One of my correspondents has been roundly criticizing Paul Krugman and lauding the views of people with "money on the table." Here's a nearly year old comparison of Krugman's views with the views of John Paulson, a well known hedge fund manager with "money (lots of it) on the table."
Tell me who you think got it right predicting the next twelve months. I wonder if Paulson actually had the courage of his convictions and went long housing. For an illustration here's a look at the Case Schiller index. Paulson and others also predicted an improvement in the corporate bond market. Here's what happened.
Looks to me like Krugman's theory has done a better job predicting what was going to happen in late 2010 and early 2011 than Paulson's intuition.
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