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Financial Sense And Nonsense

Tyler Durden's picture




 

Some recent deep and not so deep financial thoughts, as compiled by Edelweiss' Dylan Grice

 

“…the best way to get interest rates up is to have low interest rates, because that promotes a stronger growing economy and that causes interest rates to rise. In some ways the fact that interest rates have gone up a bit, and it happens on the real not the inflation side, is actually indicative of a stronger economy, which again suggests that maybe this is having some benefit.”

—Fed Chairman Bernanke responding to a Congressional testimony question by California Representative Miller

 

“Credibility is an enormous asset. Once earned, it must not be frittered away by yielding to the notion that a little inflation right now is a good thing, a good thing to release animal spirits and to pep up investment. The implicit assumption behind that siren call must be that the inflation rate can be manipulated to reach economic objectives. Up today, maybe a little more tomorrow and then pulled back on command. Good luck in that. All experience demonstrates that inflation, when fairly and deliberately started, is hard to control and reverse.”

—Paul Volcker, 29 May 2013

 

“When you’re one step ahead of the crowd you’re a genius. When you’re two steps ahead, you’re a crackpot.”

—Rabbi Shlomo Riskin, Lincoln Square Synagogue, Feb 1998, cited in Arizona Jewish Post, 18 Sept 1998, B10

 

“Let’s be clear. We’ve intentionally blown the biggest government bond bubble in history.”

—Andy Haldane, Bank of England director of financial stability

 

“(As a teenager) I was utopian. I found adults and adulthood fundamentally corrupt, self-serving and unclear. I still do but I now find the utopian even more harmful.”

—Nassim Nicholas Taleb

 

“We all know it’s going to end badly, but in the meantime we can make some money.”

—Jim Cramer, CNBC

 

“Thank God for the Fed.”

—Australian Treasurer Wayne Swan

 

“In money management what sells is the illusion of certainty... a fund manager who tells the truth (the truth being that he may be wrong at any time) is a more difficult sale but a better investment.”

— John Hempton

 

“Banks need more capital—lots more capital, not minimal provision based on a pseudoscientific calculation of risk-weighted assets. Neither regulators nor management can assess accurately how much a bank really needs. The only safe bank is one with more capital than it could possibly require. Like banks of old.”

—John Kay, cited in the Financial Times, 2 April 2013

 

“He defeated fascism, this is what matters the most. And life was cheap and affordable too.”

—Ushangi Davitashvili, Georgian admirer of Josef Stalin, explaining the recent rise in popularity of the old Soviet tyrant to Bloomberg (According to a poll referenced in the same article, 45 of Georgians approve of Stalin.)

 

“What is the foundation for your certainty that as peacetime debt hits new records in coming years, the United States will be able to engage in forceful countercyclical fiscal policy if hit by a large unexpected shock? Furthermore, do you really want to find out the answer to that question the hard way? … we attach, as do many other mainstream economists, a somewhat higher weight on risks than you do, as debts of all measure—including old age liabilities, public debt, private debt and external debt—ascend into record territory.”

—Harvard’s Carmen M. Reinhart responding to Paul Krugman’s recent volley of attacks with significantly more class than the shrill mudslinger from Princeton, 25 May 2013

 

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