Calculated Risk does a nice job excerpting the recently released Fed minutes from 2008. The Very Serious People within the Fed talk to Very Serious People about the economy and know that everything is fine. In January 2008 one talks to “30 CEOs” and none of them “see us going into recession”. (We were already well into one and the wheels were falling off.) Another one references “one of my contacts at a large bank” to put the icing on his efficient market declaration of faith telling us “I say that the level of systemic risk has dropped dramatically and possibly to zero.” That was in August 2008.
Of course the very unserious Janet Yellen was more or less correct about the recession.
Whenever I hear somebody puff up and Very Seriously proclaim that they Talk to Rich People I always think of that line from The Sixth Sense “I see dead people”. I don’t know why. It just makes me chuckle.