The market predictions by knowledgeable people? Economists?

[K. A. Pital]

1. "We will not have any more crashes in our time."
- John Maynard Keynes in 1927

2. "I cannot help but raise a dissenting voice to statements that we are living in a fool's paradise, and that prosperity in this country must necessarily diminish and recede in the near future."
- E. H. H. Simmons, President, New York Stock Exchange, January 12, 1928

"There will be no interruption of our permanent prosperity."
- Myron E. Forbes, President, Pierce Arrow Motor Car Co., January 12, 1928

3. "No Congress of the United States ever assembled, on surveying the state of the Union, has met with a more pleasing prospect than that which appears at the present time. In the domestic field there is tranquility and contentment...and the highest record of years of prosperity. In the foreign field there is peace, the goodwill which comes from mutual understanding."
- Calvin Coolidge December 4, 1928

4. "There may be a recession in stock prices, but not anything in the nature of a crash."
- Irving Fisher, leading U.S. economist , New York Times, Sept. 5, 1929

5. "Stock prices have reached what looks like a permanently high plateau. I do not feel there will be soon if ever a 50 or 60 point break from present levels, such as (bears) have predicted. I expect to see the stock market a good deal higher within a few months."
- Irving Fisher, Ph.D. in economics, Oct. 17, 1929

"This crash is not going to have much effect on business."
- Arthur Reynolds, Chairman of Continental Illinois Bank of Chicago, October 24, 1929

"There will be no repetition of the break of yesterday... I have no fear of another comparable decline."
- Arthur W. Loasby (President of the Equitable Trust Company), quoted in NYT, Friday, October 25, 1929

"We feel that fundamentally Wall Street is sound, and that for people who can afford to pay for them outright, good stocks are cheap at these prices."
- Goodbody and Company market-letter quoted in The New York Times, Friday, October 25, 1929

6. "This is the time to buy stocks. This is the time to recall the words of the late J. P. Morgan... that any man who is bearish on America will go broke. Within a few days there is likely to be a bear panic rather than a bull panic. Many of the low prices as a result of this hysterical selling are not likely to be reached again in many years."
- R. W. McNeel, market analyst, as quoted in the New York Herald Tribune, October 30, 1929

"Buying of sound, seasoned issues now will not be regretted"
- E. A. Pearce market letter quoted in the New York Herald Tribune, October 30, 1929

"Some pretty intelligent people are now buying stocks... Unless we are to have a panic -- which no one seriously believes, stocks have hit bottom."
- R. W. McNeal, financial analyst in October 1929

7. "The decline is in paper values, not in tangible goods and services...America is now in the eighth year of prosperity as commercially defined. The former great periods of prosperity in America averaged eleven years. On this basis we now have three more years to go before the tailspin."
- Stuart Chase (American economist and author), NY Herald Tribune, November 1, 1929

"Hysteria has now disappeared from Wall Street."
- The Times of London, November 2, 1929

"The Wall Street crash doesn't mean that there will be any general or serious business depression... For six years American business has been diverting a substantial part of its attention, its energies and its resources on the speculative game... Now that irrelevant, alien and hazardous adventure is over. Business has come home again, back to its job, providentially unscathed, sound in wind and limb, financially stronger than ever before."
- Business Week, November 2, 1929

"...despite its severity, we believe that the slump in stock prices will prove an intermediate movement and not the precursor of a business depression such as would entail prolonged further liquidation..."
- Harvard Economic Society (HES), November 2, 1929

8. "... a serious depression seems improbable; [we expect] recovery of business next spring, with further improvement in the fall."
- HES, November 10, 1929

"The end of the decline of the Stock Market will probably not be long, only a few more days at most."
- Irving Fisher, Professor of Economics at Yale University, November 14, 1929

"In most of the cities and towns of this country, this Wall Street panic will have no effect."
- Paul Block (President of the Block newspaper chain), editorial, November 15, 1929

"Financial storm definitely passed."
- Bernard Baruch, cablegram to Winston Churchill, November 15, 1929

9. "I see nothing in the present situation that is either menacing or warrants pessimism... I have every confidence that there will be a revival of activity in the spring, and that during this coming year the country will make steady progress."
- Andrew W. Mellon, U.S. Secretary of the Treasury December 31, 1929

"I am convinced that through these measures we have reestablished confidence."
- Herbert Hoover, December 1929

"[1930 will be] a splendid employment year."
- U.S. Dept. of Labor, New Year's Forecast, December 1929

10. "For the immediate future, at least, the outlook (stocks) is bright."
- Irving Fisher, Ph.D. in Economics, in early 1930

11. "...there are indications that the severest phase of the recession is over..."
- Harvard Economic Society (HES) Jan 18, 1930

12. "There is nothing in the situation to be disturbed about."
- Secretary of the Treasury Andrew Mellon, Feb 1930

13. "The spring of 1930 marks the end of a period of grave concern...American business is steadily coming back to a normal level of prosperity."
- Julius Barnes, head of Hoover's National Business Survey Conference, Mar 16, 1930

"... the outlook continues favorable..."
- HES Mar 29, 1930

14. "... the outlook is favorable..."
- HES Apr 19, 1930

15. "While the crash only took place six months ago, I am convinced we have now passed through the worst -- and with continued unity of effort we shall rapidly recover. There has been no significant bank or industrial failure. That danger, too, is safely behind us."
- Herbert Hoover, President of the United States, May 1, 1930

"...by May or June the spring recovery forecast in our letters of last December and November should clearly be apparent..."
- HES May 17, 1930

"Gentleman, you have come sixty days too late. The depression is over."
- Herbert Hoover, responding to a delegation requesting a public works program to help speed the recovery, June 1930

16. "... irregular and conflicting movements of business should soon give way to a sustained recovery..."
- HES June 28, 1930

17. "... the present depression has about spent its force..."
- HES, Aug 30, 1930

18. "We are now near the end of the declining phase of the depression."
- HES Nov 15, 1930

19. "Stabilization at [present] levels is clearly possible."
- HES Oct 31, 1931

20. "All safe deposit boxes in banks or financial institutions have been sealed... and may only be opened in the presence of an agent of the I.R.S."
- President F.D. Roosevelt, 1933

Serves as a nice reminder that the pompous statements of modern economists about the nature, duration and severity of the economic crisis might have a similar amount of "worth"

[PainRack]

Anyone remember the Asian Crisis and China/Hong Kong economic crisises? Let me see......

Sept 10 2001: Time= Hong Kong is dying/dead. Why? Because the government continue to bailout and support the banks. Add in some banter about Beijing, real estate speculation and the property bubble, tycoons manipulation of politics and economics...... and its all bad.

Now, fast foward 7 years...... America will go on !

There's also the WSJ and their comments on how stock/property bubble, and borrowing doomed the Japanese economy. But revert to America and.......................

And do we even need to talk about Mathathir and economic speculation, speculation and capital movement?

[aerius]

On the other hand it's an excellent contrarian indicator, as long as the mainstream economists and talking head "experts" continue to say the worst is over and the bottom is in, you know that it's going to get a hell of a lot worse. On another forum I'm on it's referred to as the "Cramer Rule", named after CNBC's Jim Cramer; whatever Cramer says or advises on his show you do the exact opposite, and 80-90% of the time you'll make a hefty profit.

[Fingolfin_Noldor]

Anyone remember the Asian Crisis and China/Hong Kong economic crisises? Let me see......

Sept 10 2001: Time= Hong Kong is dying/dead. Why? Because the government continue to bailout and support the banks. Add in some banter about Beijing, real estate speculation and the property bubble, tycoons manipulation of politics and economics...... and its all bad.

Now, fast foward 7 years...... America will go on !

There's also the WSJ and their comments on how stock/property bubble, and borrowing doomed the Japanese economy. But revert to America and.......................

And do we even need to talk about Mathathir and economic speculation, speculation and capital movement?

Meh... and on the other hand, there were plenty of Asian economists who said Asia was decoupled from the West, yeah, sure.

[J]

A little food for though from Nassim Taleb and Benoit Mandelbrot.

"I think we may be expriencing something which is vastly worse than we think it is"

"I've been waiting for this since 2003...waiting for this crisis"

One of the key points he stresses is that economists and other financial experts were far too keen on extrapolating the past & present into the future without understanding what's really going on. There's too much reliance on measurements & metrics which they made up, and which do not correspond to the real world, in effect they've modeled their own ideal world and based all their decisions upon the model without bothering to see if said model bears any resemblance to real life. Watch the videos, I think they're very enlightening.

[PainRack]

[Meh... and on the other hand, there were plenty of Asian economists who said Asia was decoupled from the West, yeah, sure.

Now? lol. I always found that funny. Sure, most of Asia is now tied to the China and Japanese markets........... which are directly linked to the US markets. So its just a one step removal.


We're still seeing predictions in Australia, Singapore and China that the upcoming disaster would last only a year because governments have learned the disaster of the 1930s/Asian Finanicial Crisis. Ha!

[Fingolfin_Noldor]

[Meh... and on the other hand, there were plenty of Asian economists who said Asia was decoupled from the West, yeah, sure.

Now? lol. I always found that funny. Sure, most of Asia is now tied to the China and Japanese markets........... which are directly linked to the US markets. So its just a one step removal.


We're still seeing predictions in Australia, Singapore and China that the upcoming disaster would last only a year because governments have learned the disaster of the 1930s/Asian Finanicial Crisis. Ha!

Yeah right. This is only the calm before the storm. Anyone who gives overly optimistic predictions ought to be shot. It doesn't get reported in the papers much, but the financial sector in Singapore is taking a big hit, according to some of my banking friends.

[ray245]

Well, Singapore is in a recession, while Malaysia isn't.

That's saying something, when our leaders love to refer to Singapore as the financial hub of SEA.

[Stark]

We're still seeing predictions in Australia, Singapore and China that the upcoming disaster would last only a year because governments have learned the disaster of the 1930s/Asian Finanicial Crisis. Ha!

What's most amusing is the constant stepping back from each rosy prediction isn't itself seen as a bad thing.

[aerius]

There's also the WSJ and their comments on how stock/property bubble, and borrowing doomed the Japanese economy. But revert to America and.......................

It's not just the WSJ, pretty much every single business & investing magazine is still claiming "2009 recovery" and "the worst is over, it's time to bargain hunt for stocks". I was at the bookstore last week and spent a few hours skimming through every business & investing magazine they had, and there was only one, just ONE SINGLE ARTICLE in a Canadian investment magazine which said "get the hell out of stocks, get into cash and/or government bonds and protect your fucking money". One article out of over hundreds that I skimmed through. All the rest were saying "now's a great time to buy" or offering some variation of the "averaging down" strategy, it'll average down alright, all the way to zero.

It's funny, everyone thinks it's different this time and past examples of similar situations don't apply to them. Until it does, and then they're fucked. I'm seeing this in Canada right now, almost everyone thinks we'll escape mostly unharmed thanks to our "healthy" finances and strong resource sector. Well, problem is our resource sector depends on $50-80 oil and shitloads of home construction in the US, oil at ~$45 plus no home construction going on down there thanks to the housing implosion means our oil & wood exports are toast. Plus our federal government is on a "tax break and spend" spree, and our banks have exposure to the US housing mess plus the Canadian housing & finance market isn't nearly as sound as generally accepted, put it all together and it means we're fucked. But few people believe me when I say that, then again, no one believed me a year ago when I said the TSX would be below 10,000 by the end of this year.

[Aranfan]

When people say "It's different this time", that is the time to sell and get out.

[J]

A few choice quotes from the current crisis:

I believe we can get to the point within months where we turn the corner on housing

Sec Tres Hank Paulson, July 2007

The market impact of the subprime mortgage fallout is largely contained

Sec Tres. Hank Paulson, August 2007

Washington Mutual Inc. late Thursday provided an update on its financial health, saying that its provision for loan losses in the third quarter will fall from the prior period though it remains "well capitalized" and its retail deposit balances have remained relatively stable.

Wamu went the way of the dodo about a week after this statement was released

... we have the capital (both existing capital and an additional $400 million, or so, we will generate by suspending the common dividend and shrinking our balance sheet) to absorb nearly triple our presently forecasted 2008 credit costs and fight our way through until the housing and mortgage markets do stabilize."

So claimed IndyMac's CEO in a shareholder statement about 6 months before they went under.

"Wachovia is a fundamentally strong and stable company on solid footing ... and is well-capitalized," said spokeswoman Christy Phillips-Brown.

Wachovia spokesperson, about 2 months before they went under.


The record so far is pretty awful...

[PainRack]

What's most amusing is the constant stepping back from each rosy prediction isn't itself seen as a bad thing.

What's Howard latest comment BTW?

[Medic]

snip

Ugh. Which is the closest approximation to the truth you think: head-in-the-sand denial, an outright belief that nothing is wrong or they KNOW they're fucked but don't want to put out bad news which will result in a self-fulfilling prophecy?

[ray245]

snip

Ugh. Which is the closest approximation to the truth you think: head-in-the-sand denial, an outright belief that nothing is wrong or they KNOW they're fucked but don't want to put out bad news which will result in a self-fulfilling prophecy?

Is it reasonable to assume that those people are preventing the situation from getting worse by misleading the consumers and the public?

[Medic]

snip

Ugh. Which is the closest approximation to the truth you think: head-in-the-sand denial, an outright belief that nothing is wrong or they KNOW they're fucked but don't want to put out bad news which will result in a self-fulfilling prophecy?

Is it reasonable to assume that those people are preventing the situation from getting worse by misleading the consumers and the public?

To prevent a good old-fashioned bank run, I believe so. My opinions here aren't strong though since I'm relatively ignorant on economic matters.

[aerius]

[quote="SPC Brungardt"Ugh. Which is the closest approximation to the truth you think: head-in-the-sand denial, an outright belief that nothing is wrong or they KNOW they're fucked but don't want to put out bad news which will result in a self-fulfilling prophecy?[/quote]

We think it's class warfare. The rich assholes with the power know we're fucked, in fact they engineered the fucking in the first place and now they're going to keep the game going as long as possible to transfer as much wealth as they can from us to them. It's a con game, and it'll keep going until we the people take action and make them stop.

[mr friendly guy]

What's most amusing is the constant stepping back from each rosy prediction isn't itself seen as a bad thing.

What's Howard latest comment BTW?

I would imagine its something along the lines of if the Liberals were in power none of this would have happened and we would have magically stopped the debacle in the US which in turn has caused Asia to decrease demand for our goods. Somehow. Or maybe we would just pick on some Muslims again or something.

Thats all he can say since he kind of is out of power, and not only that, but lost his own seat against a novice. And he had the Chaser comedy team mock his loss. Plus his second in command turn against him publicly whereas before the fighting was kept behind close doors so to speak. Now we just need Obama to take a swipe at him after Howard took one at Obama before we was even selected as the democratic candidate, and Howard's humiliation would be complete.

But back to the predictions in Australia, its still that we would avoid a recession. That remains to be seen. Oh well, I still have a job and a decent amount of savings. I only lament that with falling interest rates I won't be earning as much interest any more. Oh well, at least house prices are falling.

[Uraniun235]

We think it's class warfare. The rich assholes with the power know we're fucked, in fact they engineered the fucking in the first place and now they're going to keep the game going as long as possible to transfer as much wealth as they can from us to them. It's a con game, and it'll keep going until we the people take action and make them stop.

The irony is that this is a more positive view of the situation. Assuming that this is a deliberately engineered effort which sabotages the normal/natural order of market-driven societies presumes that, without such malicious effort, we would be much better off; that we could in fact manage things if some people weren't assholes. Assuming that this is mostly due to incompetence implies that as a society we cannot help but fuck everything up, that we are truly damned to cycles of subsistence and starvation.

[J]

More hilarious predictions from the "experts".

Link

The Worst Predictions About 2008
By Peter Coy – Mon Dec 29, 10:46 am ET

Here are some of the worst predictions that were made about 2008. Savor them -- a crop like this doesn't come along every year.

1. "A very powerful and durable rally is in the works. But it may need another couple of days to lift off. Hold the fort and keep the faith!" -- Richard Band, editor, Profitable Investing Letter, Mar. 27, 2008

At the time of the prediction, the Dow Jones industrial average was at 12,300. By late December it was at 8,500.

2. AIG (NYSE:AIG - News) "could have huge gains in the second quarter." -- Bijan Moazami, analyst, Friedman, Billings, Ramsey, May 9, 2008

AIG wound up losing $5 billion in that quarter and $25 billion in the next. It was taken over in September by the U.S. government, which will spend or lend $150 billion to keep it afloat.

3. "I think this is a case where Freddie Mac (NYSE:FRE - News) and Fannie Mae (NYSE:FNM - News) are fundamentally sound. They're not in danger of going under I think they are in good shape going forward." -- Barney Frank (D-Mass.), House Financial Services Committee chairman, July 14, 2008

Two months later, the government forced the mortgage giants into conservatorships and pledged to invest up to $100 billion in each.

4. "The market is in the process of correcting itself." -- President George W. Bush, in a Mar. 14, 2008 speech

For the rest of the year, the market kept correcting and correcting and correcting.

5. "No! No! No! Bear Stearns is not in trouble." -- Jim Cramer, CNBC commentator, Mar. 11, 2008

Five days later, JPMorgan Chase (NYSE:JPM - News) took over Bear Stearns with government help, nearly wiping out shareholders.

6. "Existing-Home Sales to Trend Up in 2008" -- Headline of a National Association of Realtors press release, Dec. 9, 2007

On Dec. 23, 2008, the group said November sales were running at an annual rate of 4.5 million -- down 11% from a year earlier -- in the worst housing slump since the Depression.

7. "I think you'll see (oil prices at) $150 a barrel by the end of the year" -- T. Boone Pickens, June 20, 2008

Oil was then around $135 a barrel. By late December it was below $40.

8. "I expect there will be some failures. I don't anticipate any serious problems of that sort among the large internationally active banks that make up a very substantial part of our banking system." -- Ben Bernanke, Federal Reserve chairman, Feb. 28, 2008

In September, Washington Mutual became the largest financial institution in U.S. history to fail. Citigroup (NYSE:C - News) needed an even bigger rescue in November.

9. "In today's regulatory environment, it's virtually impossible to violate rules." -- Bernard Madoff, money manager, Oct. 20, 2007

About a year later, Madoff -- who once headed the Nasdaq Stock Market -- told investigators he had cost his investors $50 billion in an alleged Ponzi scheme.

10. A Bound Man: Why We Are Excited About Obama and Why He Can't Win, the title of a book by conservative commentator Shelby Steele, published on Dec. 4, 2007.

Mr. Steele, meet President-elect Barack Obama.

Don't you love how history repeats itself? Funny isn't it?

[Stark]

I would imagine its something along the lines of if the Liberals were in power none of this would have happened and we would have magically stopped the debacle in the US which in turn has caused Asia to decrease demand for our goods. Somehow. Or maybe we would just pick on some Muslims again or something.

The Howard Cult of +5 economy bonus is fucking hilarious. You can explain to people why he happened to be in charge during a global boom and engineered some privatisation and was lucky enough to be defeated right before a global economic crisis, but people just come back to the simpleminded idea that 'Howard in charge = omg dollars, Howard not in charge = omg fail'. It's really pretty pathetic, and that's why democracy doesn't work.

I have LITERALLY heard people say this wouldn't have happened if Rudd wasn't PM. Astonishingly retarded, but not surprising.