8 really, really scary predictions

What bothers me is how CNN has decided that succession implies insight. By the screens, they:

  1. "saw the mortgage-related meltdown coming"
  2. "warned of a subprime contagion back in July 2007"
  3. "called both the dot-com and housing bubbles"
  5. "predicted two years ago that the credit bubble would devastate Wall Street"
  7. "was among the first to warn that the big banks had big problems"

The problem is that none of these people might have any insight. Yes, they said something, then it came true. However, astrologists say things that come true. They're more wrong than they're right, but you can easily find astrologists who have gotten a few big things correct. CNN has plastered up at least 5 of them as having the insight to see this mess coming. If you and I decide today to make predictions - me that 2009 will see a resurgence and you that 2009 will be more of the current pain, one of us is going to look like a financial genius. Well, at least to those who infer insight from a succession of events. One of them even says, "I was right a year ago, and I think I'll be right this year too."

I have made one correct prediction for the future, therefore future predictions of mine are likely to be correct. I guess I'm sick of the doom and gloom the media wants to sell us. Part of what happens in economic crisis is that people stop trusting the economy. In that distrust, people do things that aren't economically useful like hoarding (since they fear for the worst). It's a natural reaction and these stories heighten that reaction making the crisis considerably worse. People say credit is tight. People (banks) hear that and don't want to lend money since they might need it to cover something unexpected. As banks stop lending, credit actually becomes tight.

While I certainly don't believe this crisis is merely a factor of public perception, public perception can (and has) led to real problems in other nations and does cause problems like our current situation to become worse than it is - similarly, when we're all happy about the economy, our perception puts ourselves into a bigger boom than is real.

Live simply. Don't overextend. Save for the rainy days. Ignore the news.

While all the predictions were somewhat negative, but realistic about the economy, to use the term "scary" is media sensationalism at its finest.

Objectively, we all need to prepare ourselves to weather this economic storm. Whether or not that's "scary" is a personal opinion. Personally, I'm not scared. However, I'd like to believe that I will continue to react to the situation in rational ways (unlike the political classes, unfortunately, who seem to be in full panic mode).

The thing about being a contrarian means that you're bound to be declared a prophet at least two or three times in your career. That's probably a nice feeling and great for book sales.

For those of us who spend time building businesses, these sorts of articles don't really mean anything. I'm still not going to crawl into a hole somewhere, so I don't see the point in reading "scary" predictions.

CNN has learned the art of link bait.

I was disappointed to not see Peter Schiff on that list.

So basically yet another regurgitation of the same sky is falling trap we've been hearing for months. Yes, I said trap instead of crap. It's slang for crap. The things that are getting hit hard right now are the things that were overvalued to begin with.

There is no sign of a bad economy. This looks like a correction to me, not like a crash.