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Topic Title: What do you think of Peter Schiff and other pessimists ?
Created On Sun May 10, 09 07:35 AM

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AbhiJ
Senior Member

Posts: 533
Joined: Aug 2008

Sun May 10, 09 07:35 AM

There are a small number of pessimist- Peter Schiff,Nouriel Roubini, Gerald Celente,Nassim Taleb, who say that we are in for a a depression similar to The Great Depression.

Peter Schiff appears logical when he says that socialism(read bailout) cannot correct

fundamental mistakes (housing bubble).

Posts: 86
Joined: Jul 2007

Sun May 10, 09 08:27 AM

http://nymag.com/news/intelligencer/53858/

Roubini is the only one with any credibility in your list. Rest are just good entertainers; i believe Obama will successfully re inflate the credit bubble by his reelection time, we will certainly not go into a "depression", more like the pre 1990s time i imagine.

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AbhiJ
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Sun May 10, 09 08:55 AM

Now is the best time to develop a time machine.If times go bad go back 20 years or go in future when the market has improved.

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cryptic26
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Joined: Feb 2002

Sun May 10, 09 02:47 PM

It's definitely worse than the pre-90s. Even as we emerge from the crisis, I think there shall be more job in risk management than in asset management and that too in the structured products, commodities, ABS space.

Edited: Sun May 10, 09 at 02:47 PM by cryptic26

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HyperGeometric
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Sun May 10, 09 07:52 PM

All these people are being realistic so I don't think they're pessimists. Roubini was talking about this mess a couple of years before it started. He continued to explain this to other economists at IMF meeting in '06 when everyone laughed at him.

I don't understand Taleb however. He has made his money and is now talking about nationalizing banks. He talks about unbearable risk traders take to print money for themselves. He might have a different metric for calculating risk but afterall, this is how he made his fortune.

Edited: Sun May 10, 09 at 07:53 PM by HyperGeometric

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spice
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Posts: 476
Joined: Mar 2006

Sun May 10, 09 09:35 PM

Peter Schiff is my favourite.

Can't stand Roubini. He is totally over-stepping the line trying to give stock picks these days. If he wants to, he should just get a job on Wall Street.

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AbhiJ
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Posts: 533
Joined: Aug 2008

Sun May 10, 09 09:35 PM

You can google "peter schiff was right", people were laughing at him then and people are still dismissing him.He may be exaggerating but he has a point,he has learned economics from the steet.

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KackToodles
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Posts: 3966
Joined: Aug 2005

Sun May 10, 09 11:51 PM

Quote
Originally posted by: cryptic26
I think there shall be more job in risk management than in asset management

if there is less asset management, what risk are those new guys in risk management going to management?

Posts: 167
Joined: Jan 2008

Mon May 11, 09 02:59 AM

Of all those clowns yo mentioned none of them actually put their money where their mouth is. If they were so sure, wouldn't they have made loads of money in the process?

I recall P. Schiff calling oil at $200 or something like that. He lost on oil. He also lost on gold. Yeah he called the housing bubble but if you look at what Schiller was putting out back in 2005 it doesn't take a genius to realize things were overvalued.

Remember: a broken watch is right twice a day.

How about J Paulson? Instead of going on CNBC to claim that he was right, he's probably busy counting the 600% or so returns he got in one of his funds that shorted ABX to the hilt.

Edited: Mon May 11, 09 at 03:06 AM by Nomade

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Mon May 11, 09 09:10 AM

peter schiff was right one time in 10-15 years and since then all he has done is chest beating.

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DominicConnor
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Mon May 11, 09 09:24 AM

I don't know the number of professional economists in the world who are "substantial" enough that they might get noticed if they prediuct.
If you take that as having the word "professor" somewhere in a job title, I'd guess that is in the order of 5,000 in the USA, Britain and Europe.

If you let them make forecasts, then you have a state space that is 5 years long then you have 25,000 prediction years.

If they randomly choose positions then you have every economic situation that has occurred since cavemen bartered for stone knives to the impact on food markets of a rogue computer leading a revolution on the Lunar colonies.

You have events that are so improbable that they would not be predicted by the most bizarre SciFi, varying from the biggest industrial growth since the 1940s caused by highly purifed lumps of stone, and a large number of people who make money by using the standard deviation of random events in the stock markets.

Set in that context, of course some predicted a rough picture of what has happened.

A few friends of mine have sort of betting club where we gamble on tail events. I for instance have money on British troops occupying Belgium and at least 1% of the citizens of China dying in civil violence.
Neither are really very likely, but the mean time between failure of a countries since the industrial revolution is <50 years. (France is the 5th Republic, Britain's land area has shrunk by more than 1/3, Sweden used to have a suprisingly large empire that almost everyone has forgotten, etc.

Economic crashes happen more often than you might think. The reason so many people are jumpy this time is that we've gone so long between large scale fuckups, indeed I suspect this is the longest period of monotonic growth in the world economy since the fall of the Roman Empire.
Already, less than 18 months in, positive growth is already drifting into some Western contries, and places like China and India never stopped growing.

Its been bad, but anyone who actually paid attention in history class, knows that much bigger shit happens much more often.

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Discussion on the new regulations on bonuses here.

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Mon May 11, 09 10:23 AM

Personally, I appreciate to have a few different opinions out there. There is quite a few out there that show good reasoning. Take Schiff for example. His conclusions are not totally out of the world given his assumption that a bail-out does not cure is correct, so that the delay and all the additional money will make things rather worse than a crash right now. Some people may point out that his assumption is extreme. They may be right, but my point is that this current crisis is nothing anyone has experienced so far. Since the global economy is quite a bit to complex for me to forecast what scenario will turn out to be true, I prefer to spend a few thoughts on all of them. So having people out there that come up with a few good and well thought scenarios safes me time to come up with it myself. Judging how likely these scenarios are is a different thing.

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AbhiJ
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Mon May 11, 09 10:48 AM

Quote
Originally posted by: DominicConnor

If you let them make forecasts, then you have a state space that is 5 years long then you have 25,000 prediction years.

The only thing is that only two people(in my knowledge) namely Peter Schiff and Roubini predicted the coming market crash back in 2005-6.One can say that was a chance but you when you see the you tube videos taken back in 2006 and how they were laughed at publickly, however they still continued to defiantly stand by their opinion appears to me as a quality and not as a chance.One has to give some credit to these guys.

Edited: Mon May 11, 09 at 11:17 AM by AbhiJ

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AbhiJ
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Mon May 11, 09 11:06 AM

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Originally posted by: pgeek1
peter schiff was right one time in 10-15 years and since then all he has done is chest beating.

The sad part is nobody listened, inspite of the chest beating.

Edited: Mon May 11, 09 at 11:16 AM by AbhiJ

Posts: 70
Joined: Dec 2007

Mon May 11, 09 11:53 AM

Back in the 1980s, there was an analsyt by the name of Bob Beckman. From about 1984 onward he was calling an end to the bull market and when the crash came in 1987 he hailed himself as the man who predicted the crash. However, if you had followed his investment advice and sold every year from 1984 you would have lost far more than if you had bought every year, including the crash.

There are always doomwatches who seem to forget that human beings are ingenious and resourceful and get themselves out of bigger messes than we are in at the moment.

Although i enjoy Nassim Taleb's books i do find him rather depressing and pessimistic. However, i guess that is a result of growing up in Lebanon during the eighties!

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O you who turn the wheel and look to windward,
Consider Phlebas, who was once handsome and tall as you.

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twofish
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Mon May 11, 09 01:02 PM

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Originally posted by: CEexsThey may be right, but my point is that this current crisis is nothing anyone has experienced so far.

Except that this isn't true. What we have is a garden variety banking crisis and credit bust, which has happened about a dozen times in the last century.

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twofish
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Mon May 11, 09 01:10 PM

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Originally posted by: AbhiJThe only thing is that only two people(in my knowledge) namely Peter Schiff and Roubini predicted the coming market crash back in 2005-6.One can say that was a chance but you when you see the you tube videos taken back in 2006 and how they were laughed at publickly, however they still continued to defiantly stand by their opinion appears to me as a quality and not as a chance.One has to give some credit to these guys.

That doesn't mean that they are right. If you consistently predict that things are awful then you are going to be right sooner or later. I hereby predict that there will be a massive crash in the financial markets. I don't know when and how which makes the prediction useless. Also, Roubini was pretty wrong about *how* things would blow up.

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spice
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Posts: 476
Joined: Mar 2006

Mon May 11, 09 08:18 PM

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How about J Paulson? Instead of going on CNBC to claim that he was right, he's probably busy counting the 600% or so returns he got in one of his funds that shorted ABX to the hilt.

Or licking his wounds from his short Barclays trade.

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Joined: Feb 2008

Mon May 11, 09 11:34 PM

It is very easy to make predictions. A lot of people were saying in 2004-2005 that the housing market was over valued. The problem is making money of this. As Keynes said "The market can stay irrational longer than you can stay solvent".

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Joined: Apr 2009

Tue May 12, 09 04:04 AM

Quote
Originally posted by: twofish
Quote
Originally posted by: CEexsThey may be right, but my point is that this current crisis is nothing anyone has experienced so far.

Except that this isn't true. What we have is a garden variety banking crisis and credit bust, which has happened about a dozen times in the last century.

Sure, banking crisis and credit bust is nothing new and fancy. However, earlier cases had smaller geographical dimensions. Additionally, despite the fact that quantitative easing was quite popular in earlier crises already, it is reaching new dimensions right now. So yes, it is a garden variety of banking crisis and credit bust, but being baked from the same basic ingredients doesnt mean they all have to follow the same pattern.

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