2006-07: Pundits scoffing at predictions of economic meltdown

[kevyn]

This is video quite amusing to watch:

Peter Shiff is apparently someone to pay attention to on economic matters, because he got it right. He appears to be a real analyst, not a cheerleader, unlike so many of the talking heads on TV.

Ben Stein comes off looking particularly bad in hindsight, especially when he goes all bullish on Merrill Lynch. And Charles Payne's prediction that WaMu will be the stock to have in 2008 is a real laugh.

( Ganked from BoingBoing )

Comments

[snousle.livejournal.com]

Where was Peter Shiff in 2002, or 1990, when the bears were the ones being made fools of? Was he an optimist back then, or was he spouting the same line? I bet that his long-term performance is no better than any of the others. None of these people can predict what is going to happen, and there will always be a few that are right in retrospect; that is no indication of special wisdom. Many of the specific predictions Shiff made were wrong as well, so many that I lost count.

It has been known for a very long time that "analyst" recommendations offer no advantage over the dart-board approach, so it's not exactly a surprise when they're wrong. It's just that when everyone is making money on paper, nobody cares.

It is unfortunate that TV has become a vehicle for corporate interests. But who in their right mind pays attention to it? This video is making a fuss over what is little more than noise. Shiff included. It's just another effort to extract marketable drama from one of the dryest and least palatable subjects in the world.

Oooh, here's a good one

[snousle.livejournal.com]

It turns out that I have been personally affected by Shiff being wrong. From a May interview at:

http://www.usnews.com/articles/business/your-money/2008/05/30/permabear-peter-schiffs-worst-case-scenario.html

Why don't you think soaring oil, grains, or commodities prices are the next bubble?

These prices do not constitute bubbles. They simply constitute the repricing of goods to reflect the diminished value of our money. The way you can tell there's not a bubble is that these markets are clearing. People are buying food and eating it. They're buying gasoline and using it. Speculators aren't buying gasoline and warehousing it in big facilities because they think the price is going to go up. At the same time, we've increased the supply of money dramatically, and the Fed is increasing it even faster now to deal with the bursting of the housing bubble. The only thing that can happen is for prices of commodities to rise to reflect the equilibrium of a greater supply of money.

Wow, was he ever wrong on that. My father bought Tek-Cominco at $35 a share based on an expectation of rising commodity prices, and the recent collapse of what can only be called a bubble drove the price down to less than $5 while also clobbering the Canadian dollar. Now, this is a stock that is especially sensitive to metals and oil prices, but their investment was based on exactly the advice Shiff was giving. They lost a LOT of money now that oil is down to $60 instead of the $200 that Shiff predicted. Not a small matter; this is one of the very few things my father has ever mentioned to me about his finances.

My point is, there is a huge gap between "being right" on TV and making money in practice. This video is really just propaganda.

[kevynjacobs.livejournal.com]

Wasn't directed at you, Tony, don't take it so personally.

I know you're annoyed by I told you sos.

I just think it's funny to see the 20/20 hindsight view.

And you have to admit, it's a hell of a piece of viral marketing for Peter Shiff. As a meme it's successfully reproducing because it rings true.

You'll note I had put "apparently" in my description of him. I was smart enough to recognize that these clips were assembled completely out of context, and hedge.

Still satisfying as hell to watch Ben "Bueller, Bueller" Stein go down in flames. Call it schadenfreude. Never liked that guy.

[kevynjacobs.livejournal.com]

Well this is Faux News, after all. Fox is all about extracting marketable drama from dry subjects.

[snousle.livejournal.com]

I don't mind I told you sos, but I get a little pissy when they are undeserved. Actually I was Mr. Crankypants yesterday and was feeling pissy about quite a lot of things. So ignore it please. ;-)

These TV guys drive me stark raving mad, though. I have a friend nearby who has had a "houseguest" for six months that fancies that he's going to become stock trader. He sits in front of the television ALL DAY watching the finance channel and fiddling with his notebook. I guess it's a really good thing he hasn't actually done anything about this ambition because he would have lost whatever money he had in short order. But having to listen to that channel for even an hour was hell!!!

[kevynjacobs.livejournal.com]

> Actually I was Mr. Crankypants yesterday and was feeling pissy about quite a lot of things. So ignore it please. ;-)

NP. "Mr. Crankypants?" I like that.