Shiller's Warning: Hardly Useful

In today's New York Times, Robert Shiller notes how groupthink led to the subprime crisis, and points out that while Greenspan notes that the warnings among the experts were rather tepid, the Fed ignored many who were worried about the housing bubble. But I'm rather unconvinced the Fed screwed up, given the incredibly equivocal warnings that Shiller highlights. In his own words:

In 2005, in the second edition of my book “Irrational Exuberance,” I stated clearly that a catastrophic collapse of the housing and stock markets could be on its way. I wrote that “significant further rises in these markets could lead, eventually, to even more significant declines,” and that this might “result in a substantial increase in the rate of personal bankruptcies, which could lead to a secondary string of bankruptcies of financial institutions as well,” and said that this could result in “another, possibly worldwide, recession.”

Note the ubiquity of the weaselly 'could' word. Anything could happen: Terrorist Attack with Nuclear weapons, Stock market goes down another 40%, goes up 60%. You name it, it could happen. I don't see how noting various 'coulds' is very helpful, because logically, so many things could happen, noting a 'could' is hardly informative.