While watching the October 2 Vice Presidential debate, I couldn’t help notice the huge amount of time the candidates spent playing the game, “MY Guy Predicted The Financial Turmoil First.” On the scoreboard:
Democratic Senator Joe Biden bragged: “But here’s the deal. Barack Obama pointed out two years ago that there was a subprime mortgage crisis and wrote to the Secretary of the Treasury and said, 'You’d better get on the stick here. You’d better look at it.' ”
-- Versus --
Republican Alaska Governor Sarah Palin boasted: “We need to look back, even two years ago and we need to be appreciative of John McCain’s call for reform with Fannie Mae, Freddie Mac… So we have John McCain to thank for at least warning people.”
Suddenly it hit me. If anticipating the current U.S. economic crisis BEFORE it unfolded is qualification enough to run for Leader of the Free World, then I have a dark horse ticket to fill: Bob Prechter for President.
Fact checkers unite: Elliott Wave International (E.W.I.) president Bob Prechter foresaw the collapse of the booming economic cycle not one, or even two years ago -- when the wheels had already started turning down AND the “head of abuse” (as Sarah Palin put it) had just begun to rear itself in the popular media.
Let the record show, in his 2002 (I repeat, 2002) best selling book Conquer the Crash, Bob set the stage for a historic reversal of fortune for every major sector of the U.S. economy, including these specific insights:
- Housing: “What screams ‘bubble,’ giant historic bubble, in real estate is the system-wide extension of massive amounts of credit to finance property purchases… When prices begin to fall, lenders will experience a rising number of defaults on the mortgages they hold.”
- Bonds: “The unprecedented mass of vulnerable bonds extant today is on the verge of a waterfall of downgrading.”
(Subprime, Housing, Finance, Insurance, and Stocks: What Will Be Next To Go? The October 2008 Financial Forecast Service publications stage a full frontal attack on the economic crisis. See how the plot will unfold from those who saw the bust coming long before anyone else did. Act Now)
- 5 conditions that pose a danger to Banks: “Low liquidity levels, dangerous exposure to leveraged derivatives, the inflated value of the property that borrowers have put up as collateral on loans, and the substantial size of the mortgages that their clients hold compared both to those property values and to the clients potential inability to pay under adverse circumstances.”
- Fannie Mae & Freddie Mac: “Investors in these companies’ stocks and bonds will be just as surprised when the stock prices and bond ratings collapse.”
When the point of no return had been reached, E.W.I.’s expert team of analysts remained one step ahead of every violent shift of the ongoing “sea change” that is now reshaping the face of the U.S. economy; namely, into the pointed snout and furry brow of a BEAR.
On this, the following catalog of our past publications speak volumes:
March 2005 Elliott Wave Financial Forecast went against the bullish housing crowd with a compelling lead story titled “Real Estate Bust Begins” and wrote: “As the most aggressive dispensers of credit to the housing industry, subprime firms are on the front edge of the housing bubble.”
July 2005 Elliott Wave Financial Forecast outlined the coming recrimination against the housing mania’s biggest enablers: “This time, there’s no mistaking who the Enrons of the bust phase will be. They will be the firms now peddling adjustable-rate, no interest/nothing down and assorted other types of subprime mortgages.”
September 2005 Elliott Wave Financial Forecast: “Banks seem to be blind to the danger of overpriced collateral as they continue to stuff their balance sheets with mortgage-backed assets… There is a larger, and more important message: Bad times are ahead in the financial industry.”
January 2007 Elliott Wave Financial Forecast: “The Year of the Financial Flameout.”
Of course Bob Prechter doesn’t want to be president -- he would never agree to surrender the blunt honesty that allowed him to warn of the crisis long before anyone else did. He’s more content holding the commanding post of the G.O.P -- Good Objective -- Party.
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