Shiller: What People Say Can Set Off Recession

While economic and monetary policy as well as “leading indicators” can provide insight regarding the state of the markets and the economy, “they have severe limitations as forecasting tools. This approach will not produce a definitive advance reading of a major shift from growth to contraction: a recession.” This according to a recent article by Yale professor and Nobel Laureate Robert Shiller for The New York Times. Predicting a recession is extremely difficult to do,… Read More

Robert Shiller Says a Data Revolution is Coming

Nobel Laureate Robert Shiller says we are facing a revolution rooted in a “huge acceleration in the amount of data available to researchers,” which he discusses in his new book Narrative Economics: How Stories Go Viral and Drive Major Economic Events. This according to an article in Barron’s. Shiller, who reportedly predicted both the dot-com bust and the events that led to the 2008 financial crisis, argues that the last time there was a data… Read More

Robert Shiller On What Investors Should Be Worrying About

At the Inside ETFs conference in Florida last month, Yale professor and Nobel laureate Robert Shiller talked about an impending recession, the threat of nuclear war and the importance of human narratives. This according to an article in Advisor Perspectives. Here are some highlights: Shiller characterized a recession as “inevitable” but didn’t pinpoint timing. “There has to be an elevated probability of a recession this year or next year,” he said, noting that the current… Read More

Robert Shiller Discusses Bubbles and Narrative Economics

A CFA Institute article offers insights from Nobel laureate Robert Shiller on current market conditions and what lies ahead. Here are some highlights from Shiller’s comments: Both the stock market and housing boom “show signs of disruption right now, which is a little unusual as these two markets are not very correlated with each other on a historical basis. On whether we’re in a bubble, Shiller says the question seems vague but also indicated an… Read More

Our Beliefs Don’t Predict Economy

An article in The New York Times by Nobel Laureate Robert Shiller argues, “The more we learn about how people really think, the more we must rethink economic theory.” Shiller highlights the findings of two new studies that show how people “systematically change their beliefs in thinking about the financial future.” The authors of the 2018 paper, he reports, “attribute some of the economic pain that occurred after the 2008 financial crisis to a change… Read More

U.S. Corporate Earnings Trend Could Be Short-Lived

In a recent article for Financial Advisor magazine, Robert Shiller discusses whether today’s share prices are justified by the growth in reported earnings. “With prices and earnings moving together on a nearly one-for-one basis,” Shiller writes, “one might conclude that the US stock market is behaving sensibly, simply reflecting the US economy’s growing strength.” But Shiller argues that earnings are volatile, adding that “sudden sharp increases tend to be reversed within a few years. This… Read More

Shiller: Stocks Could Rise Higher Before They Fall

According to an article in Bloomberg, Nobel laureate Robert Shiller says “The stock market could get a lot higher before it comes own. It’s highly priced, but it could get much more highly priced. It’s a risky market now.” In an interview with Bloomberg Television, Shiller said that President Trump’s support for corporate America is driving both sentiment and market strength: “The U.S is just doing great right now in terms of the strength of… Read More

Robert Shiller on the Pricey U.S. Market

Nobel Laureate and Yale professor Robert Shiller recently wrote for the Project Syndicate about the comparative levels of market valuation across countries and how, “right now, the United States is leading the world.” He adds, “What everyone wants to know is why—and whether its stock market’s current level is justified.” Shiller advocates using the cyclically adjusted price-earnings ratio (CAPE)– that he developed 30 years ago with Harvard professor John Campbell—and discusses the importance of evaluating… Read More

Shiller: Another Bear Market Could Happen

The kind of panic that ensure thirty years ago, on October 19th, 1987, could happen again. This according to Yale professor Robert Shiller in his recent New York Times article. While Shiller points out that regulatory and technological progress has ruled out an exact repeat of that day, the results of a survey he conducted within four days of the event revealed that “fundamentally, that market crash was a mass stampede set off through viral contagion.” … Read More

Shiller Tracks Past Bear Markets

In a recent article for MarketWatch, Yale professor and Nobel Laureate Robert Shiller shares insights on past bear markets in the U.S. and how the current market environment resembles the periods preceding them. Citing the “conflicting messages” of “high valuations following a period of strong earnings growth and very low volatility,” Shiller shares data he collected by reviewing 13 U.S. bear markets since 1871 (a drop in the market by at least 20%) regarding each… Read More