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Stephen Roach Mops Floor With Keynesianism And Former Fed Governor Larry Meyer

Tyler Durden's picture


Following David Einhorn's take-down of the great and glorious Oz Larry Meyer eighteen months ago, the latter has been in training - readying his counterfactual counter-punches and controlling his ire. The king of Keynesianism just had his bell rung once again by a market realist and pragmatist as Stephen Roach destroyed the "if-we-don't-have-models-we-are-making-it-all-up" maestro and his constant diatribe of counterfactual crap. "Where's the beef, Larry?" Roach asked on CNBC this morning, which was followed up with a rabbit punch from Kiernan, "and what about Christina Romer's stimulus-employment model?" The visibly shaken (seriously watch the clip) Meyer falls back once again to a defensive pose - and while practically admitting that the Fed is impotent - as he pulls out the ultimate "but without our models we would not be able to tell you how much worse it would be without the Fed interventions". Roach takes this weak cross to the chin and comes over the top with a devastating "mark your models to market in light of what the economy has done over the four and a half years, the traction from monetary policy has been the major disappointment of this so-called post-crisis recovery." TKO.

"There is no science in what you say - that conventional or unconventional monetary policy will deliver real economic growth"

"we have an incredibly dysfunctional system"


When is Roach-Meyer II - 'We woulda been a contender'?

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Wed, 08/01/2012 - 09:10 | 2668225 ZippyBananaPants
ZippyBananaPants's picture

I'm in a hotel room and tv only gets jerkoffs on CNBS. No Bloomberg.

Cramer, drink some more cock juice and fix the gravel in your annoying voice!

Wed, 08/01/2012 - 09:18 | 2668257 flacon
flacon's picture

Wow, Larry Meyer is so angry he is visibly trembling. 

Wed, 08/01/2012 - 09:23 | 2668277 lizzy36
lizzy36's picture

Larry Meyer went all high squeaky as soon as he was challenged. Same as Blankfein. Pretty sure it it some sort of signalling device kleptocrats use.

Wed, 08/01/2012 - 09:29 | 2668296 gjp
gjp's picture

Squeal like a pig

Wed, 08/01/2012 - 09:35 | 2668314 GetZeeGold
GetZeeGold's picture



I see a guitar and a banjo.....not a good sign.


Wed, 08/01/2012 - 10:05 | 2668445 SWRichmond
SWRichmond's picture

Fed guy arguing about "models"...the existence and use of "models" belies the managed economy, itself a model, and one that has failed.

If we have "scientific models," then we have credibility that we can manage the economy.  Absent those, then we have free markets.

Wed, 08/01/2012 - 10:19 | 2668508 Temporalist
Temporalist's picture

Larry Meyers: "Maybe we don't get it right.  Maybe we have the wrong models.  Maybe we kill a few million people.  Maybe we give too much money to banksters and kleptocrats.  At least we're doing economics."

Wed, 08/01/2012 - 10:38 | 2668587 Leopold B. Scotch
Leopold B. Scotch's picture

You can tell Larry needs to go back to the shleter of his coddling colleagues in the ivory tower who can reassure him that everyone else are just a bunch of idiots who don't get it.    Then, they must take over government so they can force their views on everyone.  Wait.  I guess that's already happened.

It's amazing with all the counterfactual talk, he certainly never considers the Broken Window Fallacy counterfactual.

Wed, 08/01/2012 - 11:05 | 2668674 forexskin
forexskin's picture

its just amazing - the newspeak about models and counterfactuals - being 'intelligently' discussed.

a model is only necessary when statist hubris insists, that at best, a planned economy is really the form of government best suited to the human condition. have these assholes forgotten the moral degeneration of the 20th century wrought by the statists? 150 million innocent civilians killed for objecting to their 'government's' utopian nightmares?

i can just hear this asshole's response "but we can't do nothing!" - with the hidden subtext being, to protect and extend our power as the status quo. how long can these assholes pull strings from behind the curtains?

brings to mind one of my favorite quotes: "America is at that awkward stage. It's too late to work within the system, but too early to shoot the bastards." Claire Wolfe

Wed, 08/01/2012 - 11:51 | 2668948 smlbizman
smlbizman's picture

was that larry myers or nathan thurm?

Wed, 08/01/2012 - 12:08 | 2669031 economics9698
economics9698's picture

Can I write a blog about how stupid 130 IQ Jews are and not be racist?  Seriously has anyone seen such an “intelligent” group that is so utterly clueless?

Wed, 08/01/2012 - 12:24 | 2669114 Hugh_Jorgan
Hugh_Jorgan's picture

He is an elitist buffoon. You are too obsessed with the whole Jewish/Banking/Zionist Conspiracy thing. Meyer is an over-educated sliverspoon-licking gloablist idiot that happens to be of Jewish decent, he probably isn't even a man of real Hebrew faith. Maybe you are just a bigot? (along with many other ZH-ers)

Wed, 08/01/2012 - 10:29 | 2668554 Killtruck
Killtruck's picture

“...out from the door of the farmhouse came a long file of pigs, all walking on their hind legs...out came Napoleon himself, majestically upright, casting haughty glances from side to side, and with his dogs gambolling round him.

He carried a whip in his trotter.

There was a deadly silence. Amazed, terrified, huddling together, the animals watched the long line of pigs march slowly round the yard. It was as though the world had turned upside-down. Then there came a moment when the first shock had worn off and when, in spite of everything-in spite of their terror of the dogs, and of the habit, developed through long years, of never complaining, never criticising, no matter what happened-they might have uttered some word of protest. But just at that moment, as though at a signal, all the sheep burst out into a tremendous bleating of-

"Four legs good, two legs better! Four legs good, two legs better! Four legs good, two legs better!"

It went on for five minutes without stopping. And by the time the sheep had quieted down, the chance to utter any protest had passed, for the pigs had marched back into the farmhouse.”

Wed, 08/01/2012 - 10:35 | 2668584 Leopold B. Scotch
Leopold B. Scotch's picture


Wed, 08/01/2012 - 13:59 | 2669482 ATM
ATM's picture

It's utterly transparent bullshit. If the observed data don't fit the model then we only need to adjust our model to accept the new data.

It is never once a consideration that perhaps the model is a piece of fuck that is completely wrong and irrelevant. We are supposed to bow to the model because it is complex and unknowable. It's a religion of it's own that these fucks use to confuse and placate the masses. Much like the bullshit that is the man-made global warmingists. Their models never predict anything but we are supposed to kowtow to their abiltiy to predict everything. 

Wed, 08/01/2012 - 14:21 | 2669571 XitSam
XitSam's picture

If we just end the fed, we don't need to worry whether the fed has models or not.

Wed, 08/01/2012 - 09:59 | 2668418 Kinskian
Kinskian's picture

I believe that tortured squeaking tone is taught to yeshiva students for use during talmud debates. 

Wed, 08/01/2012 - 09:24 | 2668279 ArkansasAngie
ArkansasAngie's picture

The truth hurts.

Models that start from the beginning with incorrect data such as not marking to market cannot possibly be right

It's about time we demanded that this crap stop

There can only be one ledger.

Wed, 08/01/2012 - 10:05 | 2668449 Dr. Richard Head
Dr. Richard Head's picture

There is one ledger for those that are not connected to the cartel and that ledger includes true accounting for assets and liabilities.  The cartel has one journal that has no accounting of liabilities, as those liabilities get to be assets.  What a wonderful FUCKING world!

Wed, 08/01/2012 - 09:34 | 2668312 Beam Me Up Scotty
Beam Me Up Scotty's picture

I have noticed alot more tension on CNBS lately.  Yesterday that British idiot host with the plastic face was all red faced about something too.  Santelli was ripping Becky Quick the other morning.  It hasn't been all nicey nicey lately, and I don't even watch it all that much.  Turning into reality TV!!

Wed, 08/01/2012 - 12:08 | 2669032 ebworthen
ebworthen's picture

I would have liked to have seen Santelli give Becky a lesson or two.

That little tart worships her own preconceptions.

Wed, 08/01/2012 - 14:01 | 2669491 ATM
ATM's picture

I'd love to see Santelli give that smug little leftist fuck Carl Quintanilla a good ol' Chicago Italian once over.

Wed, 08/01/2012 - 09:47 | 2668333 Winston Smith 2009
Winston Smith 2009's picture

"Wow, Larry Meyer is so angry he is visibly trembling."

That's what tends to happen when you challenge someone's "religion."  The models they use to try to run the world are absolute garbage as this short video makes obvious:


And even the ignorant mainstream media is beginning to wake up to what ZH readers have known for years:

Headline: Echoes of Japan? US economy may be in slow-growth mode for long time


Wed, 08/01/2012 - 09:47 | 2668368 DeadFinks
DeadFinks's picture

His hands were balled up into tight little fists. He looked ready to deliver a Woody Hayes left hook.

Wed, 08/01/2012 - 14:28 | 2669633 Imminent Crucible
Imminent Crucible's picture

I think he'd realized what he'd just said: "The Fed can bungle rate policy and blow up giant bubbles, but when they collapse there isn't much the Fed can do about it."

In other words, the Fed can do terrible damage to the economy, but then it doesn't have the tools to repair that damage. So, tell me, Larry: What do we need the Fed for?

Wed, 08/01/2012 - 09:59 | 2668414 Town Crier
Town Crier's picture

Didn't he look like Lewis Black for a moment?

Wed, 08/01/2012 - 10:28 | 2668464 Dr. Richard Head
Dr. Richard Head's picture

Up arrow for your sir.  Lewis Black, however, is funny and causes no harm to anyone.  This FED prick has brought devastation to the savers throughout the world.

Wed, 08/01/2012 - 11:13 | 2668730 FEDbuster
FEDbuster's picture

Is he related to Lewis Black, sure looks like it?

Wed, 08/01/2012 - 10:41 | 2668616 YuropeanImbecille
YuropeanImbecille's picture

I do not understand why the average goy/sheep can not see that these people are men of satan, he looks like pure evil that unpleasant zionist-satanist.


And no, I am not a believer, but I do know that they believe in their all mighty satan.

Wed, 08/01/2012 - 11:31 | 2668822 madridisburning
madridisburning's picture

You just go back to throwing feces with your fellow chimps.

Wed, 08/01/2012 - 11:40 | 2668874 banksterhater
banksterhater's picture


Wed, 08/01/2012 - 12:17 | 2669065 Indrid Cold
Indrid Cold's picture

Simplest explanation: Meyer's not used to being challenged in any significant way.

His reactions are akin to those of a religious zealot who's been asked to justify the existence of his chosen diety.

I'd expect he's surrounded by like-minded sycophants at all those oligarch cocktail parties to which he likes to be invited (and would prefer to continue to be invited.)

Wed, 08/01/2012 - 09:36 | 2668318 SeverinSlade
SeverinSlade's picture

The fact that idiots like Meyer are the most powerful men in the world just demonstrates how insanely fucked we all are.

Wed, 08/01/2012 - 09:13 | 2668235 Debtonation
Debtonation's picture

America is an independent nation that has been occupied by the Federal Reserve.

Wed, 08/01/2012 - 09:14 | 2668239 q99x2
q99x2's picture

What's the deal with Keynesians all talking with voices like men that have had their nuts cut off.

Wed, 08/01/2012 - 09:26 | 2668287 TWSceptic
TWSceptic's picture

Keynesianism is a very feminine ideology: women like to spend.


(No offensive girls).

Wed, 08/01/2012 - 10:12 | 2668475 Dr. Richard Head
Dr. Richard Head's picture

I have to agree there.  The idea that one can spend money and actually save based on the nominal price being lowered to a real price is outlandish indeed.

Shopper or FED: Look honey!  I saved all of this money with all of this shit I just bought.

Saver or Realist:  You didn't save money if you spent it bitch.  Go get me a beer.

Wed, 08/01/2012 - 10:40 | 2668606 Vince Clortho
Vince Clortho's picture

I think you are on to something.

Wed, 08/01/2012 - 11:16 | 2668751 FEDbuster
FEDbuster's picture

I do too.  This phenomena needs to be thoroughly investigated and perhaps even illustrated by WB7.

Wed, 08/01/2012 - 09:15 | 2668244 RacerX
RacerX's picture

These Fed guys just dont' fucking get it. Complete shills for the Banks and Gov't.

Wed, 08/01/2012 - 09:17 | 2668251 Vincent Vega
Vincent Vega's picture

Down goes Meyer! Down goes Meyer!

Wed, 08/01/2012 - 09:19 | 2668262 thomas pain
thomas pain's picture

but we have models....

Wed, 08/01/2012 - 09:25 | 2668284 MillionDollarBoner_
MillionDollarBoner_'s picture

...and limos, and coke :O)

Wed, 08/01/2012 - 09:27 | 2668291 piliage
piliage's picture

A CEO is interviewing three candidates for a CFO job, a mathematician, an accountant, and an economist.

The mathematician walks into the CEO's office, and is handed an excel spreadsheet. "What is the final total net profit for fiscal 2011"? asks the CEO to the mathematician. The mathematician gets out his trusty Thinkpad, and after 25 minutes, tells the CEO, "$10,986,567.54 net profit". "Thank you", says the CEO.

In comes the accountant. The CEO hands the same file to the accountant, who pulls out his Macintosh, and after 5 minutes says, "$10 million net net plus or minus 10%". Thank you says the CEO.

In comes the economist. The CEO hands him the file and asks, "What is the final total net profit for fiscal 2011"? The Economist bolts out of his chair, runs and locks the door jamming a carpet under the gap, goes to the window and closes all the blinds, unplugs the phone and computer, turns off the lights save for one dim lamp in the corner, leans into the CEO's ear and whispers..."What do you want it to be"?



Wed, 08/01/2012 - 15:47 | 2670014 ArkansasAngie
ArkansasAngie's picture

That's one of my favorite jokes.  The problem is it isn't actually funny.  Of course I often find that I am laughing inappropriately. 

The horror?  The absurdity.

Wed, 08/01/2012 - 09:42 | 2668347 TWSceptic
TWSceptic's picture

but but models... that was basically the whole argument. As if the market is predictable like a scientific experiment. That's what these guys never seem to get. It's not like an organism, is far less predictable. That's why central planning will never work.

Wed, 08/01/2012 - 09:18 | 2668259 FMR Bankster
FMR Bankster's picture

It was pretty funny stuff. Meyer can't stand the possibility that people will stop paying attention to his models because they don't work. Then what's left? Take the Fed out of the predictions business, stop intervening in the economy, and return to sound central banking. (see Bagehot)Good god, we won't be masters of the universe anymore determining the worlds fate. How will the poor peons survive without us.

Wed, 08/01/2012 - 09:57 | 2668401 DUNTHAT
DUNTHAT's picture

I am an engineer and an Economist.  The problem with their "models" is essentially they are LINEAR---in the mathematical sense--and the real world is some combination nonlinear, discontinuous, fractal feedback loop thingy.  As long as the economy stays on a glide path , they trumpet "See how great our models are", but as soon as something changes, and their models completely miss the call, then they look to "adjust" the models!!

They actually have given Ph.d"s for over fifty years based on this crap.  Amazing.

Wed, 08/01/2012 - 10:07 | 2668446 piliage
piliage's picture

Some are linear, but many like cobb douglas, and Black Scholes are not. The larger problem is many if not most assume equal normal risk distributions or least squares regressions, and thus woefully underestimate tail risk.

Wed, 08/01/2012 - 10:48 | 2668637 Vince Clortho
Vince Clortho's picture

Do their models incorporate the megalo/klepto-mania factor?

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