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Brian Lucey completely wrong about housing market: Irish Times

mollox

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In yesterday’s Irish Times (June 30th) Harry McGee has a report on Prof. Brian Lucey’s December 2005 prediction of ongoing growth in the housing market and the potential for subprime lending by Irish mortgage lenders.

In an analysis prepared for mortgage company Homeloan Management Limited in December 2005, Prof Lucey dismissed the notion of an unsustainable property bubble and forecast the Irish housing market would continue to grow at a “modest but still significant pace”. He also identified more scope for increased mortgage lending by financial institutions by means of subprime mortgages, 100 per cent mortgages and equity-release loans.

TCD professor admits being wrong about housing bubble - The Irish Times - Tue, Jun 30, 2009

Could he have been more wrong?

McGee’s article contains some memorable quotes from Lucey – who admits he got it wrong (he could hardly deny it!):
“In retrospect I was wrong. Hindsight is 20-20. That is life. Does that invalidate the analyses I am doing now? Not necessarily. We will know for sure [about Nama] in 10-15 years.”
“This is not physics. It’s a social science. People are looking for more certainty that can be given.”
“I think we need to be cautious and humble.”

:D :D :D :D

Lucey has become something of a media whore, riding the banking crisis for all it’s worth. He’s on radio, tv and in the press on an almost daily basis – indeed he’s featured on multiple radio & tv stations on the same day (it must be a tidy little earner to boost that modest academic salary from TCD).

Lucey was also one of the 20 academics who penned an article for the Irish Times, which is often cited as proof that nationalisation of the banks must be the right solution – the clever academics have told us so!

Reading/hearing/seeing the regular output of Prof. Lucey, you wouldn't be aware of any of the above "health warnings", he leaves no room for doubt as to his certainty that he is right and the Govt is wrong.

He was, presumably, one of the main targets of Alan Ahearne’s barbed quip about there being two types of economist – “those who know they don’t know and those who don’t know they don’t know”.

Let’s hope that Lucey remembers his own “health warnings” the next time he addresses the nation on the banking crisis or the economy.

Effin’ academics. Time for a cull - An Bord Snip Nua please note.
 
Last edited:


DS-09

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I see your still visiting your favourite discredited website :rolleyes:
 

orbit

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Lucey has become something of a media whore, riding the banking crisis for all it’s worth. He’s on radio, tv and in the press on an almost daily basis – indeed he’s featured on multiple radio & tv stations on the same day (it must be a tidy little earner to boost that modest academic salary from TCD).
Yeah, the recent "debate" over NAMA between him and Alan Ahearne seemed as much about ego, and being seen to be right, rather than actually helping the country.
 

joemomma

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“In retrospect I was wrong. Hindsight is 20-20. That is life. Does that invalidate the analyses I am doing now? Not necessarily. We will know for sure [about Nama] in 10-15 years.”
“This is not physics. It’s a social science. People are looking for more certainty that can be given.”
“I think we need to be cautious and humble.”
Re-read his recent pronouncements in the light of the above and have a giggle. Whatever you think about his analysis, he has been ridiculously dogmatic. Now apparently he's telling us we were supposed to know to take his definitive statements with a pinch of salt all along.
 

goosebump

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Nice to see somebody finally puncturing Lucey's bubble.

The defferance shown by the media to the likes of Lucey and McWilliams is staggering.

The basic cocktail seems to be that if you are opposed to Government policy and an academic you are omnipotent.
 

Scorpio

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Lucey has become something of a media whore, riding the banking crisis for all it’s worth. He’s on radio, tv and in the press on an almost daily basis – indeed he’s featured on multiple radio & tv stations on the same day (it must be a tidy little earner to boost that modest academic salary from TCD).

Lucey was also one of the 20 academics who penned an article for the Irish Times, which is often cited as proof that nationalisation of the banks must be the right solution – the clever academics have told us so!

Reading/hearing/seeing the regular output of Prof. Lucey, you wouldn't be aware of any of the above "health warnings", he leaves no room for doubt as to his certainty that he is right and the Govt is wrong.

He was, presumably, one of the main targets of Alan Ahearne’s barbed quip about there being two types of economist – “those who know they don’t know and those who don’t know they don’t know”.

Let’s hope that Lucey remembers his own “health warnings” the next time he addresses the nation on the banking crisis or the economy.

Effin’ academics. Time for a cull - An Bord Snip Nua please note.
While I don't always agree with him or his style, I'd just make a couple of points:
- You don't get paid for doing media appearances. It may be about ego, it's certainly not about boosting his salary
- I'm not sure if you read the irisheconomy.ie blog. On that he has been very open about how little anyone knows in this scenario. He always responds to questions and comment put to him on it and has said on many occasions that he will change his mind if/when the evidence changes.

It would be worthwhile reading his and particularly Karl Whelan's many contributions on the NAMA/nationalisation debate (and also the lengthy discussions after each contribution), before just writing him - and the entire pro-nationalisation (or rather anti-NAMA) camp - off because he called the housing market wrong.
 

Wendy

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I think they should all put a lid on it for a while and let the inevitable take its course. Economics is an inexact science in which forecasting seems to have very little connection with the ordinary understanding of the concept.
 

Dios

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I think they should all put a lid on it for a while and let the inevitable take its course. Economics is an inexact science in which forecasting seems to have very little connection with the ordinary understanding of the concept.
The problem isn't with economics, its with the people paying the economists.
 

goosebump

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The problem isn't with economics, its with the people paying the economists.
Precisely.

As far as I can see, the only reason banks employ economists is so that they can go on the radio every couple of months and advise people to fix their mortgages.

Think about it. Have you ever heard an economist who is employed by a bank advise people to stay on their variable rate mortgage?
 

Oppenheimer

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Nice to see somebody finally puncturing Lucey's bubble.

The defferance shown by the media to the likes of Lucey and McWilliams is staggering.

The basic cocktail seems to be that if you are opposed to Government policy and an academic you are omnipotent.
In fairness, being opposed to Govt. policy in the past ten years or so would probably make you right 80% of the time! Lucey's error here was to go along with the "soft landing" theorists.
 

seabhac siulach

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The problem is not with the economists...the problem is with those who take the theories of the economists and who then apply them unthinkingly to the real world.

As with all theories, comparison with empirical data often proves them to be completely wrong. Economy is considered a science by some, so it must really be considered by others in that way. Many theories in science have been proven wrong; for example, that the Earth is the centre of the universe, etc. By the same token economic theories should also be taken with a pinch of salt, unless proved (as they have been with the present economic crash) that they are wrong.

Unfortunately, the only way to prove economic theories correct or false is to compare them to real world (everyday) data, so unlike other sciences. This, however, opens economists up to direct criticism, as everyone (expert or not) can see the failure of their models. So, in short, don't blame the 'science', blame those who misread and exaggerate the 'science' for their own ends...
 

cHeal

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Atleast he admitted he was wrong. The government is still trying to push the line that nobody seen it coming.
 

Oppenheimer

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The problem is not with the economists...the problem is with those who take the theories of the economists and who then apply them unthinkingly to the real world.

As with all theories, comparison with empirical data often proves them to be completely wrong. Economy is considered a science by some, so it must really be considered by others in that way. Many theories in science have been proven wrong; for example, that the Earth is the centre of the universe, etc. By the same token economic theories should also be taken with a pinch of salt, unless proved (as they have been with the present economic crash) that they are wrong.

Unfortunately, the only way to prove economic theories correct or false is to compare them to real world (everyday) data, so unlike other sciences. This, however, opens economists up to direct criticism, as everyone (expert or not) can see the failure of their models. So, in short, don't blame the 'science', blame those who misread and exaggerate the 'science' for their own ends...
Indeed, its how the information is used not created that is important but decisions have to be made in the now when it comes to economics and with Science, the peer review process can take its own sweet time, in fact has to.

Interesting to see Prof. Lucey now say his next stab will take 15 years to produce the goods - gives him a good runway!

Harry S. Truman once said he wanted an economist who was one-handed. Why? Because his economic advisors would typically give him economic advice stating, "On the one hand….And on the other...."
 

mollox

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It would be worthwhile reading his and particularly Karl Whelan's many contributions on the NAMA/nationalisation debate (and also the lengthy discussions after each contribution), before just writing him - and the entire pro-nationalisation (or rather anti-NAMA) camp - off because he called the housing market wrong.
I'm not writing Lucey off, I'm not even saying that he's wrong about NAMA.

What I do object to is the strident certainty he brings to the topic - he's right and the Govt is wrong - no grey areas permitted.

Yet here he admits that it's all an inexact science - he may be right or he may be wrong - we won't know for several years.

If he had the basic honesty to accompany his many media contributions with appropriate health warnings I'd respect him a little more. As it is, he knows that the media want the most sensational headline - which comes from making the most dire predictions possible. He delivers what the media wants and boosts his media profile accordingly.
 

cyberianpan

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Nice to see somebody finally puncturing Lucey's bubble.

The defferance shown by the media to the likes of Lucey and McWilliams is staggering.

The basic cocktail seems to be that if you are opposed to Government policy and an academic you are omnipotent.
In fairness McWilliams has been proven mostly right ... on the other hand Lucey comes across as a shrill & silly prima donna type

cYp
 

mollox

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Atleast he admitted he was wrong. The government is still trying to push the line that nobody seen it coming.
Surely Lucey is adopting the same defence here as the Govt - he didn't see it coming!
 


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