What is amazing to me is how Zandi can remain so confident about his capabilities when sufficient evidence has accumulated to the contrary. I suppose talking heads, pundits, market economists (and even some successful scientists and corporate leaders) are selected specifically for this kind of overconfidence. There's no room for intellectual honesty when you're trying to get ahead ;-)
Ritholtz: The Fed, Treasury and the Senate Budget Committee appear to have a favorite private sector economist, one who has managed to become a favorite even though he works for a unit of the same rating agency whose analysis is intrinsically tied to both the market, banking and housing crisis.
Mark Zandi of Moody’s Economy.com is routinely trotted out as an independent expert. He was the sole economist at the August 17 Treasury Conference on the Future of Housing Finance, the Fed’s REO and Vacant Properties conference and has now testified at the September 22nd Senate Budget Committee hearing on “Assessing the Federal Policy Response to the Economic Crisis”.
Never mind that, based on Zandi’s record, either his analysis is just wrong or his independence is compromised. Everyone seems to like to hear the guy who is saying what people want to hear, even the press appears to prefer “feel good” analysis to considering the accuracy of his record. ...
“It’s at least three or four quarters before we see the bottom of the housing market,” Zandi said.
Wire & Staff Reports – Oct 27, 2006
“The housing market correction is in full swing but it probably has another year to go before it bottoms out,” said Mark Zandi, chief economist at Moody’s Economy.com.
Los Angeles Times – Jan 6, 2007
“Mark Zandi, chief economist for Moody’s Economy.com, said jobs and wages were growing too fast for their own good. He warned that higher wages could induce companies to raise prices, which could lead workers to demand higher wages — an inflationary wage-price spiral.”
[Note: The chart below shows 3-mo. Changes in total civilian compensation. It seems not to demonstrate any wage-price spiral:
Marketwatch - March 26, 2007
"Zandi sees a bottom for sales in spring as sellers become more motivated and start cutting prices." [Note: In August 2010, new home sales fell to the lowest level since 1963, when the government began to keep records.]
New York Times – March 18, 2007
“Weakness in the market has been concentrated in certain segments,” says Mark Zandi, chief economist of Moody’s Economy.com. “We’re not witnessing the entire housing market in metro areas caving in.”
MTG Foundation – April 28, 2007