I will say one thing about the bloggers vs. the economists controversy. Anonymous bloggers are free to express themselves and offer opinions as they see fit and without fear of repurcussions. The professional economists have their professional reputations to consider, they have their employers’ interests to consider, and they also want to avoid becoming part of the story itself. That is to say, if an economist’s job is to observe and report on the conditions of the market they don’t want their comments to actually affect the conditions they’re supposed to be observing from the outside.

Greenspan took a beating when he repeated Shiller’s “irrational exuberance” comment in a speech. A lot of people felt he stepped outside of his role and actually contributed to the problems he was commenting on.

So I can see why most of these economists would be a little circumspect. It would always be better for them to lag the indicators on the ground because nobody van know when it’s going to reverse course. Better to be wrong by a matter of degree than by direction.

In defense of Bugs, Roubini is similar to Shiller, both are professors and free to be bears while Economists working in the private sector are hamstrung by the things Bugs mentioned. In fact Shiller was more free when he wrote Irrational Exuberance, now that he has a publicly traded housing index, he has had to edit himself. Roubini has nothing to hold him back right now, that’s why he is one of the few economists that can speak his mind. Bugs’ post mentioned how greenspan was attacked for quoting Shiller seven years ago, today, Bernanke would be attacked if he quoted Roubini, but that doesn’t mean he doesn’t agree with him. Economists working outside of academia have to get paid somehow, so if they don’t write books, they need to be wary of who is paying the bills when giving an opinion in public. The UCLA professors are usually bullish but their department is heavily endowed by the building industry ( I could be wrong but I think Lusk, a builder, is who the school of economics and housing is named after). On a side note, how cool would it be to be in either Roubini or Shiller’s economics class, in my next life I am going to college in the 30’s, even if I had them as professors I’m sure I would have acted just as I did in college, just looking to get the answers for the tests, studying the high points but failing to comprehend what they were actually teaching, thinking only of the next fraternity party and staring at the hot chick in class, damn I wasted my youth.

OOps..The above from OC

No need for oops; this will be the National pattern for at least two more quarters.

We are overtaxed and Overmaxed.

Actually, if we were overtaxed (for what we are spending), we would have realized the costs for our actions and things wouldn't be this bad. It is the over borrowing that gave us a false sense of affluence – causing all misdeeds. Now that the rest of the world has found out we are junkies, we have to suffer the cold turkey syndrome.

Greenspan used the phrase “irrational exhuberance” years before Shiller used it in his book.

http://www.irrationalexuberance.com/definition.htm

another war

I think you can sleep well on that issue. If there is as much as a rumbling of another war, my guess is, you will see treasuries drop like a rock and the term "Full faith & credit" severely challenged. It may seem weird – but the threat of Bankruptcy is a powerful antiwar protest!