Another house price crash seer who was ridiculed in 2006

luvpump

sabretoothtigger wrote: »

Peter says the USA will suffer 5 million unemployed, 3 million more then this years loss. Government is digging a hole, should be raising interest rates (like iceland, etc)

http://in.youtube.com/watch?v=-w0hi7m3gBQ

I think ireland may suffer even more than the u.k as property was such a huge driver in there Economy ... The Celtic Tiger is loseing it Teeth big time !

tomstickland

01:34, borrowing is not wealth divot!

Excellent, this is so relevant to the UK house price bubble.
Arthur Laffer exhibits the delusion very clearly.

What a bunch of cocks - laughing at someone else's opinion is so rude.

tomstickland

Watching does make some of these pundits look no better than people gambling randomly on horses but convincing themselves that they are experts.

Of course, these twerps will never admit that they were wrong.

sabretoothtigger

Arthur Laffer was on Reagan's Economic Policy Advisory Board.
He has (with others) been doing this for years and its been wrong for years hence their debt has been building up

They laugh because their estimates dont or cant include what is talking about. It must feel like an attack but if he was wrong it would be easy to prove him wrong

People like Kirsty allsop have to then say its dangerous to discuss the idea of crashes, etc As if the idea was the problem

The uk might not be in shape but really I got more faith then the long term for the usa and obama promises to spend more as a solution.
I thought he was all about change, these are his new ideas - http://in.youtube.com/watch?v=ODshB09FQ8w

Entertainer

Here's our equivalent of Peter Schiff.:

http://uk.youtube.com/watch?v=f5k-ChUk0hs

tradetime

The problem with any crisis, and important note, I'm not suggesting this one was particularly hard to see, is that they are nearly always obvious after the fact, and there are always plenty of people who spend their lives predicting one disaster after another, and as the old saying goes "Even a broken clock is right twice a day."
That said, although I have heard his name (Peter Schiff) I have not followed his predictions so my comment is not directed towards him.
The beauty of major disaster predictions, is that they rarely have an expiry date, there were people predicting the house price crash back in 2000 who are "claiming their prize" Fact of the matter is a house bought then has probably more than doubled since, and even if you weren't investing you've had 8 years with a roof over your head and are well protected from negative equity in I presume the house of your dreams.
People have been predicting "the end of the world is nigh" since time and memorial, one day they'll be right, every dog has its day. If you can't put a reasonable timeframe on a prediction, or you can't make money out of it for the security of your family then I'm afraid I don't take a great deal of notice to your predictions, to me it's just attention seeking.

sabretoothtigger

I cant find the 'they saw it coming' thread I was looking for, but another guy who warned of massive over valuation and recession coming was Jeremy Grantham

Probably a guy worth paying attention to, he is a fund manager and called the march low recently also

http://money.cnn.com/galleries/2007/fortune/0708/gallery.crisiscounsel.fortune/12.html


http://www.businessweek.com/magazine/content/02_11/b3774101.htm

^^ Thats from 2002, so a long term bear which can either be called wrong since dow went to 17k after that or right in the long term or 'on the fundamentals'

By Grantham's standards, U.S. stocks still are way overpriced, so he's bearish. Look at the price-earnings ratio for the S&P 500. Its long-term average p-e over the past 75 years is 14, but the current number is 26.3, using the S&P 500's trailing 12-month operating earnings. (By using operating earnings instead of net earnings, Grantham eliminates the many writeoffs and one-time charges that occurred in the S&P 500 in 2001. Adding those in would raise the p-e ratio to over 50.) Grantham doesn't think stocks need to return all the way to the mean. Economic cycles are longer and recessions fewer, so stocks are less risky than they have been--and he figures stocks can sell above the mean and still be reasonably priced. His target p-e is 17.5.

To get to that number, either earnings have to rise or stock prices fall. But profit margins already are at historic highs with little room to grow, he believes, so earnings growth through margin expansion will be tough. And sales growth will still be only in the mid-single digits. That suggests downward pressure on share prices. Right now, his yearend 2008 target for the S&P 500 is 1,067, which is actually 7.5% below today's price. The only thing that makes the returns from stocks positive is the dividends. The bottom line: a 1.2% average annual return. Grantham's outlook on U.S. small caps is somewhat better, 4.4% per year. Small-cap p-e ratios are higher, but small companies have faster growth rates, and there's also a takeover premium.

Grantham reserves his greatest enthusiasm for off-beat investments. Emerging-market stocks--companies in Latin America, Eastern Europe, and most of Asia--have a cheap 12.9 average p-e. Because they are riskier than U.S. stocks, Grantham assumes they deserve only a 15 p-e, lower than his estimate for the S&P 500. Still, with such bargain prices, a 2.4% average dividend yield, and 5.2% average profit margins, he figures emerging-market stocks can deliver 11.6% per year through 2008. Emerging-market bonds should also deliver 9% per year, because of their hefty yields.

Although Grantham does have a grim view of the U.S. stock market through 2008, he thinks stocks may continue to rally this year, as investors become enthusiastic about an economic recovery. "But then we'll run into the longer-term problems, such as the tremendous capital spending and debt buildups of the 1990s," he says. That excess will hurt profit margins and drive stocks back down. Siegel acknowledges these problems but still predicts high single-digit returns.

PasturesNew

Generali wrote: »

My views are a minority view in Aus still.

Register it then: australiahousepricecrash.com.au

Or: downunderdownhill.com.au

Or something ... anything.

Masomnia

Generali wrote: »

My views are a minority view in Aus still. Not for long looking at what is happening at auction over here. Auction is a common way to sell a house here. You have an open day and then a little later you have an auction outside the front of the house.

Yup, see it on Neighbours quite often :beer:

sabretoothtigger

Just another one for the list, Gillian Tett

In 2006, she says, she felt a 'reckoning loomed' and FT readers can attest that she was well ahead of most in forecasting misery.
But she wasn't alone.
Sure, not many non-bankers had a clue about the market, but her book makes it clear that the J.P. Morgan team were well aware of the problems in the derivatives market.

By 2006 they were getting pretty cautious, expecting the credit cycle to turn, and getting traders to take out derivative contracts betting that mortgage and corporate defaults would rise.

http://www.thisismoney.co.uk/book-reviews/article.html?in_article_id=484607&in_page_id=186


http://search.ft.com/search?queryText=Gillian+Tett&x=10&y=13



Article by Vince Cable

When my job was attempting to predict future economic developments for the Shell oil company, I was frequently reminded of an Arabic saying: 'Those who claim to foresee the future are lying, even if by chance they are later proved right.'

http://www.thisismoney.co.uk/news/columnists/article.html?in_article_id=480574&in_page_id=19&in_author_id=2326