Matt Yglesias takes on the myth-making surrounding those who predict market crashes on a regular basis and then take credit when one eventually materializes. One of the worst things about 2008 was that it bailed out a lot of misanthropes who were then able to capitalize on their “prediction”. This is turn has led to many investors missing the market’s comeback as the doomsayers continually kept them ill at ease.
In this era of obsession with bubbles, I think it’s important to recognize how fundamentally unimpressive it is to call a financial crash years in advance. If I predict to you today that the stock market is going to crash soon and people are going to lose a lot of money, and then people keep making money for the next 40 months and then the stock market crashes that would hardly make me a genius financial forecaster. It just shows that the stock market has big crashes every now and again. Sometimes those crashes are driven by clear deterioration in the fundamentals (2008), sometimes they’re driven by past overexuberance (2000), and sometimes they seem to be driven by nothing at all (1987). That’s life.
That is, indeed, life. Anyone can say “something bad is going to happen” over and over again. We are aware, shit happens. Thanks.