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> I just can't get past the very first sentence. First, it ignores the realities of both economists and financial insiders who made attempts to blow the lid off

> I just can't get past the very first sentence. First, it ignores the realities of both economists and financial insiders who made attempts to blow the lid off of the ARM/toxic loan schemes - not unlike pre-Snowden whistle blowers who were equally ignored and erased from history. The fact they were effectively silenced and ignored is largely because they were few in number. The vast majority didn't foresee the scale of the disaster. > Second, even as a 17 year old kid, in 2001, I wrote an economics paper about the impending housing collapse - only I was guessing 2005 not 2008 - based on ARM's; 103% financing with 0% down; and stated income. If you can demonstrate this for a significant number of recessions [e.g. 5+], its relevant. I pulled my money out in May of 2007 because I was pretty sure something was going to happen and threw it back in to basically double it...doesn't mean I believe it was abundantly obvious to everyone. The mere fact I could do that demonstrates it wasn't obvious. The simple fact is, whenever there is a crisis, there is going to be a minority of Doomsayers who predicted correctly. However, the fact the majority was oblivious implies it was non-obvious and possibly chance that a specific Doomsayer was, ultimately, correct in his/her prediction for reasons beyond random chance.

dragonwriter 11y ago
> The fact they were effectively silenced and ignored is largely because they were few in number. No, they weren't particularly few in number -- it was lots of economists (they were few in number compared to the whole population, but the universe at issue was economists, not the whole population.) They were ignored because there was substantial financial interests among the powerful interests resting on the perception that things were going to continue going well, and because the top-line economic indicators (which aren't particularly good leading indicators, in any case) that the mainstream media likes to look to were strong, so there was a PR effort that was in line with what the media was naturally inclined to follow; the warnings from various different directions were an inconvenience for the interests of the powerful and the comfortable narrative of the media. > I pulled my money out in May of 2007 because I was pretty sure something was going to happen and threw it back in to basically double it...doesn't mean I believe it was abundantly obvious to everyone. The mere fact I could do that demonstrates it wasn't obvious. Sure, it proves that it the particular impacts and timing of the impending collapse weren't widely expected by market participants. That's not inconsistent with a significant number -- not very few -- predicting an imminent and significant downturn to be driven by the collapse of the housing bubble.
- fweespeech 11y ago
  > No, they weren't particularly few in number -- it was lots of economists (they were few in number compared to the whole population, but the universe at issue was economists, not the whole population.) http://www.nytimes.com/2009/09/06/magazine/06Economic-t.html?_r=0 http://www.nytimes.com/2009/09/06/magazine/06Economic-t.html... > Paul Krugman > Few economists saw our current crisis coming, but this predictive failure was the least of the field’s problems. More important was the profession’s blindness to the very possibility of catastrophic failures in a market economy. During the golden years, financial economists came to believe that markets were inherently stable — indeed, that stocks and other assets were always priced just right. So, I mean, you can argue a Nobel Laureate is so ignorant of his field that you are correct if you want. However, you need to provide a great deal of evidence to convince me of that which so far none of you have. For instance the quality of evidence I generally see is on par with this comment: https://news.ycombinator.com/item?id=10760402 https://news.ycombinator.com/item?id=10760402 Yes, one group of folks went out and found something they believed to be true but that doesn't represent the majority view simply by its existence. Signal to noise is a very real problem that requires a very large level of agreement to move the levers of policy for a reason. > They were ignored because there was substantial financial interests among the powerful interests resting on the perception that things were going to continue going well, and because the top-line economic indicators (which aren't particularly good leading indicators, in any case) that the mainstream media likes to look to were strong, so there was a PR effort that was in line with what the media was naturally inclined to follow; the warnings from various different directions were an inconvenience for the interests of the powerful and the comfortable narrative of the media. This is a comforting conspiracy theory but the fact economists, as a class of people, failed to capitalize on this for their own financial gain based on knowing that the public perception was in error ... well, that would imply they failed to predict it in sufficient numbers. > Sure, it proves that it the particular impacts and timing of the impending collapse weren't widely expected by market participants. That's not inconsistent with a significant number -- not very few -- predicting an imminent and significant downturn to be driven by the collapse of the housing bubble. If many economists predicted a recession on that scale, we would have many rich economists. Specifically, a minimum of doubling the value of their investments due to timing the market. Do we? I mean, if you have a vast body of evidence you can present that proves this is the case by all means present it. I've never seen such evidence myself.

dragonwriter 11y ago

> The fact they were effectively silenced and ignored is largely because they were few in number. No, they weren't particularly few in number -- it was lots of economists (they were few in number compared to the whole population, but the universe at issue was economists, not the whole population.) They were ignored because there was substantial financial interests among the powerful interests resting on the perception that things were going to continue going well, and because the top-line economic indicators (which aren't particularly good leading indicators, in any case) that the mainstream media likes to look to were strong, so there was a PR effort that was in line with what the media was naturally inclined to follow; the warnings from various different directions were an inconvenience for the interests of the powerful and the comfortable narrative of the media. > I pulled my money out in May of 2007 because I was pretty sure something was going to happen and threw it back in to basically double it...doesn't mean I believe it was abundantly obvious to everyone. The mere fact I could do that demonstrates it wasn't obvious. Sure, it proves that it the particular impacts and timing of the impending collapse weren't widely expected by market participants. That's not inconsistent with a significant number -- not very few -- predicting an imminent and significant downturn to be driven by the collapse of the housing bubble.

fweespeech 11y ago
> No, they weren't particularly few in number -- it was lots of economists (they were few in number compared to the whole population, but the universe at issue was economists, not the whole population.) http://www.nytimes.com/2009/09/06/magazine/06Economic-t.html?_r=0 http://www.nytimes.com/2009/09/06/magazine/06Economic-t.html... > Paul Krugman > Few economists saw our current crisis coming, but this predictive failure was the least of the field’s problems. More important was the profession’s blindness to the very possibility of catastrophic failures in a market economy. During the golden years, financial economists came to believe that markets were inherently stable — indeed, that stocks and other assets were always priced just right. So, I mean, you can argue a Nobel Laureate is so ignorant of his field that you are correct if you want. However, you need to provide a great deal of evidence to convince me of that which so far none of you have. For instance the quality of evidence I generally see is on par with this comment: https://news.ycombinator.com/item?id=10760402 https://news.ycombinator.com/item?id=10760402 Yes, one group of folks went out and found something they believed to be true but that doesn't represent the majority view simply by its existence. Signal to noise is a very real problem that requires a very large level of agreement to move the levers of policy for a reason. > They were ignored because there was substantial financial interests among the powerful interests resting on the perception that things were going to continue going well, and because the top-line economic indicators (which aren't particularly good leading indicators, in any case) that the mainstream media likes to look to were strong, so there was a PR effort that was in line with what the media was naturally inclined to follow; the warnings from various different directions were an inconvenience for the interests of the powerful and the comfortable narrative of the media. This is a comforting conspiracy theory but the fact economists, as a class of people, failed to capitalize on this for their own financial gain based on knowing that the public perception was in error ... well, that would imply they failed to predict it in sufficient numbers. > Sure, it proves that it the particular impacts and timing of the impending collapse weren't widely expected by market participants. That's not inconsistent with a significant number -- not very few -- predicting an imminent and significant downturn to be driven by the collapse of the housing bubble. If many economists predicted a recession on that scale, we would have many rich economists. Specifically, a minimum of doubling the value of their investments due to timing the market. Do we? I mean, if you have a vast body of evidence you can present that proves this is the case by all means present it. I've never seen such evidence myself.