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" Every single one of those who correctly called the financial crisis are quite clear: it's not over by a long shot." Who are these people that correctly calle

by utnick 18y ago

" Every single one of those who correctly called the financial crisis are quite clear: it's not over by a long shot." Who are these people that correctly called the financial crisis? It could be that they are perpetual pessimists. A broken clock if you will...

ivankirigin 18y ago
These broken clocks had reasoned arguments to justify their claims, similar to their claims as to where the bottom is. That's different than just being a pessimist. Also, it's overly optimistic to presume those predicting this recession were just lucky.
misterbwong 18y ago
Some of the people that called the financial crisis are perpetual bears. That said, many of their reasons for this bear market are sound. The bleeding has slowed a bit but the fundamentals just aren't there. Unemployment is still high, credit is still in a crunch, and banks are still over-leveraged. All that AND we haven't been hearing about the coming Alt-A mortgage flood.
- mattobrien 18y ago
  Just because the bubble lasted longer than "perpetual bears" thought it would, does that mean their analysis was wrong? For instance, Andy Beal, the banker Forbes profiled (that was at the top of HN), saw the crazy deals being made in 2004 and got out of the market. If for the last 4-5 years you'd heard him argue that the fundamentals did not justify the credit bubble, would you call him a perpetual bear? The same happened with George Soros in 1997. He recognized that the stock market had become an enormous bubble, and he began shorting it. He lost a huge sum of money because the bubble went on for three more years. Was his analysis incorrect? No one likes to hear that the party is over, or that things won't go back to the way they were in our lifetimes. During the bubble, people try to marginalize those opinions by calling them "perpetual bears". But we're finding out that they were right. It will probably take years for banks and households to fix the holes in their balance sheets. Even if GDP stops contracting, a "recovery" will likely be so anemic that it will feel like a recession. And job losses will continue to pile up. I'm afraid we haven't hit bottom yet - and maybe aren't even particularly close.

by utnick 18y ago

ivankirigin 18y ago

These broken clocks had reasoned arguments to justify their claims, similar to their claims as to where the bottom is. That's different than just being a pessimist. Also, it's overly optimistic to presume those predicting this recession were just lucky.

misterbwong 18y ago

Some of the people that called the financial crisis are perpetual bears. That said, many of their reasons for this bear market are sound. The bleeding has slowed a bit but the fundamentals just aren't there. Unemployment is still high, credit is still in a crunch, and banks are still over-leveraged. All that AND we haven't been hearing about the coming Alt-A mortgage flood.

mattobrien 18y ago
Just because the bubble lasted longer than "perpetual bears" thought it would, does that mean their analysis was wrong? For instance, Andy Beal, the banker Forbes profiled (that was at the top of HN), saw the crazy deals being made in 2004 and got out of the market. If for the last 4-5 years you'd heard him argue that the fundamentals did not justify the credit bubble, would you call him a perpetual bear? The same happened with George Soros in 1997. He recognized that the stock market had become an enormous bubble, and he began shorting it. He lost a huge sum of money because the bubble went on for three more years. Was his analysis incorrect? No one likes to hear that the party is over, or that things won't go back to the way they were in our lifetimes. During the bubble, people try to marginalize those opinions by calling them "perpetual bears". But we're finding out that they were right. It will probably take years for banks and households to fix the holes in their balance sheets. Even if GDP stops contracting, a "recovery" will likely be so anemic that it will feel like a recession. And job losses will continue to pile up. I'm afraid we haven't hit bottom yet - and maybe aren't even particularly close.