Have you noticed how all the world's most learned economists so accurately predicted the current financial melt-down? How they warned that Iceland was about to teeter on the edge of insolvency? That after the US Congress passed the bank bail-out plan last Friday, share prices in New York and London would plunge on Monday?
Actually, plenty of economists (and non-economists, for that matter) have been predicting these sorts of things, precisely because they did some rational thought of their own instead of taking the perspective of the BBC fuckwits like Robert Peston.
Hell, I predicted the current financial melt-down, making said prediction in about 2001/2002. The only thing I was wrong about was that it took a couple of years longer than I expected, but those years certainly made it even worse.
As far as Iceland is concerned, EVEN THE FUCKING BBC SAW SOMETHING WAS WRONG! Here's another one. Nobody cared, was all.
None of the blogs I read were in favour of the Paulson bailout (except, ironically, BOM.) I didn't think the Paulson bailout was going to fix anything, because it was fixing the wrong problem. I thought that MSM-believing sheeple would swallow it up and that confidence would be restored until it was realised that nothing had been fixed. I'm delighted to see that people didn't believe it, so the gap between the "recovery" and the "re-crash" was a lot shorter (i.e., no time at all.)
The BBC is currently doing itself no favours at all. Stop confusing what happens in your little bubble world with what real people are thinking.
Perhaps you should read Timmy and Adam.
2 comments:
Agreed. The problem is economics doesn't have good boundary control. Any fool in a suit can call themselves an economist and if the credulous media swallow the bait, the damage is done.
The "economists" who comment on house prices for Nationwide, Halifax or the RICS are good examples. The chief economists of banks are better termed "publicist".
The vaste swathes of Keynesian fools taking public money at university Economics departments are little better.
Economists who actually understand economists (such people do exist) called this crisis way in advance.
Still, the nubbin writing that piece is one of those fools who is proud of not having learned economics but chooses to comment on the subject nonetheless.
Courtesy of a commenter on Timmy's blog we get this link to an Economist article from 2003
http://www.economist.com/finance/displaystory.cfm?story_id=E1_TJRJQPD
Banks are shifting vast amounts of their lending risk out of the banking system. Healthy diversification, say some. Dangerous, say others
THE world's leading banks decided some years ago that lending is a mugs' game. They began to get rid of their loans, repackaging them and selling them off as securities, or getting others to re-insure their risk. And the policy has been bearing fruit. The glut of corporate bankruptcies in 2001 and 2002—including the two biggest of all time, Enron and WorldCom—have not had the devastating effect on the big banks' balance sheets that might have been expected. The two biggest banks in America, for instance, have hardly registered a tremor. Citigroup's profits for the second quarter of this year were $4.3 billion (12% up on a year earlier), and those of J.P. Morgan Chase were $1.8 billion for the same period (78% higher than last year).
...
Others, though, are less sanguine. They fear that credit losses, buried today, will show up in new places later, causing unpredictable damage deep in the world economy.
...
Certainly, there is a conundrum. Loans of some $34 billion were wiped out in the bankruptcies of Enron and WorldCom alone. Yet only millions, rather than billions, of losses are showing up in the quarterly reports of big financial institutions. Where have all the losses gone, if not through the profit-and-loss accounts of the few big banks that do most of the lending to giant corporations?
If you don't have an Economist subscription and want to read the whole article let me know.
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