People often decry the fact that the media focuses virtually all of its attention on the negative. However, media is a business and business is predicated on demand. If the news says "Everything's hunky-dory, details at 11 p.m.," how many people would tune in? On the flip side, if the news tease is "Something in your house may be slowly killing your children," it's a much more compelling decision not to miss that report. (For more on past predictions, read Guru Investing Advice For Today's Market.)

TUTORIAL: Economics Basics

So it is with the business of Wall Street prophet-hood. Many financial commentators have made a name for themselves by stepping up and declaring that a particular emperor had no clothes, often well before the majority of people are willing to consider the possibility.

Nouriel Roubini
Roubini was hardly an unknown before the 2000s, having worked at the IMF, Federal Reserve and within the Clinton administration, but this economist really made his name with his prophecies regarding the housing market in the United States. Called "Dr. Doom," Roubini began commenting in 2005 that the housing market in the U.S. was a bubble and that there would be a tremendous global fallout from the eventual market collapse and collateral damage in mortgage-backed securities.

Unfortunately, Mr. Roubini's predictions have not gotten substantially more optimistic, as he sees a long period ahead wherein the U.S. must struggle to find a new viable economic growth model. Moreover, he sees a global economic future that more resembles a zero-sum game than a cooperative model.

Marc Faber
It doesn't take too long to figure out Faber's shtick; his newsletter is famously called "Gloom, Boom & Doom Report" and the newsletter's website prominently features a medieval painting titled, "The Dance Of Death." Faber originally gained quite a bit of fame, when he advised clients to get out of U.S. stocks just before the Oct. 1987 crash; however, Faber himself has always been reluctant to take credit for predicting a sell-off on that scale.

Faber has generally been bearish on the American economy on the basis of what he sees as worsening inflation and a hollowing-out of the U.S. economy. That said, he is not universally negative; he currently believes stocks are a better pick than bonds for the next 10 years, and he has often been positive on emerging markets. That said, he has recently stated that most of the governments in the developed worlds are merely postponing a severe day of reckoning and that China's real estate market is a dangerous bubble. (To read about China's real estate bubble, check out China's Real Estate Bubble.)

Jim Rogers
When you work for many years with George Soros and make a phenomenal amount of money in the early days of hedge funds, people will care what you have to say. When you become famous for wearing a bow-tie, they'll also remember who you are. Jim Rogers has both of those working for him in spades.

Rogers has been commenting on the financial markets for quite a while now. He certainly deserves credit for being ahead of the curve, in warning of commodity inflation around the turn of the century, the dangers of the housing bubble and the dangers of excessive sovereign debt. At this point, Rogers is still very bullish on commodities, believing that there simply isn't enough to go around with burgeoning developing world demand, and he believes that more political unrest is likely to come.

Rogers is a long-term bull on China, believing that it is the emergent power for the 21stcentury, that the U.S. is likely to lose its preeminent position in the global economy, and that the dollar is fading as a global reserve currency.

Glenn Beck
Glenn Beck is not a typical Wall Street prophet in that his day job is rabble-rousing and socio-political commentary through his writings and radio shows. That said, he has gotten into the economic prediction game from time to time. Most famously, or infamously, depending on one's point of view, Beck used his platform to advocate for buying gold as protection from the collapse of the dollar and of Western civilization itself.

Although Beck's advice to buy gold has worked so far, and echoes many other recommendations to buy gold as protection against social upheaval, it has also created controversy. Beck's interest and enthusiasm in gold seems to correlate with the addition of a paid advertiser in the business of selling gold. Beck had previously been less than forthcoming in disclosing that connection. (If you are interested in investing in gold, read Getting Into The Gold Market.)

Meredith Whitney
Prior to a very contrarian, and very correct, call on Citigroup (NYSE:C), Whitney was a relatively unknown sell-side analyst, more famous for occasional appearances on Fox News and her marriage to a former professional wrestler. Nevertheless, her calls that major U.S. banks would suffer grievously in the collapse of the housing market, and that too much "goodwill" was baked into the valuations, proved prescient.

More controversial, though, was her call in late 2010, that 2011 would see the beginnings of rampant municipal defaults. Although her point was arguably that credit rating agencies have been too complacent in their reviews of municipalities, the fact remains that there have been very few defaults, so far, as we approach the end of 2011. To be fair, though, her prediction was that 2011 would see the beginning of this trend, and downgrades have started to build, leading to the possibility that this prediction could yet prove accurate.

Other Names Of Note
By no means are these the only well-known commentators to make worrisome predictions. Famous former hedge fund manager George Soros has said that the "financial markets are driving the world towards another Great Depression with incalculable political consequences. The authorities, particularly in Europe, have lost control of the situation." Likewise, other commentators like Gary Shilling, who also predicted the housing collapse, and Bill Gross, have had less than sanguine things to say about the path of the U.S. recovery and the future of the economic system that has long been in place in Europe and North America.

The Bottom Line
Bad news is part and parcel of the financial world, and there will always be a market for warnings from savvy observers with well-researched positions. Most of these predictions of doom will prove wrong, or at least imprecise, but certainly some will come true. This shouldn't scare investors out of the market, as there is almost always an opportunity to make money, but it should lead them to reexamine some of their assumptions and make sure they have a plan in place to deal with changing circumstances. (To help you predict the future, check out Using Compound Indicators To Predict Market Fluctuations.)

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