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JP Morgan navigated the 2007 crisis and came out on top. They're saying recession risk is 50/50 and the S&P will end up positive for the year. There were defini
by tootie 4y ago
JP Morgan navigated the 2007 crisis and came out on top. They're saying recession risk is 50/50 and the S&P will end up positive for the year. There were definitely a lot of people in power and especially policy makers who put their own interests ahead of what the data tells them.
Burry is also a shameless self-promoter who has predicted a lot of disasters that haven't happened including WW3 a few years ago. There's like a dozen people who have made careers out of claiming to be the only ones that predicted the 2007 recession. If you keep predicting recessions you're bound to be right. In reality, it's just not possible to predict accurately. Here's Krugman in late 2006 presenting the data and putting the recession risk for 2007 at 2:1
https://www.nytimes.com/2006/12/01/opinion/01krugman.html https://www.nytimes.com/2006/12/01/opinion/01krugman.html
Right now there are several indicators flashing and a lot that aren't. Technical data like P/E ratios, volatility, yield curves are great at predicting things that happened in the past but they just can't be relied on as being infallible.
- mancerayder 4y agoBurry's famous because he placed a bet on a carefully researched observation connected to the sub-prime crisis before it was remotely known, and he was disbelieved. He might have made other wrong predictions but to gloss over the above fact is a big omission. There are the economists and there are people with skin in the game, I think there's a big difference if you're a wealth manager versus a NYT editorialist. Incidentally Krugman seems like a proponent for whatever blue tie is in power (https://www.nytimes.com/2022/01/04/opinion/2021-economic-recovery.html https://www.nytimes.com/2022/01/04/opinion/2021-economic-rec...). That's different than placing bets in the tens of millions.
- tootie 4y agoI'm not sure what that link is supposed to prove. 2021 was a pretty great year. Krugman is usually very sanguine about not ascribing credit policy or presidents and he didn't in that article. He doesn't disclose his holdings because he doesn't give investment advice. And Burry definitely wasn't a rogue genius. Lots of hedge funds bet on the crash. Goldman Sachs was specifically called out for betting heavily on a crash while they were still selling mortgage assets to customers.
- mancerayder 4y ago2021 was a fake year for growth, that's the point, because we were relying on cheap and plentiful money being subsidized by borrowed time. We'll be paying the press for a long time for the spending and helicopter money that provided demand, while supply was still limited. For Krugman, a monetarist, printing money when there are fewer goods and services in an economy, wasn't registered as a problem. Ah, but he admitted recently that he was wrong in the party line of "transient inflation" (where every private economist outside of academia and the government knew it was not going to be transient and made moves at the end of the 2021).