SFI External Professor John Geanakoplos comments in a Financial Times article that available statistical information about markets and companies is not being used well by the Feds to understand and predict market behavior.
"For years, individual statisticians, technology specialists and economists from regulators, financial institutions and academia had warned of the dangers," the article says. "For years, they were dismissed as Jeremiahs and a root-and-branch reform of the data networks underpinning the financial system was rejected by the industry and regulators, which saw big costs and limited benefits."
"John Geanakoplos, a Yale University professor, blames the Fed for not using data well, sometimes because of bureaucratic blockages, in one instance because officials balked at paying $400,000 for mortgage information, and sometimes because of a philosophical belief in self-correcting markets. In a recent presentation to the European Central Bank, he took aim at the 'Greenspan-Bernanke doctrine' that 'denied that there are bubbles, or that they could recognise one if they saw it.'"
Read the Financial Times article (February 15, 2011)