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Who actually predicted this Financial Crisis?

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Knobby22

Knobby22

Mmmmmm 2nd breakfast
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Who actually accurately predicted this downturn and where are they on the economic compass?
An MRPA paper (Netherlands university) has looked into this. http://mpra.ub.uni-muenchen.de/15892/

I have summarised below:

Peter Schiff, Kurt Richbacher - Austrian School - emphasises savings and production against asset prices. (apologies to Wayne L)

Stephen Keen, Wynne Godley, Michael Hudson - Keynsian - emphasis on the accounting flow of funds approach (Says Law) - These guys have actually set up models that appear to have worked.

Sorenson, Baker - Financialization scenario - i.e. financial innovation will casue a liquidity drain at some point.

Schiller, Roubini, Janszen, Baker - Cycles theory, we were due for a downturn.


The paper is particuarly critical of neoclassical theory which failed to predict this occuring even at the late stages using the Equilbrium model. Specifically noted is the Washington University Macro Madel which is a massive dominant model.

I really liked the Keynsian model set up, but then I am a Keynsian fan. Bit of a big read but worth it.
 
Soros Published a book about it before/at the time it happened.
 
From 2004 I read on it indepth from four books, different author/economists and also the newsletter Privateer.

No accuracy to the timing (but who can exactly time markets) but on the ball with the fundaments and the scope of the fall. If my reading is any guide we have a long way to fall yet in markets, real estate, derivatives, currencies and bonds.
 
Steven Keen - the only Australian to make this list - well done.

For those interested in his work, go to :
http://www.debtdeflation.com/blogs/

Lots of interesting reading about debt, fiat currency system, stimulus, neo economics etc.

Don't see our own Assoc Prof. Robots on this list.

Cheers
 
satanoperca said:
Steven Keen - the only Australian to make this list - well done.

For those interested in his work, go to :
http://www.debtdeflation.com/blogs/

Lots of interesting reading about debt, fiat currency system, stimulus, neo economics etc.

Don't see our own Assoc Prof. Robots on this list.

Cheers
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Jack Buckler "The Privateer Newsletter" also, lives in Noosa

Who owe a huge debt of gratitude for opening up my eyes to the real financial world.

Not associated, just subsribed and got value.
 
I did and so did many other ASF posters....and yet, it has hardly begun. Just wait until the real crises hits. And where are we on the economic compass?....as a guess, probably not much above toe rag status.

When this time does come, it will be obvious to all that the Keynsian theory was the biggest mistake man had ever made financially. Rather than allow debt to be vanquished, we have made it boom!

Cheers
 
tech/a said:
Soros Published a book about it before/at the time it happened.
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lol, Soros has been predicting it since the early 80s.

Luckily, Soros actually times it with price (like a trader would) and doesn't fight it as many academic economists try too.
 
satanoperca said:
Steven Keen - the only Australian to make this list - well done.

For those interested in his work, go to :
http://www.debtdeflation.com/blogs/

Lots of interesting reading about debt, fiat currency system, stimulus, neo economics etc.

Don't see our own Assoc Prof. Robots on this list.

Cheers
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hello,

no, but you can catch Assoc Prof. Robots over at "house prices to continue to rise" at ASF,

how the predictions going in relation to housing?

SK sells his joint and the area goes up 7-8%, amazing, and cash rate still at 3% only thing thats been smacked is the shonk market

thankyou
professor robots
 
I remember hearing Satyajit Das talking about it. He and others predicted 6 of the out of last 2 :)
 
explod said:
Jack Buckler "The Privateer Newsletter" also, lives in Noosa

Who owe a huge debt of gratitude for opening up my eyes to the real financial world.

Not associated, just subsribed and got value.
Click to expand...


thank you for the link, his newsletter looks very good and is quite cheap. do you still subscribe and if so do you still think it is a worthwhile buy?

wonder.
 
wonderrman said:
thank you for the link, his newsletter looks very good and is quite cheap. do you still subscribe and if so do you still think it is a worthwhile buy?

wonder.
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I subscribed for about four years, just moved home and it ran out so have to get back to it. I think you can see some trial issues and then take up a months sub for a small fee to see how it fits for you.

All of his stuff is backed by actual figures from the organisations and governments concerned. He is a great intellectual and also had many years in the pits of Chicargo I understand. I found him from a US website initially so he is read world wide.

It is an economic education.
 
Austrian economist sappear to have predicted the collapse.

But regulatory changes to US Banking laws appear to have allowed it to occur.

It's the old having your cake and eating it conundrum.

I note WayneL has made some valid and accurate points. But I don't agree
with Schiff's line on the free market.

It's more a matter of pure logic.

If both market players (P) (ch) cheat then both (B) lose. (ch - -)
If one market player (P) co-operates (c) and the other cheats. Then the one that co-operates loses as well. (c - ch +)
If both market players (P) co-operate then both (B) win (c ++)

therefore ch = (ch + B)
If prevalence of B increases then P (ch) can only increase.
If B = 0 then P(ch) = 0.
If prevalence of B decreases then P(ch) can only decrease.

ch = B increasing


Look here

http://en.wikipedia.org/wiki/Glass-Steagall_Act

and here

http://www.bloggingstocks.com/2009/...ti-deregulation-gets-a-spike-through-its-hea/

Last month, I posted on 2008's eight worst ideas. At the top of my list was deregulation. Robert Rubin, who spent a decade as a director of Citigroup (NYSE: C) and is now retiring, is partly responsible for one very important act of deregulation -- the repeal of Glass-Steagall which separated investment and commercial banking. (It was former Citi CEO Sandy Weill's 1998 merger of his Travelers with Citi that spurred Glass-Steagall's repeal in the 1999 passage of the Gramm-Leach-Bliley Act which allowed commercial and investment banks to own each other.)

And by bringing down that barrier -- established in the wake of the stock market manipulations of the 1920s enabled by commercial banks that made margin loans to trade stocks -- the U.S. helped usher in the current financial catastrophe. Now the government is gradually reimposing Glass-Steagall -- in effect, if not in law.

Conclusion, stop cheats.
 
jono1887 said:
Karl Marx actually predicted it more than a century ago :p:
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And I wonder why???? :bonk:

Marx must have been in outerspace compared to this guy.
At least Merrill Lynch's CEO was grounded in reality.

http://consumerist.com/5137115/merr...office-renovation-as-company-prepared-to-burn

Merrill Lynch CEO John Thain spent over $1.22 million to renovate his office in early 2008, just as his firm was getting ready to slash thousands of jobs, cut back on spending and dump businesses. Here's this douchebag's big-ticket tally of personal aggrandizement in the midst of financial crisis:

$800,00 to hire celebrity designer Michael Smith. He's interior-decorating Obama's White House. For $100,000. Mixing in items from Target.
$87,000 for a ****ing area rug. I think I could buy all of the area rugs in stock at my local IKEA for $87,000, and have enough money left over to buy all my fellow shoppers an all-you-can eat Swedish Meatball feast. Then invest the remainder in high-yield moon-backed derivatives.
$87,000 two guest jerkface chairs
$44,000 another goddamn area rug
$37,000 six chairs for private dining room. Who has a dining room in their office?
$35,000 "commode on legs." I'm guessing that's a claw-footed toilet. Bad choice. Those gather dust underneath like nobody's business, let me tell you. Update: Actually it's a chest-of-drawers on legs. Too bad no one told me that before I took a crap in it.
$28,00 four stupid curtains
$25,000 mahogany pedestal table. I think my brother just found one of those on the curb on garbage day recently.
$24,000 "Regency Chairs." These are the kind of chairs that you use to line walls and corners but no one actually sits in and some day they end up in the Met and people are like, wow, that looks like a well-preserved, expensive, uncomfortable chair.
$18,000 "George IV Desk." You can find George I desks just as good on eBay, the advances in the later models are mainly cosmetic.
$16,000 custom coffee table. Shellacked with the blood of virgin Peruvian tribe-boys.
$13,000 chandelier in private dining room. Really fun to swing on.
$11,000 fabric for "Roman Shade." That's a euphemism for something dirty, right?
$5,000 mirror in private dining room. It's the one from Snow White.
$5,000 40 yards of fabric for wall panels. That's actually a pretty good deal. In pesos.
$2,700 6 wall sconces. Sconces are for nancies. Real titans of industry use torches.
$1,400 "Parchment waste can." Guess they were out of vellum.

Aren't you feeling good now that the government gave Bank of America a big check to buy these guys? It was vital to the national interest to prevent the collapse of the interior decorating industry.
 
GumbyLearner said:
Merrill Lynch CEO John Thain spent over $1.22 million to renovate his office in early 2008, just as his firm was getting ready to slash thousands of jobs, cut back on spending and dump businesses.
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He probably knew what was going to happen, and realised that it was a "now or never" chance to redecorates his office.

I remember filling out a survey back in 2007. One of the questions was asking which class of asset I thought would produce the highest return for the next 12 months. I ticked the box for "other", and when it asked me for more information, I typed in "cash". In some way, I hoped I was wrong, but it was a relief having my money in >8% term deposits while watching everything else crashed and burn.
 
There are a lot more people just on that list that have predicted the financial crisis. Althought I am aware of the criteria that the author of the paper used to select the candidates. (Steven Keen obviously mentioned about this paper a while ago. heheh)

Bill Bonner, John Mauldin (he's gooood), David Rosenberg (very good too), George Soros, Jim Rogers, Bill Gross, Mike Shedlock, Karl Denninger, Marc Faber (Dr Doom and Gloom), Martin D. Weiss, probably some of the guys at Mises.org.

There are certainly more than I am unaware of. But I certainly understand some of them may not have given an exact "value or timing" on the occurance.

And ironically, you have Queen Elizabeth complaining why "no one" say this coming and her country's prominant economists (neo-classicial) apologise to her with stupid reasons on why they couldn't. Then you have Vice President Dick Cheney also saying no one saw this coming and Bush cannot be blamed for it. Blah blah blah

Chopper Ben obviously didn't see this coming but now everyone is praising him for his role in "solving" the crisis and that he should been re-elected again.
 
Temjin said:
There are a lot more people just on that list that have predicted the financial crisis. Althought I am aware of the criteria that the author of the paper used to select the candidates. (Steven Keen obviously mentioned about this paper a while ago. heheh)

Bill Bonner, John Mauldin (he's gooood), David Rosenberg (very good too), George Soros, Jim Rogers, Bill Gross, Mike Shedlock, Karl Denninger, Marc Faber (Dr Doom and Gloom), Martin D. Weiss, probably some of the guys at Mises.org.

There are certainly more than I am unaware of. But I certainly understand some of them may not have given an exact "value or timing" on the occurance.

And ironically, you have Queen Elizabeth complaining why "no one" say this coming and her country's prominant economists (neo-classicial) apologise to her with stupid reasons on why they couldn't. Then you have Vice President Dick Cheney also saying no one saw this coming and Bush cannot be blamed for it. Blah blah blah

Chopper Ben obviously didn't see this coming but now everyone is praising him for his role in "solving" the crisis and that he should been re-elected again.
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Just about everyone of the Austrian school and their followers saw it coming. That's many tens of thousands.

Even some Keynesians saw it coming. Dr Vince Cable, the Liberal Democrat's shadow Chancellor of the Exchequer warned about it in public and in parliament as early as 2006.

Lizzy would have known if she didn't confine her council to the Stalinist b@stards currently in power.
 
Define accurate prediction, as many people were expecting the markets to decline a great distance. Anyone with any understanding of how markets work would have realised the potential for a slump or crash.
 
Mr J said:
Define accurate prediction, as many people were expecting the markets to decline a great distance. Anyone with any understanding of how markets work would have realised the potential for a slump or crash.
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Only the people who actually perform such manipulations will know the accuracy of such crashes/booms :cautious:
 
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