We should have listened to Peter Schiff

We should have listened to Peter Schiff

When everyone else was blowing sunshine about the economy, Peter Schiff saw exactly what was coming. And he was saying it 2 years ago! Just as amazing is completely wrong everyone else was. Not just slightly wrong, but picking Washington Mutual and Merill Lynch and Bear Stearns to be big stocks and predicting the Dow at 16,000 by the end of 2008 and so on. They were all laughing at Schiff, but he’s got the last laugh now.

[Link via Signal v. Noise.]
  • Yeah, this is all very sad because there were people who were telling us exactly what was going to happen.  Being in Boston, it was infuriating to see that Barney Frank commercial where he had the nerve to blame Republicans for the market collapse.  And yet there are videos of him saying things that contributed to this crisis.

  • And we should have listened to – and elected – Ron Paul for president, for whom Peter Schiff served as economic advisor.

  • There are always contrarians and they are always right eventually. Several commentators were right in the short term. For example, Stein was right at the time and MER went to $90 towards the end of 2006 and the DJ hit 14,000. Schiff consistently described how things have unraveled.

    So what’s he saying today? It looks like he spends a lot of time explaining why his “how to survive a bear market” aren’t working like he thought. He appears bullish for the long term on high-dividend stocks selling at low multiples (2x – 3x earnings)—quite a limb he’s out on there.

  • Laughing at Mr. Schiff…

    Living in the San Francisco Bay Area, I lived through the dot.com hype and fortunately had very very little invested in high tech when the bubble burst.

    Following that, the real estate out here, and elsewhere of course, increased and increased.  House prices were demented out here in 2001 and then grew to even more demented levels.  When we bought our home we were told that we would qualify for at $500K mortgage on our family income of $90K. 

    I told myself “no way” I would take that on.  So we went for something smaller, dumpy, and termite infested (ha!) but within our means.

    However, out here in San Francisco Bay Area (ground zero of progressive politics and thought), a majority of the home sales in 2004 to 2006 involved interest-only and other novelty loans. People and families were willing to take on huge risks to own homes in this demented housing market, and then it hit the fan. Local and state governments loved it as higher home values meant more revenues from property taxes.

    The home across the street from me recently sold in auction for $8K more than what we paid for our house in 2001, and $200K below the peak values of 2005 or so. And the state government, after closing one budget gap has informed us that there is a $28B budget gap over the next year and a half.

    Times were good throughout the area and for many were the hype was strong, but the living beyond our means has caught up to us and the local economy has taken a very scary turn in the past few weeks.