Why Ben Bernanke Is Like A Monkey

Tyler Durden's picture




 

Excerpted from Seth Klarman's Baupost 2012 Letter to investors,

If economics were a hard science like chemistry, you’d mix a little of this with a bit of that and the concoction would lead to strong economic growth, full employment, rising home prices, buoyant financial markets, and low inflation every time. But economics is a soft science, and real life simply doesn’t work so predictably. Though economists might wish otherwise, economics is, at its core, behavioral.

 

Modern economies are too complex to be reliably modeled; their connections and correlations are loose and imprecise, the second- and third-order effects largely immeasurable, the fickle vagaries of individual and aggregate human behavior utterly unknowable. Put an economist in a powerful government job and provide levers that can be pulled to start the printing presses, set reserve requirements, fiddle with the Fed funds rate, expand the Fed’s balance sheet, and deliver indecipherable communiqués, and that economist will feel compelled to pull those levers.

 

He or she, like a monkey with a typewriter, might even give us Shakespeare (or Adam Smith) on occasion. But mostly that economist will spout gibberish, a mélange of untested and potentially counterproductive measures that unleash all manner of unintended consequences.

 

Were the meddling to actually remedy the targeted deficiency, it might well be at the cost of dangerous feedback loops and unexpected ripples growing beneath the surface into the incipient waves of tomorrow’s much larger problems.

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Wed, 01/30/2013 - 14:03 | 3199423 DavidC
DavidC's picture

dot_bust,
I've been thinking about this as well over the last month or two, very little seems to have been said about it.

DavidC

Wed, 01/30/2013 - 14:30 | 3199499 helping_friendl...
helping_friendly_book's picture

dot_bust,

I don't see any provision in the federal Reserve Act of 1913 which outlines an end to their charter.

The article gave no basis in fact that the FRBS will expire.

Show me the money. Please provide a link substantiating your claim that the Federal Reserve Charter expires after 100 years.

Wed, 01/30/2013 - 15:21 | 3199726 dot_bust
dot_bust's picture

It seems that you're correct. The article whose link I posted was incorrect. Sorry about that.

Wed, 01/30/2013 - 13:49 | 3199368 1000yrdstare
1000yrdstare's picture

not ....gonna...happen....

 

Wed, 01/30/2013 - 13:54 | 3199387 yogibear
yogibear's picture

How appropriate, Bubble Bernanke, the Federal Reserve and a Banana Republic.

Monkeys like Bernanke like bananas. 

Wed, 01/30/2013 - 13:55 | 3199392 LongSoupLine
LongSoupLine's picture

Huge fucking insult to monkeys.

Monkeys don't destroy the fucking wealth of an entire middle class civilization. He's a fucking financial rapist.

Fuck you Bernanke, you fucking pile of shit.

Wed, 01/30/2013 - 14:04 | 3199426 Kaiser Sousa
Kaiser Sousa's picture

Soup - thats my guy....

stuck the landing yet again.....................

Wed, 01/30/2013 - 13:56 | 3199399 ejmoosa
ejmoosa's picture

The 5th Amendment states: " nor shall private property be taken for public use, without just compensation"

So when Bernake destroys the value of our private property on behalf of the Federal Government, I contend that they are violating the U.S. Constitution.

Wed, 01/30/2013 - 15:43 | 3199853 XitSam
XitSam's picture

With the US Congress and President as co-conspirators.

Wed, 01/30/2013 - 13:57 | 3199401 Hedgetard55
Hedgetard55's picture

An insult to monkeys.

Berspanke knows exactly what he is doing - stealing everything I have worked and saved for my entire life through currency debasement and ZIRP, and giving it to his asshole buddies on Wall Street.

He will get what is coming to him in the next life, not this one.

Wed, 01/30/2013 - 14:03 | 3199420 Kaiser Sousa
Kaiser Sousa's picture

"why is Bernanke like a monkey...."

becuase, FUCK YOU BERNANKE YOU SOCIOPATH COCKSUCKER PIECE OF SHIT BANKER BITCH.....FUCK ALL BANKERS.............

Wed, 01/30/2013 - 14:13 | 3199447 de Cosmos
de Cosmos's picture

Our algorithm may not be perfect, but it's bigger, quicker and slicker than your algorithm.

Wed, 01/30/2013 - 14:21 | 3199468 janus
janus's picture

did i ever tell you bitchez that janus once met seth klarman's son?  well, i'm a' tellin ya right now.  i believe i have mentioned my high regard for mr. klarman before; and i must confess that i got something of a kick from meeting his son.

to my way of thinking, a man is ultimately judged by his library and the people circling about the more intimate orbits of his life -- his wife, children, lieutenents...etc.  if you've ever read klarman, you know he has that rare dexterity with words and ideas; and so i'm left to assume he's done some serious reading (on matters not specifically (or even tangentially) related to finance or markets) and that his library is therefore well-stocked with good stuff.  what is more, his son is an upstanding and highly intelligent young man.  he seems to understand music in a profound and philosophical way.  never met seth's wife; so i can't speak to that.

anyway, i was taking the kid from one place to another...which is sorta what i do in a profound and philosophical way -- literally, too.  it was a nice cab ride.  we chatted about the Bible and whatnot.

i'll tell you bitchez this much...it does feel oddly exilerating holding the credit card of a billionaire.  and it felt even better when they delivered the new jag i ordered with it.  i figure very few days go by in which a billionaire is not off buying a luxury automobile...he probably didn't bat an eyelash at it.  what's new jag among friends, anyway?

it was probably taking things too far when i bought that new mega-yacht; and having the thing retro-fit to accomdate a battery of patriot missles was where things got messy.  who knew billionaires were so pissy about such things?  you live and you learn.

i won't say anything more about our meeting; as i believe mr. klarman is a very private man. 

that's some good thinking and dandy writin, m. klarman -- you get a gold star.

http://www.youtube.com/watch?v=P-Q9D4dcYng

http://www.youtube.com/watch?v=Wrs5DjHNUOE

http://www.youtube.com/watch?v=RG73Pk1yUj8

http://www.youtube.com/watch?v=Xj2bmQ4P4cM

it was twenty years ago today/

sgt. pepper taught the band to play/

they've been goin in and out of style/

but they're guarenteed to raise a smile/

so may i introduce to you/

the act you've known for all these years,

Janus

Wed, 01/30/2013 - 14:22 | 3199475 Zen Bernanke
Zen Bernanke's picture

Reality on one side, politics on the other, and bernanke's story book land right in the middle.   I have watched him speak on numerous occasions and imho, he truly believes what he's saying and what he's doing will lead to the betterment of the economy or he's a better actor than Daniel Day-Lewis. 

Wed, 01/30/2013 - 14:25 | 3199484 IamtheREALmario
IamtheREALmario's picture

"Modern economies are too complex to be reliably modeled"

One may ask why that is the case and I would propose that the reason is that we are applying non-economic, non-optimal and non-free market inputs for social and personal goals. The system is corrupted. How can one model something that purports to be based on the free market but obviously is not. The  base assumption is wrong.

Wed, 01/30/2013 - 14:42 | 3199539 randomdrift
randomdrift's picture

"Modern economies are too complex to be reliably modeled" ---  This is a property of large overly-interconnected systems. You'll find it under "chaos theory." These systems have no closed-form solutions. However, you can analyse and predict their behavior in a neighborhood using sensitivity analysis. That was what Greenspan did to set the rates. What he did was transparent, if, you knew that statistical method. Unfortunately, what Breneke is doing, isn't. 


Wed, 01/30/2013 - 15:21 | 3199711 IamtheREALmario
IamtheREALmario's picture

But if the goal is global domination of a certain group of people or moving money from the lower classes to the upper classes (for example), the set of input are not random, are predictable, just not what one would expect if one's base assumption is that there is a free market at work.

One is not trying to model economics, but a social effect of certain inputs. Of course the result appears wrong and therefore too complex... but really they would not be if the base assumptions were correct.

Wed, 01/30/2013 - 16:59 | 3200221 randomdrift
randomdrift's picture

I agree that their goal is domination. They have repeatedly stated that they want a totalitarian Fascist theocracy. However, both the inputs and system are economic and so long as the system remains too large and too interconnected, its behavior will continue to have no general solution but will be predictable locally using sensitivity analysis. From their comments it is clear that they continue to use that method, I just don't see how they're doing the testing. That is what is opaque to me.

Wed, 01/30/2013 - 17:26 | 3200290 randomdrift
randomdrift's picture

Perhaps, I've been looking at the wrong output or measure of the system. They could be testing the socio-political response, instead of the economic response. ...  Hmmm.  That is exactly what the Hoover Administration did, as they were causing the Great Depression. They'd introduce an economic policy and, then, observe its impact on social trends. 

Wed, 01/30/2013 - 14:25 | 3199486 mudduck
Wed, 01/30/2013 - 15:38 | 3199775 Jake88
Jake88's picture

"minkey" you said, "minkey" "how can an idiot be a policeman?" How can an idiot be the Fed Chairman?

Wed, 01/30/2013 - 14:32 | 3199502 janus
janus's picture

http://www.youtube.com/watch?v=DQ5w3Kywdp0

mmm,mmm,mmm!

mrs. bernake is lovely, no?

but geithner's momma really stole the show!

chickie-chic-boom, indeed!  madame, you are too much!

wasn't that wonderful, folks?

de nada,

janus

Wed, 01/30/2013 - 14:37 | 3199528 Atomizer
Atomizer's picture

Generally I use this feature to depict Obama. Since they share the same banana peel, let them redistribute the power of ownership.

http://www.youtube.com/watch?v=UFwf7gRiLYM&feature=related

Wed, 01/30/2013 - 14:41 | 3199543 Fix It Again Timmy
Fix It Again Timmy's picture

This monkey has 535 stooges working for him...

Wed, 01/30/2013 - 15:07 | 3199663 TWSceptic
TWSceptic's picture

I'll take the monkey over the Bernank any day.

Wed, 01/30/2013 - 15:25 | 3199678 michael_engineer
michael_engineer's picture

"Modern economies are too complex to be reliably modeled; their connections and correlations are loose and imprecise"

I beg to differ. On the macro scale, it can be modeled much like an electric circuit. For electric circuit modeling, given a fixed energy source and just knowing how much load there is, you can predict exactly how much work is done. Now if you allow your energy source to slowly decrease, you can precisely predict that the amount of work performed by the circuit will also be decreasing.

The same concept applies to the economy. If our energy inputs start decreasing then less physical work will get done (and most work involves kinetic energy stages) . The majority of GDP contributions involve kinetic energy stages and some very important ones are almost exclusively characterized by kinetic energy stages. So therefore if our energy sources start dropping then less GDP can be expected.

Wed, 01/30/2013 - 16:15 | 3199986 Clowns on Acid
Clowns on Acid's picture

Nice try, but over simplified. You are still quoting from a hard science perspective.

Wed, 01/30/2013 - 15:29 | 3199787 Jake88
Jake88's picture

Bernanke is the organ grinder. Obama is the minkey.

Wed, 01/30/2013 - 16:01 | 3199939 YouAreBliss
YouAreBliss's picture

More a trained pet monkey of the Banksters - they crank the organ and he dances!

 

He gets a peanut and they get to pocket the loot.

Wed, 01/30/2013 - 16:16 | 3200002 Clowns on Acid
Clowns on Acid's picture

Monkeys just eat low hanging fruit, they don't eat away at the foundation of your house like termites.
Much more difficult to eradicate a termite problem than a monkey problem.

Wed, 01/30/2013 - 19:10 | 3200633 ncdirtdigger
ncdirtdigger's picture

GET YOUR STINKING PAWS OFF ME, YOU DAMN DIRTY APE!

Wed, 01/30/2013 - 19:10 | 3200634 ncdirtdigger
ncdirtdigger's picture

GET YOUR STINKING PAWS OFF ME, YOU DAMN DIRTY APE!

Thu, 01/31/2013 - 00:47 | 3201502 deebee
deebee's picture

an insult to monkeys. At least monkeys have redeeming features

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