Remembering the Easy Economic Fixes back in 2007

Here's an interesting quote from an economist . . . It is now abundantly evident that the so-called "economic experts" were about three ants short of a picnic. At every step of the way, they have told us that the problem ought to be fixed any day now, and these predictions have proven to be nowhere near the truth.

These experts may well be very intelligent, but if they are also liars, they only prove to be smart liars. But if we remember what they said in the past, we can easily find out who has been lying all along. The alternative is that they really did not know, and so they were not nearly as intelligent as they presented themselves to be. Either way, why should we believe them now?

But here is a source that has been pretty accurate all along. . .

As an aside, do you remember when the credit crisis first started way back in August 2007? At the time they estimated that it would cost close to US $500 billion to "fix" it. Then Merrill Lynch came out in August and shocked the financial world by writing off US $4 billion. The spin doctors immediately went to work saying that it was a good thing because you get all the bad news out right at the beginning. To date Merrill Lynch has written off US $55.5 billion and no longer exists in their own right. Just a few minutes ago I read an article saying that the banks need another US $2 trillion, just to stay solvent. I think this comes up short, way short. There are US $550 trillion in derivatives and most of that is issued by banks. I would guess that you'll need at least 10% of that to buy time. I know of no one who has that kind of money.

Ignatio Merino, Dow Theory Analysis, January 15, 2009