Sunday, December 14, 2008

Robert Shiller: The only one who saw it coming

Better late than never, but a couple of weeks ago I went to a lunchtime seminar at the “Work Foundation” to see a presentation by the Robert Shiller. In his book “Irrational Exuberance” published 8 years ago he predicated the current financial crisis. The book was an international best seller but was of course largely ignored and he got a lot of stick at the time as being some sort of doom and gloom merchant. Now he is the hero of the hour.

There were a number of heavy duty hitters at the seminar from the City and even Downing Street. The seminar was hosted by Will Hutton who has written about Shiller here. Tom at Labour & Capital has also an excellent report here on the seminar. So I’d just mention some things that particularly struck me.

The first thing is that Shiller’s presentation on why the bubble was predicable was so absolutely convincing that even with the benefit of hindsight you wondered why he was ignored? I asked my usual question about the role that poor governance of companies played in the crisis but he responded by saying that it was not an area he had looked into.

At the end I bought a copy of his new book “The Sub-Prime Solution - How Today’s Global Crisis Happened and What to Do about it”. I asked him to sign it which he did, reassuringly putting down the wrong month which he apologised for while quizzing me on the origin and pronunciation of my surname. After all no-body gets everything right.


Anonymous said...

great post!

Charlie Marks said...

I guess he was ignored because, hey, no one likes to hear that a boom ends in bust... Especially not those people doing well out of it - the Madoffs of this world.

Anonymous said...

of course I would state Karl Marx also saw it coming

unlike Leon Trotsky, who couldnt even see it wasnt snowing

Charlie Marks said...

"unlike Leon Trotsky, who couldnt even see it wasnt snowing"

Hence the glasses?

John Gray said...

Hi Anon and Charlie

Please explain reference to Trotsky/snow and glasses. I haven't got a clue?

Charlie Marks said...

I give in, Anon. Do enlighten us. Was Trotsky sacked from the Met office or something?

Anonymous said...

Ice Pick

Anonymous said...

If someone walks into your room in Mexico with an Ice Pick

It would pay to be very Suspicious

Charlie Marks said...

Oh yeah. But the bloke who killed him was a guy acting undercover as a follower.

Last words?

"Hey, what are you doing with an ice pi-"

Anonymous said...

never trust followers

a lesson for todays (or should I say yesterdays SWP)