They said deflation would not happen here. Bernake was talking about goldilocks economy. Greenspan for many years said economy was in the best shape ever. There was no housing bubble according to the experts. Then after the crash many said it was not possible to see it coming. But for some others, it was as clear as day light.
The Economic Crisis That No One Saw Coming: A Convenient Untruth
August 9, 2010
By Elliott Wave International
The single most convenient untruth about the 2008 (and counting) financial crisis is that it was unforeseen. For two years policymakers have insisted "There was no way to know ahead of time" that the liquidity boom would come to a screeching halt. Back in November 2008, in fact, the usually tight-lipped Queen of England herself publicly described the turmoil of international markets as "awful" and openly asked a panel of experts from the London School of Economics "Why did nobody notice?"
Her Majesty is right: Most financial authorities did NOT notice the crisis before it was too late. Comedy Central's "The Daily Show with Jon Stewart" of all places provided the most poignant evidence: A March 2009 video montage shows executives and economists from the world's leading financial firms repeatedly forecasting continued upside strength in stocks, plus renewed bull market growth in financials -- right as debt markets came unhinged and the US stock market headed into a 50%-plus selloff.
Dubbed the "8-Minute Rap" (after the "18-Minute Gap" of Nixon's Watergate tapes), the Daily Show video feature sent an equally powerful message, as the video below makes clear.
Yet even as the mainstream authorities failed to detect the economic earthquake moving below their own feet, somebody did "notice" well in advance. That person was EWI's president Bob Prechter.
The clip below is from a 2007 Bloomberg interview. Clear as PLAY, the foreseeable nature of the crisis emerges from Bob's October 19, 2007 interview.
As the historic trend change began to unfold, Robert Prechter issued this timely insight:
"We've seen the first crack in the credit structure with a huge drop in commercial paper... These are the harbingers of a change toward the downside for the stock market, commodities including oil, and the debt market itself."
