Tornado Alley (PROG)

[fuagf]

Austrians Predicted the Housing Bubble? – But so did Post Keynesians and Marxists

Wednesday, December 14, 2011 .. bits ..

Dean Baker (who seems to be associated with Post Keynesianism) clearly identified a housing bubble in August 2002

[...]

by 2004 onwards, we can also find Marxists identifying a housing bubble and coming economic crisis:

Nick Beams, “Greenspan Testimony Points to Deepening US Fiscal Crisis,” World Socialist Web Site, 16 February 2004.

Nick Beams, “Australia at the Forefront of Housing Bubble,” World Socialist Web Site, 27 September 2004.

César Uco, “Is the US housing boom turning toward bust?,” World Socialist Web Site, 6 August 2005

Nick Beams, “US Housing Crisis could Spark Serious Economic Downturn,” World Socialist Web Site, 3 September 2007.

Now does anyone seriously think that these correct identifications of an asset bubble in housing vindicates the Marxist theory?

[...]

Both Austrians and Marxists have economic theories that are fundamentally
flawed, even though some of them correctly identified a housing bubble.

[...]

I. Alleged Austrian Predictions: 1999–2003

[ Paul gets a pat in 2001, a bit tarnished though according to this author .. ]

[...]

However, Ron Paul predicted that a “weak dollar will prompt dumping of GSE securities before treasuries”: he was wrong. It was the bursting of the real estate bubble and defaulting mortgages that prompted the crisis in mortgage backed securities: the financial crisis then occurred in the investment banking sector and spread to the commercial banking sector. No dumping of US treasuries occurred. These failed predictions have to be borne in mind, with Paul’s prediction of a housing market crash.

[ Ron Paul and Peter Schiff videos inside ]

[... ]

Peter Schiff does not predict or identify any housing bubble in this interview. The interviewer (not Schiff) refers briefly to “housing prices up” (in part 1), but that is all. Instead, Schiff predicts a bear market in US stocks from 2002 onwards (a false prediction); and a US dollar collapse that would send US interest rates through the roof (another false prediction). At 7.25 onwards (in part 1), Schiff refers to a “bubble” that already exists, but it is clear he is referring to stocks and shares, not housing. So much for Schiff’s predictive power.

[ Maybe there are other videos for Schiff ]

heaps more .. http://socialdemocracy21stcentury.blogspot.com.au/2011/12/austrians-predicted-housing-bubble-but.html

===== .. more names

Who Predicted The Global Financial Crisis?

The Crisis Summary & Book Reviews | FCIC Report | The Crisis

In the years since the Global Financial Crisis exploded on the scene, there have been a number of articles and initiatives documenting the individuals that publicly predicted the crisis and arguably deserve credit for having sounded the alarm. This page summarizes those efforts and links to those sources (and I expect to update it over time as more information and research becomes available). While plenty of foreign leaders and professional doomsayers have long predicted the collapse of the US economy, to the extent possible it should be useful to differentiate them from those that legitimately warned about a financial crisis or critical elements of it based on some logical analysis that appears to have merit after the fact. I believe a large percentage of investors and home buyers were exposed to at least some credible warnings about a housing bubble, but clearly many people chose to ignore those warnings or dismiss the predictions of a coming housing crash and/or crisis as unlikely to come true. Separately, I was interested in hearing what these individuals prescribe and 11 of the predictors/winners have participated in the crisis expert survey thus far.

[...]

Nouriel Roubini appears to be the most commonly recognized by (virtually all) the main sources I've seen. Yet, economists chose Australian Professor Steve Keen over Roubini for the Revere Award (outvoted by more than a 2 to 1 margin - details below) for publicly warning of the Global Financial Crisis.

[Dean Baker was third there]

[...]

The first major effort to identify those that publicly predicted the crisis was a paper titled "No One Saw This Coming": Understanding Financial Crisis Through Accounting Models by Dirk Bezemer. Bezemer identified 12 individuals (academics, government advisers, consultants, investors, stock market commentators and one graduate student) that between 2000 and 2006 warned specifically about a housing led recession within years. "Together they belie the notion that ’no one saw this coming’, or that those who did were either professional doomsayers or lucky guessers." The Bezemer 12 are

* Dean Baker
* Wynne Godley
* Fred Harrison (UK)
* Michael Hudson
* Eric Janszen
* Steve Keen (Australia)
* Jakob Madsen & Jens Kjaer Sørensen (Denmark)
* Kurt Richebächer
* Nouriel Roubini
* Peter Schiff
* Robert Shiller

[ok .. Schiff's on that list so we don't need any other videos]

[...]

Warren Buffett is an interesting case that highlights the importance of context in quotes related to what people did or didn't see coming prior to the crisis. In an interview with Charlie Rose Buffett stated "No one saw the tsunami coming fully" (or here). Yet Buffett was one of the cautionary voices in the years leading up to the crisis, both in terms of risks in derivatives and in real estate prices. For instance, the Berkshire 2002 Shareholder Letter includes "Charlie and I are of one mind in how we feel about derivatives and the trading activities that go with them: We view them as time bombs, both for the parties that deal in them and the economic system." See also Buffett warns on investment 'time bomb' (3/4/2003). In this 2006 interview titled Buffett: Real estate slowdown ahead with Jason Zweig, Buffett states "We've had a real bubble to some degree. I would be surprised if there aren't some significant downward adjustments." So Buffett clearly warned in advance of the potential problems, but he (and most people) perhaps just didn't expect the severity or sequence of events that played out.

Real-World Economics Review is an economics journal that in 2010 polled their readers and asked them to vote for "the three economists who first and most clearly anticipated and gave public warning of the Global Financial Collapse and whose work is most likely to prevent another GFC in the future." Revere Award for Economics winners and details are here and documentation of the predictions by the finalists are included in Foresight and Fait Accompli: Two Timelines for the Global Financial Collapse. The Revere finalists in voting order below included four not previously identified (in italics below) by Bezemer.

1. Steve Keen
2. Nouriel Roubini
3. Dean Baker
4. Joseph Stiglitz
5. Ann Pettifor
6. Robert Shiller
7. Paul Krugman
8 Michael Hudson
9. Wynne Godley
10. George Soros
11. Kurt Richebächer
12. Jakob Brøchner Madsen

mucho more: http://investorhome.com/predicted.htm

wow .. there are another 60? names in there of those with
claims to have forecast the booble .. one day i might read it all ..