Dr. Ed Yardeni on Tony Brown's Journal

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I just caught a 10 minute interview with Dr. Yardeni. Highlights from Dr. Ed:

1. "There has been gross mismanagement & a complete lack of leadership with regards to the Y2K problem."

2. Contingency planning MUST be done NOW. This planning needs to extend beyond borders if we are to best handle the unknowns of Y2K. So far, Yardeni has seen barely a glimmer of action in this area. He feels if this trend continues, & it appears that it will due to the leadership vacuum, the year 2000 WILL bring chaos - a mad scramble to plug the holes in the global economic dyke.

3. Dr. Ed believes that the U.S. financial sector (including Wallstreet) has performed better than any other. He stateded this sector HAS NOT achieved compliance, but has made significant progress.

4. Dr. Yardeni insisted the biggest threats to the global economy are the JIT system of manufacturing (domino effect), overseas financial sector non-compliance, potential telecommunications failures, & the lack of LEADERSHIP.

For those of you who have never seen Tony Brown's Journal, it is a half-hour TV program produced by Tony Brown, broadcast on PBS in the U.S. It is a marvelous show. Mr. Brown & guests address issues & viewpoints from a fresh perspective.

I've been feeling more optimistic lately, although I can't pinpoint the source of the optimism. Dr. Yardeni burst my bubble. It was obvious to me that he sees deep trouble ahead, not a three-day snowstorm. Glad I just put up another 300 lbs. of grains!

Peace to All.

-- Bingo1 (howe9@pop.shentel.net), April 03, 1999

Answers

People should remember that Dr. Ed's powers of prognostication are pretty good. He did the "DJIA 5000 by 1995" and "DJIA 10,000 by 2000" predictions, both of which were esteemed overly optimistic at the time he made them. I don't recall that he wavered from these, despite any bad times that hit the markets (like last fall).

If your initial gut instinct was to prepare, ignore posts like Norm's and continue to buckle in and take root in self-sufficiency. It may not be Y2K itself, but it doesn't take a GED to see serious problems ahead.

-- Brett (savvydad@aol.com), April 03, 1999.


Any clue as to when the interview was taped?

-- FM (vidprof@aol.com), April 03, 1999.

Yardeni is also predicting a DOW 15,000 by 05-07! Why would that burst your bubble? Think long term.

-- Lurkey lurker (NOYB@This.time), April 03, 1999.

Remember that Yardeni's worst case scenario is a 3% decline in real GDP. This meets the criteria for a depression. Some predictions here imply a 90% decline in real GDP. This is on the order of an all-out nuclear war.

If Yardeni's worst fears come to pass and we indeed suffer a 3% decline in real GDP, few of us will have occasion to use any of our preparations.

-- Flint (flintc@mindspring.com), April 03, 1999.


FM - I have no idea when the interview was taped. That's always an important fact to divulge.

Flint stated, "If Yardeni's worst fears come to pass and we indeed suffer a 3% decline in real GDP, few of us will have occasion to use any of our preparations."

Am I missing something? Is the above statement one long typo? Did you experience a brain cramp? No offense intended. I have enjoyed reading your posts for many, many months. Please elaborate (as I know you can & will do).

I'll hold off jumping up on the soap box until I read your response.

-- Bingo1 (howe9@pop.shentel.net), April 03, 1999.



bingo1:

A 3% decline does not imply any widespread infrastructure failure. It implies high unemployment for a year or two, some business failures, many shortages of specific items (but we can substitute other, available items in most cases), possible local and temporary problems. I suppose some of us might be required to eat stored food if we lack any access to income. Some of us might need a generator for a while. Quite a few of us better have some savings, though these need not be buried under the doghouse.

But most of us won't need what we've stockpiled. To make this clearer, I mean a minority of us will face a situation that forces us to fall back on our preparations, without substitutes.

-- Flint (flintc@mindspring.com), April 03, 1999.


I saw a Yardeni-Brown interview about eight months ago.

-- dave (wootendave@hotmail.com), April 03, 1999.

It appears that Dr. Yardeni is revising his prognostication for y2k downward. His 3% decline in GDP will more than likely also be revised lower.

I believe his statement about a complete LACK of LEADERSHIP is significant. Quality leadership would have gone a long way in reducing the problems we will soon be confronted by.

Ray

-- Ray (ray@totacc.com), April 03, 1999.


Flint --- Where did you get that 3% with respect to a depression? I recall Yardeni somewhere in that ballpark (I thought 5%) with respect to a recession. 3% GDP decline is not a depression. 10-15% sharply over a year, maybe.

-- BigDog (BigDog@duffer.com), April 03, 1999.

Thanks for the elaboration, Flint. Now I get where you're coming from. I operate under the assumption that most folks here (and in the general population) are not terribly wealthy. In fact, I assume the majority of the Yourdonites have spent less than $2000-$3000 each on preparations. Perhaps I'm wrong.

1. Do most of us have the necessary cash on hand to weather a year or two of unemployment/underemployment? I don't.

2. Do most of us eat from our stored food right now? I do.

3. Have the majority of us purchased a generator, & acquired several hundred gallons of fuel? I haven't.

4. Do we currently grow vegetables or plan to taking up gardening as a hobby/additional source of fresh veggies, thereby using the seed & tools we've put away for "what may come"? I do.

I would very much like to hear from folks on this. Where do you stand on Flint's statements:

"Remember that Yardeni's worst case scenario is a 3% decline in real GDP. This meets the criteria for a depression." "But most of us won't need what we've stockpiled. To make this clearer, I mean a minority of us will face a situation that forces us to fall back on our preparations, without substitutes."

Please know my intent is not to bust your chops on this. This inquiring heart/mind/soul really wants to know.

-- Bingo1 (howe9@pop.shentel.net), April 03, 1999.



A "depression" is technically defined as a contraction of 10% or more in the annual GDP. Dr. Yardeni currently rates the odds of a U.S. depression as 5%.

-- Don Florence (dflorence@zianet.com), April 03, 1999.

Bingo --- it is curious to see Flint making definite statements for a change, refreshing actually "most of us WON'T need ..., etc". I disagree, which I know is rare when it comes to me and Flint! :-)

We have spent quite a bit more than $2-3K. We do not have a generator, but are prepared to live indefinitely without electricity. We have always gardened but have purchased a greenhouse and are prepared to feed up to 100 people after a second year (may it never come to that). We do eat from our stored food.

How much one spends is obviously tied to judgments about Y2K and resources but also family situation and location. With five children, living in a Northern climate, my situation requires more commitment up front.

-- BigDog (BigDog@duffer.com), April 03, 1999.


I still feel one year of severe disruption and a decade of depression to be easily possible as Ed has stated.I feel this is also a midrange prediction.It could easily get worse with so little focus on Y2K now with our other recent distractions.I will eat on stockpile and grow my own food to save as much cash as I can, hopefully cash will still have value in the post Y2K era. Traveler

-- traveling stranger (robq@mindspring.com), April 03, 1999.

Big Dog:

I sincerely hope you're never in a position where you would have starved or frozen if you hadn't been prepared. I hope this for everyone. I also hope you never have occasion to take advantage of your fire insurance.

I didn't say we wouldn't *use* our preparations. I'm heating with a wood stove now (or was before the season ended - its 80 degrees right now). I'm only saying I expect those of us who would have died without those preparations will be in the minority (a very small minority, I hope and expect). I'm glad I've prepared. I hope the time never comes when I'll be even gladder.

-- Flint (flintc@mindspring.com), April 03, 1999.


Tony Brown's Journal comes on PBS at 11.00 AM In the Seattle area (KCTS) on Sunday,April 4th.Maybe this is an update with Yardeni?

-- Ted Brown (SimplyTed@webtv.net), April 04, 1999.


Flint --- I certainly agree with you on that.

-- BigDog (BigDog@duffer.com), April 04, 1999.

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