Fed Policymakers 'Do Not Understand Risk' Says Taleb

Bloomberg:

The risks stemming from the Federal Reserve's efforts to stimulate the economy through bond purchases are "humongous" and the central bank doesn't fully understand the potential effects, said Nassim Taleb, author of "The Black Swan."

Read the whole story: Bloomberg

Comments

[CPAwADD]

03:13 PM on 11/16/2010

It's difficult for a man to understand something if his salary depends on him not understanding it.
Sinclair Lewis

[Whigist]

12:31 PM on 11/15/2010

Like Taleb or not, he has been correct so far....

What is surprising the the depth of feeling in the video

http://alaricinvestments.blogspot.com/2010/11/nothing-is-as-permanent-as-things.html

[Henry Boxlor]

07:02 AM on 11/15/2010

Ok the election is over and all we heard from the candidates “I am going to create more jobs”. I actually heard a candidate for Judge promise more jobs. How? Tell me HOW? Name one concrete thing any of these clowns can do that will actually create a job. See - you can’t. It was all a bunch of campaign hooey just to get your vote. If any of them could actually create a job it really wouldn’t matter who you voted for because they all were promising jobs. It’s pretty easy for the politicians to make jobs go away. Just raise taxes add a few more regulations with a bunch of fees and you pretty well can bet you just eliminated some jobs.
You might think that if you did just the opposite that would create jobs. Cut taxes, eliminate regulation etc. Not necessarily so. As you see in the election process, politicians are all flip floppers and business knows that. Smart business people don’t trust politicians much. So they wait. They wait to see what the trend is. That’s the problem. They are still waiting to figure out what to do about taxes, fees, health care etc. Elected officials need to get on track, set an agenda and execute it. All the bickering and worrying about the next election is just fueling more uncertainty. Until those who legislate get it right, those who invest and hire people are likely to keep sitting on their hands and their money.

[steve11407]

10:21 PM on 11/14/2010

http://www.investors.com/EditorialCartoons/Cartoon.aspx?id=553694

[casino capitalism]

07:05 PM on 11/14/2010

We must keep the people busy with political antagonisms.
We'll therefore speed up the question of reform (of tariffs within) the Democratic Party; and we'll put the spotlight on the question of protection ... (for) the Republican Party.
By dividing the electorate this way, we'll be able to have them spend their energies at struggling amongst themselves on questions that, for us, have no importance whatsoever.
-- United States Bankers magazine 1892

[phread]

06:54 PM on 11/14/2010

"the ben bernack" ain't that sharp folks...but truth is, they don't want to change the economy by fixing it. This is all about:

“Neoliberalism is the expression of the desire of a class of capitalist owners and the institutions in which their power is concentrated, which we collectively call "finance," to restore-in the context of a general decline in popular struggles-the class's revenues and power, which had diminished since the Great Depression and World War II. Far from being inevitable, this was a political action.

The rules whose imposition define neoliberalism are generally designated euphemistically as "market" rules, avoiding the direct reference to capital. In this use of the term "market," various types of mechanisms are at issue. The labor market refers to the tightening up of rules concerning hiring, layoffs, wages, and labor conditions. This market has been a favorite target of neoliberalism. The other market, directly at stake here, is that of capital. Neoliberalism has indeed completely changed the conditions under which the capital markets function. There are many aspects to this the centrality of the stock market and of capital in general, free international mobility of capital, and so on. Finally, neoliberalism is indeed the bearer of a process of general commercialization of social relationships, and that is one of its more shocking aspects. But it is the logic of the capitalist relationship that extends and governs the whole process, in accordance with its rules.”

Capital Resurgent
Roots of the Neoliberal Revolution

[Violinhunter]

04:33 PM on 11/14/2010

Not all crooks are bankers and not all bankers are crooks. Let us be fair. It is only the really big bankers who are crooks. Who was it that said "Little people don't leak."? I say little bankers don't steal.

[marijam]

06:21 PM on 11/14/2010

While it is true that not all crooks are bankers and that not all bankers are crooks, I would not go so far as to say only the big banks have crooks. A whole lot of small banks have failed, I wonder why that is?

[LunaPark]

01:19 PM on 11/14/2010

Oops... Walmart already seeing inflation of higher than 4%, double Ben's target.

http://www.cnbc.com/id/40135092

Why do the main stream media trust the CPI?

[OldTulsan]

01:42 PM on 11/14/2010

LunaPark, the MSM publicly trusts all government statistics because it's the safe thing to do, and doesn't require any effort:

Others have spoken out about the distortion of statistics:

http://www.counterpunch.org/roberts11082010.html
Paul Craig Roberts: Phantom Jobs

http://www.counterpunch.org/lindorff11092010.html
Dave Lindorff: BS From the BLS

They reference John Williams ShadowStats.com site:

http://www.shadowstats.com/
Shadow Government Statistics : Home Page

http://www.shadowstats.com/alternate_data/unemployment-charts
Alternate Unemployment Charts

http://www.shadowstats.com/alternate_data
Inflation, Money Supply, GDP, Unemployment and the Dollar - Alternate Data Series

[cassie reinara]

12:44 PM on 11/15/2010

Because, first and foremost, it does not take into account "energy and food prices." How can you measure inflation if you exclude this? It's because they want to manipulate the inflation numbers to make the picture look better than it actually is. It's like unemployment numbers and the fact that they don't count people who fall off unemployment benefits and have stopped looking as well. It's all smoke and mirrors to paint a deceptive picture and keep the natives from wielding pitch forks. It's all a cleverly construed deception on the part of the people in charge to justify their policy agenda. Hence, no social security COLA's because inflation is tame or non-existent BS.

[Carl Caroli]

08:14 AM on 11/14/2010

I wouldn't trust Ben "I didn't see the train coming" Bernanke with my piggy bank. He needs to be relieved of his position immediately.

[schatsie]

12:53 PM on 11/14/2010

He was sitting there at the table when LTCM went down....as were greenspam, and buffett and gates and geithner.........

[Robert Cantor]

06:20 AM on 11/14/2010

The Fed and Bernanke may be blind to risk, but mainly they dont care. they are committed to propping up a failing system of Wall St. Banks. Like a gambler down a huge amount at the tables, you keep on playing anyway you can because once you stop it IS over.

[valeskas]

05:54 AM on 11/14/2010

These policymakers on Wall street, do not care, because the money they gamble away, is not their own money, but that of people who saved their whole lifes. Those people on Wall street are crooks.

[ArabianMoney]

04:25 AM on 11/14/2010

This neat little video explains in child's terms what QE is and why it will not work, see: http://www.arabianmoney.net/us-dollar/2010/11/14/understanding-qe-and-why-it-will-fail/

[TheCommons]

07:03 PM on 11/14/2010

The cute little critter thinks that deflation is a stable phenomenon that will simply benefit consumers with no downside. That's funny. Not sure why it should matter that The Ben Bernanke was never elected to office nor ran a business. Not that I a saying he is right. I don't claim to know with any certainty either. It's just that some of the arguments seen irrelevant.

[jabailo]

01:32 AM on 11/14/2010

There's no risk in counterfeiting at that level...Talib and his boys know that. Time for the Bunco Squad to put a stop to it all!

http://www.youtube.com/watch?v=s-tMPDMq7Dg

[Lorianne]

10:13 PM on 11/13/2010

We Need A Rally To Restore The Rule Of Law And/Or The Constitution
http://ampedstatus.com/we-need-a-rally-to-restore-the-rule-of-law-andor-the-constitution

[Statsgrrl]

06:29 PM on 11/13/2010

Taleb is brilliant simply because he is willing to admit that human beings are challenged in their ability to understand and quantify risk. We make bold, audacious and risky moves. Some of the greatest successes were the result of huge risks being taken. On the other hand, we are at a point in time when the risks being taken are not necessarily about to create anything at all except some giant asset bubbles. A spreadsheet and Calc 1 does not a quantitative risk expert make.

[schatsie]

12:56 PM on 11/14/2010

You might want to look at the book Bailout Nation........We taxpayers have bailed out the Oligarchs repeatedly....Kind of like a spouse staying with an abusive husband....Of course it does not help that the Oligarchs pay the lowest taxes in the developed countries.....