. >> look, in my vie the fed kind of established this fantasyland, but a credible fantasyland in which for 30 quarters in a row they've been saying, "next year conditions are going to be really strong and we are going to raise." the data comes in. "well, we are not going to raise yet. we are going to wait until next quarter when the forecast says it is going to be great." now we're back on that cycle. >> why is this? you advise the new york fed. are they saying, we have been wrong a lot, we should adjust our position? >> that is what they should do. the new york fed has been better than most of the regional feds on that front. i think it is because, and the fed is not alone in this, i think it is because most of the forecasting models are fundamentally about reversion to the mean and we predict the future will look like the past looked. they're basically saying in the model, implicitly, when house prices go up, the data from the 2000's tells us people will spend money and the economy will come booming back. and what happened in 2006 is the thing that is abnormal, not now. >> if you are

view, the fed kind of ,stablished this fantasyland but a credible fantasyland in which, for 30 quarters in a row, they've been saying next year conditions will be really strong and we are going to raise. and then the data comes in and it is not that strong. and they say, well, we won't raise yet. we will wait until next quarter with the forecast says we will be great and we will raise. now we are back on that cycle. david: you advise the new york fed. in a way, the new york fed has been better than the board offeds are the governors. i think it is because -- the fed is not alone in this. i think it is mostly the forecasting models are fundamentally about reversion to we predict the future will look like the past saying ind they are the model implicitly, when house prices go up, the data from the 2000s tells us that people spend housing starts will skyrocket and the economy will come booming back. 2006 is thepened in thing that is abnormal, not now being the thing that is abnormal. david: if you are running a company and you had a model that was running the norm -- the wrong numbers, wou

and it is part of the appeasement, appeasing vladimir putin, you name it, he has a foreign policy and fantasyland. >> he criticizes donald trump for his limited role in the global stage which is fine, but he didn't have any foreign-policy credentials when he was elected. when he was a first-term senator, it betrays the notion he thinks being liked is the most important thing, it is not the most important thing. being liked by other countries -- i did not say that. >> i thought that was where it was going. >> it is critical, it is paramount to him, to have someone else in complete contrast which is what donald trump is, a reaction to this president. arthel: i want world leaders to underestimate donald trump. >> i want vladimir putin to hang out with donald trump. you could get some good stuff out of it. >> donald trump castigated our closest allies, pretty deep with vladimir putin who is anathema to everything we stand for and said we should sit down with the head of north korea. >> i want trump to be the guy, the only one who could possibly do it. hillary clinton is stuck in the old way. traditio