100 False Prophecies by the Pied Piper of Doom: 11-19, bankrupties are gonna crash and burn the economy! (1)

- by New Deal democrat

Introductory note: For those of you who aren't aware of the past history of the bloggers here with Daily Kos, or don't want to hear more about it, please pass on. Regular economic blogging will resume tomorrow. For those of you who do, put some popcorn in the microwave or pour a nice libation and enjoy ths following Sunday reading.

Once again I request that you not cross-post this. Unfortunately you're not going to change anyone's mind. I simply decided that rather than having this sit unpublished in my computer, a record should be available.

This installment turned out to be so long, I've had to split it into two sections. This is the first section. Here is last week's post with the first 10 false prophecies.
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The Pied Piper of Doom has been very sure that, well, just about everything is on the brink of bankruptcy that will surely cast the economy into the abyss.

11. In May 2009 he claimed that there were going to be

upcoming six-figure job losses certain to occur throughout the auto industry

Obama was able to arrange for the prepackaged bankruptcy of GM and Chrysler. Those 6-figure layoffs never happened.
He was wrong.

12. On July 21, 2009 he claimed that CIT corporation would go bankrupt and throw the economy into the abyss:

the CIT Group bailout may collapse over the next few days, despite the recent hoopla about the private sector's so-called (feeble) attempt to support an entity that represents one of the most important sources--if not the most important source--of financing for a good portion of Main Street.
We're talking 300,000 small business--out of the almost one million served by CIT--in jeopardy of closing their doors in coming days or weeks as a result of this "not-too-big-to-fail" mentality being deployed by our government's pretzel logic right now.

...Our government's indicating Main Street's expendable! " See: "Treasury Bets U.S. Financial System Can Weather CIT Collapse."

Businesses are closing their doors due to this, and it isn't even official! See: "Alabama Tool Supplier Blames CIT Woes for Bankruptcy."

Now multiply that times 300,000... Gone. Do you know what this will do to the unemployment numbers in coming weeks and months?

CIT did declare bankruptcy, and not one of his apocalyptic predictions came to pass.
He was wrong.

13. The next day he said:

The disparity between the "happy news" crowd's call for an imminent economic recovery simply doesn't jive with their occasionally (more) sober comments regarding stark Main Street realities.
Backed into a corner, with the imminent closing of no less than 300,000 of their almost one million Main Street small business clients (accounting for, perhaps, millions of existing jobs in the retail and manufacturing sectors) on the line, CIT Group senior management agreed to "Don Corleone financing" terms, accepting 'an offer they couldn't refuse' that guaranteed an immediate $100 million-plus profit to the PIMCO-led vulture capital group the moment the ink hit the bondholder agreement documents.

He was still wrong.

14. On September 9, 2009 he claimed that The Auto Sector was going to tank:

And, of course, there are the government programs to support our ailing auto and housing sectors...note the first sentence of the story, below...today we heard that Ford's sales were up 17% last month...but...wait a minute...GM and Chrysler were down? It will be very interesting to follow car sales over the next few months. The sales volume will fall, as the stimulus to buy is no longer there. The question will be: " Did the clunker program just steal from future consumption, or has there been a permanent increase in demand that reflects a stronger economy? My bet is that the demand is going to fall flat. I visited a car dealer on Tuesday and they had not seen a customer. Without the rebate there are no buyers. We're told things are looking up; but these statements are based upon slight upticks in manufacturing indices which are only temporarily inflated by short-term government programs. Both the retail auto and housing sectors are, indeed, projected to continue to tank after the federal supports are withdrawn.

Auto sales fell for only one month, and then resumed their upswing, hitting 11 million by spring 2010, 12 million by autumn, and as of last month, 15 million.

Yeah, he was wrong.

15. 10 days later, he claimed:

The cash-for-clunkers program, in view of even near-term sustainability of auto sales, was a failure. Comments coming from senior industry analysts with regard to September sales are far beyond even awful.

Yeah, you know. Still wrong.

16. Remember the commercial real estate catastrophe? In March 2010 he said:

the commercial real estate (CRE) bust will do more to undermine an already-struggling small business environment than most realize, simply because Main Street businesses have always relied upon the mid-sized and small community banks for the lion's share of their credit needs, and these are the same banks that are going to feel the brunt of the CRE meltdown

The CRE meltdown never happened.
He was wrong.

17. Or how about the catastrophe of Christmas 2010 caused by the SBA failing to make loans? In July 2010 he said:

It creates a brutal, cascading effect upon U.S. small business, of course. (Both directly and indirectly.) So, when I read articles like this, "SBA Lending Cliff Dives in June, Boding Ill for Employment," from Naked Capitalism, today, it's disconcerting, to say the least.
....
[quoting Naked Capitalism] Christmas-related spending is a big boost for much of the economy; businesses need to buy supplies and produce/carry inventory in advance of Christmas orders. Limited access to funding in the runup to this critical selling season would be particularly damaging.

Didn't happen.
He was wrong.

18. Remember how BP had to declare bankruptcy and crashed the economy? During the gulf oil disaster he said:

Stories have been circulating over the past few days that BP may be looking at its bankruptcy options as the only way out of its self-made travesty in the Gulf of Mexico. But, in the past hour, according to an interview with top oil and gas consultant Matt Simmons, just posted on Fortune Magazine's website, it now appears that the possibility that BP will file bankruptcy very soon is quite real.

BP didn't declare bankruptcy.
He was wrong.

19. Remember how the commercial real estate disaster took down over 1/3 of the nation's banks? The Pied Piper claimed:

due to the just-commencing downturn in commercial real estate (CRE), approximately 3,000 of our nation's 8,000 banks are at risk of insolvency in the course of the next 36 months. In what's just the first inning of a rather massive commercial real estate bust, it's really all about how this will affect these banks that just happen to be the same banks that have been the traditional source for capital for much of our nation's small business

.... the double-dip Great Recession, the meme that even some of the blogosphere's most optimistic pundits downplayed up until just the past few weeks...

That didn't happen either.
He was wrong.

To be continued ... and continued ... and continued ....

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100 False Prophecies by the Pied Piper of Doom: 1-10, the stock market's gonna crash!

- by New Deal democrat

Introductory note: For those of you who aren't aware of the past history of the bloggers here with Daily Kos, or don't want to hear more about it, please pass on. Regular economic blogging will resume tomorrow. For those of you who do, put some popcorn in the microwave or pour a nice libation and enjoy the following Sunday reading.
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On November 6, 2009, I had the following exchange with Meteor Blades:

Me: I am challenging you on bias as a front pager.
Do you believe that those who "tell us what's likely to happen next" have any more than a random chance of being right?

MB's response: I think that one judges that by their record. Of course, as the stock analysts (are required to) say, past performance is no guarantee of future performance. What I find appalling is the willingness of so many people to accept the assumptions and predictions of economists who have proved to be so completely wrong on repeated occasions. That's not an indictment of all economists, even those who have been wrong. Only of those who are so f'n arrogant about their certainty.

by Meteor Blades on Fri Nov 06, 2009 at 06:58:48 AM PDT

[my emphasis] By MB's own standard, it is appalling that he and others continue to accept the predictions of the Pied Piper of Doom.

While I was out Friday, a commenter asked permission to cross-post an article by Bonddad at Daily Kos (one that was also cross-published by Barry Ritholtz at the Big Picture yesterday). The predictable sh**storm ensued, but in due course I learned that many of you still read both blogs. At least one of you wished there were an official reckoning of the Doomers' wrongitude. I've had that reckoning sitting in my computer for over a year. Since another front-pager on that allegedly "reality-based" blog has apparently developed a severe case of amnesia and has embraced the position of

what poor prognosticating? once again, the prognostications i saw were that the stimulus was inadequate, hamp was a joke, and we'd pay a political price for it in 2010.

now is a good time to set the record straight. I'll continue this on weekends as the spirit moves me. There is no point crossposting it at DK and I request that you not do so, at least until the entire record of over 100 false prophecies is laid out.

Herewith the beginning of the Reckoning:
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For someone who believes the stock market shouldn't be used as an indicator of anything, he sure thinks it is an indicator of Doom!

1. No sooner had the market reached one of its all time bottoms, he waited less than a week before pronouncing, on March 13, 2009 that

MSM and the public are grasping at straws. The market goes up 200 pts. Someone puts up $11 billion--the equivalent of chump change in the marketplace--to buy bonds (a very tiny sale, btw). And, a report comes out that says: consumer purchases didn't drop as much as everyone expected?.... All the pundits are saying 2010 to 2011 before there's any upturn...at best! This is what's known as: a.) "bottom bouncing," and, b.) a "sucker's market," which is just what was and is being predicted by many over the past few months.

That was the beginning of a 6500 point rally on the DJIA, in which it has since doubled and reached a 4 year high. He was wrong.

2. At the end of March, he was still convinced that

The truth is, many are of the opinion that this is nothing more than a "sucker's rally;" which is also referred to as "bottom-bouncing" in a bear market....
there's really little rational reason--other than spin--for the markets to be up right now.

He was still wrong.

3. In April 2009, he claimed that

Crash and Burn? A Strong Case That Recent Market Upswings Were Illusion.

This was the first of many times that following the short-side hedge fund blog Zero Hedge led him down the primrose path.

He was wrong.

4. On that same day, he claimed that:

As Roubini noted a few months ago, it may reach a point where all market trading might stop, completely, at least for a few days or weeks. Durden concludes with a quote from a trader telling us this event could occur as early as this week.

He was tinfoil hat moon made of green cheese wrong.

5. On May 11, 2009, he thought that the stock market rally since March had reached its peak:

BTW, I think the sucker's rally is ending today...maybe...a lot of people have been taken for a ride the last 8-9 weeks.

He was wrong.

6. The very next day, May 12, 2009, he said that he had

Shifted to 75% Cash/Bonds Friday!

because he agreed with Gjohnsit's position that

The rally is done. .... If you are buying now you are simply giving your money away. Now is the time to go to cash. Maybe in a few months things might be different.

Commenter Ticket Punch wished him luck. Ticket Punch was right. The PPoD was wrong.

7. On August 19, 2009, he again claimed that a market crash was near

Yves Smith, who is, arguably, one of the more calm, evenhanded and liberal Wall Street pundits in the blogosphere has let loose today, in: "Is This the Start of the Big One?" If you read her Naked Capitalism blog frequently, you'll realize this is quite out of character for her. There are some statements she makes here with which I'm not in full agreement--for instance, the Federal Reserve and the Plunge Protection Team, a/k/a "The President's Working Group On Capital Markets," simply will pull out all the stops to prevent a market crash as they have in the past--but there is much of what she says today with which I now concur.

There was no need for a "plunge protection team." There was no crash. Yves Smith was wrong. So was he.

8. On August 24, 2009, he once again called for a stock market crash, claiming:

This market's going to crash very, very hard...sometime in the next few months, IMHO.

As with all his other predictions of a stock market crash, he was wrong.

9. At the end of November 2009, he said:

about 10 days ago, Whitney also had this to say: "CNBC: Stocks Overvalued, Recession Will Return: Meredith Whitney"

That was about 3000 DJIA points ago. Whitney was wrong. So was he.

10. He got out of the "stock market's gonna crash!" business after that, but you can still make a lot of money if you use the Pied Piper of Doom as a contrarian indicator. Just last October 3, he proclaimed:

You might not know it yet, but the U.S. has just entered into another recession, according to the world’s (arguably) leading expert on economic business cycles. And, when it comes to this type of thing, the guy’s never been wrong.
...
it’s now quite self-evident, especially given the inconvenient business/economic news of the past 72 hours, noted down below, that we have already entered into another recession.

In fact, the world’s (arguably) leading expert on business cycles, Economic Cycle Research Institute Co-Founder Lakshmann Achuthan, has just called it. We are in a recession…again! And, he’s been about 100% accurate on his calls since…forever.

Done freakin’ deal..... Achuthan [ ] tells us we’re already in a Recession; we just don’t know it yet.) Meanwhile, here’s my commentary from a little over three weeks ago (see last link in paragraph immediately above)…

…“The ‘recovery’ that may be no longer.”

That was 2000 DJIA points ago. Q3 GDP was 1.8%, and Q4 was just raised to 3.0%. ECRI's initial call was wrong. So was the PPoD.

That's just the first 10. There are at least 90 more false prophecies, on plenty of other economic topics, where those came from. Needless to say, to be continued .... and continued ... and continued ...

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