On 14-15 Sept 2008 Lehman Brother went down in flames.
In the aftermath of Lehman Brother crash we published on internet a forecast of the crisis “duration and magnitude”. Interestingly, only a handful of contacts asked us clarifications and to give details on the scale of consequence we had used (is it linked to stock markets? To financial indicators?)…
May be, no one believed that reasonable predictions can be made?
As we were publishing our prediction, we were indeed already seeing in the media statements reporting that “quantitative models were wrong” and other inflammatory statements. As usual, in panic/emergency situations, our society tends to react with little finesse (that’s by the way one reason why Crisis Management Plans are so important to implement BEFORE a crisis).
“Models” as a whole were discredited in the eyes of many readers and “forecasters”, now seen as pariah, became persona non grata.
Apparently no one bothered to say that “some models” are plainly wrong or were very poorly used, but others may work just fine!
No one bothered either to say that may be some ruthless people had used the models in order to get the replies they wanted (we have seen the same happen in fields as different from financial forecasts as humanitarian demining, and we have even published papers on this subject, all along with others).
In the full paper we summarize the prediction as it was made one year ago, and we analyze how it stands in front of one more year of history.
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