New doomsday poll: 99.9% risk of 2014 crash:Black-swan crisis warning for now through mid-April
By Paul B. Farrell
MarketWatch.com
March 15, 2014
SAN LUIS OBISPO, Calif. (MarketWatch) — Global risks are accelerating. This is our fourth major poll update of industry leaders: A critical review of their warnings from early last year when we first predicted a 87% risk of a crash: Bernanke’s Fed saw an “unsustainable bubble” … Gross: “credit supernova” … Gundlach: “kaboom ahead” … Ellis: “Don’t own bonds” … Shilling: “shocker” … Roubini: “Prepare for perfect storm” … Shiller: “Irrational exuberance is back” … Schiff: “Doubling down” on “doomsday” prediction … InvestmentNews’ warning 90,000 advisers: “tick, tick … boom!”
A few weeks later the crash risk was up to 98%. Then a dramatic preholiday uptick in investor sentiment. America’s collective unconscious tired of negativity after a Halloween headline: “Economic guillotine dead ahead.” A week later, 2014 became the “Year of the Boom.” Bank of America’s chief strategist screamed: “Bet on the bulls now.” The Great Gatsby spirit was celebrating the holidays: “Even old grumpy Dr. Doom, celeb economist Nouriel Roubini, began humming a happy tune all over television: “A global recovery is going to occur, get into equities.”
What really happened? Fed politics. Short-term, Larry Summers withdrew as a candidate for the Fed chairman’s job. Dark cloud lifted as Janet Yellen become the pick. Wall Street cheered, Bernanke’s easy-money printing presses would not screw up their year-end bonuses. Plus Main Street was mentally exhausted, tired of the bad news, relentless political drama. We needed a holiday break.
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