How did our nations top economists NOT see this crisis coming!?
It baffles me!
Answers
3963 points
MNSL answered one year ago …
Not only top bank economists but also some top investors, analysts, fund mangers, brokers and other rating agencies could not see crisis coming. Some fund mangers said we never sell and we are for the long run. What is the point in keeping bankrupt companies in their portfolios for the long run? They misled the clients and made wealth destruction .Now they are struggling to survive. Still they have not realized that some sectors will never recover and some sectors will take more than 05 years to recover. In addition current market mess is completely different from past market turmoils.
Only they talked about commodity supper cycle, more bullish on the Euro, rapid rise in China, India, and Brazil etc. Different types of instruments and funds including commodity and real estate funds introduced to the market and advised their clients to invest in this super bull market.
They did not study and did not identify risk factor in advance. They completely forget about bubble in assets. Some top economist could not forecast currency trend and commodity correctly. Even now they can not forecast currency trend and commodity trend correctly. Further they can not forecast trend in the property sector with all information currently available. Only few were able to forecast correctly and their current forecast also 100% correct.
Some had marketing programmes to promote their investment products including highly risk financial, credit and insurance products globally. At the end everybody has lost. They created one of the greatest wealth destruction in the world. Some should take responsibility in destroying many industries including car industries. We can not expect any revival in the near term for some sectors. Only two sectors will outperform market in the year 2009.
678 points
BoxCar answered one year ago …
Economics is NOT an exact science and that is the fallacy of our financial system.
Like religion, they act as if they believe the Earth is still Flat, "go forth and multiply"
when NSO solar scientists predicted all this to the decimal, 2007.5, deduced from
The Solar Mortality Theory discovered in 1993- but when have politicians and top
economists & financiers ever listened to scientists and their preposterous theorys?
In short, No one could see the forest for the trees, they were so imbedded in the
arcane ideas of how to make money in a FLAT world that goes on forever. As
long as we continue to rely on leaders who act as if the world is FLAT, we are
doomed to repeat our bouts with economic collapse leading to genocidal wars
"Again & Again" never mind, "Never Again" a statement made in ignorance.
Read blog entitled genocideorigins.blogspot.com to understand Modern History
731 points
thinker70 answered 11 months ago …
In a word, IDEOLOGY!
What i mean is simply that standard economics has a rigid perspective on how to deal with what is referred to as the business cycle! Whether a person is educated to believe in "supply side economics" Keynesian theories etc, few have been taught "critical thinking" that enables them to sort out cause and effect by thinking outside the box, (whatever their particular ideology) so their response is like that politicians, toe the party line.
The simple truth is that the more highly educated an individual is in a particular discipline, the LESS likely they will be able to get the BIG PICTURE and focus on provable facts as opposed to acting in self interest or a collective interest that is inimical to the best interests of the nation or the masses.
Since 1971 when we went off the gold standard we have in effect been conducting a gigantic experiment with a faith based fiat currency system that invites unscrupulous greedy people to BEND RULES to feather their own nest.
White collar crime is alive and well in the financial world and the foxes have been put in charge of protecting the chicken coop. To answer your question in the most direct way, establishment economists have been MISEDUCATED and simply do not understand the most basic fundamentals of true economics such as house prices can not rise above the ability of the average working mans wage level for very long, nobody on the long term can borrow their way out of debt, for something to qualify as money it must not only be a medium of exchange, but also a STORE of VALUE in which PAPER is a complete and utter failure as we are current witnesses too.
