A Walk Down Memory Lane

Let's travel in our wayback machine for a few minutes to 2002 and 2003 and see what the economic powers-that-be were saying. We're going to hold them to their words in case they decide to reinvent themselves as experts on managing our economy. Of course, there is the sticky problem that they are already considered experts, some of them have practically had their ring kissed by members of Congress and been knighted.
The Fed Chairman who can't recognize bubbles until after they burst apparently was not worried about the use of derivatives.

...judging from the data on the use of derivatives, the potential for financial innovation to have a broader impact and thereby to continue contributing to globalization appears considerable...
-Fed Chairman Alan Greenspan, March 7, 2003

But one of the most brilliant investors that ever lived sure was (and still is). He is one of the few people in the financial world I have respect for:

We view them as time bombs...financial weapons of mass destruction...The range of derivatives contracts is limited only by the imagination of man or sometimes, so it seems, madmen.
- Warren Buffett, in annual letter to shareholders, March, 2003

OK, we'll remember this Mr. Greenscam!

The United States is nowhere close to sliding into a pernicious deflation..
- Fed Chairman Alan Greenspan, December 2002

How about this quote, which just shows that we who blog about bubbles are just very negative people:

...Because we had a bubble in the stock market, people are thinking about bubbles nowadays and wondering, where could we have another bubble...Intellectually once people decide to be negative they start to look at things in the worst possible way...
- Maury Harris, UBS Warburg Chief Economist, October 2002

Beyond the current tummy ache, in the long run we have a very healthy, very vibrant future...
- Newt Gingrich, September 2002

The time has come to put this issue to rest...the nation’s home builders have said it, the Realtors have said it, and now Alan Greenspan has said it once again, in no uncertain terms: there is no such thing as a current or impending house price bubble.
- David Seiders, Chief Economist of the National Association of Home Builders, July 2002

And here was the mindset of Joe Consumer:

I want to go to the Caribbean... I don't care if it's on plastic for a year...
- US consumer overheard by a bubble watcher, May 2002