Goldman: "Some Lessons From The Past Four Years"

Tyler Durden's picture

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winter is coming's picture

we are at point where it is just annoying...there will be no crash and europe will get bailed out until politicians are killed... until then, people will pay for the bailouts and the markets will not crash

TruthInSunshine's picture

there will be no crash and europe will get bailed out


How that's crack?

That stuff will kill you.

Get clean, sober and wake up to reality, junky.


I can sum up Jan Hatzius's speech thusly:

Give us, at Goldman Sachs and our parasitic ilk on Wall Street, more taxpayer money, Bernank & Geithner.

Caviar Emptor's picture

Give us, at Goldman Sachs and our parasitic ilk on Wall Street, more taxpayer money, Bernank & Geithner.

Here here, my corporatist friend. Those fat, lazy, moronic taxpayers don't realize how good they have it thanks to us. We provide them with soap opera themes, aspirational shopping, and a healthy level of jealousy that keeps them on their toes! And we also fill the world with beauty by spending on things like yachts and hookers. Those turds. 

AldousHuxley's picture
  1. As long as we have GS execs in US Treasury, we will be bailed out
  2. As long as we pump money to K-Street, Congress will not reform our business
  3. As long as we have the Fed, we will profit and get bonuses
  4. As long as we have Clinton's son-in-law employeed, Clintons and Rubinites will defend us
  5. American public is stupid and /or weak
  6. Moral hazard in the land of no morals can happen as often as we request it.
Harlequin001's picture

“[U]nder a fiat money system, a government (in practice, the central bank in cooperation with other agencies) should always be able to generate increased nominal spending and inflation, even when the short-term nominal interest rate is at zero.”? (Ben Bernanke, 2002). Again, this is true in theory.'

this is staggering. No it cannot. the limit on spending on credit is not the availability of credit, which is always endless but the ability to make good on the repayment. Which when limited to wages under a currency peg is  a very finite quantum. Where the hell was Snow when he had the opportunity to take on China for fixing it's currency. let me guess, not his fault.

We're going to need a lot of lamp posts before this is finished, because the UK is no better.

The Big Ching-aso's picture

Somewhere right now in an alternate universe.............................

"As evidenced through testing their economic and monetary theories in real-time live market settings, these brilliant academics have demonstrated beyond a reasonable doubt that their theories while highly lauded in their respective inner circles are completely and utterly full of shit."

Akrunner907's picture

Are we still going God's work?  I wonder if Blankenstein still believes that?  Or maybe he is learning that God is angry with him.

Zero Govt's picture

once the likes of fleecing-agents Dimon and Blankfein have done their worst with JPM and Goldmans there will nothing left to possibly kick-start of either burnt-out smouldering carbonised carcass of a bank

the economic anarchists of politics and central banks have zero understanding of building customer loyalty and brands because they are monopolists sitting their fat crony arses behind desks all day answerable only to their pea brained peers and not end-users

So they think they're 'saving' these bankrupt fraudsters by plugging holes in their cooked books (balance sheets) but are clueless to these same firms reputations going down the sewer in non-stop market rigging, rule breaking and fraud

Investors invest on reputation as much as balance sheets.. nobody is going to touch Blankfein and Dimons 'nuked' criminal legacies or what Benny has 'saved' with a barge pole

Benny cannot even save the toxic MBS's on his own Fed balance sheet (rumour is pea-brain wants to buy more!!!) or his own nose-diving Kamakazi printer-investor reputation.. however does this chubby chump think he can save other banks while his own Fed sinks to new depths of incompetence and crookedness under his stewardship?

Someone give that toxic crone a bullet

DaBernank's picture

Let's just add nominal derivatives exposure to the GDP equation.

Tsunami Wave's picture

Fourth, Nothing is ever our fault and governments and central banks and the serfs (taxpayers) must bail us out from all of our mistakes. 

Also, we will never acknowledge that Keynesianism in a broad form ever works.  Finally we will also never admit that an economy truly works like an ecosystem or an organism, and not like a complicating machine where we can turn one spigot or a lever and a deired effect happens without consequences.

Caviar Emptor's picture

Yes. We here in the United States of Corporate Welfare never need to pay atttention to those quaint rules about supply and...what was that other one again? Oh well, doesn't matter anyway. Taxes, rules, economics: those are for the little people. 

Tsunami Wave's picture

Supply and... more supply! Monetary supply that is, though we don't mind if fiscal [supply] supports us!

Caviar Emptor's picture

Never thought this would happen, but we're finally reaching Peak Bullshit. 

When BS becomes so bald, so obvious that it gets as silly as playing a game with your 2-year old nephew. 

And it's only sickening the already angry OWC/Indignados/Arab Spring crowd that is going viral around the globe. 

Harlequin001's picture

So, - 'and thereby produced very favorable economic outcomes—higher profits, higher stock market valuations, low inflation, and a strong labor market...' is nothing to do with printing money through ever lower interest rates, it was all the fault of a lack of volatility?

Nothing to do with the Fed then. Remind me why did we referred to him as 'Maestro' again...

and this bit, classic - 'And the favorable economic outcomes time and time again “proved wrong” the naysayers who thought that the boom would end in a bust.' So, can someone confirm please  that we didn't actually end in a bust, and that everything is really honkey dorey, because I think I'm missing something...

Now, where are those blasted always wrong 'naysayers' again...

Harlequin001's picture

“The central irony of the crisis is that while it was caused by too much confidence, borrowing, and spending, it is only resolved by increases in confidence, borrowing, and spending.” (Lawrence Summers, 2011) - might I be silly enough to suggest that too much confidence, borrowing, and spending is only resolved by BANKRUPTCY.

It gets better - 'I believe that this is true. But unfortunately, it is probably too much of an irony to resonate with most voters and elected officials.' That's because it is bullshit, and if this is what's being taught in US universities by this so called fuckin professor, or whatever title he has then it's no fuckin wonder we're in such deep shit and wading deeper still.

Does he drive to work? Why is it you can never find a good car accident when you need one?

FinHits's picture

Sadly "Government's dont rule the world, Goldman Sachs rules the world" didn't make the cut this time around. Where is Alessio when you need him?

More stimulus is bad for the ADHD world markets, but good for Goldie.

paarsons's picture

How dare you mock Larry Summers!

He's brilliant.  Or at least that's what they keep telling me over at CNBC.


Coldfire's picture

Churnside pabulum, worthy of mock.

Yamaha's picture

Honest to God - where do these guy find all the stupid pills. I just hope most of these idiots don't reproduce.

Tsunami Wave's picture

It must feel good to be stupidly ignorant like them. Ignorance is bliss.. especially at the expense of everyone else! If only Goldman got into the pharmaceutical business....




That got me thinking.. Then they could come up with their own brand of hopium! They could push it to everyone in congress and everyone in any governmental position around the world. It could save millions in lobbying.. Imagine the profits they'd get, putting the drugs onto some newly created commodity drugs exchange, and constantly frontrunning, shortselling, and pushing their product. That sounds like a great multi-million dollar idea.

Sequitur's picture

Hey I like reading the institutional reports ZH posts. Remember the Don's wisdom: "Keep your friends close, but your enemies closer."

chump666's picture

I actually think the economic doomsday is within 6mths or less.  Nothing is going to stop it, I am not a conspiracy theorist or any of that jazz.   Those maniacs at the FED have gone insane, same sh*t repeated again and again...There is nothing anybody can do anymore.

In saying that, markets should rally into middle next week, flat to end OCt, then major selling/volatlity into Nov. 

Europe will decend into chaos.

LongBalls's picture

I agree in that we are weeks and months away from resolution. This can't go on for months and years. Investors will reach fatigue of volatility soon enough. It's time to go all cash for awhile IMHO.

ViewfromUndertheBridge's picture

"The problem is that it is difficult to know what “confidence” means, how one can measure it, and what policymakers can do to improve it.

The difficulty is that despite dumbing the sheep down, shearing them repeatedly, giving them bread and circuses, turning them against each other, they continue to try to think...and now they are thinking we have stolen their future and looted their past...what can you do with sheep like this?

You certainly can't assign words like "confidence" their true meaning Jan, that's for sure. But you can mull about it as an ephemeral, abstract and difficult concept. Like trust.

Thanks for posting this Tylers, game-fucking-over and from their own mouths! Again.

slackrabbit's picture

Agree....I mean Double Plus Good 

jmc8888's picture

Gotta love your business school sponsoring piece of shit ideas.

So in order to reduce the fraiser crane effect associated with setting monetary (aka bullshit monetarism sophistry) policy from the zero bound during an economic recession (not depression?), we need to change the rules (more sophistry) in order for our ADHD ritalin filled heads to not get scared of our reflection in the mirror so that we may more clearly see that which our goalseeked minds had already come up with?

That my friends is monetary pseudo bullshit.  Create a fake standard so that your bullshit seems believable. Create the authority you need to then use for your next step.  Or Back to the Goalseeked Future.

This now fits our bullshit bankster attempted ball saving approach better than the last sophistry we pulled out of Taylor's ass that even he thought we were crazy to follow.  You know like Moby Dick was about sled dogs in Alaska during the Klondike, or some shit.

We won't notice whether or not the Titanic is sinking, we'll just measure that we're 10 feet above sea level by climbing up to another deck.  Glad we in Ivory tower land have 1st class tickets.  Shame no one else does, but it doesn't matter.  By then we'll be in NY and back on Wall Street pedo-ling shit.

We use this newfound sophistry to funnel more trillions to our bankster friends which of course, is now backed by science*, and promise that we'll force the people to accept bogus cutbacks later to pay it off.  In the meantime happy days are here again. 

It's hard to measure confidence, but if we fudge the numbers, the idiots, I mean citizenry won't be the wiser.  Never mind confidence means dick, we must engineer it because we have no other engineers left building anything in the physical economy.  The people will believe all this chart changing mumbo jumbo sophistry, and let their pent up cage animal demand spirits run wild like it's Ohio. 

It all must be true because it was sponsored by my W.P. Carey School of Business @ ASU.   Excuse me while I puke up my jumbo jack.

There's no solution like Glass-Steagall

There's no solution like Glass-Steagall

There's no solution like Glass-Steagall

Ahhh shucks, I said it three times and I'm still stuck in crazy fucktard mOZetary land still.

ViewfromUndertheBridge's picture

Not only is it pseudo monetary is also lies. The 80s and 90s saw a reduction in volatility???? I think 1982 saw Citibank blow up more money than they had ever made as profit in their entire history...and the 90s had the Savings & Loan...he just means compared to what we just went through the 80s and 90s were a walk in the park.

What's next?

As you say, unless they bring back Glass Steagall the writing is on the wall.

Temporalist's picture
Revealed – the capitalist network that runs the world

"When the team further untangled the web of ownership, it found much of it tracked back to a "super-entity" of 147 even more tightly knit companies - all of their ownership was held by other members of the super-entity - that controlled 40 per cent of the total wealth in the network. "In effect, less than 1 per cent of the companies were able to control 40 per cent of the entire network," says Glattfelder. Most were financial institutions. The top 20 included Barclays Bank, JPMorgan Chase & Co, and The Goldman Sachs Group."

Element's picture

for the most accurate forecast over the prior four years to the Goldman Sachs US Economics team.


Well, if you included the surreptitious naked-shorting of Bear Sterns and Lehman Bros ... that's possibly right ... but not so much finance or economics ...

More a type of ... global ... Wreckonomics ...  and having the mint's back-office number also helped ... sshhh!


I think I may have just coined a name for a whole neo-Economics Sub-Discipline.

catch edge ghost's picture

I would like to mock it but that would take time away from preparing for it.

See, today I've also learned about cost of living adjustments to Social Security, Federal Uncome Taxes, and IRA contributions. All in one day! Very exciting... So I fed my spreadsheet some wikipedia and it told me the Federal Minimum Wage is about 40% below its trend.  

And since I'm pretty sure that guy on BBC was right about Goldman running the world, I figure this is just Hatzius updating the Owners' manual.

I'm still calling it hyper-controlled inflation. It will require a degree of global price and wage fixing that only 25th century technology could provide. They'll try it anyway.

For now tho, ima stay all freaked out until they're done killing bitchez. (thinking it's best to just avoid anywhere with sand really)


falak pema's picture

1°    But I hope you will forgive me for noting that the basic story was very well laid out by Bill Dudley and Ed McKelvey in a Goldman Sachs study called “The Dark Side of the Brave New Business Cycle” in 1999,

2°     The central irony of the crisis is that while it was caused by too much confidence, borrowing, and spending, it is only resolved by increases in confidence, borrowing, and spending.” (Lawrence Summers, 2011)

3°   “[U]nder a fiat money system, a government (in practice, the central bank in cooperation with other agencies) should always be able to generate increased nominal spending and inflation, even when the short-term nominal interest rate is at zero.”? (Ben Bernanke, 2002).


Point 1° says there was an Oligarchical plan evident in the 80s (Reganomics) whose ramifications/consequences GS saw first and foremost, understood and explained the workings of better than anybody else, to the reigning Oligarchs, making them (GS) the Machiavellian power house they have become : the Consigliere of the New Borgias of the outsourced NWO financial economy. 

Point 2°  Says exuberant and outright hubristic execution of said global plan creates problems that can ONLY be resolved by MORE hubristic affirmation of said mind set and resolute follow on of said plan. (Never change a winning strategy for minor reasons. Go for it all.)

Point 3° Says the nerve of the game financial plan is Monetary control, with cheap money as accelerator and inflation as safety valve for releasing periodically excessive irrational exuberance. That way the plan continues to work for the benefit of the Oligarchs.

Seems like their game plan is working to a T. All we need now is QE-3!!!!

As a slight reminder of historical perspective : all hubrisitic plans end up going the opposite way to that planned. From the house of Atreus, to the fall of colonial Europe, same old story. Now its the turn of USa, USa. Sad to say, for the nation of Jefferson. 

Market Efficiency Romantic's picture

Totally agree. Only I think they were not made the NWO Consigliere due to their precise analysis of the major agenda behind Reagonomics. With JPM, the NWO headquarter moving up the latter from being a flexible and discrete instrument to becoming a controlling body (thanks to Glass/Stegall resolution, again thankfully pushed by Citi, so JPM could sit, wait and see and not become target of public anger in case of failure), the oligarchy needed a new delta squad, that is GS. Power shift and rewarding was managed in the course of the IPO. From then on, GS managed all the dirty work.

Instant Wealth's picture

So how do we overcome this bias toward excessive caution?

Putting LSD in people´s toothpaste ?

Market Efficiency Romantic's picture

And another award for Summers, one of the main engineers of the overall financial deregulation policy started thirty years ago. If it was not so sad, it would be anice peace of comedy, how he wraps the effects of institutional risk-taking, economic unbalancing and major shift of wealth into some academic argument of irresponsible market behavior. Oh yeah, great policy, only that abstract market beast tried to fight our artificially created, but sustainable rewards. But, Larry sure has the answer, fight that beast with another dose of our policy. And can you hear his undisputable reasoning: Either you follow up with more of our policy or you cannot blame us. Only going half-way is not what we prescribed. Unfortunately, going all the Summers way to the end means, there will nothing left, end of the road. Then, people won't care about blaming anyone anyway, as they have more pressing problems such as survival.

Unfortunately, he is untouchable. What an evil bastard.

Jendrzejczyk's picture

The "Masters of the Universe" are busy circle jerking each other in a mental masterbation orgy. Mr. Reality is about to spoil their party in an unglamorous fashion.

williambanzai7's picture

What a fucking joke.

Element's picture

Humans can do amazing things with body and mind ... they can CONtort into a snake, and think like one as well ... these people have spent a LONG time mastering the art of the lie and the con ... they are unbelievably skilled and flexible.

Jendrzejczyk's picture

In summary, our global Ponzi must be allowed to continue to destroy the world, in order that we may save it.

s2man's picture

I blow my nose in your general direction, silly GS team.


MaggieL's picture

"...fiscal stimulus is typically undersupplied after a crisis..."


I keep telling you, the patient died because you didn't apply enough leeches. 

Mr. Lucky's picture

Complete newspeak.

BandGap's picture

Just listened to an "expert" on the radio telling us everything is rosy as far as the economy.  Again and again, the S&P is up and companies are reporting positive earnings. Things are getting better, just wait and see.  Europe tells us all is well.  This is frustrating initially, then fascinating when you step back.  If/when the house of cards fall, the majority will not know what hit them.  They are still on the "pay no attention to the man behind the screen" scene.  We go over the cliff at the maximum height and with eyes closed.

karzai_luver's picture

Nothing succeeds like psychosis.

Can't anyone see Summers is a sick animal?


We have Obomber in the big house and his sidekick the Unibomber of eCON, Summers.


What a scene.



BennyBoy's picture

The world works according to what academics like Larry and Benny say.

El Gordo's picture

I'm truly disappointed that no one on this thread seems to be able to recognize and be grateful for the green shoots that our benevolent benefactors are providing for us.  Shame, shame, shame.

gookempucky's picture

Again and again these lymph nodes are all as per WBs excellent midget expose reminds us , just trying to win the worlds tallest midget contest. As some here have mentioned, the public is fed shit on a stick from the msn and its homemade---sheeple believe the lye and eat it up while saying that smell is hoorible but this fudgesicle sure tastes good. 

These folks are nothing but wasted cock wads.

Scalaris's picture

The central irony of the crisis is that while it was caused by too much confidence, borrowing, and spending, it is only resolved by increases in confidence, borrowing, and spending.” (Lawrence Summers, 2011) 

I'm going to assume that the audacity of the above quote won’t be lost in its own irony, to whatever audience it was directed to.

I will also assume that said audience can only be comprised by bankers who elect bankers to serve bankers, because for anyone else it will most probably be another round of pseudoidealistic platitudes known as bullshit, from another banker cum governmental cog.

Stating that the crisis was caused by “too much confidence, borrowing, and spending”, implies an unfortunate causality, innocent even, derived from mere naivety or miscalculation in the spectrum of macroeconomic “scientific” forecasting.

It also assumes that the banking industry was simply following its “traditional” structure as a business model, in a “reasonable” capitalistic system of course, and that whatever evolution has undergone, it only did because of the organic growth, technological and scientific ability, were evolved in tandem.

The factual explanation is that the banking industry evolved into nothing short of an abomination, infiltrating the higher echelons of corporatism and eventually managing to erase whatever ethical boundaries were left, by seamlessly blending its administrative layers with the ones of its own government.

And of course since the 80’s and the revolution of leverage, the only “natural” evolution which was achieved was the one in which the “traditional” practice of a fractional reserve system wasn’t enough, even if managed to maintain a more “reasonable” equilibrium in order to project itself as combination of a more “rational economic serfdom” and an economic system, vital for the maintenance and even prosperity of the society.    

So when money renting and quantum mechanics were eventually combined, and whatever endless possibilities they’ve offered, have already being realized, the society is now facing the consequences of the violent burst of 20 years worth of parabolic bubbles, along with its subsequent economic policies which were only implemented in order to keep the growth within “control”, while ensuring, of course, that those who were to benefit the most, did so within the safety of the democratic law, without engaging in any unethical contraventions, evident by the formation of the numerous government agencies who safeguard said law that were “created” by the same bankers cum governmental cogs.

At the same time, these very policies made sure that the American economy is reduced to a money creating industry though the creation and packaging of complex and riskful “assets” and the automatic algorithmic super-speed trading, along with two or three somewhat viable industries, whose growth was formed according to the amount of influence the aforementioned industry exercised within them.

As a result, America’s middle class was reformed into a mould of a new conformity, which was given the choice to educate and train itself accordingly in order to be useful for its corporate employers, or pursuit a path of self-employment, which would of course imply the required capitalization trough monetary leasing.

So in my opinion I’d say that this is a more fitting explanation regarding the central irony of the crisis, Mr Summers.