Credit crunch forecaster getting panned on video - help

[westhamtim]

Morning all

I vividly remember seeing a panel session on a US business channel where the panel members gave their views on the level of the US indices in the coming year. All of the panelists make bullish forecasts except one guy who forecasts the credit crunch and associated fall in the markets. When he makes his forecast the other panellists fall about laughing and I'm sure there's a great comment as the host signs off along the lines of "coming up an expose on Santa Claus".

Can anybody remembers the guy's name?

TIA

[westhamtim]

Peter Schiff. Can't find the video though.

[afrochicken]

It's on YouTube

The "expose on santa clause" line is just after 7:45

[westhamtim]

Thanks - that's the one. Also great to see George Agdgdgwngo's prediction that the Dow was going to hit 16,000. I hope he was able to put his monies where his mouth is.

[fido]

He's also talking about bond yields blowing up next year. Precisely why i have made sure i can cover the mortgage on my next place with cash. Just in case he is right again!

[westhamtim]

I keep worrying about the lack of bonds in my SIPP (it doesn't keep me awake at night but you know what I mean) but this kind of thinking reminds me that for the time being it's probably not a bad thing.

So here's the thing: the subprime crash and subsequent credit crunch was easy to piece together in hindsight and of course Schiff, John Paulson, Steve Eisman, Greg Lippmann et al were sharp enough to see it at the time and made a great deal of money (I know the last 3 did, I assume Schiff also did. And if you're at all interested in this stuff and haven't already done so then read The Big Short and The Greatest Trade Ever - both very interesting and very easy reads). Now we have historically low interest rates, massive QE, looming fiscal cliff..... Will it be obvious in a few year's time that this was always going to be the 'next big thing'?

[fido]

We had a situation in 2007 where Credit was being massively underpriced to a situation today where (supposedly) risk-free government debt is being overpriced. The Fed & ilk has shifted a problem of private & corporate debt to a problem of national debt. I can't see this problem being resolved without a series of painful rate rises.

[sidicks]

fido said:

We had a situation in 2007 where Credit was being massively underpriced to a situation today where (supposedly) risk-free government debt is being overpriced. The Fed & ilk has shifted a problem of private & corporate debt to a problem of national debt. I can't see this problem being resolved without a series of painful rate rises.

Not only that, but current regulations force many of our financial institutions to hold those over-valued government bonds....

[e8_pack]

I prefer his speech at the mortgage bankers conference in 2006 - nothing like telling a room full of mortgage lenders that you'll all be out of jobs! Quite long, but describes the whole problem down to a tee brilliant.

What i don't understand is how so many so called "experts" couldn't see what was happening..

[westhamtim]

e8_pack said:

I prefer his speech at the mortgage bankers conference in 2006 - nothing like telling a room full of mortgage lenders that you'll all be out of jobs! Quite long, but describes the whole problem down to a tee brilliant.

What i don't understand is how so many so called "experts" couldn't see what was happening..

Need to check that out. I've seen references to it but never actually watched the speech.

I would imagine that many of the experts had more than an inkling but were quote happy with their underwriting commission / arrangement fee / investment banking bonus thankyou very much and didn't want to upset the apple cart. And the rest were so used to house price appreciation that the possibility of a change in the status quo didn't occur to them.

Back to my other point, I can't help thinking that a similar situation (opportunity) is gathering at the moment and whilst I certainly wouldn't stick my neck out and say it's all going to go down in 2013 I am starting to give more thought to how to best prepare for (make the most of) it.

[e8_pack]

I bought some gold in 2009ish, was 750/oz and 500/kilo for silver - took a slight dip, lost my nerve and sold it when it went above my buying price. Not sure i have the nerve for stocks and shares.

I do think the dollar collapse is a big possibility so i should heed my own advice and buy some PM's, just looking for a good entry point though. If it hits 1500/oz again i think i might buy some. Maybe a bit more QE will push the price down a little..

[wong]

QE pushes the price of gold up, not down.

[98elise]

e8_pack said:

What i don't understand is how so many so called "experts" couldn't see what was happening..

Plenty did, but that doesn't stick in the mind of an average punter. I worked for a huge property company at the time, and we cut our investment in new projects just before the crash. A lot of current projects were also shelved in readiness. This was something that was made public, and was reported on in the financial sections of the press.

Most of the general public get their financial information from the front page of the Daily Mail. I had mates who were puting everything that had into BTL's and one who had become a full time "Property Developer". Whenever I mentioned a crash I was viewed as an idiot! One of them lost 100k on his last development

All the signs were there on the high street as well, as soon start seeing bonkers mortgage offers (5x salary, 125% deals, buy with 5 friends, etc etc) you know its all going to unravel. Same thing happened in the last crash, this one was bigger though.

[Derek Chevalier]

98elise said:

Same thing happened in the last crash, this one was bigger though.

Why do you use the past tense when referring to the current crash?

[e8_pack]

Derek Chevalier said:

98elise said:

Same thing happened in the last crash, this one was bigger though.

Why do you use the past tense when referring to the current crash?

Probably because were running headlong into the next one...

[98elise]

Derek Chevalier said:

98elise said:

Same thing happened in the last crash, this one was bigger though.

Why do you use the past tense when referring to the current crash?

Because I think prices have stabilised. locally prices have been the same for around 3 years. Property company share prices are also on the increase, at a sensible growth rate this time though.

[Derek Chevalier]

98elise said:

Derek Chevalier said:

98elise said:

Same thing happened in the last crash, this one was bigger though.

Why do you use the past tense when referring to the current crash?

Because I think prices have stabilised. locally prices have been the same for around 3 years. Property company share prices are also on the increase, at a sensible growth rate this time though.

But they have only stabilised because we have record low interest rates and forbearance - do you not think the Government are just postponing the inevitable?

[R11ysf]

westhamtim said:

I keep worrying about the lack of bonds in my SIPP (it doesn't keep me awake at night but you know what I mean) but this kind of thinking reminds me that for the time being it's probably not a bad thing.

So here's the thing: the subprime crash and subsequent credit crunch was easy to piece together in hindsight and of course Schiff, John Paulson, Steve Eisman, Greg Lippmann et al were sharp enough to see it at the time and made a great deal of money (I know the last 3 did, I assume Schiff also did.

You'd think so right? No, very wrong. Schiff is the poster boy for doomk-sayers, continually telling everyone they are living beyond their means for ages and as with a stopped clock being right twice a day, if you stick to one mantra you will be right eventually. Paulson, Eisman and Lippman (especially Eismanand Michael Burry) are not the guys all filling up you tube with how they were "right" and how they know best. They saw something, they acted upon it and they cashed in. Schiff created a load of fanboys whilst actually LOSING money through most of the period. He called it all right and then acted all wrong. That's the difference between a trader and an economist. Have a read of these and then think how you'd feel as an investor if you'd seen him on tv and agreed with how "he called it right".

http://selfinvestors.com/tradingstocks/news/peter-...

http://globaleconomicanalysis.blogspot.co.uk/2009/...

Edited by R11ysf on Monday 26th November 13:36

[R11ysf]

westhamtim said:

I keep worrying about the lack of bonds in my SIPP (it doesn't keep me awake at night but you know what I mean) but this kind of thinking reminds me that for the time being it's probably not a bad thing.

So here's the thing: the subprime crash and subsequent credit crunch was easy to piece together in hindsight and of course Schiff, John Paulson, Steve Eisman, Greg Lippmann et al were sharp enough to see it at the time and made a great deal of money (I know the last 3 did, I assume Schiff also did.

You'd think so right? No, very wrong. Schiff is the poster boy for doom-sayers, continually telling everyone they are living beyond their means for ages and as with a stopped clock being right twice a day, if you stick to one mantra you will be right eventually. Paulson, Eisman and Lippman (especially Eismanand Michael Burry) are not the guys all filling up you tube with how they were "right" and how they know best. They saw something, they acted upon it and they cashed in. Schiff created a load of fanboys whilst actually LOSING money through most of the period. He called it all right and then acted all wrong. That's the difference between a trader and an economist. Have a read of these and then think how you'd feel as an investor if you'd seen him on tv and agreed with how "he called it right".

http://selfinvestors.com/tradingstocks/news/peter-...

http://globaleconomicanalysis.blogspot.co.uk/2009/...

Edited by R11ysf on Monday 26th November 13:37

[westhamtim]

R11ysf said:

westhamtim said:

I keep worrying about the lack of bonds in my SIPP (it doesn't keep me awake at night but you know what I mean) but this kind of thinking reminds me that for the time being it's probably not a bad thing.

So here's the thing: the subprime crash and subsequent credit crunch was easy to piece together in hindsight and of course Schiff, John Paulson, Steve Eisman, Greg Lippmann et al were sharp enough to see it at the time and made a great deal of money (I know the last 3 did, I assume Schiff also did.

You'd think so right? No, very wrong. Schiff is the poster boy for doom-sayers, continually telling everyone they are living beyond their means for ages and as with a stopped clock being right twice a day, if you stick to one mantra you will be right eventually. Paulson, Eisman and Lippman (especially Eismanand Michael Burry) are not the guys all filling up you tube with how they were "right" and how they know best. They saw something, they acted upon it and they cashed in. Schiff created a load of fanboys whilst actually LOSING money through most of the period. He called it all right and then acted all wrong. That's the difference between a trader and an economist. Have a read of these and then think how you'd feel as an investor if you'd seen him on tv and agreed with how "he called it right".

http://selfinvestors.com/tradingstocks/news/peter-...

http://globaleconomicanalysis.blogspot.co.uk/2009/...

Edited by R11ysf on Monday 26th November 13:37

To be fair whether or not Schiff made money is not my main point, which initially was: how stupid must those people outrightly slating him on CNBC have felt when he turned out to be right? And turned into: is there another collapse (or a continuation / worsening of the current collapse) still to come which in hindsight will have been obvious.