Predicting the Future

The Big Picture has some quite interesting and, in many cases, misguided quotes about the financial world over the past few years. Here are a few.

George W. Bush, June 17, 2002
“Now, we’ve got a problem here in America that we have to address. Too many American families, too many minorities do not own a home. [...] Freddie Mac will launch 25 initiatives to eliminate homeownership barriers.”
Ben Bernanke, August 9, 2005
“There’s a lot of good news on housing. 
Alan Greenspan, September 26, 2005
“In summary, it is encouraging to find that, despite the rapid growth of mortgage debt, only a small fraction of households across the country have loan-to-value ratios greater than 90 percent. Thus, the vast majority of homeowners have a sizable equity cushion with which to absorb a potential decline in house prices.”
Ben Bernanke, March 28, 2007
“At this juncture, however, the impact on the broader economy and financial markets of the problems in the subprime market seems likely to be contained.”
Tim Geithner, May 15, 2007
“Financial innovation has improved the capacity to measure and manage risk. Risk is spread more broadly across countries and institutions.”
Henry Paulson, July23, 2007
“There has been a very significant housing correction. I think we’re at or near a bottom there,” Paulson said on CNBC television. “I don’t deny there’s a problem with subprime mortgages but…it’s quite containable.”
Paul Krugman, December 3, 2007
“But the [financial] innovations of recent years — the alphabet soup of C.D.O.’s and S.I.V.’s, R.M.B.S. and A.B.C.P. — were sold on false pretenses. They were promoted as ways to spread risk, making investment safer. What they did instead — aside from making their creators a lot of money, which they didn’t have to repay when it all went bust — was to spread confusion, luring investors into taking on more risk than they realized.”
George W. Bush, March 12, 2008
“I think when people take a look back at this moment in our economic history, they’ll recognize tax cuts work.” 
Ben Stein, July 8, 2008
Don’t Panic – Buy Index Funds and Real Estate (“The truth is that while the economy is clearly slowing down we are not yet in a recession.”) [Ed. Note: S&P500 closed that day at 1,273.70, on its way to a 676 close in March 2009.]
Christopher Cox, Chairman, Securities and Exchange Commission, October 2008
“There is no question that, somewhere in this terrible mess, many laws were broken. Right now, the criminal authorities and the civil authorities, not only in the federal government and the state governments, but in other countries, because this is now, as you know, a matter of intense international focus, are working to make sure that lawbreakers are held accountable and people are brought to justice.” [Ed. Note: It's now almost three years later. How are those investigations progressing? Seems the list of folks "brought to justice" could fit on an M&M.]
WSJ Editorial Page, May 29, 2009
The Bond Vigilantes (“They’re back. We refer to the global investors once known as the bond vigilantes, who demanded higher Treasury bond yields from the late 1970s through the 1990s whenever inflation fears popped up, and as a result disciplined U.S. policy makers. [...] It’s not going too far to say we are watching a showdown between Fed Chairman Ben Bernanke and bond investors, otherwise known as the financial markets. When in doubt, bet on the markets.”) [Ed. note: What would the WSJ tell us the markets are saying now as that is, after all, what we should "bet on"? The 10-yr was around a 3.70% then vs. about 2.25% now; place your bets.]