concerned.

Thu, 10/11/2012 - 15:54 | 2878689 redpill
redpill's picture

I like to press my crotch against the computer screen because it makes me feel closer to you MDB.

Thu, 10/11/2012 - 16:24 | 2878787 Sock Puppet
Sock Puppet's picture

You some kinda "Constitutionalist"?  This is what happens to subversives.  Might even happen you.

Link: "He's a Constitutionalist"

http://freedominourtime.blogspot.nl/

Thu, 10/11/2012 - 20:47 | 2879307 JohnnyBriefcase
JohnnyBriefcase's picture

This is exactly why I always buy new monitors.

Thu, 10/11/2012 - 15:55 | 2878691 Sixdeuce062
Sixdeuce062's picture

Though the haze of your smoke filled room while checking the stock market on your Obama phone

Thu, 10/11/2012 - 15:55 | 2878692 azzhatter
azzhatter's picture

yeah, you're a real stud MDB

Thu, 10/11/2012 - 17:45 | 2878982 cranky-old-geezer
cranky-old-geezer's picture

 

 

What?  It takes brains to figure out Bennie is gonna inflate S&P?  After 4 straight years of it?

Thu, 10/11/2012 - 19:24 | 2879133 WhiteNight123129
WhiteNight123129's picture

MDB are buying on a hyperinflation call?

Thu, 10/11/2012 - 15:41 | 2878637 redpill
redpill's picture

Except they both jumped the shark.

Thu, 10/11/2012 - 15:47 | 2878665 NewThor
NewThor's picture

That's still better than Betty Liu jumping Warren Buffet.

 

Thu, 10/11/2012 - 15:56 | 2878701 venturen
venturen's picture

I think you meant to say Corzinie...a fine Goldman product!

Thu, 10/11/2012 - 15:45 | 2878658 Gully Foyle
Gully Foyle's picture

redpill

I barely care enough t....

Thu, 10/11/2012 - 16:42 | 2878841 disabledvet
disabledvet's picture

How 'bout if he spontaneously combusted like the drummer(s) in Spinal Tap? Would you watch then?

Thu, 10/11/2012 - 15:37 | 2878624 fightthepower
fightthepower's picture

What an asshole, he could stop QE any time he wanted to.  Bernanke works for the big banks. 

Thu, 10/11/2012 - 15:49 | 2878674 LongSoupLine
LongSoupLine's picture

Fuck you Cohn, you cookie-cutter Goldman piece of shit.  Eat Shit and Die you fucker.

Thu, 10/11/2012 - 15:56 | 2878690 Pegasus Muse
Pegasus Muse's picture

That Cohn dude reminds me a lot of Steve Liesman -- sounds the same,  looks the same, same supersized goofy bald heads. 

Thu, 10/11/2012 - 15:56 | 2878700 azzhatter
azzhatter's picture

I'll bet he's been blown by LIESman

Thu, 10/11/2012 - 15:59 | 2878713 knukles
knukles's picture

That picture's just plain wrong.

Thu, 10/11/2012 - 16:00 | 2878720 Mark Carney
Mark Carney's picture

I was gonna say he looks like Blankfeins long lost retarted older brother......

Thu, 10/11/2012 - 16:01 | 2878722 Mad Mohel
Mad Mohel's picture

I think thats from the yarmulkes.

Thu, 10/11/2012 - 15:34 | 2878609 Meesohaawnee
Meesohaawnee's picture

the biggest beneficiary of POMO. yea . painful indeed to bonuses..the only "spectacular job" draghi has done is blowin bernake and leavin some hot spunk in his face.

Thu, 10/11/2012 - 15:38 | 2878625 CPL
CPL's picture

http://www.youtube.com/watch?v=x4o-TeMHys0

The Rent is too damn high.

 

http://www.youtube.com/watch?v=4d_FvgQ1csE

The horrible decay of incisor issues.

 

Would consider if their weird powers were combined.  They could not do any worse.

Thu, 10/11/2012 - 15:41 | 2878641 razorthin
razorthin's picture

higher than fo years ago

Thu, 10/11/2012 - 16:03 | 2878733 CPL
CPL's picture

They could be a dual Prez/VP bid.  They could flip a coin for the job.  

 

i believe that with the right marketing and their names on the ballot, they could take 100% of the sick of the nonsense vote.  There's the platform

 

Sick of the nonsense party

Thu, 10/11/2012 - 15:40 | 2878626 razorthin
razorthin's picture

They may know that pain very soon, should Romney be elected.  But I trust Romney's words about as much as I trust Obama's.

Thu, 10/11/2012 - 15:47 | 2878664 Gully Foyle
Gully Foyle's picture

razorthin

Dude, Romney will be moving "left".

Maybe not radical left but John Roberts left.

There isn't much further right to go for either party without becoming Tito's Yugoslavia.

Thu, 10/11/2012 - 18:04 | 2879007 Esculent 69
Esculent 69's picture

Further right than becoming Tito's Yugoslavia? Which right are your talking about? If because the socialistic/communistic government uses the military against it's own people it is considered politically right wing then you sir have a disconnect of the definining terms, at least in the USofA, of the meaning of words.  The Republican party was formed and has been about the Constitution of the United States which guarantees a Republican form of government; i.e. a representative government.  Like Ron Paul who believes in the limitation of government force over it's own citizens by following the constitution is what political right means in this country. The political left in this country believes the constiution is outdated and is constraining to let the political elites to do what is best for the greater good. If you do not go along with  the greater good or you speak out in a  way that is displeasing to the government then you find yourself in jail like the guy who the government says is responsible for the video that caused the attacks on 9/11/2012. The guy is still in jail for his freedom of speech. Those that use authoritarian tactics againsts it's OWN PEOPLE are politically LEFT!  The politcal right want to use the military to protect you from outside enemies.  One wants to inprison/ kill its own people while the other wants to protect its own people from those that wish to kill its fellow citizens no matter which party they belong.  

Thu, 10/11/2012 - 17:00 | 2878878 Ghordius
Ghordius's picture

The Squid supported Obama, last time. The Squid is supporting Romney, this time. Just saying...

Thu, 10/11/2012 - 15:38 | 2878629 Atlantis Consigliore
Atlantis Consigliore's picture

Short Limit Bonds, short cash bonds, short munis, short everything.....

not taking the punchbowl away, TAKING THE PRINTING PRESS AWAY  

and the humphrey hawkins, employment FED law.

Thu, 10/11/2012 - 15:45 | 2878650 Dr. Engali
Dr. Engali's picture

I didn't hear him say anything about muppets in that piece.

Thu, 10/11/2012 - 15:44 | 2878651 Gimleteye
Gimleteye's picture

when the crack addict goes cold turkey--ouch! how does QEwhatever stop?  high interst rates?  bank runs?  pain indieed should be felt by the irresposnible bankers, lamposts come to mind, maybe they will see the way

 

Thu, 10/11/2012 - 19:44 | 2879173 lotsoffun
lotsoffun's picture

to some degree - QE does actually stop bank runs, and i'll explain why.  because - by forcing people into risk assets to see any return - they move their money from 401k and savings accounts into the stock market.  which - as we know means that when the time is right - the casino owners sweep the table and collect what you thought were your winnings.  meaning, since you took it out of FDIC money market account and bet it - those $$ you thought were yours are now mine.  and - there's no need to go to the bank for a bank run and take your cash - because???  come on guys.  come on.  IT IS GONE.  problem solved.  no bank run.

does anybody think i'm joking and they don't know this? 

 

 

Thu, 10/11/2012 - 15:44 | 2878656 Zero Govt
Zero Govt's picture

"We know that the Fed wants to create job growth"

How's that going, 4 years and $4 Trillion down the sink????

2 months ago the Fed said they'd take a calm "wait and see" approach to unemployment. 

Last week the Fed said they're pissing an unlimited amount of money into outter space to stimulate employment.

What changed so dramatically in 1 month?

We weren't born yesterday Mr Con, sorry Cohn, the Fed is lying through its teeth it gives a shit, it's just another sick fucking lie to cover your bankrupt arses

Thu, 10/11/2012 - 15:48 | 2878670 Gully Foyle
Gully Foyle's picture

Zero Govt

Dude, how many rich people kept their jobs and actually increased their income?

Their JOBS GREW.

Thu, 10/11/2012 - 16:17 | 2878753 Zero Govt
Zero Govt's picture

Mr Cohn is crap, his bank is garbage, if he had a stitch of integrity he'd go see a liquidator tomorrow and save Bernanke another material lie to the country about helping unemploymnent, a smokescreen for him bailing out Goldman Sucks (again???)

Cohn is lying through his teeth the Fed keep an eye on unemployment because 2 months ago they said they'd take a "wait and see" approach, but they beat the latest news on unemployment (a drop in unemployment) to the punch and rolled out the big guns

why do nothing 2 months ago with "wait and see" and when the official unemployment figures are officially improving this month press the panic button???

it's absolute bolllocks, they've been caught with their pants down

Thu, 10/11/2012 - 18:37 | 2879056 Zero Govt
Zero Govt's picture

Gully, i didn't junk ya (honest) but to answer your question on the specific issue of Bernanke creating jobs for the financiers yes he's kept them in (worthless) jobs but he's funneling money to bankers that are shedding jobs by the thousand

why funnel money to an industry culling jobs? Why back bankrupt losers anyway as a way to recovery?

in every way Bernankes arguments don't hold water and his lying's exposed

 

Thu, 10/11/2012 - 15:48 | 2878668 realtick
realtick's picture

If You Follow Turd Ferguson You Need To Wake Up

http://chartistfriendfrompittsburgh.blogspot.com/2012/10/if-you-follow-t...

Thu, 10/11/2012 - 15:52 | 2878684 redpill
redpill's picture

Gold is not a stock, it's a reflection of the value of the currency it is priced in.  For the price of gold in dollars to collapse, the value of USD would have to sharply increase.  And in case you didn't realize, we're in a race to the bottom of global fiat currency devaluation.  Try to make that reality fit with your chartsturbation.

Oh, and YOU LEAVE TURD ALONE!

Thu, 10/11/2012 - 16:29 | 2878798 Bay of Pigs
Bay of Pigs's picture

"Blow off top"? What the hell are you talking about dude?

LOL. Get.The.Fuck.Out you retard...

Thu, 10/11/2012 - 15:56 | 2878696 centerline
centerline's picture

Elliot waves?  In this centrally planned world?  Shit.  I speculated back in 08' that this sort of analysis was used to assasinate bears and fuel the BB put.

I could imagine about anything though... including a crushing blow to PMs in the short term.  Only investors/traders/speculators would be hurt though.  The growing number of people trying to hedge against reckless bullshit by central banks and governments could care less about the price relative to already purchased metals.

Thu, 10/11/2012 - 18:13 | 2878736 fuu
fuu's picture

Why don't we play a nice game of STFU there Mr. Fisher.

Thu, 10/11/2012 - 15:50 | 2878679 muppet_master
muppet_master's picture

CON

is "investing" in the QEorganizer's pumped up PORKULosus CON casino...

i AIN'T BUYING NO FECAL MATTER JACK !!! got it !!!

gimme a -35% drop from now in spx to 950 area..THEN i'll buy b4 dead cat bounce....then watch out below 3-2009. 

Thu, 10/11/2012 - 15:51 | 2878682 yogibear
yogibear's picture

LOL, Bernanke and the bunch of wacko Fed member Keynesians stop? No way. 

They are trapped. 

They will allow and encourage massive inflation. They want it.  If Bernanke's son has $400,000 of school debt doesn't that tell you what his plan is? 

Bernanke intends to inflate like there is no tomorrow! 

http://www.loop21.com/politics/ben-bernankes-son-owes-400k-student-loans

 

Bernanke recently stated that his son, a medical student, will graduate with $400,000 in student loan debt. 

 


Thu, 10/11/2012 - 15:57 | 2878693 Landotfree
Landotfree's picture

if you don't have inflation then the system starts to implode.   

http://2.bp.blogspot.com/--RkLZLRlRi8/UGAGOUg7fNI/AAAAAAAAABs/HHgMlfUYP2...

"They want it."   They can want the moon to be made out cheese but it isn't.   

If the Fed could magically produce what you say we would not be missing the $20 trillion from the system.  The Fed is no more powerful than the Wizard of OZ, it's all you nutbags that think the helicopter is coming that momentarily stopping the implosion.   The implosion will begin again in due course.

Thu, 10/11/2012 - 16:00 | 2878718 centerline
centerline's picture

They will try though.  It's is the only real play they have.  Try to squeeze the last drop of anything from the ponzi.  Then they will be forced to liquidate the ponzi in order to keep the party going for themselves (that's when it really ends for us).  I suspect this will come in go in waves to keep people hoping... and confused.

If the plan fails... well, there is always war... or 1.6 billions rounds of ammo.

Thu, 10/11/2012 - 16:10 | 2878754 robertocarlos
robertocarlos's picture

Hi Mako. Glad you are back.

Thu, 10/11/2012 - 15:59 | 2878707 muppet_master
muppet_master's picture

school debt

for medical school or law school = good debt.

BAD debt = school loan for some piece of crap commercial mechanic, cook, photographer school = subprime debt at high interest rates...

anyways...if you invest $100k in SILVER when @ $4.00.....--> RIDE to $100 (25X gain)...you'll have $2.5mm.  of course you have to unload it before CONFISCATION!!

of course you can pay off your $400k medical school loans...of course gas = $20/gallon and milk @ $18/gallon...LOL !!!

Thu, 10/11/2012 - 19:37 | 2879160 lotsoffun
lotsoffun's picture

i missed bernake stating that his son will graduate with 400k student loan debt.  what is that supposed to mean to US?  the sheeple?  somehow he feels our pain?  ben shalom should be happy.  if his son was an economist, he'd be fine.  but better as a medical kind of guy - he can hopefully re-assemble all the pieces when the time comes.

 

Thu, 10/11/2012 - 15:56 | 2878697 Piranhanoia
Piranhanoia's picture

Why would anyone quote the cancerous growth on top of goldman's head?   This cancer is being fed corn syrup and would never say anything that wasn't meant to enhance its position.  It would have no reason to understand  the facts or reality, and it sure wouldn't repeat them.

 

 

Thu, 10/11/2012 - 16:18 | 2878770 semperfi
semperfi's picture

"perhaps more mainstream will begin to question the one-way path we are on."

The mainstream has a collective critical thinking capacity of a dung beetle.  They won't question it until it smacks them in the face.

Thu, 10/11/2012 - 16:23 | 2878781 q99x2
q99x2's picture

You just try stopping QE buddy and I'll get the star of the Obamaphone and her friends to gather up pitchforks and head out to Hamptons sooner than you can get on a jet to try and save your sorry ass. Fuck You Bernanke.

Thu, 10/11/2012 - 16:24 | 2878785 Peter Pan
Peter Pan's picture

So Draghi is doing a great job, but can't solve the longer term problem? Sounds like a doctor who can keep his comatose patient breathing but that's about all. In Draghi's case he has more and more European nations barely able to gasp let alone breathe.

Thu, 10/11/2012 - 17:01 | 2878889 Ghordius
Ghordius's picture

I'd be worried if he would have said anything else...

Thu, 10/11/2012 - 16:45 | 2878847 disabledvet
disabledvet's picture

For a guy who just screwed Wall Street out of 100 billion in less than a year he seemed...well...pretty relaxed and all. At least Morgan Stanley (wisely) fled the country in search of oil for their part in the scam. Of course "why would New York wanted perfectly good 'Mercian oil?"

Thu, 10/11/2012 - 17:56 | 2879002 cranky-old-geezer
cranky-old-geezer's picture

 

 

We know that the Fed wants to create job growth. We know the Fed wants to create asset appreciation.

It's just asset appreciation moron, there is no job growth.  Pumping up stocks and bonds with printed money doesn't create jobs idiot. 

Of course you're neither moron nor idiot.  You're a smart guy who understands what the Fed is really doing, looting America, giving it all to you folks.

There will be an end of quantitative easing. We will have to go through the pains of stopping quantitative easing.

Bullshit, never gonna happen.

What WILL happen is hyperinflation followed by currency collapse.  But it's not politically correct to mention that.

Thu, 10/11/2012 - 18:03 | 2879014 booboo
booboo's picture

This Cohn could play a mob boss very convincingly in a Hollywood movie script. Gary "greasy thumb" Cohn, yea, I like that, nice ring to it.

"So's Greasy Thumb say's to's me. Benny, you's gots a printer, make it fuckin happen, and tell that fucking mutton head Geithner to shut the fuck up and or I'll have one of da boyz put a bullet in his head and fuck the hole, capiche?

Thu, 10/11/2012 - 20:22 | 2879239 chump666
chump666's picture

QE is backstopping the Goldmans of the world derivative timebomb, the Fed print job is flowing straight into the Goldman's a-hole.

So of course QE stopping would hurt them.  Who cares.  As for Mario, he is joke beyond jokes, weak ass Germany might as well allow the ECB to be governing body...hey like communism and backstop the whole f*cking region. 

Spain is a peasant country, if you have been there you'll see that.  Send their foods prices up and you'll have an absolute horrendous situation unfolding.  Mario is doing that with energy inflation.

Hurt?  The whole world is in hurt, from the middle east throughout  Europe and soon-to-be winter anguish (energy bills) slamming into America.

Fri, 10/12/2012 - 02:51 | 2880139 luna_man
luna_man's picture

 

 

I know nothing has changed...I'll keep shorting this market and purchasing gold & silver until I can't...

 

Ben has painted himself into a corner with all that Q-Easing and I'm just a waiting.

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