The Fed should not vary interest rates from normal levels, says author Nassim Taleb
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- Опубліковано 14 вер 2022
- Nassim Taleb, Universa Investments scientific advisor and 'Black Swan' author, and Barry Sternlicht, Starwood Capital chairman and CEO, join CNBC's 'Squawk Box' to weigh in on the Federal Reserve's efforts to tame inflation, markets, and more.
The host asking if this is a black swan event never read “The Black Swan.” Taleb in the old days would have ripped him up.
he is polite and treats naive people as sick not criminals. how many times have you heard idiotic phrases like hunting black swans, or paradigm, shifts?
Listening to the commentators ask this person question is embarrassing.
CNBC trying to spin it the way they always do...they can't handle the TRUTH.
Yeah especially that bald headed untitled dude
Poor guy will be spending the rest of his life explaining that things that have happened every 5-10 years are not Black Swan events and thinking to himself (“why do you pretend you read the book”)?
He's probably worth 300 million dollars. Much of it made from.his own trading
He makes several references to this in his book(s) -- he attends these things for book promotional purposes only, not for any kind of intellectual discourse
I like what he says about not varying the reates. The FED has hijacked the stock market and real estate market, meaning FED's decisions have higher impact on company and property evaluations than their intrinsic quality. Predicting what FED will do earns you way more money than doing something useful. This needs to stop.
totally agree, the Fed needs to stop thinking they can quick fix every thing. Market will be far better of left to the market
@eric kanter i know and my point is simply that the fed should let the market decide the rates. Everything would be much more realistic priced. High rates are not bad in itself, high rates are bad after a period of low rates. It creates financial instability
They are slowly expeculate and take money from stock and crypto to pay their own mistakes
Intrest rates and unemployment FED pretty much always drives the markets. That stuff all effects earnings of companies.
Money should be got by producing real value, not fake Fed induced price increases.
At the very end, did he say (imply) "bitcoin will be a $1000 or zero" and immediately CNBC cut him off?
Lmao i thought the same
Never underestimate the price of bitcoin when people are prepared to spend billions on meme junk like doge, shib, lunc etc..
@@Nick-sd7um I bought SHIB last year and sold at market top. Well, transaction took long so not really market top.
He's been saying BTC is worthless for the past 6 years. And yet here we are.
@@chcknball185 , well the government is about to regulate it, so it will be worthless soon 😂
My Man is back. Please bring him more often
They will not bring him more often because he does not fit the narrative of wall street, main street or the crypto cult.
Yeah too short though, love Nassim. Only thing i disagree with him on is bitcoin. Man is a Genius.
Success is about focusing Your energy on what creates results and using what you already know.
I wanted to trade cryptocurrency, but I got discouraged with the market price fluctuations and constant loss🥺
The wisest thing that should be on every wise individual's list is to invest in different stream of income that don't depend on the government to bring in money especially after the lesson of pandemic hitting
Haven't you heard of Madam Carol Ann Mcelroy? She's an experinced broker who has been helping many to make good profits with her trading experience.
Everyone needs more than there basic salary to be financially secured. The best thing to do with your money is to invest. Money left in savings always end up used with no returns..
I started investing in the financial market mid August, 2009 with the help of this well-known professional Carol Ann Mcelroy and bought a home for my mother in 4 months. it's really amazing 👏
Finally an adult in the room
Love me some Doomers on National TV
@@sreckohorvat2298 He's not a doomer he's a really positive man. Ever read Antifragile?
Not only keeping the intrest normal, 3 - 4%.
The FED shouldn't buy treasuries. It shouldn't finance the goverments overspending. Let them push their bonds on the open market, until no one wants them, so they have at least some limit.
It's not just the FED themselves. It's also the sick relationship with the goverment.
But of course, the goverment likes deficit spending, so they won't change the rules which allows them to do that to infinity.
100%! Nailed it
That's the truth. But the politicians and business people want that free money for doing nothing to keep coming to them.
I love this guy. Life changing thinker
His writing stretch your inner narrative and push it forward into mapping the hidden!
That's a stretch. I read one of his books, good but nothing new. By his own arguments his books prob won't be read much in 10 20 50 years
@@jesusmtz29 I think this varies a lot by book. Fooled by randomness is essentially a behavioral econ 101 essay stretched to book-length. Black Swan on the other hand had some really interesting and novel ideas, especially for the time of its writing in the early 2000s. Still have to go through his later works.
Unfortunately not a behavior-changing thinker, in particular not the behavior of those in power.
I really wish the interviewers did not interrupt Taleb.
Absolutely - at one point he could barely get a word in - i thought he was being interviewed?
The historically "normal" interest rate is 2% above inflation. The Fed balance sheet is absurd. Debt for the federal government is 134% of GDP. The people responsible for this should be stripped of their wealth and prosecuted.
Government should be kept to a tiny size of GDP, preferably as small as possible. It's out of control.
They must be held accountable for their fraud and crimes.
It’s criminal, they taken away the spending power of millions and possibly billions of people around the world. They should be charged with crimes against humanity.
Anyone who post negative opinions about the government will have their cell phones confiscated.
First you have to get a big shovel and start digging them out. Most of those responsible already passed away, or on their way out. And that is the reason they do what they do; By the time the harm from their action is exposed, they're already gone... They always blame the previous administration and the cycle continues.
Stocks are falling and bond yields are rising, but markets still don’t seem convinced the Federal Reserve will pursue plans to keep increasing interest rates until inflation is under control. I'm still at a crossroads deciding if to liquidate my $117k stocck portfolio, what’s the best way to take advantage of this bear market?
While there’s more pain to come, investors should look for stocks like Royal Philips NV and Alstom SA that have been beaten down enough that they’re a bargain or get a good portflio manager.
@@mesutserim1595 agree, I've been in constant touch with a Financial Analyst for approximately 8 months. You know, these days it's really easy to buy into trending stocks, but the task is determining when to sell or keep. That's where my manager comes in, to help me with entry and exit points in the industries I'm engaged in. Can’t say I regret it, I’m 40% up in profits just in 5months with my initial capital of $160k.
@@chrisbluebird5037 that's impressive!, I could really use the expertise of this advisors , my portfolio has been down bad....who’s the person guiding you?
@@joshspring7686 The advisor I use is Wendy Helene Bennett, she's verifiable.
@@chrisbluebird5037 I just looked up Wendy Helene Bennett online and researched her accreditation. She seem very proficient, I wrote her detailing my Fin-market goals and scheduled a call.
My greatest concern is how to recover from all these economic and global troubles and stay afloat especially with the political power tussle going on in the US.
As with any big financial decision, it’s important to keep your guard up for economic risks. However, smart planning, time management and seeking advice from a financial adviser can help keep you and your money safe.
@@wiebeplatt4749 I agree with you. I ventured into stock with less than $100,000, and now I'm about 17,000 short of half a million dollars. Credits to Susan Agnes Hancock . She's verifiable.
@@instinctively_awesome8283 Thank you! i just looked her up and sent a message hoping she gets back to me.
@@instinctively_awesome8283 I just looked up this person out of curiosity, and surprisingly she seems really proficient. I thought this was just some overrated BS, I appreciate this.
The US and the world will recover.
We recovered from worse humanity always find a way to get out of crisis.
Nassim Taleb. This guy is legit! What a trenchant analysis of our economy over the last 15+ years.
What no one is talking about is globalization (1990's -2016) is consistent with low inflation and low interest rates. De-globalization, which started in the late 2010's and was accelerated by the pandemic and aftermath, is more consistent with higher persistent inflation (4-5% like in the 1980's) and higher interest rates. The best way out of this mess is to work on the supply side.
I agree that we need to work the supply side and deglobalization is a stupid path to take. So is anti-immigration. We also need to raise interest rates - should have done that starting in 2018. Rates have to be sufficiently high so that the financial markets can do their job of aiding the proper allocation of resources.
I'm not sure globalization is dead yet. Alliances seem to be shifting, new 'friendly' countries. People have been trading since the beginning of time. Even trading ideas, if not the physical manufacturing. I'm still optimistic but we will see if our stubborn human nature gets in the way or not.
This guy talks too much logic for clowns to want to listen to.
Where can I find the full interview?
Taleb really restrained himself in this interview. He didn't call anyone an imbecile. 🧐
This gentleman knows what’s up
No, he’s a simpleton who’s understanding of economics is terrible
The 12-month trailing earnings yield of the SPX has been above or below the ten-year Treasury yield for decades at a time, according to the charts from Ed Yardeni. Currently, the SPX earnings yield is at 5%, which is well above the 10-year yield. Of course, that could change with time.
Bitcoin can't be a tumor. It's shrinking!
Maybe it's on a plant based diet
It needs to be gone for good.
Life is hard enough with accidents, storms and fires without malicious politicians causing trouble💥💥
I giggled at the question about the likelihood of a black swan event.
The whole idea of a black swan is its unpredictable
Taleb = Wall st legend
Taleb, OMG, so effing smart. Such a command of the concepts & terminology!
The USA’s fiscal “deficit” is actually private sector income (double entry accounting). By the same token, a fiscal surplus is actually a private sector deficit (a loss of income for individuals and private companies), and who would wish to be poorer?
The money for fiscal spending was not borrowed and is thus not owed. Even treasuries are mere savings vehicles, honored by the US Treasury, and the money to pay them comes from the same place as fiscal spending: thin air. If “the debt” was real, the ‘debt ceiling’ couldn’t be moved at will (except it has, 70+ times), nor has the USA ever reneged on a treasury security, and cannot renege *involuntarily* (key word)
Rate hikes cause inflation as well as unemployment, since it makes money more expensive, and 95% of the money supply is bank credit. The decrease in the money supply caused by higher rates (which is deflationary) is massively off-set with the higher price setting of money (which is what an interest rate hike is). Looking at historical data, when overlapping inflation with rate hikes, you'll see that rate hikes precede inflation the overwhelming majority of the time, going back to the 1930s.
Such an important interview. Share with family members, brother-in-laws, know-it-all uncles..
Peter Schiff brought me here.
Is this the whole Interview ?
Just let him speak, the other guys should shut up!
The Fed must throw the old playbook out the window. The world has changed too much!
Bravo 👏 👏 👏
One of the five brightest minds on the planet.
See the next black swan as a blessing in disguise.
This guy speaks much sense. He is absolutely correct. It will be hard to impossible to wean the markets and the US economy off of “free money”.
Just look at a 50 year chart of real rates. What does that look like. Another lift off.
he started out so well but just dropped the ball on the 30-yard line with the bit about raising or lowering from 3-4%. the reason we're in this mess is because they did lower them. they lowered them and left them there lmao
ofcourse they should leave the rate at neutral but how else are they supposed to enrich a select few?
I hoped for a question about stock picks
Every stock loses as the market crashes, this is why hedge funds have big cash balances.
The Fed has no choice but to increase interest rates. If they were serious about dealing with inflation, they will have to raise interest rates to a level higher than the inflation rate.
Then interest rate should be 8% now
He’s actually right
"WHAT ABOUT THE STRESSORS AND BUCKLE POINTS?" Taleb's response; if there were stressors and buckle points, Bitcoin would not be at $20,000
If the market was truly tight on cash due to high interest rates, people would sell their crypto tokens to finance their needs.
indeed and let´s be honest here. Taleb as a trader, as a lot of option traders got luck in the 80s and was wise to know when to stop. he started a hedge fund that in 2ys gave no real profit (and got out of it and stayed as 'advisor'). He understand little about blockchain ecology (so little that he said Bitcoin Satoshi Vision was BETTER and SAFER than bitcoin itself - what was proven wrong idea from him a lot of time)... and he is full of himself talking about a lot of things as if he´s an expert in all of it... funny fat oldman, call him fat because he even gives advice on how to be healthy and loose weight - but these ideas seems to not work in his own life. funny guy.
Truth
I’m under contract in a house and they should raise it to 20 percent and get this over with.
Adjusting interest rates one way or the other isn't going to solve the problem. There would need to be massive changes to financial marketplaces to quash speculation. There would need to be massive changes in the housing market to convert it back into being an expense where living modestly would be advantageous, and buying big was just wasting money. There would need to be a massive retrenchment in tertiary education so that it only made sense for the really hard working and smart or already rich. It just can't be done in the current paradigm.
historically, when this type of inflation occurs, we need more than 5% of rate to stop inflation and more than 5% rate always caused some trouble for long period of time. i guess 2000-2002 all over again.
I think what people need to realise about Taleb is when they are pressuring him to make a prediction (he skilfully) does not really answer it. The reason is quite clear if read his books. No-one can predict the future, no one really knows (is the fed going to hard or too soft). What Taleb does know (and does answer) is where there is evidence of fragility where a system is prone to stressors and this where quite frankly he has made the majority of his wealth not in making predictions (per say) but in identifying fragile systems and purchasing protection against them.
Exactly my thoughts, these news segments want a 2 minute prediction from an "expert" which makes a headline.
I love how he asks Nassim what he thinks and then tells him it’s not right.
Now read Edward Chancellor's book, "The Price of Time."
Nassim doesn't like technology such as bitcoin....Why?🤔
Life isn't fair. Wealth disparity is real. Inflation is up, wages are stagnant, recession is likely. But, complaining won't help you. Cut costs and spending choices. Build your skills and earn more. Learn how to invest and grow. Take control of your life.
I love this. Life isn't fair. You have to take responsibility and do everything you can to improve your situation if you're unhappy with it. The good news is that there are plenty of resources to build your skills and learn how to invest! Start today!
@@wiebeplatt4749 The challenges we face are unevenly distributed, no doubt about it. But we all have the power to choose how we respond (emotionally and through action). Choosing our responses wisely is how we can gradually tilt the odds more in our favor. That's right, I started investing sometime in 2018 and by late 2021, I pulled out a profit of over CAD750k with no prior investing knowledge or skill. I was basically just following the guidelines set by my financial advisor. So you don't necessarily need to be a perfect investor or do the hard works, just have a professional who guides & mentors you.
By definition we’re in a recession
this is the time to buy, what next month it will be higher long term investing KO, HD, COST
3:44 That idiot actually had the nerve to ask Nicholas Nassim Taleb the absolutely idiotic question, "as the author of The Black Swan, what are the chances that we will see a black swan event?" He clearly has not read the book, or if he did, he didn't understand it. I'm surprised Taleb didn't call him an idiot.
The exhaling 😮💨
he was diagnosed with throat cancer and got treatment (this is why).
NO MATTER WHAT HAPPENS - The US will still be the best house on an ugly global street.
The same people who complained about loose monetary policy are complaining about tightening. SMH
One of the few true men
I wish Taleb or better Sorkin will invite him back when Bitcoin hits 6 or 7 figures in 5 -10 years,
if he's not dead yet.
I agree that seesawing rates is problematic.
The problem is an egomaniac pressed the Fed to keep rates very very low for to long.
The Fed wanted to raise rates in 2019
The President’s concern for Personal Politics allowed bubbles to get out of control
Now the blame goes to the Fed ?
It’s an old story. Politicians love to Rev up economic activity
Then take credit for the “ booming growth “
Speculators love it because “ all boats rise together “
The problems get kicked down the road to another administration
The opposition can then blame them and use it as a talking point to get back in.
Start It up all over again.
It’s an old story.
The Fed is an independent private bank that has no influence aside from biases the Fed wants to do. So only the President can nominate and they are still approved by Congress
@@cordsig It just seemed to me that theFed was pressured by the previous potus to keep rates low.
So annoying how they keep interrupting. Let the man talk!
The funniest part of the conversation is white swan.
"Tumors like Bitcoin". I like that.
School is back in session.
I'm a little surprised CNBC let Nassim on. He isn't all everything is good so buy buy buy.
Wall Street is the biggest CASINO in town.
When CAESARS and BELLAGIO don’t make money at gushing rates - then there’s a new Las Vegas Sheriff. Count on it.
Wall Street and Las Vegas Blvd weren’t built without “the fix” being in.
Calling bitcoin a tumor has to be the best definition by a mile 👌
you do not understand it, you will be surprised like many others
@@arthurgol500 I understand that buying a computer generated hashcode is not going to save the world.
@@MADMAX7330 Bitcoin is a hedge for people who don't trust the fed not to print more money. I guess you trust the fed more than others, each to their own.
@@snowviper64 I trust real assets that make me money, and hold real companies that are innovating and make money. I'm not dumping money into a ponzi so that it's value goes up only if I get more minions to take the bait.
Play out the scenario of doomsday in your head. Governments fall, currencies crash..Do you see people going around hunting bitcoin then? What is it's value when there is no dollar to compare against? Who says that 1 BTC is equal to 1 loaf of bread in a post apocalyptic era?
@@MADMAX7330 lol shares real estate precious metals all need the next person to pay more for it, no different to bitcoin 🤣. Maybe google words before you use them, because you have absolutely no idea what a ponzi scheme is 🤣
Why this dude out of breath
answer: diagnosed with non-smoke related throat cancer and then treated.
Guys, let the most intelligent man speak.
Max was here
Can't go back to normal without a CRISIS!
PARAPHRASED: THE FED SHOULD NOT VARY FROM ITS "DOVISH HAWKISH" POSITION !?! 🤣😂😅
Too much to fast, must be slower
i love me some nassim taleb
Who else came here because of schiff?
Anybody notice shrinkflation driving the CPI # wasn't even mentioned the true stagflation
Copy paste comment
@@HateTheIRS paste did shrink by 10% but copy held steady release the hate
@@garydavidson2367 incoherent comments
@@HateTheIRS I will look into pics or popups to help you out thanks for your comment
Bitcoin is a tumour...wow yes, excellent analogy
All crypto currencies are freeze-dried assets. Just add intrinsic value before searching for a greater fool.
Nassim has been calling it a tumor for the past 5 years.
@@chcknball185 maybe time for the tumour to be operated on
Hmmm maybe he is an ETH Maxi.
When he says 3-4% that means we're almost there. After the fed raises by 75 basis points this month we'll be at 3.25 and by the end of the year we'll be around 4% if not higher. All this is already priced in so what will lower the markets then ?
Yes, those rates are priced in already. But what is not priced in is the earnings of actual companies, which I believe will go down, just as Fedex.
@@internationalinvesting4336 you can believe that, but the big companies have not really shown much of a slowdown, infact last quarter amazon raised their guidance. Even if earnings go down a bit there's not a ton of room for downside here. The reward is much higher than the risk here
Earnings.
Or lack thereof.
And normalizing interest rates are not fully priced in. 4% would require stocks to drop 25% without any earnings impact. Plus the leverage is also going to be pulled out.
We are looking at a 50% drop in my opinion. NASDAQ will be worse.
@@joebagodonuts8119 you mean 50% from here ? If so you are dreaming my friend keep dreaming lol
@@hiphophead8053
50% S&P, maybe 60-70% for NASDAQ - top to bottom
He kept trying to throw Barry under the bus. Barry don’t seem like he believe in his own argument anymore
Feel free to interject (with something he's currently talking about) but for Christ sake, give him 30 seconds to answer your question!
Most often I just buy, but I've been interested in trading ever since I came across articles of people making upto $50,000 in just months of trading, thanks for the video and pls I'd really love more tips on how to outperform the market.
traders legit make more money.
you can make up to $50k if you start with a substantial capital
Staying in touch with a mentor or tutor for guidance's pays off. For instance, getting in touch with a financial coach earlier last year was the one reason I was able to accrue a profit of $80,000 within 5months.
I agree, investing through the guidance of a professional or a broker has its perks, I got in touch with a lady broker late last year, and through her assistance, I was able to invest in the right funds and grow a profit of $80K from May till now.
@@flossietaylor6239 Hi, please who is the professional assisting you, I need help and I cant wait to get started.
I wasn't in a position to get rich on the way up, but I'm still going to get hammered on the way down?
Look at that 2 year treasury note yield. DELICIOUS
8% should do it !
The economy was a stage one tumour know its at stage 3. 2008 was supposed to be a moment for economic systemic reconstruction but instead we doubled down at the black jack table and got a 22 on one hand and a 25 in another hand betting the free market on that. Instead of building up market resilience we just ignored the systems that was to come. This recession better be a life changing economic system reconstruction or we will be living in a fascist reagonite wet dream of Corporate Statism. But wtff do I know I'm just a schmuck political science student with no background in economics.
The markets are still doubtful that the Federal Reserve will keep to its plan to raise interest rates until inflation is under control, even if bond yields are rising while stock prices are falling. What is the greatest method to profit from the current bear market while I'm still deciding whether to sell my $401,000 worth of stocks?
Even though there will probably be more pain in the future, without a doubt, the Fed is to blame for the exceptional catch-up measures currently in place since they were initially too slow to control inflation. Many people do, in fact, downplay the value of financial professionals until they are experiencing emotional turmoil. I definitely remember needing encouragement to continue running my business.
You're not doing anything wrong; you simply lack the expertise necessary to make money in a bear market. Only highly knowledgeable professionals who had to witness the 2008 financial crisis could expect to make a sizable income in these turbulent times.
@@mattandersen2458 I've been looking into the potential of speaking with consultants lately. I require direction because I am an adult, but I wonder how really beneficial their services might be.
@@AnthonyHart34 They are definitely experts in their field; I had the pleasure of dealing with one, and it was quite beneficial as they assisted me with restructuring my whole portfolio. My mentor is none other than "sharon lee casey," a well-known name in her field who you may know.
@@mattandersen2458 I must say, Sharon seems to be extremely informed, so I appreciate you sharing this insight. I found her online and carefully read over her qualifications, educational history, and CV. I must admit, it was rather remarkable. I've scheduled a session with her after getting in touch with her.
Let the guy speak.
Love the scene when NNT calls bitcoin a tumor and host is shocked as hell… at worst, he was only used to listen bitcoin as a bubble 😅…
He doesn't get bitcoin. Unbelievable and you call him a economist... And we have bow to his sentiment people the world is changing digital assets are coming...
I love how He is laughing.
Because he is recession proof. You probably aren't.
@@R3tr0v1ru5 this fool missed out on the biggest bull run ever seen in the stock market. Even now he is crying for the market to drop more after it has been cut in half. Just Another the world is gonna end fool.
The market has to set the rates
The FED will go down in history as a mass murderer
Smart people don't interrupt to be heard. He assumes people know what he is talking about. A complete disaster to listen to.
Economy 747 to hit a flock of black swans?
This interview goes nowhere because Talib can’t string together a cogent point. Connect the threads of your conversation so the interviewer doesn’t have to continually ask for elaboration.
U.S. stock market is the biggest bubble in HISTORY !!
With Tesla has the poster boy of the bubble
FedEx was the black swan
I agree... with lower rates for too long and biden spending too much...
We had financial tumors... and bubbles..
Who got the 0 %
everyone who got in the market the last 15 years
Yes, the last 15 years of free money/no-cost debt financing will come to a *painful* end. Economic and monetary policy over the past 15 years shows that those making the decisions are the least fit and have the poorest instincts. The interviewer is *clueless* and cannot hear what Taleb is saying.