I am a “prophet of doom”
heh heh:
Meet the Cassandras, 14 economists, bloggers, politicians and businesspeople of all political stripes who have become the most strident critics of President Obama’s stewardship of the economy . . . [I guess this means I am a bi-partisan critic]
Hard answers are in short supply. But here’s a guide to the prophets of doom. We’ve identified them, attempted to ascertain the moment when they first turned against the White House, and summarized the basic points of their critique. We’ve included economists, members of the business community, bloggers and, just for fun, two of the most anti-Obama Republicans we could dig up.
Yes, I am one of the 14:
BARRY RITHOLTZ: Author of financial blog the Big Picture; regular commentator on CNBC, Bloomberg, Fox and PBS; CEO and director of Equity Research at Fusion IQ, an online quantitative research firm. Barry Ritholtz has ridden his blog’s huge popularity to a bookstore near you. Keep your eye out for “Bailout Nation.”
Earliest critique: Jan. 29, 2009
Stimulus: Too small.
Banking plan: Will not work. Nationalization in the form of “prepackaged Chapter 11 bankruptcy reorganization is the fastest way to fix the banking system.”
Most hurtful quote: In response to Geithner’s statement that “We have a financial system that is run by private shareholders, managed by private institutions, and we’d like to do our best to preserve that system,” Ritholtz exploded: “No! Defending these idiots was your old gig. In the new job, you no longer work for the cretins responsible for bringing down the global economy. Please stop rationalizing their behavior, and preserving the status quo!”
My big criticism of Obama is not his policies, but his appointments of Larry Summers and Tim Geithner. These two may end up being the Dick Cheney and Donald Rumsfeld of the Obama administration.
Nice company to be in, too. Here’s the rest of the 14:
PAUL KRUGMAN:
MARTIN WOLF
SIMON JOHNSON
JIM ROGERS
NOURIEL ROUBINI
WILLEM BUITERS
GREG MANKIW
WILLIAM BLACK
DEAN BAKERRON PAUL
BARRY RITHOLTZ
YVES SMITH
JIM CRAMER
MICHELE BACHMANN
>
Source:
The prophets of doom
Andrew Leonard
Salon, Apr. 16, 2009
http://www.salon.com/news/feature/2009/04/16/cassandras/index.html
See also:
10 Hot Economists
http://www.thedailybeast.com/blogs-and-stories/2009-04-13/10-hot-economists/
April 28th, 2009 at 12:52 pm
prophets of doom LOL!!!! how about the realists……. let’s see the other list of jackasses who by the way didn’t see an oncoming freight train until it flattened them. this list consists of all the parasites on wall street and gov
April 28th, 2009 at 12:53 pm
Rather than Prophet of Doom, I think Jim Cramer would be best described as “That bi-polar guy shouting random shit every day.”
The list has Krugman, but no Stiglitz? They’ve been saying pretty much the same thing for years now….
And Ron Paul? I think all hardcore libertarians would be constantly shouting about imminent Rapture due to the fact that governments exist.
April 28th, 2009 at 12:54 pm
prophets of doom LOL!!!! how about the realists…….
Seriously, is a weather forecaster who correctly predicts a cat-5 hurricane a “prophet of doom” or just a guy who’s doing his job properly?
April 28th, 2009 at 12:55 pm
Unclear what BR means by not having a big criticism of Obama’s policies. Does that mean favoring the AIG counterparty bailout that occurred on the Obama watch? Does it mean favoring or at least being neutral on the PPIP?
~~~
BR: Actually, most of the AIG pass through took place in December2008 . . .
April 28th, 2009 at 1:01 pm
That list should have definitely been cut to 10. Because one is not predicting doom at all (Cramer), one is insane (Bauchmann) and two believe in an economic school of thought that has been disproven 100 times over (Rogers and Paul).
How is Singapore treating you Jim? The decoupling theory really worked out well didn’t it. You think that US is going down the shitter, so you move to a country whose entire economy depends on selling electronics to US consumers. Genius!
April 28th, 2009 at 1:02 pm
Also, here’s a video of Willem Buiter, a guy who needs a bit more attention in the states IMO:
http://www.youtube.com/watch?v=r_msosmodCQ&feature=related
April 28th, 2009 at 1:04 pm
I think a lot of the Obama team policies are great (Health care, Science, Education), just not the ones that have the Geithner/Paulson/Summers signature on them. Perhaps that’s what BR is saying. [BR: The other policies aren't in my areas of expertise]
Hussman’s quote above really outlines what Barry has called the problem of “malinvestment” in this country. Taking my taxpayer $ and trying to save a manufacturing job is one thing, or starting an engineering school or a nursing school or training math teachers – I don’t really have a problem with that – we can legitimately call that economic stimulus. Taking that same $ and giving it to AIG or an I-bank so that someone can take home a $1M bonus is something else entirely. It’s called theft, not only from me as a taxpayer but from the alternative places where it could be better spent.
April 28th, 2009 at 1:06 pm
@Machiavelli: I live in Minny and you are indeed correct – Ms. Bachmann is completely insane. I’m stunned that she’s won two elections now (not my rep though, we have the Muslim guy Ellison), albeit both by the skin of her teeth. She’s an idiot AND she’s insane. Deadly combo.
April 28th, 2009 at 1:09 pm
@leftback: We’re on the same page there. I also actually don’t mind what he’s been doing on the foreign policy front. Kill them with kindness first and then you get the capital you need to bring down the hammer when they step out of line. Very shrewd, IMO. My biggest problem with O continues to be these bank bailouts.
April 28th, 2009 at 1:15 pm
Ritholtz, as a registered Republican, I am amused to see you enjoy being in the privileged company of Michele Bachmann. Michele Bachmann is a Congresswoman so hot, you don’t care if she’s totally insane.
As for you, Ritholtz, I never thought of you as a Cassandra as maybe as Suzie or Brenda or Gladys. I totally agree with your criticism of Obama, but looking from his perspective, I can understand why The Big O has chosen not to wean us off our habit of relying on money printing, government bailouts, and mountains of debt. Think of the US electorate as 130 million or so crack addicts. You aren’t going to get re-elected if all of a sudden, you take away the crack.
April 28th, 2009 at 1:17 pm
Isn’t Michelle Bachmann a lunatic? At least, that’s how she comes across on TV when she makes her goofy speeches. I suspect she would claim that sucking on a boiled potato would cure the economy if it furthered the Republican agend in some way.
~~~
BR: Hmmmm, boiled potato . . .
April 28th, 2009 at 1:17 pm
“Nice company to be in, too. . .”
Really? You do realize that your name is now on a list with Michele Bachmann’s, don’t you? She’s got a major case of ‘Da Crazies’.
BR either get your name, or hers, off of this list.
[BR: I thought everyone knew she was crazy!]
Some quotes:
“Literally, if we took away the minimum wage—if conceivably it was gone—we could potentially virtually wipe out unemployment completely because we would be able to offer jobs at whatever level.”
—Michele Bachmann, 1/26/05, Jobs, Energy and Community Development Committee
“Many teenagers that come in should be paying the employer because of broken dishes or whatever occurs during that period of time. But you know what? After six months, that teenager is going to be a fabulous employee and is going to go on a trajectory where he’s going to be making so much money, we’ll be borrowing money from him.”
—Michele Bachmann, 1/26/05, explaining why teenagers should pay employers for the privilege of working instead of receiving minimum wage.
“If we allow businesses to be prosperous and accrue capital, they’ll be giving their employees more than they can even begin to imagine. But when we continue to tie cement blocks on businesses (like the minimum wage) and constrain them, they can actually do less than their employees.”
—Michele Bachmann, 1/26/05, testifying against SF 3, a bill to raise the MN minimum wage and explaining why it actually keeps wages and benefits lower.
“I look at the Scripture and I read it and I take it for what it is. I give more credence in the Scripture as being kind of a timeless word of God to mankind, and I take it for what it is. And I don’t think I give as much credence to my own mind, because I see myself as being very limited and very flawed, and lacking in knowledge, and wisdom and understanding. So, I just take the Bible for what it is, I guess, and recognize that I am not a scientist, not trained to be a scientist. I’m not a deep thinker on all of this. I wish I was. I wish I was more knowledgeable, but I’m not a scientist.”
— Michele Bachmann interviewing with Todd Fiel at KKMS as quoted in the Stillwater Gazette, September 29, 2003.
“Something that I think sometimes people don’t like to hear is that secular people can be sometimes even more dogmatic in beliefs than people who are not secular. … In some ways, to believe in evolution is almost like a following; a cult following — if you don’t believe in evolution, you’re considered completely backward. That seems to me very indicative of bias as well.”
—Michele Bachmann quoted in the Stillwater Gazette, September 29, 2003.
“Spending comes just as natural to liberals in Minnesota and the Minnesota legislature as bashing decency comes to the editorial board of our major metropolitan newspapers.”
— Senator Michele Bachmann, EdWatch conference, October 10-11, 2003
Many more here:
http://www.thebachmannrecord.com/thebachmannrecod.html
April 28th, 2009 at 1:20 pm
I think many of us “O” supporters are uneasy at best about the bank bailouts. Here, generally speaking, is what I think is going on.
There are a lot of former Clinton officials in the Obama administration. They remember well what happened in 1992/93. Things were not that good at the time — the deficits of Reagan/Bush 1 were huge compared with history. However, they saw an opportunity to decrease military spending, increase taxes somewhat, and ended up riding it out to the point that the budget was in balance overall by the end of the second term. I suspect they think they can do the same thing this time, given enough time and given that Armageddon doesn’t happen.
I’m not comfortable with the approach they are taking, because the magnitude of the problem seems much bigger than before, and I’m nervous about the idea that they may be fighting the “last war”. I’m also pissed that the architects of so much of this have not been frog marched around the country, but that’s another story…
April 28th, 2009 at 1:21 pm
@Marcus and hobo: Yes, she’s completely off her rocker but like CNBCSucks notes, is quite a cougar, so some may find her views/comments endearing, cute even. I don’t. I’m embarrassed by/for her.
April 28th, 2009 at 1:22 pm
There you have it, on this rather tedious Tuesday.
Michelle Bachmann: Hot*, but not a rocket scientist.
* By the definition of The Great CNBC Sucks.
April 28th, 2009 at 1:26 pm
Mannwich,
Re Bachmann:
Does anyone in Minn write about her in the same way people kept a Palin watch in Alaska? Or is there just something about Minn that attracts the odd and unusual to politics there and nobody really notices?
April 28th, 2009 at 1:28 pm
@hobo: Yes, they do but her district is pretty conservative overall, so she’s been able to skate through on those views and her looks, I mean, “charm”, similar to the way Palin has skated through. Let’s face it – hot women are used to getting a free pass throughout their entire lives. Many take full advantage of it. I can’t blame her.
April 28th, 2009 at 1:33 pm
I can understand why The Big O has chosen not to wean us off our habit of relying on money printing, government bailouts, and mountains of debt. Think of the US electorate as 130 million or so crack addicts. You aren’t going to get re-elected if all of a sudden, you take away the crack.
Yep. It’s like somebody chooses you to be their new dealer because their old one got shot and you don’t give them any drugs.
Your lifespan is going to be very short.
April 28th, 2009 at 1:36 pm
Oooo… TNX back over 3.0%.
April 28th, 2009 at 1:40 pm
@Mannwich
Cases in point: Jessica Alba, Natalie Portman.
Neither can act worth a damn, but their faces are pretty enough to sell theater tickets. Alba movies are so much better on mute. Star Wars I II III should come with laugh tracks.
April 28th, 2009 at 1:42 pm
yeah that is a club i would not want to be a member of – Bachmann AND Cramer??!!??
she is scary/dangerous and he’s a complete asshat.
~~~
BR: OK, I’ve reordered the list in order of my being proud to be in the same company as them — Top of the list, alot, bottom of the list, not so much!
April 28th, 2009 at 1:48 pm
you could probably add Jesse, Mish, Kevin Depew, Todd Harrison, and Grantham to that list…
April 28th, 2009 at 1:48 pm
crappy list since Chris Whalen and Meredith Whitney aren’t on it.
April 28th, 2009 at 1:48 pm
Marcus Aurelius @ 1:17
Teenage unemployment would indeed be a lot lower if there were no minimum wage.
April 28th, 2009 at 1:51 pm
I think this might mean homeland security is monitoring this site for additions to their watch list.
April 28th, 2009 at 1:54 pm
I don’t know that I would be ok about neing associated with Cramer. And why is he really on that list? He’s been anything but a cassandra. He said the bottom was in six times and was wrong and he says the bottom was in on March 9th. Not excactly a Dr. of Doom. He’s more in line with Krudlow, Laffer and the goldie locks economy sisterhood club!
April 28th, 2009 at 1:54 pm
Super-anon @12:59 Totally agree. He is one of the main reasons I can’t believe this really is worth the risk for medium to long term holders. And, of course, short term holding need stops.
April 28th, 2009 at 1:57 pm
IMO Hussman is doing an awesome job in his commentary these days:
To accrue 25-35% of GDP to cover the debt losses (which is a mainstream estimate, not a worst-case by any means), you would have to persistently depress non-financial corporate profits and personal savings by about 25% for well over a decade.
So yes, we can indeed abuse the U.S. public in order to make the bondholders of U.S. financial institutions whole and protect them from any losses. This was the policy of the Bush Administration, and has tragically become the policy of the Obama Administration as well. By doing so, we will commit our future production to foreign hands, or we will commit about a quarter of U.S. non-financial profits and personal savings to these bondholders for at least the next decade.
We can also allow bureaucrats to commit public funds that have not even been allocated by Congress, which is what we have done. We have all become dangerously de-sensitized the the sheer volume of money being tossed around here, and the potential for enormous fraud, misappropriation, cronyism, and misuse.
http://www.hussmanfunds.com/wmc/wmc090427.htm
April 28th, 2009 at 2:00 pm
Just read full NYT article on Geithner from yesterday.
I had not known:
That he wanted the taxpayer to guarantee all Big Finance debt at no charge;
That Sandy Weill wanted him to be Citi CEO (obviously for political influence, because he knows nothing about running a complex financial company);
That he has given Blackrock 3 no-bid contracts, two of which were non-emergency.
And so on. This is likely not regulatory capture. This is being owned by Big Finance lock/stock/barrel.
NO matter what promises candidate Obama may have made to backers, once TG’s tax problems were aired, he had the perfect excuse to find someone else.
So I continue to be confounded that BR and a dwindling number of other bloggers continue to differentiate the President from his man (Geithner) who is carrying out his policies, and the obvious tool of the banksters Summers who provides the President the advice Dr. Shaw and others want him to hear.
FDR did things differently.
April 28th, 2009 at 2:02 pm
I think its a terrible appointment, as is Summers.
I do make a distinction between a honest error of judgment and a corrupt political appointment
April 28th, 2009 at 2:04 pm
Super-anon @1:57 Totally agree. He is one of the main reasons I can’t believe this really is worth the risk for medium to long term holders. And, of course, short term holding need stops.
April 28th, 2009 at 2:04 pm
Imagine if I got a $1 every time someone mentioned my …..
you know, March 6th…
April 28th, 2009 at 2:18 pm
Look, chances are high that the plan, the stimulus, all of it…it could totally bomb. The smart thing is to take control of your assets, increase them where possible. This whole situation is a total disappointment…fix what you can for yourself. Here’s a start: http://www.newsmax.com/calltoarms
April 28th, 2009 at 2:25 pm
Here comes the late day buying (probably short-covering?). Can set your watches by it.
April 28th, 2009 at 2:29 pm
“dead hobo Says: Isn’t Michelle Bachmann a lunatic? At least, that’s how she comes across on TV when she makes her goofy speeches. I suspect she would claim that sucking on a boiled potato would cure the economy if it furthered the Republican agend in some way.
~~~
BR: Hmmmm, boiled potato . . .”
There is a widely circulated video of Michelle Bachmann putting her tongue down George W. Bush’s throat after one of his State of the Union speeches. She tried to climb onto his lap while he was standing up.
Just Google “bachmann bush kiss”. Maybe that’s where she got her reputation for sucking on boiled potatoes.
April 28th, 2009 at 2:32 pm
So ‘Magic Bullet’ Spectre was going to get creamed in the repug primary,
he switches to demogog.
He must feel ‘entitled’ or something.
April 28th, 2009 at 2:34 pm
“strident critics of President Obama’s stewardship”
I think somebody is a little confused about the difference between constructive critic and being a strident critic. They have actually misunderstood what Obama want and stands for. In contrast to the previous administration and GOP’s “shut up and follow the party line” attitudes, Obama want open debate and a competition of differing opinions. I am sure he would disapprove of this attack on people who like Berry disagree with him based on differing opinions and interpretation of facts.
April 28th, 2009 at 2:37 pm
Rather than Prophet of Doom, I think Jim Cramer would be best described as “That bi-polar guy shouting random shit every day.”
LOL
April 28th, 2009 at 2:37 pm
Mannwich Says:
April 28th, 2009 at 2:25 pm
Here comes the late day buying (probably short-covering?). Can set your watches by it.
reply:
————–
Stupid shorts. Don’t they ever learn?
April 28th, 2009 at 2:39 pm
I don’t know how we somehow got on the topic of Michelle Bachmann French kissing Dubya, but what is the deal with Rebecca Jarvis’ face these days? It’s like she lives inside a tanning bed.
Ritholtz, since you are among the riffraff today, how many tanning beds do they have at the CNBC studios, and why do the CNBC bosses allow Erin Burnett to appear in the mornings without having showered yet?
April 28th, 2009 at 2:56 pm
Yes Michelle Bachmann have a bigger rack and looks a lot better in a bathing suit than Barry – get him off that list.
April 28th, 2009 at 2:59 pm
DH @ 2:37
Mannwich just doesn’t get it. He doesn’t understand that the S&P will never trade below 840 again in our lifetime.
April 28th, 2009 at 2:59 pm
@DL: LOL! I will suck on a boiled potato if that happens.
April 28th, 2009 at 3:02 pm
BR, you can’t be a prophet since you have honor in your own country. Maybe Matthew meant honor on CNBC.
April 28th, 2009 at 3:08 pm
How could the market not go up ???
We are going to have 60 democratic senators and then the economy can get fixed and we can get on with our spending. Stocks have to react positively to that kind of news.
April 28th, 2009 at 3:08 pm
[...] Barry Ritholtz jokes around about on being named a “prophet of doom” by Salon (FYI: Salon is using an extremely annoying popup movie trailer that will blast your speakers) [...]
April 28th, 2009 at 3:10 pm
Office Depot up 17% today? Why, pray tell, in this business environment?
April 28th, 2009 at 3:12 pm
DeDude @ 3:08
“How could the market not go up ???”
Absolutely. The last 8 months has just been a bad dream. It’s now back to blissful spending and bubbles.
April 28th, 2009 at 3:14 pm
OTOH, the yield on the 10-year has moved into Leftback’s danger zone.
April 28th, 2009 at 3:24 pm
Why doesn’t CNBC break out the pom poms already? GS and Cramer can twitter in chants and rally cries and Bob Pisani can act them out on the floor of the exchange – it would be great (and honest)
“2, 4, 6, 8, who do we want to rape…short sellers…short sellers….choooooooke short sellers!!!!”
April 28th, 2009 at 3:28 pm
ooh la la, cramer and bachman are put on stage with Barry. Dont worry pretty soon those two jackasses will pop an arteries from spewing bullshi%t so they will be off the list.
April 28th, 2009 at 3:30 pm
Barry Ritholtz Says:
April 28th, 2009 at 2:02 pm
I think its a terrible appointment, as is Summers.
I do make a distinction between a honest error of judgment and a corrupt political appointment.
BR,
that’s a fine, appropriate, distinction to make. though, 44’s “first Draft Pick” was Rahm Emanuel and, from there, his later Round choices are pretty Questionable.
with that, how are to reckon his judgement?
http://clusty.com/search?input-form=clusty-simple&v%3Asources=webplus&query=Rahm+Emanuel+kickback
April 28th, 2009 at 4:03 pm
The 13 Cassandras…
They make it sound like the Keating 5 or something…
Do you ever get together with the other 13 to come up with new dooms-day prophecies?
April 28th, 2009 at 4:44 pm
I meant of course the 14 Cassandras…
You mush be excited to be in the same group as Michele Bachmann, the GOP’s head Taliban.
April 28th, 2009 at 5:19 pm
Time will tell regarding Summers and Timmy. The ditch was dug so now we need a trench and these guys have the shovels. That is how I see it.. No point in bringing in a backhoe yet although Michele Bachmann probably has a heavy equipment operating license.
With Cramer being on the list it just goes to show how a single correct call, regardless of all others, and lacking in any real critical thinking, influences the MSM and other ditto heads. I will offer my brokerage statements as testimony that I was more correct, over the last 2.5 years than he.
April 28th, 2009 at 5:23 pm
@DoctroRx
FDR put Joe Kennedy in charge of the newly created SEC. ‘Nuff said.
April 28th, 2009 at 6:17 pm
Michele Bachman. She is certifiable insane. She is dumb as a box of rocks. But is she hot?
Sometimes she looks pretty good other times a little haggard. She is a super devout Bible-thumper and any guy who has spent any time in the Bible Belt knows that Wednesday night is a great night to score and get pornstar freaky.
She does know her U.S. history though, here she is today:
“I find it interesting that it was back in the 1970s that the swine flu broke out then under another Democrat president Jimmy Carter,” said Bachmann. “And I’m not blaming this on President Obama, I just think it’s an interesting coincidence.”
Of course, Ford was President then, and I’m somewhat sure viruses aren’t partisan. Of course Wilson was a Dem too, so….
April 28th, 2009 at 6:18 pm
Mazel Tov
Nice company
April 28th, 2009 at 6:51 pm
Congrats! The real key now is to see how many of the people on this list will also be the prophets of the turnaround, whether it is the economic or the market call… interesting question for sure!!!
http://moneyneversleepsblog.blogspot.com/2009/04/bear-market-all-stars-who-will-blink.html
Sadly the answer may be that most on the list will overplay the negative side for far too long… time will tell. What is up with the Cramer thing?! Depends on which call you want to use I guess but he is all over the place. His sell everything call was late but timely in October but there are so many other calls before that to take into account… What about Peter Schiff? Nassim Taleb?? The real depressing thing about that list is the most obvious.. no Bernanke, no Geithner, no Greenspan, nobody else involved in trying to fix the mess.
April 28th, 2009 at 11:34 pm
set aside what inclusion of jim cramer or michele bachman do for the credibility of this list. i miss the nuance that ritholtz is not against the obama policy, just against the obama officials. of what harm are the officials, except that they determine the policy? and what nuisance, if the policy is commendable?
from the financial analysis perspective, it doesn’t matter whether geithner is a marxist, or a thumbsucker, or a bulge in the pants of a wall street oligarch. it only matters whether his policy decisions can be described and anticipated, and what advantage that anticipation can provide to financial analysis and market positions. moralizing what are essentially policy disagreements too easily becomes political opinion.
worse, the condemnation laid on geithner and summers implies that this blog takes itself as an influence on policy. if that is so, the community here should be able to explain to me why the market still hasn’t tanked (“corrected”) as predicted.
April 29th, 2009 at 10:03 pm
Barry – I am disappointed that you think any list that includes Michelle Bachman is “pretty good company”!
April 30th, 2009 at 6:53 am
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May 4th, 2009 at 12:53 pm
[...] Barry Ritholtz is pleased to be counted with 14 ‘prophets of doom’ (financially speaking) who criticize current U.S. economic policy; [...]
May 4th, 2009 at 1:08 pm
[...] I am a “prophet of doom” – Barry Ritholtz, The Big Picture, Tuesday, April 28, 2009 The author finds himself counted in company with 14 critics of the administration’s economic policies. [...]