Tullett Prebon CEO Is Latest Entrant In Rapidly Growing Anti-Keynesian Bandwagon

Tyler Durden's picture

Tullett Prebon has been recently making headlines due to its extremely stark, objective and realistic Project Armageddon, in which it "Thinks the Unthinkable" where it reached the conclusion "that Britain’s debts are unsupportable without sustained economic growth, and that the economy, as currently configured, is aligned against growth. Radical solutions are required if a debt disaster is to be averted. All macroeconomic options have been tried, and have failed. The only remaining options lie in the field of supply-side reform. Unfortunately, public opinion may be inimical to the scale of reform that is required." Needless to say, Keynesians around the world are not happy: after all it takes away from their voodoo punch that just doing more of the same insane things over and over should eventually help. Because if not, then all the BS that is taught in Ivy League is just that... BS. Today, none other than the CEO of Tullett Prebon takes such floundering voodoo economists as Ed Balls, Samuel Brittan, Paul Krugman, George Magnus and Barack Obama, and Keynesianism in general, to task by finally saying what we have been claiming for years: Keynesianism, as applied in modern soceity, is ultimately doomed to failure, but not before we transform from an FX war to a trade war to its final state - shooting war. Because there is nothing like spilling human blood in the name of a false economic religion in its last hurrah before it is finally wiped out from the face of the world.

From the blog of Terry Smith, CEO of Tullett Prebon

Today’s Financial Times published my letter to the Editor concerning the financial crisis. Here is the letter in full.

From Mr Terry Smith.


Sir, I refer to the debate being conducted in the pages of the Financial Times between those who propose further Keynesian measures, such as Martin Wolf ("Struggling with a great contraction", August 31), and those who do not accept that they will work, such as Wolfgang Schäuble ("Austerity is the only cure for the eurozone", September 6).


Such so-called Keynesian measures as advocated by, among others, Ed Balls, Samuel Brittan, Paul Krugman, George Magnus and Barack Obama as well as Mr Wolf have not worked to date, and they will not work. Their advocates seem to assume that their repeated failure to solve our economic problems just means that the medicine must be repeated, which reminds me of Richard Nixon's motto that "if two wrongs don't make a right, try three".


I say "so-called" Keynesians because these advocates seem not to realise that Keynes' theories did not rescue us from the Great Depression. They are also asymmetric in their application of his theories - calling for ever larger deficit spending, having overlooked the bit about running a surplus in a boom. But above all, they do not seem to realise that they cannot work in a period of debt deflation in which a recession is preceded by the collapse of the banking system, as their current failure is demonstrating.


To the ordinary person in the street, the idea that we can rescue ourselves from a crisis caused by excessive borrowing by borrowing even more must seem mad. In this respect they are possessed of far more common sense than those who are currently advocating just such a course of action and purport to be our leaders.


The first step in rectifying this situation should be to make a clear and unambiguous statement about the actual debt the UK is carrying.


To give a lead to this, today we have circulated to every member of parliament a tin can emblazoned with the UK debt figure - £3,589bn including commitments for public sector pension commitments, private finance initiative and banking sector guarantees, so that they can see what it is they are metaphorically "kicking down the road" with their present policies. This, ahead of the party conference season, I hope might spur some considered and honest debate on this issue.


It is time for those who wish to lead us out of this crisis to tell people how bad the current situation really is and the painful remedies which will be needed to remedy it.

h/t James

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AnAnonymous's picture

in the name of a false economic religion in its last hurrah before it is finally wiped out from the face of the world.


If so, the situation is critical because economics are religion and well, the story between what religion is the true one usually end like that: war.

MFL8240's picture

Finally someone gets it!

Beau Tox's picture

I live in voluntary austerity.  It may be time to do without alcohol and tobacco pretty soon.

LawsofPhysics's picture

Crap, that is when the riots start.

youngman's picture

I do my best rioting when I´m drunk....

Nothing To See Here's picture

Once TSHTF, the one thing I want to make sure I do before I go down is to have one last sip of Highland Park 18yrs.

You stick or not to your tobacco if you want, but I'll never give up on my liquid gold.

e_goldstein's picture

Good choice, although I think I'm going to down that bottle of Grappa I've been saving for 15 years.

theprofromdover's picture

Yep, that's the one.

But why did they change the bottle shape and the fonts. (Spoiled the classy effect)

RemiG2010's picture

"Crap, that is when the riots start."

The riots start, when Internet is being cut off!

LawsofPhysics's picture

You mean when people actually have to communicate in person?  Okay, I can see that being problematic.

LawsofPhysics's picture

Both sides of this coin are retarded.  The keynesian call to "print to infinity" and the consevative call to "grow to infinity" are both not sustainable.  Now where the hell is that plague I ordered?  I knew I should not have used the U.S. postal service.


Seriously though, when is the world going to have any serious discussions about sustainability based on facts?  Anyone, anyone, Bueller, Bueller...

Oxytan's picture

But that would shatter just about all of our assumptions!  Could it be 'ALL' of our assumptions of endless growth on our little round ship? 

doomandbloom's picture

We really need to work on an alternate sustainable theory...

I know keynes is not workable...but the people i speak to ...man on the street or even reasonably educated ones....have been bought up in this culture. They do not know anything better. they will unknowingly support Keynes..

GeneMarchbanks's picture

The last paragraph haunts me. If we need to be told that "things are bad" by the so called leaders, then we are a failed species. Be your own leader you sad, sad saps.

doomandbloom's picture


It will take a generation to realise that we do not need leaders...

I mean look how much time has it taken for us to realise the problem with Keynes....

GeneMarchbanks's picture

It says "Thinks the Unthinkable", which, once you get passed the absurdity of the statement, you realize it's complete bullshit seeing that many people think this. The fact that their views are discredited by the "Truth Ministry" is the only real story.

According to the research of my own private think tank: salt is... indeed ... salty.

flacon's picture

Buit if you don't have a leader, where will all the tax money go and who will live in the castle / white house? /sarc

Darth Hayek's picture

Anyone got a way to repeal human nature?  No?  Then learn to accept that this is going to have to become supremely ugly, and we're all going to have to start over.  I figure we'll have a couple of generations before the stupid sets back in, but it will be an incredible time.

If you live to see it.

Azannoth's picture

Keynesian economics is not the holy grail of the ruling class, it is merely the tool they use to support their social experiments (ie. pulling in millions of 3rd world immigrants and 'integrating' them)

It's just a smoke screen for the re-engineering of society, it has nothing to do with economics in the 1st place

My theory

The white race is too intelligent and individualistic to control so they can never rule out the possibility of a rebellion against their tyrany

The black race is too stupid to make for good hard workers but easy to control


Interbreed the black and white race creating the 'perfect worker' a new race that is physically strong, just intelligent enough to do provide quality services but not intellectually capable of rebellion

(Now this is not me being racist, this is me putting 2 and 2 together)

I know you people like to junk everything that has the word 'jew' or 'black' or 'race' in it but put your prejudice away for a second and think logically

DogSlime's picture

"The black race is too stupid to make for good hard workers but easy to control"

"The white race is too intelligent and individualistic to control so they can never rule out the possibility of a rebellion against their tyrany"

Ever seen an intelligent black person?  Ever seen a stupid white person?

You think that the white "race" are intelligent and the black "race" are stupid?  Simple as that?


o2sd's picture

Well it's certainly a theory ...


LawsofPhysics's picture

Nice try, but robotics make "people" less and less useful every day.  Race is but a footnote to your jewish masters.

Azannoth's picture

That provided the masters want robots to replace their human servants, personaly I believe it's way easier and cheaper to keep a human slave than bother with a multimillion dollar piece of metal that does not even know how to change it's own oil, think about what does a human slave cost you ? Food and shelter .. a pittance, but with robots you need to have mainanace you need to provide them with constant energy input and the things are darn expensive and unreliable, and sexually molesting them is no fun I might add.

Nature has created the perfect robot 'the human' why bother trying to improve upon it when you know you can't build anything better or cheaper to provide you with all the blowjobs you ever desire ?

Azannoth's picture

Don't believe me? Maybe you'll listen to Geroge Carlin http://www.youtube.com/watch?v=rsL6mKxtOlQ

"They DON'T want a population of citizens capable of critical thinking. They don't want well-informed, well-educated people capable of critical thinking. They're not interested in that, that doesn't help them. That's against their interests. That's right. They don't want people who are smart enough to sit around the kitchen table and figure out how badly they're getting FUCKED by system that threw them overboard 30 fuckin' years ago. They don't want that. You know what they want? They want OBEDIENT WORKERS. OBEDIENT WORKERS. People who are just smart enough to run the machines and do the paperwork, and just dumb enough to passably accept all these increasingly shittier jobs with the lower pay, the longer hours, the reduced benefits, the end of overtime, and the vanishing pension that disappears the minute you go to collect it."

AnAnonymous's picture

My theory

The white race is too intelligent and individualistic to control so they can never rule out the possibility of a rebellion against their tyrany

The black race is too stupid to make for good hard workers but easy to control


Made me laugh.

The failure in perception usually displayed by US citizens, that is people converted to US citizenism, is that impressive.

US citizens can not picture themselves as they are , it goes beyond anything.

A theory? But theories are used to explain facts.

The white race is too individualistic? The same white race that have come with group notions one after the other, like racism? The same white race that have developped US citizenism, a system of thought that is the graveyard of individuality?

Of course, US citizens come in all flavours. But if indeed, white people were that individualistic, as historically, first US citizens were nearly exclusively white people, that would have repelled US citizenism.

US citizens can not even face the fact they are all about groups and for certain reasons unknown up to now, want to be perceived as hardened invidualistic people.

Now, indeed, the proposition can be founded on facts: Most white people left in the US world order are way too about the group to be easy controlled, they want entitlements because of their group(which is expensive), they value a culture of gang, making them unprincipled therefore alien to the concept of justice, they share a mob spirit that can ignite riots anytime until they are bribed appeased that people might want to substitute to them other less inclined to see only groups whenever they breathe.

If indeed white people who have been behind the foundation, the development and the spread of US citizens were about individualism, the world would not have been subjugated so much in group approachs.

Azannoth's picture

You are talking about the culture that we have today here now, I am talking to what the white race was before it became uttery corrupted by 'the corruptors'

I am talking about what was not to what is

Today's culture is the effect of 50+ years of Cultural Marxism, and the white race today is a degenerated shadow of it's former self

Additionaly we are talking 2 different things, you are talking culture I am talking instincts, you can easily influence instincts with culture but you can't erase it unless you genetically/chemically manipulate the race

We have done it with dogs, cats, horses, sheep, cows, pretty much all domesticated species have been selectively bread to make them more usefull to us, what's so outrageous about

selective breeding of human races to make them more of use to 'the usurpators' ?

AnAnonymous's picture

Sinking deeper...

The white race is a social construct of US citizenism. Who is the corruptor?
If race was a product of instinct, it would happen much before.

Marx? But the guy was born after US citizenism was kick started.

The famous elite. But there is no discontinuity between the elite and the base in US world order.

The elite is only that, an elite, that is a group operating on a greater scale than the base. But the base and the elite want the same.

Why would the elite engage in manipulating as the social order they have installed select people already? It is unneeded.

A collection of non sense.

Quite tough days for the racists of the world: today, as a result of racism, white people control and get their life style support by 85pc of the world resources. So yep, white people who have not secured their racial entitlement wont have many chances to do so.

Quintus's picture

I met Terry Smith several times in the course of some business I once did with Tullett's.  He is a VERY sharp cookie.  One of the few who truly 'Gets it' and isn't afraid to go against the consensus and say so publicly.

Oh regional Indian's picture

"Balls, Samuel Brittan, Paul Krugman, George Magnus and Barack Obama as well as Mr Wolf have not worked to date, and they will not work. "

I thought that was a funny cut-paste.



ArkansasAngie's picture

Demand side economics is so silly.  Just as voodoo supply side is.  They both skew you.


It’s supply AND demand … stupid.

DogSlime's picture

I understand the pattern of currency war -> trade war -> shooting war...

...but who is there to shoot?  Who is going to be shooting who?

In the 1930's there were major hostilities between nations that could be exploited to start a shooting war.  There don't seem to the those conditions right now.

Who is the "enemy" that can be scapegoated this time?   Petty, nasty little wars like Afghanistan don't seem big enough to do the job - it would need to be a big international conflict, wouldn't it?

Even if Israel takes a pop at Iran (as predicted here on ZH a few weeks ago)... will other countries join in en masse?

I don't doubt that we might be headed for a shootout, but I can't manage to construct a scenario for it.

Any suggestions?

JW n FL's picture




more money for the rich..

fucking over the working people of America some more..

that is all this is...

anything but make the top 1% pay taxes.

ANYTHING but that!

no worries.. Michigan will be the first State with a mass exodus and with hungry armed roving crowds.. lets get this experiment under way already! it should make for some interesting cable news if nothing else.

all of you bitching about me being a commie??? can come say it to my face! you fucking cowards!

you scumbags who are making excuses for the job creators are a cancer in America.. just as bad as the ignorant / dumbass crowd.

JW n FL's picture



Ex-Citigroup VP Admits Embezzling Over $22 Million A former vice president for Citigroup pleaded guilty Tuesday to embezzling more than $22 million from the company and funneling the money to his personal bank account.



No Taxes being Collected becuase of Loop-Holes so big you could fly a jumbo jet thru the language!!

this is our porblem as a Country!


Smiddywesson's picture

Terry was right a few years ago, but we have long since passed the point of no return.  I think the "Keynesians" in power learned at the end of 2009 that stimulus wasn't going to grow us out of this one.  That's why all of the central banks started to buy gold.  Since then, it has been all kick the can and no real reforms have been attempted.  The game is to delay the inevitable and buy gold.

Dyler Turden II Esq's picture

Good thing you put "Keynesians" in quotation marks. It seems that there are some in these parts who think that multi-trillion-$$ cash gifts to banks represents "Keynesianism".

Sudden Debt's picture

So in the end Stocks will ALL recover to their 2011 highs. To bad inflation will catch up 100% and destroy all the actual value.


And in the end Obama will give billions to billionaires and expect them to hire people which they won't.

It's like I already seen this movie....


Dyler Turden II Esq's picture

"Keynesianism, as applied in modern soceity, is ultimately doomed to failure"

Yes, as applied in modern society by neocons, warmongers and corporate shills -- e.g. Obama. Poor old Keynes must be  rolling in his grave at the thought of the wild misallocations that pass for "Keynesianism".


Byte Me's picture

Exactly so.

At least Prebon reminds everyone of the usurping of the term Keynesianism and calls the arsewipes to book for what they are. But surely their book is Ponzianism.

spanish inquisition's picture

The big "economic plan" is to rescue the private owners of the Federal Reserve and other central banks. To continue in power and profit through inflation they need a distribution system which they also are heavily invested (i.e. Wall Street). The distribution system bribes government through a sophisticated system of campaign contributions, junkets and post service lobbying jobs. Explanations are given to the people through a corrupted economic base theory engineered to support the private central bank owners. If successful, the bill is handed to the people. If not successful, a war is started. Not for economic growth, but to cover the origins and motives of the people who started the crisis in the first place.

Nothing To See Here's picture

"Because there is nothing like spilling human blood in the name of a false economic religion in its last hurrah before it is finally wiped out from the face of the world."

Amen. You sir do have a talent for lyrics.

grinchman's picture

This Armageddon report is shaky if not outright misleading.

For example, the UK external debt at 400% of GDP is singled out.  But they omit the Netherlands (470%), Luxembourg (3443% - no typo), and Hong Kong (334%).  On a per capita basis the UK ($141k) near neighbours include Norway ($133k), Switzerland ($154k), Netherlands (225k), Denmark, Hong Kong, Belgium,...

And is external debt the right measure?  Surely the right measure is net international investment position which is assets less liabilities.  On this measure the UK is in the hole the magnificent figure of -13% of GDP.  Here are some comparables:

US -17%

Philippines, Inda, France ~ -10%

Eurozone -11%

South Korea -17%

Sweden -22%

Australia -61%

All figures from Wikipedia (2009/10)


Tullet Prebon seem to be picking data to suit their thesis.  Not convincing.

Nothing To See Here's picture

The problem with these figures is that more often than not, people who use them include assets at book value rather than at market value. This is an old trick to keep the borrowing bonanza going since it suggests that you can borrow on assets that have no market value such as monuments.

richard in norway's picture

ascets, that would be loans to other people that are never going to be paid back

richard in norway's picture

is he just talking about govt debt and forward commitments, cos if so then he is an optimistic sob


the real problem is the total uk debt both public and privite. which is somewhere near 600% of gdp, worse than just about anybody. avg house prices are at 6.5 times avg wages, which is just silly and the uk govt is expecting that the public will take on more debt in the coming years


i don't know why people talk about soulutions. cos there aren't any. 



crash is inevitable

rustymason's picture

During casual chats in the hallways some twenty years ago in business school, after final exams, our economics teachers smiled and admitted that all of the Keynsian stuff they had taught us was horsemanure. They only taught it because the university paid them to. What an eye-opener. College students, caveat emptor.