Malpass: Wrong on Housing, Credit, Economy

by: Barry Ritholtz

I really don't like to single out any one firm or strategist for excessive criticism -- hey, we're all wrong on quite a regular basis. But goddamn if Bear Stearn's David Malpass hasn't been on the wrong side of more than a few major issues facing the economy over the past few years.

We first noted his wrong way cheerleading from a NYT piece in 2005, where Malpass was complaining that "the way the Bureau of Economic Analysis calculates savings, the changing asset values haven't affected the national savings rate." The problem with his analysis was that these variable assets (Stocks, Houses, etc.) fluctuate in price, while the other side of the ledger -- debt to acquire these assets -- did not. More recently, Malpass downplayed the credit crisis -- just as Bear Stearns (NYSE:BSC) was blowing up from the, uh, credit crisis. And he's been wrong on the dollar also.


He's surely not the only one. Anyone else worth mentioning? Who else has been on the wrong side of the dollar, oil, equities, bonds, agriculture, consumer spending, precious metals, employment, homebuilders, financials, technology ?

What's the U.S. Savings Rate Really?

'Don't Panic About the Credit Market
WSJ, August 7, 2007

Is It a Savings Crisis or a Math Error?
NYT, May 22, 2005