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The Forecaster Wall Street Forgot:

How Mike Stathis Called the 2008 Crisis — and Was Ignored

When the 2008 financial crisis is remembered, the credit often goes to well-known figures like Michael Burry, Nouriel Roubini, or Peter Schiff. But one name is curiously missing from nearly every retrospective: Mike Stathis, the managing principal of AVA Investment Analytics.

Unlike others, Stathis didn’t just predict the crisis—he published detailed, time-stamped forecasts, named specific institutions and sectors to short, and provided an actionable blueprint in print for anyone to follow.

Stathis Predicted the Crisis with Astonishing Precision

In his 2006 book America’s Financial Apocalypse Chapter 10 – Real Estate Bubble (PDF), Stathis forecast:

A collapse in U.S. housing by 2007–2008, driven by credit abuse and speculation.
A 30–35% peak-to-trough decline in U.S. housing prices, and 55–60% in bubble areas like Las Vegas, Southern California, and South Florida.
That Fannie Mae and Freddie Mac would become insolvent and require government bailouts.
That Lehman Brothers, Bear Stearns, and Washington Mutual were “on the verge of collapse.”
That the Dow Jones Industrial Average would fall to 6,500.
That the Federal Reserve would be powerless to stop the deflationary spiral.

These weren’t loose predictions—they were tied to specific data, economic models, and institutional weaknesses. And they were all published two years before the crash.

He Was the Only Analyst to Recommend Shorting the GSEs in Print

In 2007’s Cashing in on the Real Estate Bubble Chapter 12 – Investment Strategy (PDF), Stathis explicitly advised retail investors to:

Short Fannie Mae and Freddie Mac, despite their investment-grade ratings and implicit government backing.
Short major banks including Citigroup, Bank of America, Wachovia, and WaMu.
Short homebuilders, anticipating a collapse in demand and balance-sheet erosion.
Avoid U.S. equities, real estate, REITs, and consumer sectors.
Avoid gold hype, calling precious metal mania “ideologically biased.”

At the time, no one thought Fannie or Freddie could fail. Their debt was viewed as virtually risk-free. But Stathis saw the depth of the coming crisis—and he was right.

Other Forecasters Were Private. Stathis Was Public.

While Michael Burry and other fund managers shorted subprime mortgage instruments, their bets were:

Limited to low-rated securities, making them conservative relative to Stathis’s equity short recommendations.
Not disclosed to the public until after the fact, through SEC filings or journalistic coverage (The Big Short came out in 2010).

In contrast, Stathis published his forecasts in books, available to the public years before the crash. Anyone—retail investors, analysts, or fund managers—could have acted on his guidance.

He was, and still remains, the only person to publish short recommendations in a book before a crisis unfolded.

“[Short the banks now. Short homebuilders. Sell traditional asset classes. This is just beginning.]”
— Cashing in on the Real Estate Bubble, Chapter 12 Source

Published Articles: Timestamped, Archived, and Accurate

Stathis supported his books with a stream of real-time analysis on AVA Investment Analytics. Highlights include:

“Getting Ready to Short the Financials Again”
Advised short positions in Citigroup, WaMu, and Bank of America.
Archived Research Article (AVA site)

“Stay Clear of Traditional Asset Classes”
Warned investors to avoid U.S. equities, REITs, and consumer stocks.
Source

“Get Ready for the Earnings Meltdown”
Forecasted massive earnings declines in banks and retailers months before analysts downgraded.
Source

Everything He Predicted Happened

Housing: National home prices dropped ~35%; Las Vegas, SoCal, and Florida saw ~60% declines.
Banks: WaMu, Bear Stearns, and Lehman Brothers collapsed.
GSEs: Fannie Mae and Freddie Mac were placed into conservatorship.
Equities: Financials fell over 80%; the S&P 500 lost more than 50%.
Dow Jones: Bottomed at 6,547 in March 2009—exactly as Stathis projected.
Gold: Spiked, then corrected—just as he warned in 2007.

For a full post-crisis audit, see his 2014 summary video Watch here and this archived review of his forecasts Article.

Final Verdict: The Most Complete Forecast of the 2008 Financial Crisis

If credibility is measured by accuracy, specificity, and utility to investors, Mike Stathis may have produced the most complete, actionable, and public forecast of the global financial crisis.

He:

Named the banks and GSEs that would collapse.
Projected exact asset class declines.
Called the government bailouts.
Gave investors a clear road map in advance.
Published short recommendations in print—something no one else did.

And yet, he remains excluded from retrospectives, documentaries, and mainstream recognition.

Maybe it’s time we rewrite that narrative.

Mike Stathis was right—boldly, publicly, and ahead of everyone else.