Profile picture for n00bzilla

8 who saw the crisis coming... and 8 who didn't

Just a few from the list:

2. The Economist
Nouriel Roubini
NYU Stern School of Business

In 2005, Roubini said home prices were riding a speculative wave that would soon sink the economy. Back then the professor was called a Cassandra. Now he's a sage.

His current forecast is equally apocalyptic: a protracted recession with up to $2 trillion in credit losses and a systemic banking crisis. "The FDIC spent 10% of its reserves to bail out IndyMac, and that was the first in a wave of failures," Roubini says. "Will we soon have to bail out the FDIC?"

4. The Investor

Robert Rodriguez
First Pacific Advisors

Anticipating an economic slowdown, Rodriguez began moving his stock mutual funds into cash in 2004. Big warning signs for him included the mania in the mortgage market and lax corporate lending covenants. "We clearly no longer had lending standards," he says.

He is still not buying stocks, expecting the slump to last a long time as the credit crisis that began in the housing sector spills into other areas.

5. The Regulator

William Poole
Former president, St. Louis Federal Reserve

He warned in 2002 that Fannie and Freddie didn't have the cash to weather a storm, and he's pessimistic about their future. "They can limp along because they are now explicitly backed by the government, but they should be wound down," he says.

He also believes the Fed's strategy of maintaining low interest rates to keep the economy humming will backfire: "To avoid a mild recession now, we're risking a much deeper recession later."

Full story:

 

http://money.cnn.com/galleries/2008/fortune/0808/gallery.whosawitcoming.fortune/

 

  • August 08 2008 - US
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Answers (78)

Profile picture for urge
  • urge
  • 207 contributions

How come they didn't mention Peter Schiff. He's been calling it for more than 6 yrs.

  • August 08 2008
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Profile picture for Kasper


Plenty of smart people seen it coming even the fed but didn’t do anything until it was to late and the banks started failing

What the Fed's Worried About THE U.S. HOUSING BUBBLE ISN'T GETTING ANY SMALLER
Dated October 11, 1999
http://money.cnn.com/magazines/fortune/fortune_archive/1999/10/11/267016/index.htm

the fact thay know abount it makes one wornder what were thay thinking and why are we “taxpayers” should bail them out. Nuts!

  • August 08 2008
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John R. Tallbot -  former investment banker for Goldman Sachs in New York and Visiting Scholar at UCLA's Anderson School of Management

 

John R. Talbott called the causes of the current housing and mortgage crisis spot-on in his 2003 book, The Coming Crash of the Housing Market and even nailed the peak of the market with his January 2006 book, Sell Now! The End of the Housing Bubble.

 

http://www.commondreams.org/archive/2008/07/05/10125/

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"How come they didn't mention Peter Schiff."

 

Yeah I think they should have included the Schiffster.

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Profile picture for silent_observer

how come they didn't include my name? when i attended phase releases of new homes prices went form 350K to 398K and i said this is a bubble in 2003 :-)

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Everybody is a sage, but consider the dates.  1999 for the Fed, 2002 The Regulator and 2004 the Investor.  The move out in 2004 was a solid move, but if you are going as far back as 1999 and 2002 and started taking action then (from an investment perspective) you would have left a lot of money on the table.

 

Mark my words the economy will recover.  Date August 8, 2008.  We will have to google "Chutta" in 7-10 years to show what a sage I was.

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THey should have thrown my name down too. When my wife's blue collar family overnight became white collar and showed up in SUVs with spinning rims, silicon tetas, and went from Target to Dolce and Gabana.. I called ..something is wrong here.

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"We will have to google "Chutta"

 

Chutta

 

"Cancer of the roof of the mouth developing in Asians who smoke cigars with the lighted end inside the mouth. A similar association has been reported from South America and Sardinia."

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Profile picture for Mike_oxafloppin

when  I was being served at denny;s by an 18 year old girl who obviously had the IQ of a cornflake  and was telling me she was going to be standing inline at a builder the following morning so she could buy a 300k house  and flip it  I knew I should go immediately to home depot and buy for sale signs. 

 

Funny  one builder gladly gave me my deposit back and had a rather flippant attitude about it like  " thats the dumbest thing I have seen anyone do in a long time .... you must have Sh!t for brains"  

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Profile picture for Mike_oxafloppin

 I think he filed bankrupt about this time last year.

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LOL very good Spleng.

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Profile picture for klarek the realist

"I called ..something is wrong here."

 

I noticed it with all kinds of people in my area where you could just tell they looked like they hit the jackpot and didn't even know what to spend it on.

 

But I called it when my deadbeat roommate four years ago bought a place at nine times his salary.  Worse than that, he was able to refi a year later and pay off $20k in credit card bills amassed from buying the most expensive crap he could find for his crack shack.  I'm sure once the housing ATM paid those off, they quickly were maxed out again before he was foreclosed upon.

 

But yeah, that's when I knew it would bust.

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Profile picture for klarek the realist

"had the IQ of a cornflake"  LMAO

 

One girl told me right after she bought in 2006 that "I'm going to make so much money off of this place" and called me "jealous" when I showed my doomer side.  Now units in her neighborhood are going for half what she paid.  Not that all people that bought had this attitude, but when I see people gloat and not know what they are talking about, I'm glad they are now learning their lesson.

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Great in your face in hindsight thread.

 

Here is my prediction.

 

In the future, the economic outlook for the US will change several times in the next 20 years.

 

You can QUOTE ME ON IT !!!!!!!

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Profile picture for space_acer

Not only did John Talbot foresee the bubble he correctly saw accounting errors

on Freddie and Fannie Maes  books... 

 

Lets not forget Robert Shiller...

 

 

 

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space.

 

I think if we were HONEST, we all saw this coming as early as 2003.

 

We just didnt want to believe it.

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Profile picture for klarek the realist

"Great in your face in hindsight thread."

 

Actually, this is the foresight thread.  Those that saw it coming versus those that revolted and bet against it.

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Klarek,

I think your waitress was right.  It is jealousy.  I think many of the doomers are especially happy, because in this crazy market they knew it was too good to be true, and those that didn't just jumped in feet first and made a lot of money.  A lot of people lost their pants, but I know quite a few people who made a lot of money and are either out of the market or in very comfortable positions.

 

LOL, in Hawaii we call it the Aama Crab syndrome where nobody wants to see anybody else get up the wall so they pull them back down, just like the Aama Crab.

 

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The other part that probably rubs Doomer the wrong way is that they feel that they are much smarter then these people that jumped in, yet some of these people who jumped right in did very well for themselves.

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Profile picture for klarek the realist

Well the girl that I was warning not to be so arrogant didn't know that I owned as well, in fact right down the street from her, when she called me jealous.   I look forward to seeing her again and inquiring about her fortunes that she was expecting.

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LOL, so you are actually planning on your next confrontation with a waitress who got to big for her britches.  Priceless.

 

"see I told you you'd be waiting tables your entire life!  B%$!&!"

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Profile picture for klarek the realist

No, she wasn't my waitress, that was spec_tater that told that story.  My story was about a girl who was dating a friend of mine and had to tell everybody at the party about her stupid purchase and how rich it was going to make her.  I felt it was my duty to inject a little bit of humility (and reality) into her ego, and she didn't take it very well.  She was a bit drunk, but it didn't justify some of the things she said back.

 

So yeah, if I see her again, I'll probably ask how that fortune is doing. 

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Profile picture for klarek the realist

And no, I would never taunt some poor server who didn't know what she was doing and was excited.  The girl I'm talking about was (for many other reasons) a greedy, raging b*tch.

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Sorry read wrong post.  The image I had was pretty funny though.

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Profile picture for Aldreth

#9 - Me.

  • August 08 2008
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Chutta

 

 You obviosly have not been around Zillow from the get go. Most of the 'doomers' are conservative realists. What rubbed me the wrong way? A-holes that didnt graduate high school, didnt want to pay their dues either by sweat or education and planned on taking a short cut to success through real estate and boasted about it. I know plenty and MOST of them are SOL right about  now.

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My point is why do you care that some guy without a diploma tried to take a short cut?  lots of guys with diploma's tried to take short cuts?  I think it is a bit of jealousy... its not the ones that failed that irritate you its the ones that succeeded.  Their success flies in the face of everything that made sense.

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Profile picture for mickee

My predictions are that ....

 

1) the economy will recover next year

2) there will be a severe recession in 2016.

3) housing will bottom in 2014, will peak again in 2019 then another crash .....

 

Anyone can make predictions because its a cycle, its in the Bible, there is time for everything, a time to borrow, a time to lend, a time to forgive debt (debt write offs) , time to plant, a time to harvest and a time to stop planting (every seven years so that land can recover its nutrients) ......  So the main thing to know is what season it is so you can act accordingly.  Buy when there is bumper crop (too much supply like now for housing) and sell when there is too little supply.   

  

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I love the idea of a high school kid with no idea what they're doing, flipping homes.  Its like craps.  Yo-Eleven!

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Profile picture for space_acer

3) housing will bottom in 2014, will peak again in 2019 then another crash .....

 

this may not happen again... the way people purchase homes may change

fundementally.  The NAR may find itself obsolete, like much of manufacturing today.

 

  

 

 

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