zerohedge.com / By Tyler Durden / January 27, 2013, 10:29
From IceCap Asset Management, January 2013
The Queen
She adores hats. She is always very polite and respectful of others. She waves to everyone, and consistently avoids conflict. She is a lady; she is The Queen.
Without a doubt, Queen Elizabeth lives a life quite unlike everyone else in the World – after all, royalty does have its privileges. Yet, when it comes to investing, the Queen is swimming in the same pool of stock market sharks as us common people.
Like everyone else, she pours through her quarterly statements to see how she’s fared. And like everyone else, she loves to make money and simply deplores negative returns.
It was rumored that the 2008 crisis hit her particularly hard – over USD 40 million in stock market losses. This experience must have jilted something, as when The Queen was visiting the esteemed London School of Economics she asked the professor a rather “un-queen” like question – why did economists fail to predict the biggest global recession since the Great Depression?
Speaking on behalf of economists, investment managers and mutual fund sales people everywhere, the professor responded that “at every stage, someone was relying on somebody else and everyone thought they were doing the right thing.“ In short, no one could have predicted the 2008 crash.
Meanwhile, in the parallel universe called America, Ben Bernanke was selling everyone the exact same story.
February 15, 2006. “Our expectation is that the decline in activity or the slowing in activity will be moderate; that house prices will probably continue to rise but not at the same pace that they had been rising.”
– America housing prices would eventually decline by up to 50%.
March 28, 2007. “At this juncture, however,” he testified, “the impact on the broader economy and financial markets of the problems in the subprime market seems likely to be contained.”
- The subprime housing market wasn’t contained, in fact it collapsed. January 10, 2008. “The Federal Reserve is not currently forecasting a recession,” – The 2008-09 recession was so severe, it was called the Great Recession.
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