Friday, October 25, 2013

Stanley Druckenmiller, Prophet

Matt Yglesias is not too impressed with Druckenmiller's credentials as a prophet:

...one of the reasons Nolan cites for why we should be impressed by rich hedge fund guy Stanley Druckenmiller wanting to cut Social Security benefits is that Druckenmiller "predicted the last financial crash (the collapse of the housing bubble) years before it happened."

In this era of obsession with bubbles, I think it's important to recognize how fundamentally unimpressive it is to call a financial crash years in advance. If I predict to you today that the stock market is going to crash soon and people are going to lose a lot of money, and then people keep making money for the next 40 months and then the stock market crashes, that would hardly make me a genius financial forecaster. It just shows that the stock market has big crashes every now and again.

Of course we could also take him seriously because he's rich.

If you're rich they think you really know...........Fiddler on the Roof