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People have been saying that there will be a "crisis" next year for the past 1000 years. The truth is nobody can reliably predict economic downturns like this.

People have been saying that there will be a "crisis" next year for the past 1000 years. The truth is nobody can reliably predict economic downturns like this. If we could, they would not happen.

lightgreen 7y ago
Some people can predict a crisis, they make films about these people: https://en.wikipedia.org/wiki/The_Big_Short_(film) https://en.wikipedia.org/wiki/The_Big_Short_(film) But yes, a significantly large number of people cannot predict a crisis, it is catch-22.
- dahfizz 7y ago
  When so many people make so many predictions, some are bound to come true from raw chance. That does not give the lucky person any actual predictive powers. Michael Lewis himself has made bad predictions, as have thousands of others.
- lokedhs 7y ago
  After every large financial event you are going to find some person who predicted it. Since there is a nearly unlimited number of people making contradictory predictions at all times, you're also going to find someone making a correct prediction. In fact, if be more surprised if you didn't. I think you'll have a hard time finding someone who made more than one correct prediction (and none, or at least very few incorrect ones). It's easy to be correct if you just throw everything at the wall as see what sticks.
  - lightgreen 7y ago
    > After every large financial event you are going to find some person who predicted it. Yes, but not so many made a fortune from it, and even fewer who gave a proper explanation of why the crisis is going to happen and weren't just lucky. These guys from "The Big Short" movie were explicitly betting against CDO, not against SNP500 as other lucky folks who also made a lot of money. > I think you'll have a hard time finding someone who made more than one correct prediction (and none, or at least very few incorrect ones). Predicting one of 5 crisis during lifetime (with real money) and simply not losing money during other 4 crisis is a huge success for predictor I think. > It's easy to be correct if you just throw everything at the wall as see what sticks. Only those predictors who throw real money at the wall count, not these endless newspaper analysts. TL;DR I don't believe those folks from the movie were just lucky.
kadendogthing 7y ago
Have you considered the possibility that these are predicted but we don't elect people who will effectively listen to qualified individuals on these matters? And that the system currently in place rewards those who use these crisis to their advantage?
- dahfizz 7y ago
  Yes, but that scenario has a few issues in my mind: 1) the people running the fed are not particularly rich. If there is some grand economic engineering scheme, these people would be 100x more wealthy. 2) if these things are predictable, where are the predictions? Besides one lucky guy who nobody knew of beforehand, nobody publicly predicted the 2008 crisis. Why aren't these qualified individuals stepping forward? The Big Short guy has gotten tons of fame and money from his prediction. If people could reliably predict these things, they would do so much more often. 3) I don't see any obvious way that a financial crisis benefits the fed or politicians or whatever shadow governments you're alluding to. 4) if such sophisticated economic engineering was possible, surely the benefactors would go about it in a much more subtle way. I think you get the point. Believing your version takes a lot more leaps of faith than accepting that an incredibly complicated and sometimes irrational system is hard to predict.

People have been saying that there will be a "crisis" next year for the past 1000 years. The truth is nobody can reliably predict economic downturns like this. If we could, they would not happen.

lightgreen 7y ago

Some people can predict a crisis, they make films about these people: https://en.wikipedia.org/wiki/The_Big_Short_(film) https://en.wikipedia.org/wiki/The_Big_Short_(film) But yes, a significantly large number of people cannot predict a crisis, it is catch-22.

dahfizz 7y ago
When so many people make so many predictions, some are bound to come true from raw chance. That does not give the lucky person any actual predictive powers. Michael Lewis himself has made bad predictions, as have thousands of others.
lokedhs 7y ago
After every large financial event you are going to find some person who predicted it. Since there is a nearly unlimited number of people making contradictory predictions at all times, you're also going to find someone making a correct prediction. In fact, if be more surprised if you didn't. I think you'll have a hard time finding someone who made more than one correct prediction (and none, or at least very few incorrect ones). It's easy to be correct if you just throw everything at the wall as see what sticks.
- lightgreen 7y ago
  > After every large financial event you are going to find some person who predicted it. Yes, but not so many made a fortune from it, and even fewer who gave a proper explanation of why the crisis is going to happen and weren't just lucky. These guys from "The Big Short" movie were explicitly betting against CDO, not against SNP500 as other lucky folks who also made a lot of money. > I think you'll have a hard time finding someone who made more than one correct prediction (and none, or at least very few incorrect ones). Predicting one of 5 crisis during lifetime (with real money) and simply not losing money during other 4 crisis is a huge success for predictor I think. > It's easy to be correct if you just throw everything at the wall as see what sticks. Only those predictors who throw real money at the wall count, not these endless newspaper analysts. TL;DR I don't believe those folks from the movie were just lucky.

kadendogthing 7y ago

Have you considered the possibility that these are predicted but we don't elect people who will effectively listen to qualified individuals on these matters? And that the system currently in place rewards those who use these crisis to their advantage?

dahfizz 7y ago
Yes, but that scenario has a few issues in my mind: 1) the people running the fed are not particularly rich. If there is some grand economic engineering scheme, these people would be 100x more wealthy. 2) if these things are predictable, where are the predictions? Besides one lucky guy who nobody knew of beforehand, nobody publicly predicted the 2008 crisis. Why aren't these qualified individuals stepping forward? The Big Short guy has gotten tons of fame and money from his prediction. If people could reliably predict these things, they would do so much more often. 3) I don't see any obvious way that a financial crisis benefits the fed or politicians or whatever shadow governments you're alluding to. 4) if such sophisticated economic engineering was possible, surely the benefactors would go about it in a much more subtle way. I think you get the point. Believing your version takes a lot more leaps of faith than accepting that an incredibly complicated and sometimes irrational system is hard to predict.