Barry Ritholtz, chief executive officer of FusionIQ and author of the “Big Picture” blog, talks about Federal Reserve monetary policy, fiscal talks and the U.S. economic outlook. Ritholtz speaks with Tom Keene, Sara Eisen and Mchael McKee on Bloomberg Television’s “Surveillance.”

Source: Bloomberg Dec. 13 2012

Category: Media, Video

Please use the comments to demonstrate your own ignorance, unfamiliarity with empirical data and lack of respect for scientific knowledge. Be sure to create straw men and argue against things I have neither said nor implied. If you could repeat previously discredited memes or steer the conversation into irrelevant, off topic discussions, it would be appreciated. Lastly, kindly forgo all civility in your discourse . . . you are, after all, anonymous.

4 Responses to “Ritholtz: No Uncertainty on Fiscal Accord”

  1. Disinfectant says:

    What happened to your defensive stance taken in late October? I don’t recall seeing anything implying that you had shifted gears until this video.

  2. We’ve slowly been adding a few additional holdings:

    Emerging market dividends, US growth — and we have been underweight tech (Still are, but les so)

  3. JoseOle says:

    God this show drives me nuts. It’s so fragmented. I watched the entire show in the Bloomberg archive, which was a big mistake. The “data checks” are just speed bumps. It’s not like we can’t check yields and futures ourselves easily enough. I wish they would spend more time talking to the guests. You sat there for an hour and probably spoke for about 5-7 minutes in total. I enjoy hearing your thoughts, but I think I’ll just wait until you’re on the radio again.

  4. Fazzini says:

    Ritholtz – I like you. I loved your book “Bailout Nation”, and I love your blog. But you appear to be somewhat confused about this whole “uncertainty” thing. Let me try and help you out.

    In your interview you state: “We don’t have uncertainty. We know what the various outcomes are.” You made that statement in the context of the so-called “Fiscal Cliff”. The Fiscal Cliff, as described in your 14 November 2012 blog post “What, Exactly, Is the Fiscal Cliff, You Ask?”, is this. On 1 January 2013 the US government will implement automatic spending cuts and automatic tax increases, unless either (a) the law is changed, or (b) Congress and the president find another way to trim the deficit.

    So, what is the probability that the law will be changed? What is the probability that Congress and the President will find another way to trim the deficit? The answer is that we don’t know. And even if it was possible to assign specific unique probabilities to those courses of action (which it is not), what are the various outcomes in terms of government spending and taxes, and their respective probabilities? Again, we don’t know with absolute certainty. And even if we did know with absolute certainty (which we do not), what would be the various outcomes for employment, inflation, GDP, interest rates, stock prices, etc. Again, we don’t know with absolute certainty because we don’t know the precise transmission mechanism – and it is impossible to know the precise transmission mechanism because the economy is a complex adaptive system; the precise transmission mechanism is always changing.

    In summary, we don’t know what the various outcomes and their associated probabilities are with absolute certainty. We might be able to guess at a range of outcomes, and we might even be able to assign various estimated probability distributions to those guesses. But no matter how sophisticated the process, we are not able to assign a unique probability distribution to the various outcomes with absolute certainty. We are therefore in the realm of uncertainty, not risk. So the statement “We don’t have uncertainty” is incorrect.

    In the real world, financial decision making ALWAYS occurs in the context of uncertainty, not risk. That is the nature of the beast.


    BR: You are conflating the words Uncertainty with Unknown — they are not the same. If sequestration occurs, we know precisely what the tax increases and spending cuts are. We know what the impact on the economy will be. We understand the net results. We dont know whether it will be heads or tails, but those are our choices.

    That is not uncertainty — it is risk, and we can calculate it.