# Economists attached to banks



## DerKaiser (11 Sep 2007)

I just cannot take the spin anymore. I'm sure there must be similar threads but I've had enough of guys calling themselves Economists talking about the ECB slashing its interest rates.
Does anyone else believe that these guys are seriously misleading the public? I mean I know the bank they are associated with is referred to each time they're quoted so people should know where their loyalties reside, but as professions are they not embarrased to be peddling this nonsensical propeganda?


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## Calico (11 Sep 2007)

I totally agree. It does nothing for the profession when every utterance is designed to serve the balance sheet of whoever they work for.


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## Markjbloggs (11 Sep 2007)

Since when does anyone with the slightest bit of "cop-on" pay any attention to what economists say?  The "profession" has very little credibility anyway.....


http://www.andyfoulds.co.uk/amusement/economists.htm


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## Sherpa (11 Sep 2007)

My personal favourite is when they pronounce on the future direction of interest rates over the coming year, yet the 1 yr fixed-rate mortgage offerings from their own institutions are completely at odds with their "predictions".

But, what do we expect?  It's not like there's some kind of Hippocratic oath that economists have to sign up to...


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## webtax (11 Sep 2007)

Markjbloggs said:


> Since when does anyone with the slightest bit of "cop-on" pay any attention to what economists say?  The "profession" has very little credibility anyway.....



Agreed, for the the ones working in the banks anyway. But some independent ones are worth listening to - David McWilliams has been talking about the property bubble for quite some time and I'd say there are a lot of people who wish they'd paid a bit of attention.
Alan Ahearnes articles in the sunday independent are a rare voice of reason also.


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## room305 (11 Sep 2007)

webtax said:


> But some independent ones are worth listening to - David McWilliams has been talking about the property bubble for quite some time and I'd say there are a lot of people who wish they'd paid a bit of attention.



Presumably there's quite a few people around who wished they'd paid slightly _less _attention to McWilliams, if they sold soon after his initial warnings, but such is the nature of bubbles I guess.


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## Gulliver (12 Sep 2007)

webtax said:


> David McWilliams has been talking about the property bubble for quite some time and I'd say there are a lot of people who wish they'd paid a bit of attention.


 
He has been talking about this bubble for probably 10 years now - as have the Economist magazine for even longer.  There is an even greater number of people over those years who are glad that they paid no attention.


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## Sunny (12 Sep 2007)

Gulliver said:


> He has been talking about this bubble for probably 10 years now - as have the Economist magazine for even longer. There is an even greater number of people over those years who are glad that they paid no attention.


 
Its like anything in economics. If you keep saying something for long enough, you are likely to be right at some stage!


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## Howitzer (12 Sep 2007)

Sunny said:


> Its like anything in economics. If you keep saying something for long enough, you are likely to be right at some stage!


 
I've been saying that for years.


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## webtax (12 Sep 2007)

He might have had to wait for the tide to start to go out, but that doesn't mean he wasn't right all along! And as property is a long term investment, it's the long term forecast that's important.


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## room305 (12 Sep 2007)

webtax said:


> He might have had to wait for the tide to start to go out, but that doesn't mean he wasn't right all along! And as property is a long term investment, it's the long term forecast that's important.



If you're out by ten years then you're out, simple as. 

I'm as bearish as they come but nobody can credibly claim it was a good idea to sell an asset and forego triple-digit gains, in anticipation of a crash a decade later ...


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## webtax (13 Sep 2007)

Doubt he could be out by ten years when the boom was only starting then. The fact is that many young people are saddled with huge 35 mortgages on very poor quality housing as a result of sane voices being drowned out by the property/banking industry hype. 
And as for only being proved right through saying the same thing for long enough - does this also apply to any economist who spoke out against the daft prices of the internet boom, the japanese property boom or tulip mania?


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## Sunny (14 Sep 2007)

webtax said:


> Doubt he could be out by ten years when the boom was only starting then. The fact is that many young people are saddled with huge 35 mortgages on very poor quality housing as a result of sane voices being drowned out by the property/banking industry hype.
> quote]
> 
> But thats the point of the thread. Economists attached to the banks are part of the banking hype and shouldn't be listened to. Do you think you will ever hear Sherry Fitzgeralds economist come out and say we are facing a certain property crash and we are all doomed. Economists working in these places have conflict of interest and their research is biased


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## DerKaiser (14 Sep 2007)

Hmmn, maybe I spoke to soon.  Eurozone inflation down and serious credit worries in the banking sector, maybe the ECB will reduce its rates....  
Still though if they do reduce their rates these "Economists" will infer that it's a great time to buy a house.  Nothing will be said of the underlying economic pessimism that actually led to rate reductions.


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## room305 (15 Sep 2007)

DerKaiser said:


> Still though if they do reduce their rates these "Economists" will infer that it's a great time to buy a house.  Nothing will be said of the underlying economic pessimism that actually led to rate reductions.



I've never met a car salesman who thought it was a bad time to buy car, why should we expect bank employees to be any different? The problem is that the media continually regurgitates the opinions of these employees as though they were independent analysts.

No doubt they claim that the high regard in which they hold their profession is such that they would never allow it to be overshadowed by the company paying their cheques. And perhaps this is even true in some cases. However, the fact remains that standards that are applied to pronouncements from other vested interests (e.g. scientists at Imperial Tobacco have today annnounced that negative health effects from smoking are vastly overblown and likely to become negligible in the near future, we didn't bother sourcing any other opinions for this article because these guys are scientists ...) are not applied to economists.

I've no idea why this is the case either.


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