Recession Predicted

lowfaresmeister

I just found this guy on you tube. Type property prices keet into you tube and see what you get ... its mad .. he was predicting this collapse 2 years ago....

Dirk Gently

lowfaresmeister wrote: »

. he was predicting this collapse 2 years ago....

so were most sane people tbh.

dresden8

Seriously, this is a surprise?

Seriously?

No really. Seriously?

ntlbell

lowfaresmeister wrote: »

I just found this guy on you tube. Type property prices keet into you tube and see what you get ... its mad .. he was predicting this collapse 2 years ago....

Lots of people were prdicting it over 2 years ago

no one wanted to listen

leninbenjamin

ntlbell wrote: »

Lots of people were prdicting it over 2 years ago

no one wanted to listen

horsecrap. that's as useless a generalisation as i've ever seen.

5 years of studying economics and I only ever came across a handful who predicted the current financial crises, and even then they didn't predict the current scale of the problem.

if you want to talk about our property specifically though, if you looked at the facts you'd probably begin to realise that it peaked in 2006 and that the current sudden crises was more to do with the banks unable to lend rather than any 'burst'.

but then lets not let facts get in the way of a good moan.

Thomas_S_Hunterson

lowfaresmeister wrote: »

I just found this guy on you tube. Type property prices keet into you tube and see what you get ... its mad .. he was predicting this collapse 2 years ago....

With lots of folks making predictions, some are bound to be somewhat right. It doesn't mean they new anything anyone else didn't.

amacachi

I predict that in 10 or so years the Worldwide economy will be growing again and that several years after that there will be another recession.
They call me mother****in Nostradamus.

First class in economics, everything happens in cycles.

SoCal90046

amacachi wrote: »

I predict that in 10 or so years the Worldwide economy will be growing again and that several years after that there will be another recession.
They call me mother****in Nostradamus.

First class in economics, everything happens in cycles.

Bingo!

That's the one great thing about economics: cycles repeat but are nuanced enough that in the middle of said cycle even smart people swear that it's different "this time." The details of a bubble are confounding enough that an economist predicting the future is sort of like a pathologist practicing medicine.

silverharp

Using the Austrian perspective this crash was inevitable, pinning down the exact date or scale is not the most important aspect, however any Austrian writers I was reading were describing the last couple of years as a "crackup" boom, which invovled increasing amounts of speculation and leverage against non productive assets like property, the crash was as inevitable as night following day. Human nature is the same and quite frankly People speculating on the Irish property market in the last couple of yeas were no smarter then the Albanians piling in on their ponzi scheme they got involved in a few years back.

As an investor all I have had to do over the past few years was to bet against the conventional wisdom of wall street and the Fed who are so mesmorised by their own "abilities" that they cannot see the wood from the trees


some examples

http://globaleconomicanalysis.blogspot.com/

Thursday, October 12, 2006

I keep returning to a favorite quote from The Wisdom of Ludwig Von Mises.

"There is no means of avoiding the final collapse of a boom brought about by credit expansion. The alternative is only whether the crisis should come sooner as a result of a voluntary abandonment of further credit expansion, or later as a final and total catastrophe of the currency system involved."


It is too late to stop the crack-up boom. We have already had two of them, with each bubble bigger than the one that preceded it: the Dot-Com internet bubble, followed by a global bubble in housing. How we address those bubbles may make the difference between a series of steep recessions over a number of years (starting now) or an out and out depression sometime later. The outcome is uncertain at this time, but the longer we put of addressing the real issues, the worse the ultimate medicine will taste.

XXXXXXXXXXXXXXXXXXXXX


From A well known market historian Bob Hoye who has been all over this subject for years now, this one is from 2005. It comes down to looking back at economic history to see that there are cycles and they can only be delayed never deferred

http://www.institutionaladvisors.com/pdf/050713_PEAK_CREDIT.pdf

ntlbell

leninbenjamin wrote: »

horsecrap. that's as useless a generalisation as i've ever seen.

5 years of studying economics and I only ever came across a handful who predicted the current financial crises, and even then they didn't predict the current scale of the problem.

if you want to talk about our property specifically though, if you looked at the facts you'd probably begin to realise that it peaked in 2006 and that the current sudden crises was more to do with the banks unable to lend rather than any 'burst'.

but then lets not let facts get in the way of a good moan.

Oh come off it, taxi drivers were predicting it in late 06 never mind seasoned economists

colly10

ntlbell wrote: »

Oh come off it, taxi drivers were predicting it in late 06 never mind seasoned economists

+1 - I knew this was going to happen sooner or later and I know **** about economics

zAbbo

Everyone predicted it, but very few predicting when (accurately).

There's no real insight in predicting the inevitable.

So we've had years of the smugness of homeowners with thie house value rising, and now the smugness of the "told ya so's"

Taxi drivers, to to love them, last one was telling me thats it's real people like himself who are being hit with the raised tax on petrol - as he sped through the amber lights in diesel peogeot 406.

leninbenjamin

ntlbell wrote: »

Oh come off it, taxi drivers were predicting it in late 06 never mind seasoned economists

there's a difference between predicting and being just a general pessimistic f*cker. as i've said i've only seen a handful who accurately predicted the current course of events.

Silverharp wrote:

sing the Austrian perspective this crash was inevitable, pinning down the exact date or scale is not the most important aspect,

what's point in making predictions then if the rest is irrelevant? in economics we make predictions so we can act on them, you know, to counter the business cycle etc. sweet **** all point in economists making predictions then if what you say is true. we might as well f*ck off and all become farmers and do something 'productive' then.

Deleted User

Deleted User wrote: »

Point is, shouting 'Recession! Recession! Recession!' doesn't mean you predicted it.

Think of this, you are standing on a motorway and you see a truck coming. You want a lift but you also want to buy a drink from the shop across the road. Now it is clear that a truck is coming, but that is very different to predicting when the truck will come. Having that skill allows you to cross the road and buy a drink and you know how long you can spend buying your drink without missing the truck.

In terms of this analogy, standing at the side of road shouting (A truck is coming! A truck is coming!) doesn't really help anyone nor does is differentiate from other people (as they can also see the truck). It was the glorious and illustrious ESRI who predicted the recession (truck) in this case as they gave quantifiable info rather then 'gut feeling' / stating the obvious.

I'm going to quote myself on this topic..

brianthebard

ntlbell wrote: »

Lots of people were prdicting it over 2 years ago

no one wanted to listen

I see your two years and raise you four! http://www.monthlyreview.org/0104li.htm

silverharp

leninbenjamin wrote: »

there's a difference between predicting and being just a general pessimistic f*cker. as i've said i've only seen a handful who accurately predicted the current course of events.



what's point in making predictions then if the rest is irrelevant? in economics we make predictions so we can act on them, you know, to counter the business cycle etc. sweet **** all point in economists making predictions then if what you say is true. we might as well f*ck off and all become farmers and do something 'productive' then.

If you read the analysis bit from the mish blog I posted you would see where the reasoning will take you. From my undersatnding of Austrain economics I could tell it was going to happen, and that society should have been preparing for it from at least 2005. Given that the gov. and central banks are economic players, it depends to some extent on their actions as to where the turns and wiggles occur, but the end game is clear and Bernanke and Co. will be overwhelmed by the sheer scale of the unwinding that has yet to occur

Using other market models, I knew that when the yield curve inverted, that the wheels would start coming off the cart in 12 to 18 months. I assume the fed etc look at similar models but out of arrogance they obviously thought they could get ahead of the curve , but as Jim Rogers said on an interview recently why would anyone listen to them anymore as they have been wrong for the last 2 years.

leninbenjamin

silverharp wrote: »

If you read the analysis bit from the mish blog I posted you would see where the reasoning will take you.

didn't read in detail but i saw that; it was just comment you said that rankled me. at the end of the day 'timing' and 'scale' do matter, particularly scale. forecast the scale wrong and any actions you take can potentially be counter productive.

interesting article though you've posted. I've always avoided the Austrian school for reasons i can't remember any more. given me wind to do a bit more reading in the area.

silverharp

leninbenjamin wrote: »

didn't read in detail but i saw that; it was just comment you said that rankled me. at the end of the day 'timing' and 'scale' do matter, particularly scale. forecast the scale wrong and any actions you take can potentially be counter productive.

maybe bad choice of words on my part, I meant more to express that from point in time say in 2004 , I wouldnt have been able to say that a crash was going to happen 2008 and the extent of it. I knew it is and will be bad, but not having lived through one before all I have been doing is trying to spot when a market was in distribution or looking like it was topping out and acting accordingly.

zAbbo

Deleted User wrote: »

I'm going to quote myself on this topic..

You can't hitch hike on a motorway, also none of our motor ways have shops...

Stabshauptmann

ntlbell wrote: »

Oh come off it, taxi drivers were predicting it in late 06 never mind seasoned economists

colly10 wrote: »

+1 - I knew this was going to happen sooner or later and I know **** about economics

What every tom dick and harry was predicting was that housing prices were set for a crash. Well ****ing done. Bravo. This was well known, the debate though was always over when they would crash, and there hasnt been a lot of accurate predictions about that.

Secondly, the housing crash in Ireland is not the major economic meltdown - 9/10 people dont even understand what is happening, so its complete BS to say taxi drivers say this coming years ago

K4t

So the genral concensus is that 'everyone, taxi drivers included' predicted it, except the government and all the economists and finance ministers etc.

It's all making sense now :rolleyes:

Thomas_S_Hunterson

K4t wrote: »

So the genral concensus is that 'everyone, taxi drivers included' predicted it, except the government and all the economists and finance ministers etc.

It's all making sense now :rolleyes:

There's not a whole lot they could do about it to be honest. It's not like they can wave a magic want and no-one will notice the downturn, or negate it's effect through fiscal policy.

CiaranC

K4t wrote: »

So the genral concensus is that 'everyone, taxi drivers included' predicted it, except the government and all the economists and finance ministers etc.

It's all making sense now :rolleyes:

Theres nothing that government could do to avoid it. In fact, their cronyism with the building trade propagated it. It wasnt in their interest to let people know it was happening.

There have been entire websites set up to deal with the property crash.

Thomas_S_Hunterson

CiaranC wrote: »

Theres nothing that government could do to avoid it. In fact, their cronyism with the building trade propagated it. It wasnt in their interest to let people know it was happening.

There have been entire websites set up to deal with the property crash.

If everyone braced for a recession, then things would be a whole lot worse.

You'd have runs on just about everything.

dresden8

Most discussions around the recession seem to devolve to

Nobody could have seen this coming

or

It's cyclical in nature, of course it was coming, it always comes, everybody knew that.

The odd thing is that these two contrary positions are often held by the one person.

Tossers.

I think people are failing to grasp the difference between knowing a recession is coming and knowing when a recession is coming.

It was clear that the growth rates of Ireland were unsustainable in the long run, it was also clear that the large dependence on the housing market was also going to stop.

However, knowing that, and knowing when these events are going to occur are two very, very different matters. If you believe they won't happen in the short term, then you will continue on the 'bubble path', however if you expect them to happen soon you will alter your consumption profile.

So the question is the black and white one of 'was there a recession coming', but rather a grey question of 'was there a recession coming soon'.

silverharp

Deleted User wrote: »

I think people are failing to grasp the difference between knowing a recession is coming and knowing when a recession is coming.

It was clear that the growth rates of Ireland were unsustainable in the long run, it was also clear that the large dependence on the housing market was also going to stop.

However, knowing that, and knowing when these events are going to occur are two very, very different matters. If you believe they won't happen in the short term, then you will continue on the 'bubble path', however if you expect them to happen soon you will alter your consumption profile.

So the question is the black and white one of 'was there a recession coming', but rather a grey question of 'was there a recession coming soon'.

What it shows me is that gov. are pro cyclical they spend like drunken sailors when times are good or were and still are giving property tax breaks (wtf is that all about), it's beyond me that there isnt a "recession" fund ie if growth is above long term averge a % is tucked away until a time comes when growth becomes negetive X and the fund can then be used to cut taxes or complete investment projects, there is no guessing except the near certainty that it will be used

Personally I saw this coming to the extent that I paid off my mortgage a few year back and this year liquidated all my long investments and even went short (obviously not everyone can do this). but if anyone expects guidence from the special interest groups in this country or anywhere forget it. People have to take personal responsibility for their actions, and if common sense tells you that trees cant go to the moon, then act on it.
In a way I am looking forward to the next few years, the "crack up boom" was perverse where work/saving/cash was trash and speculation and leverage was good, for the next few years at least we will see some normalisation in society's behaviour

brianthebard

Deleted User wrote: »

I think people are failing to grasp the difference between knowing a recession is coming and knowing when a recession is coming.

It was clear that the growth rates of Ireland were unsustainable in the long run, it was also clear that the large dependence on the housing market was also going to stop.

However, knowing that, and knowing when these events are going to occur are two very, very different matters. If you believe they won't happen in the short term, then you will continue on the 'bubble path', however if you expect them to happen soon you will alter your consumption profile.

So the question is the black and white one of 'was there a recession coming', but rather a grey question of 'was there a recession coming soon'.

Since we are all agreed that everyone knew there was a downturn coming, could it not have been negated or lessened by diversifying the speculation? It seems to me that the problem was everyone was piling into the property market and weren't looking around for alternatives.

ranger4

silverharp wrote: »

What it shows me is that gov. are pro cyclical they spend like drunken sailors when times are good or were and still are giving property tax breaks (wtf is that all about), it's beyond me that there isnt a "recession" fund ie if growth is above long term averge a % is tucked away until a time comes when growth becomes negetive X and the fund can then be used to cut taxes or complete investment projects, there is no guessing except the near certainty that it will be used

Personally I saw this coming to the extent that I paid off my mortgage a few year back and this year liquidated all my long investments and even went short (obviously not everyone can do this). but if anyone expects guidence from the special interest groups in this country or anywhere forget it. People have to take personal responsibility for their actions, and if common sense tells you that trees cant go to the moon, then act on it.
In a way I am looking forward to the next few years, the "crack up boom" was perverse where work/saving/cash was trash and speculation and leverage was good, for the next few years at least we will see some normalisation in society's behaviour

Will most defo see a change with peoples attitude to money, Was unreal the way lots of people were obtaining mortages not just to buy or build a property but also to buy that new designer suv fwd etc, etc, was totaly getting out of hand the level of debt that some people were exposing themselfs to, I just hope this downturn doesnt mirror the eighties but i feel this lesson will be forgotton and the same thing will happen all over again in 10-15 years.

Lord Nikon

A nation trying to tax itself into prosperity is like a man standing in a bucket and trying to pull himself up by the handles.

byrne0f56789

The Austrian school pointed to the collapse. It's a shame not many read about the Austrian School. Looks like von Mises was right and Keynes was wrong!!!!!! Yet we are still applying the Keynesian model.

Wonder if the UK's Alistair Darling has ever looked at the Austrian School?