Ed Yardeni on CNN Moneyline

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Said he was wrong, said it's obviously fixed, calls for 3.5% to 4% GDP growth on 2000.

-- Think It (Through@Pollies.Duh), January 04, 2000

Answers

I know the guy's been somewhat of a 'doombrood' hero these past few months, but it's time to tell the rest of the story.

He's been incredibly wrong, all year, about everything.

All year long the guy has been on the bond bandwagon. Bonds, he said, would rise (interest rates fall). He's been wrong, consistently and terribly wrong.

At the beginning of this year he predicted a DOW 7500 level by mid- year or late summer and that "the convictions of the buy and hold crowd would be sorely tested". Never happened.

He predicted that liquidity would dry up in December because institutions would simply quit trading. December was the most liquid month in history.

Hey, he's an economist - it's his *job* to be wrong.

Now guess what? That's right, he's wrong about y2k (I guess he never really understood it to begin with). The US economy will not grow at 4% this year (even *after* the books are cooked). The stock market will crash. Y2k will continue to rear its head and will make the debt/market crash driven recession much, much worse.

-- Me (me@me.me), January 04, 2000.


Didn't folks label Yardeni crazy when DJIA was at 4,000 & he said it would go to 8,000+?

-- David Eddy (deddy@davideddy.com), January 04, 2000.

Yardeni said he reached that conclusion when he saw China, Japan, Russia, etc. come through.

He's an unfortunate victim of the "right now" syndrome.

The Russians are running their power system on manual, the Chinese have enough manpower to run their whole nation by the abacus if need be, and Japan's economy is currently so delicately balanced that even a sustained series of minor supplier/manufacturer problems could bust public confidence there again.

The Middle Eastern oil-exporting countries haven't miraculously remediated, the US oil companies volunteered their own bleak forecasts for the SEC, Venezuela is still in crisis, and China's modern infrastructure depends to a large part on pirated - and thus probably unremediated - software.

And that's before we get to the interacting effects of all the software programs that didn't get touched for lack of time or 'criticality', and the bugs accidentally introduced with fixes.

The closed UN-conference 'strategy' now appears to have been: governments report no problems [suppress any post y2k-panic]; software manufacturers admit no problems [prevent lawsuits]; companies and utilities admit no problems [that way you can still collect on your insurance by attributing mishaps to something else]; then declare 'Victory', close down the 'command centres' in a burst of publicity, and get to work like heck trying to fix problems as fast as possible before the herd notices them occurring and begins to stir uneasily again.

No. The game's just in its first quarter. He's just off the team right now, that's all. But he'll be back when the indices change.

-- John Whitley (jwhitley@inforamp.net), January 04, 2000.


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