Ex-Morgan Stanley Chief Economist Admits "Fed Is Distorting Markets"

Tyler Durden's picture


Stephen Roach, former Chief Economist at Morgan Stanley, has never been shy to share his opinions about the world and having left the Wall Street firm is even freer to speak uncomfortable truthiness. This brief clip, as Sovereign Man's Simon Black notes, says it all so succinctly... "The market has been distorted by far bigger forces than flash trading. To me, the force that has rigged the market... is the Federal Reserve, not the flash traders."

We recommend skipping to 13:05 for about 30 seconds of brilliance if you’re pressed for time:

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Tue, 04/22/2014 - 16:32 | 4684075 NOTW777
NOTW777's picture

o really?  nah no way

bernank helping the little guy right

Tue, 04/22/2014 - 16:40 | 4684109 Arius
Arius's picture

well, thats the all purpose for creating the fed in the first place, create problem to solve it .... LATER ... the little guy, yeah well, you can go that way if you want to ...

Tue, 04/22/2014 - 16:47 | 4684127 Deathrips
Deathrips's picture

No Amnesty NOW Bitch! They are trying to throw the fed under the bus...after stuffing every orifice they could with gold and silver on the way out. I dont think so.


Fuck this rape tool!



Tue, 04/22/2014 - 16:57 | 4684130 ZerOhead
ZerOhead's picture

Wow. Just wow.

So he blames the Federal Reserve and a lack of regulation as being the primary culprits here. Also blames the 'little people'.

Says Wall Street (his former employer ironically) was NOT the problem.

So who in the hell paid for and profited from the deregulation and who benefitted from the Federal Reserve bailouts and trillions of injected fiascos?


Tue, 04/22/2014 - 16:58 | 4684170 gjp
gjp's picture

Seriously.  I was about to say something nice about him being one of the few who actually called out the bogus US economic model and the Fed bullshit behind it over the years, but then I actually watched the clip, and to exonerate Wall Street like that, WTF??? 

It's the Fed's fault, Main Street's fault too, gross distortion to blame it on Wall Street?  Who does he think owns the Fed?

Fuck.  Everyone's so full of it.

Tue, 04/22/2014 - 21:01 | 4684983 EscapingProgress
EscapingProgress's picture

We have reached the 13th level.

Tue, 04/22/2014 - 22:25 | 4685213 Buck Johnson
Buck Johnson's picture

They know it's over and they are now trying to get an alibi and also a way out when the whole thing comes crashing down.

Tue, 04/22/2014 - 16:41 | 4684112 Pladizow
Pladizow's picture

Breaking News: Water is Wet!

Tue, 04/22/2014 - 17:44 | 4684308 QQQBall
QQQBall's picture

This Stephen Roach report was sponsored by Wild Bill Akkkkman



Tue, 04/22/2014 - 16:33 | 4684078 centerline
centerline's picture

pot calls kettle black.  funny.

Tue, 04/22/2014 - 16:34 | 4684080 LawsofPhysics
LawsofPhysics's picture

Yes, now that I have profitted tremendously (and hidden my wealth around the globe) let me be honest...


roll the mother fucking guillotines, nothing changes otherwise.

Tue, 04/22/2014 - 16:46 | 4684124 pods
pods's picture

I like these "come to Jesus" moments that these paper pushers have.

Of course it is after they are old and gray, retired, and no longer depend on being in that system.

The dirty little secret is that if the financial sector blew up it would NOT be the end of the world.


Tue, 04/22/2014 - 16:35 | 4684086 f16hoser
f16hoser's picture

WOW! You're very astute. Tell us something we don't know; Dumb-Ass!

Tue, 04/22/2014 - 16:36 | 4684088 devo
devo's picture

The sun is hot.

Tue, 04/22/2014 - 16:38 | 4684095 ronron
ronron's picture


Tue, 04/22/2014 - 16:37 | 4684090 Soul Glow
Soul Glow's picture

Because Captain Obvious says so.

Tue, 04/22/2014 - 16:37 | 4684091 centerline
centerline's picture

The big question is why all the "truthiness?"  What's the play here?

Tue, 04/22/2014 - 16:39 | 4684099 optimator
optimator's picture

So he can shortly say, I only learned about it last April.

Tue, 04/22/2014 - 16:44 | 4684119 Arius
Arius's picture

WHY now?

simple is awake up time .... about time ...to many things going on right now, all hands on deck

yeah, we told you to put the vests on but you wouldnt listen, what can we do???

Tue, 04/22/2014 - 16:45 | 4684118 Notsobadwlad
Notsobadwlad's picture

Let me ask you this question and maybe it will be a little easier.

If YOU wanted to create a global banking empire and enslave the world's population under one global currency that only you can create, what steps would you need to take in order to do it? How could you make people, at least initially until it is too late, want and accept it? Think about it? Map it out on paper if you need to.

There is the question about who is really in the know and who are the useful idiots.

Tue, 04/22/2014 - 16:56 | 4684162 centerline
centerline's picture

I really don't buy into the whole global domination thing.  I think these assholes are just greedy sociopaths.  They buy the system, rig the games, etc.  Whatever it takes.  Just predators that have warped reality to hide thier crimes.

But, I would think they are smart enough not to bite the hand that feeds them.  Unless it is staged.


Tue, 04/22/2014 - 19:10 | 4684561 SDShack
SDShack's picture

If you believe they are sociopaths (and they are), then you have to believe their goal is global domination. That is all a predator lives for... domination... winning at ALL costs. They lie, cheat, steal, extort, buy, rig the game, etc, all so they can WIN in their twisted minds. They will sacrifice EVERYTHING to win. And by everything, I mean EVERYTHING... their co-workers, friends, family, any human being, anything. They never stop, because they CANNOT stop. It's in their DNA. Global domination isn't even enough. Sociopaths are the most dangerous forces in the universe. If we master warp drive, you can bet sociopaths will try to dominate other worlds.  And they can't help but bite the hand that feeds them. It's how predators show their domination. As they grow more powerful, they have to exert more force over more powerful foes, which often is another sociopath. Thus by their very nature, Sociopaths will eventually feed on each other after they have disposed of the masses. Absent the uniform enforcement of judicial law mandated by the masses, a sociopath can only be stopped by overwhelming force... usually a revolution by the remaining masses.

Tue, 04/22/2014 - 17:05 | 4684190 Arius
Arius's picture

the global empire has been created long time ago... "the merger" of rockfeller interests was the last straw of any seemingly independence

Tue, 04/22/2014 - 17:10 | 4684205 devo
devo's picture

Oh noes, de globalists.

Tue, 04/22/2014 - 18:24 | 4684418 Drachma
Drachma's picture

I'll let Mr. Omar Khayyan (11th century poet an tent-maker from Persia) tell you what my first and most important step would be:

"What! out of senseless Nothing to provoke

A conscious Something to resent the yoke

Of permitted Pleasure, under pain

Of Everlasting Penalties, if broke!

What! from his helpless Creature be repaid

Pure Gold for what he lent us dross-allay'd

Sue for Debt we never did contract,

And cannot answer - Oh, the sorry trade!"


Tue, 04/22/2014 - 16:38 | 4684097 replaceme
replaceme's picture

Wather is wet, and it's dark when I close my eyes.

Tue, 04/22/2014 - 16:39 | 4684101 hobopants
hobopants's picture

Next they're going to be telling us the precious metals markets are manipulated or something...madness!

Tue, 04/22/2014 - 16:40 | 4684105 Flux
Flux's picture

Who cares?

My stocks are rising. You can't beat the momentum.

(ps, gold has to really do some moving to be a buy this month)

Tue, 04/22/2014 - 16:40 | 4684106 Mr Giggles
Mr Giggles's picture

Nurse Nurse hes out off bed again.

Tue, 04/22/2014 - 16:43 | 4684114 iBuddhaTrader
iBuddhaTrader's picture

Everybody here knows about the Fed rigging.


Our senil friend just wants to divert attention away from the coming HFT class action, as his former employeer is one of the greediest pigs in the HFT market rigging game...

Tue, 04/22/2014 - 16:43 | 4684115 Its_the_economy...
Its_the_economy_stupid's picture

tell me again how HFT is different from Front-Running?

Tue, 04/22/2014 - 16:50 | 4684137 pods
pods's picture

HFT is legal and front running isn't.

No officer, this isn't pot, it is tomato leaves. All legal and proper.

Seems only those in the inner circles can pull that off.


Tue, 04/22/2014 - 19:57 | 4684730 rosiescenario
rosiescenario's picture

Front Running is illegal, but Front Sprinting was never conceived or addressed by the archaic law forbidding front running.....there, did that help you?

Tue, 04/22/2014 - 16:43 | 4684116 Mr Giggles
Mr Giggles's picture

In a further statement, he whent on to inform us that sharks will only attack if you are wet.

Tue, 04/22/2014 - 16:46 | 4684122 Pumpkin
Pumpkin's picture

Well fucking DUH!

Tue, 04/22/2014 - 16:49 | 4684136 Toolshed
Toolshed's picture

His minimizing of the HFT thievery sounds like book envy to me. Also, his rationalizing about it not being all Wall Street's fault and that the FED is just as guilty is pretty lame. Don't Wall Street banks own the FED, as in literally? So blaming the FED is blaming Wall Street. Just a douche bag pimping his book.

Tue, 04/22/2014 - 16:52 | 4684145 Racer
Racer's picture

'It isn't just Wall street, it is also the Fed and the reckless behaviour on MAIN street'

Put the blame onto everyone but us good guys in wall street!

Tue, 04/22/2014 - 16:59 | 4684172 alfred b.
alfred b.'s picture


   omg....what will Janet do now!     I expect this to be on CNN "breaking news" by 5 tonite!!!


Tue, 04/22/2014 - 17:04 | 4684188 OptionsHedge
OptionsHedge's picture

this is why ZH has zero credibility....a shill who's worked his life on wall street now becomes ZH hero because  he is now bottom feeding on the bottom rung, ie the FED

Tue, 04/22/2014 - 17:10 | 4684206 ronron
ronron's picture

your funny, but not funny haha.

Tue, 04/22/2014 - 17:09 | 4684200 Amish Hacker
Amish Hacker's picture

One very reliable sign that the end is near is when people stop looking for solutions and start looking for scapegoats. Another is when a leading financial expert, someone who has spent his whole working life chained to the Wall Street oar, can say with a straight face that the entire front-running, sub-pennying, rehypothecating sell-side industry is innocent, innocent I tell you. 

Tue, 04/22/2014 - 19:15 | 4684575 SDShack
SDShack's picture

Innocent like.... "not even a smidgeon of corruption"

Tue, 04/22/2014 - 17:21 | 4684231 disabledvet
disabledvet's picture

what if the market THINKS the Fed is manipulating the market when in fact "no one is in charge of that thing"?

Tue, 04/22/2014 - 17:23 | 4684237 Obama_4_Dictator
Obama_4_Dictator's picture

Please let it end...it's so painful to all of us who are awake.....

Tue, 04/22/2014 - 17:43 | 4684293 QQQBall
QQQBall's picture

Amazing that NET growth is never addressed. USSA maybe creates 4 bucks of debt for a 1 in GDP growth.  So yeah, we will continue to "grow" until reality sets in. This is absolutely a purposefully misleading analysis.

Tue, 04/22/2014 - 18:08 | 4684373 I Write Code
I Write Code's picture


Of course the fed is distorting markets, that's the whole f'ing point, the undistorted market (according to them) would be a cesspool.

The question is whether the need for this distortion ended three years ago, or is still ongoing.  Cuz there is a huge cost to distortion, even if it's needed.  And that cost tends to metastasize.

Tue, 04/22/2014 - 18:42 | 4684473 Offthebeach
Offthebeach's picture

Lot of anti-Fed/terrorists talk here. ( Snort ).
Just saying, you know?

You all might have( cough cough ) shitgum "accidents", fall off your ranch house roof, car might accelerate into a palm tree or sumthing.

Tue, 04/22/2014 - 18:43 | 4684474 villainvomit
villainvomit's picture

My name is Roach......what else do you need to know ?

China needs to shift to more consumption ?  Like USA consumption as percent of GDP?  Or as  MCD consuption of big macs and super gulp sugar surpruse ? 

Either way = fail

My name is Roach.



Tue, 04/22/2014 - 18:55 | 4684503 yogibear
yogibear's picture

Wall Street is infested with roaches.

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