Worst Predictions In History: Not Another Financial Crisis In Our Lifetimes

Mish

Let's put a spotlight on some of the worst economic predictions in history. Janet Yellen gets the blue ribbon.

Yellen: Not in Our Lifetimes

Please recall Janet Yellen's June 2017 prediction: "Not Another Financial Crisis in Our Lifetimes"

“Would I say there will never, ever be another financial crisis?” Yellen said at a question-and-answer event in London. “You know probably that would be going too far but I do think we’re much safer and I hope that it will not be in our lifetimes and I don’t believe it will be,” she said.

Flash Forward December 11, 2018: Yellen Warns of Another Potential Financial crisis: 'Gigantic Holes in the System'

I commented: "When you are in charge of the outhouse, you sing its plumbing praises. When you give speeches for money, you mention the stench."

Permanently High Plateau

In 1929, just ahead of the great depression, Yale economist Irving Fisher was Jubilant. “Stock prices have reached what looks like a permanently high plateau,” said Fisher.

Bernanke in His Own Words

Also consider Bernanke: In His Own Words

  1. March 28, 2007: Chairman Bernanke said: “The impact on the broader economy and financial markets of the problems in the subprime markets seems likely to be contained.”
  2. May 17, 2007: Chairman Bernanke said: “We do not expect significant spillovers from the subprime market to the rest of the economy or to the financial system.”
  3. February 27, 2008: Chairman Bernanke said: "By later this year, housing will stop being such a big drag directly on GDP … I am satisfied with the general approach that we’re currently taking."
  4. February 28, 2008: Chairman Bernanke said: “Among the largest banks, the capital ratios remain good and I don’t expect any serious problems … among the large, internationally active banks that make up a very substantial part of our banking system.”
  5. June 9, 2008: Chairman Bernanke said: “The risk that the economy has entered a substantial downturn appears to have diminished over the past month or so.”
  6. July 16, 2008: Chairman Bernanke said that Fannie Mae and Freddie Mac are “adequately capitalized” and “in no danger of failing.”

Trump's Three Point Claim to Fame

  1. Natural Ability: Trump says "I Know So Much About the Coronavirus Because of Natural Ability"
  2. 15 Headed to Zero: On February 26, in a White House Briefing, Trump foolishly discussed the then 15 total cases in the US. "When you have 15 people, and the 15 within a couple of days is going to be down to close to zero, that’s a pretty good job we’ve done," said Trump as noted in Coronavirus Week in Review: Top 10 Things That Happened.
  3. Trade Wars: Let's not forget "Trade Wars are Good and Easy to Win." For further discussion, please see Coronavirus Simulating a Full Blown Trump Trade War.

Mike "Mish" Shedlock

Comments (34)
No. 1-13
tokidoki
tokidoki

Let's be honest. She didn't believe it herself. Also for people like her, she wouldn't call this a financial crisis. They would engage in word play and call things like this "an unexpected event", etc, etc. Bullshitters will continue to BS.

Tony Bennett
Tony Bennett

oil < $29 barrel

back in 2015 JPM and others moved heaven and earth to raise oil prices to get out from under energy related debt.

Good Luck.

Max67
Max67

Talking about Trump stupidity, let us not forget that even Bush was repeatedly called stupid and an idiot. Also some even referred to Obama's style as ivy league stupidity and even resulted in the rise of the Bernie Sanders regressive left. So actually stupidity is a good qualification to last 2 terms

Corto
Corto

Slight variations in the wording matter. You have her true comment as "I hope that it will not be in our lifetimes and I don’t believe it will be." You picture shows "Not Another Financial Crisis in Our Lifetimes." There's a differences, however small. She had Hope and Believe. Your version made it sound way more concrete.

Just like people who say Trump said the virus was a hoax. He did not exactly say that. Regardless of liking or hating Trump or the Fed, these little inconsistencies are what the other side will latch onto.

astroboy
astroboy

Just saw this on CNN:

""Every American adult should immediately receive $1,000 to help ensure families and workers can meet their short-term obligations and increase spending in the economy," a release from Romney's office states, adding, "Congress took similar action during the 2001 and 2008 recessions."

Is Romney hallucinating, or did I miss getting my two grand?

TCW
TCW

It takes a natural crisis like this to show supply side economics make much better sense than running up huge debts to spur demand.

Tony Bennett
Tony Bennett

Dow Jones sporting a "3" handle.

Yikes.

Greggg
Greggg

Think of the stock market Like a mug of draft beer... The Trump Hump was the huge frothy head that had nothing supporting it, and then the real market that drinks beer, blew it off all over the table.

Tengen
Tengen

Maybe Grandma Yellen wasn't planning on living this long. After all, it was nearly five years ago when she looked like she had a mini-stroke at the podium during one of her boring talks.

TumblingDice
TumblingDice

Say what you will about Alan Greenspan at least he left the Fed Funds rate at ONE number.
Ben (I'm so smart) Bernanke - Instead of just lowering the Fed Funds rate to 0, I'll lower it to 0 - 0.25. Why? Because I'm so smart.

Two who continue the charade (or maybe they aren't enough to change this back to one number): Janet Yellen and Jerome Powell.

If people think a range is needed: why not 0 - 0.24 or 0 - 0.26.

TumblingDice
TumblingDice

Yellen , Bernanke etc they're all smart but intelligent only gets you so much and they can't admit they just don't know

@Sechel, Is this a joke? Lol.

daveyp
daveyp

Mish don't forget Trump's "I like the numbers where they are. I don't want that ship docking and doubling the number." That, together with the breathtaking 15 to zero comment demonstrate a staggering degree of stupidity and failure to comprehend simple biology.

Yodalives
Yodalives

What about Greenspan!! He’s the one responsible for all this


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