Why Diss Economic Forecastors ?
One of the comments in a post yesterday (When Will the Recession End?) asked why I am “always dissing on other forecasters?”
As noted many times before, I believe forecasts are folly. I do try to wargame potential outcomes and various surprises, but that is to anticipate the unexpected — the variant perception — as opposed to regularly making bold declarative predictions.
When I do make a forecast, I try to couch them in terms of odds or probabilities. (The data implies; the odds are increasing that). I always want it clear that I don’t trust my forecast any more than I do anyone elses. (My calls aren’t perfect, but they have been better than most).
And for those of you who are fans of the wisdom of crowds, allow me to remind you how poorly the consensus of professionals did last year. As we discussed yesterday:
“Consensus? Why should investors — or homeowners, for that matter — care much about the opinion representing the consensus view? That consensus missed the credit bubble as it formed, wrongly believed the sub-prime issue were “contained,” and utterly missed the top in housing. If you followed the consensus, you lost 50% of your money last year, saw your home value drop 30%, and generally got mangled in most asset classes other than Bonds, Cash and Gold.
Rather than speak generally, let’s have a closer look at two forecasts a year apart by a group of professionals: The National Association for Business Economics:
Here is their perspective as it changed from November 2007 — just before the recession officially began, then in February 2008, when it was a few months old, and then in May 2008, two full quarters into the recession:
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GDP Forecast via NABE
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Now let’s fast forward a year, and see how their forecast are today:
>
Quarterly GDP Growth Forecast via NABE
>
Bottom line: Not only are they not very good, they are consistently too bullish . . .
>
Previously:
Apprenticed Investor: The Folly of Forecasting
Barry Ritholtz
TheStreet.com, June 7, 2005
http://www.thestreet.com/story/10226887/apprenticed-investor-the-folly-of-forecasting.html
All graphs via NABE survey
http://www.nabe.com/graphweek/index.html
>
~~~
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May 28th, 2009 at 6:57 am
Nobody knows.
May 28th, 2009 at 7:24 am
Take a look at those forecasts. They are fully expecting to return to trend growth. They expect consumers to return to 0 percent savings again and borrow more than they can afford again (and lenders to lend to people who won’t be able to pay it back again). Oh, and they think that all of the government debt won’t have some sort of attenuating impact on growth.
That’s a pretty big stretch. I’m thinking that when we eventually return to a normal growth cycle, we are probably looking at a slower long term trend.
May 28th, 2009 at 7:42 am
For the ‘wisdom of crowds’ to work, each person giving an estimate must not know of any other estimates. This is very different to developing a consensus.
Mrs Thatcher had some words on political consensus: (“The Downing Street Years”, p. 167): “Consensus is the process of abandoning all beliefs, principles, values and policies in search of something in which no one believes, but to which no one objects; the process of avoiding the very issues that have to be solved, merely because you cannot (otherwise) get agreement on the way ahead”.
Michael Crichton was even ruder about scientific consensus.
http://online.wsj.com/article/SB122603134258207975.html
May 28th, 2009 at 7:49 am
yesterday’s headline that 90% of economists now see a second half recovery should be a huge warning sign to all.
Sadly, instead, most people will just take that as a sign things are getting better.
On another note, and speaking of crowds, trade-futures on Friday showed 13% dollar bulls vs 93% Euro bulls.
claims next.
May 28th, 2009 at 7:52 am
this is worth a read:
http://www.bloomberg.com/apps/news?pid=20601087&sid=a_MWEZS.CDr8
May 28th, 2009 at 7:55 am
“Bottom line: Not only are they not very good, they are consistently too bullish . . .”
Corrected:
Bottom line: Not only are they misleading to the extent of criminality, they are consistently full of bullshit . . .
May 28th, 2009 at 7:56 am
High-priced palm readers or, worse, paid shills for the Ponzi.
May 28th, 2009 at 8:05 am
thanks for switching to the banner ad for bailout nation promos. I copied the image url into my ad block plus filter and poof… they’re gone!
May 28th, 2009 at 8:08 am
Barry next time you can do a more innovative approach to a book and write it one chapter at a time on line. The feedback can help you steer the book in a direction not possible when working in one’s own bubble. Then after the fact publish it. You’ll get double whammy revenue.
May 28th, 2009 at 8:10 am
Barry: what’s your feeling on the probabilities?
Here’s another indicator:
http://www.bloomberg.com/apps/news?pid=20601039&refer=columnist_lynn&sid=aSRh7Cf2DTrU
May 28th, 2009 at 8:34 am
Harsh, Johnny. Why diss economic forecasters?
May 28th, 2009 at 8:39 am
@Marcus Aurelius (7:55)
“Bottom line: Not only are they not very good, they are consistently too bullish . . .”
Corrected:
Bottom line: Not only are they misleading to the extent of criminality, they are consistently full of bullshit . . .
CORRECTED…
“Bottom line: Not only are they not very good, they are consistently too bullish . . .”
Corrected Again:
Not only are they leading the likes of Franklin around by his gonads…they are about to show that they are GI Jow with the kung-fu grip . . .
May 28th, 2009 at 8:39 am
I forecast rough times ahead.
http://theburningplatform.com/economy/aint-no-rest-for-the-wicked-1
May 28th, 2009 at 8:40 am
Why? Because they claim to know the unknowable AND usually ask to be paid, directly or indirectly, to express their forecasts, AND those who ask for the forecasts often use the forecasts to manipulate the actions of others.
Beyond an elementary level, Economics is a fraud science. It’s a social science that has been tricked up to look mathematical in order to confuse the gullible. Politics and social skills are important qualifications when it comes to who is the best forecaster. To remain relevant, forecasters travel in herds and mimic each other. There’s no penalty for being wrong unless one follows their own bad advice. Most are smart enough not to do that.
Even Roubini left his 401K alone in spite of his dire predictions. Of course, that was probably a hedge. If he was wrong, his savings would be intact. If he was right, the fame would allow him to easily replace the evaporated wealth.
Economic forecasts by professionals are an expression of junk science. Conversely, when expressed by novices and the curious, they probably have educational value IF they are carefully developed and errors are analyzed.
May 28th, 2009 at 8:45 am
Dead Hobo Says:
“Even Roubini left his 401K alone in spite of his dire predictions. Of course, that was probably a hedge. If he was wrong, his savings would be intact. If he was right, the fame would allow him to easily replace the evaporated wealth.”
interesting observation
May 28th, 2009 at 8:49 am
@ben22 (7:52)
Jeez Ben,
In Japan they just do it out in the open like that…
You know…The scary thing is this…If I went out right now and conducted a poll of a bunch of people with 401K’s and told them their portfolios were going to get cut in half unless the government got in there and started buying common stock to prop up the prices, they’d probably APPROVE the proposal…
May 28th, 2009 at 8:57 am
Barry, as you know, forecasting is a separate business from managing money. Many of the forecasters don’t have any skin in the game and, if they do, it’s their own skin, which is not visible to the masses because the “clothing” of their forecasts covers it.
In other words, making a forecast and taking action on it are entirely different things, which is why TBP continues its strength — you manage assets and you don’t make predictions — you philosophize and lay out probabilities.
“He who has knowledge does not predict. He who predicts does not have knowledge.” ~ Lau Tzu
“Wise men speak because they have something to say; Fools because they have to say something.” ~ Plato
May 28th, 2009 at 8:57 am
http://www.bloomberg.com/apps/news?pid=20601068&sid=a_MWEZS.CDr8&refer=economy
Japan May Scrap 50 Trillion-Yen Plan to Prop Up Stock Market
My forecast is for a drop in Japanese equities….
Could be central bank “rats” may be seeing that the propping up of sinking ships is difficult at best…
May 28th, 2009 at 9:06 am
ben22 Says:
May 28th, 2009 at 7:52 am
this is worth a read:
comment:
http://www.bloomberg.com/apps/news?pid=20601068&sid=a_MWEZS.CDr8&refer=economy
is a hell of a story. It adds credibility to the idea that GS and others are playing in the current market with the support of Uncle Stupid.
May 28th, 2009 at 9:12 am
Barry,
Einhorn trashed Moody’s and the ratings agencies yesterday:
“The truth is that nobody I know buys or uses Moody’s credit ratings because they believe in the brand,” he said at the conference, which raises funds for the treatment and cure of pediatric cancer. “They use it because it is part of a government-created oligopoly and, often, because they are require to by law.”
story’s on Reuters:
http://www.reuters.com/article/marketsNews/idINN2831697120090528?rpc=44
May 28th, 2009 at 9:15 am
Dern, Ben….sorry, you and I read the same thing…and you were way ahead of me…guess I better get to work and have another cup…
May 28th, 2009 at 9:15 am
Re: Japan,
I also thought the language in the article was interesting, a belief that things are stable in that market, a clear symptom of the countertrend bear market rally.
May 28th, 2009 at 9:17 am
Forecasting (betting) today that we do not move above yesterdays intraday highs, I will know if I am wrong immediately……
Not to digress, but what is the link to send a request for AT’s email commentary?
May 28th, 2009 at 9:19 am
The Bilderberg Plan for 2009: Remaking the Global Political Economy
http://bit.ly/30kIVr
After the meetings finished, Daniel Estulin reported that, “One of Bilderberg’s primary concerns according to Estulin is the danger that their zeal to reshape the world by engineering chaos in order to implement their long term agenda could cause the situation to spiral out of control and eventually lead to a scenario where Bilderberg and the global elite in general are overwhelmed by events and end up losing their control over the planet.”[3]
Bilderberg investigative reporter Daniel Estulin reportedly received from his inside sources a 73-page Bilderberg Group meeting wrap-up for participants, which revealed that there were some serious disagreements among the participants. “
Estulin reported, “that some leading European bankers faced with the specter of their own financial mortality are extremely concerned, calling this high wire act “unsustainable,” and saying that US budget and trade deficits could result in the demise of the dollar.”
One Bilderberger said that, “the banks themselves don’t know the answer to when (the bottom will be hit).” Everyone appeared to agree, “that the level of capital needed for the American banks may be considerably higher than the US government suggested through their recent stress tests.” Further, “someone from the IMF pointed out that its own study on historical recessions suggests that the US is only a third of the way through this current one; therefore economies expecting to recover with resurgence in demand from the US will have a long wait.” One attendee stated that, “Equity losses in 2008 were worse than those of 1929,” and that, “The next phase of the economic decline will also be worse than the ’30s, mostly because the US economy carries about $20 trillion of excess debt. Until that debt is eliminated, the idea of a healthy boom is a mirage.”[9]
More reveals – see article link
May 28th, 2009 at 9:22 am
A bit OT, but anyone see Dick “Leader” Armey get the bum’s rush on CNBC this morning? Looking more hangdog than ever, he was introduced by Becky Quick and immediately tore into a five-minute diatribe about the Obama-ites and big government that would’ve made John Birch himself proud. By the end of it, the producers were screaming in Quick’s ear (she said as much: “The producers are screaming in my ear”) and Armey was foaming at the mouth. Rumor has it that Jeff Macke took Armey out to the parking lot after they cut to commercial and put him out of his misery.
May 28th, 2009 at 9:27 am
this thing about economists is really not so hard to understand is it?
The economy is usually in expansion mode. We get recessions and sometimes we get really bad recessions (depressions) If the economy goes up roughly 75% of the time then as long as economists always stay bullish then it becomes a good career tactic for them and they can claim they are right, yep, 75% of the time. That’s good right? Well, maybe not as 2008 should have taught us.
I tried however to explain this to Franklin when explaining that bears aren’t “doom and gloom” as so many claim, they a merely those that think the trend of prices will be down for some time. His response to me tells me he still doesn’t understand the following:
If an analyst saw a downturn coming and warned about it 10 times, but only 4 times the downturn happened then we are told they are only right 40% of the time, and then we can say that the economist is more valuable because they stay bullish all the time and are right 75% of the time. But wait, if the analyst warned you about 2008, and saved you from a 40% loss then they are invaluable despite the stats showing they are mostly wrong. The economist that didn’t warn you while mostly right, wasn’t really worth a dime were they?
These stats are only as good as the premises behind them. Maybe something for people to think about.
May 28th, 2009 at 9:33 am
some things need to be re-read:
BrianSJ Says: May 28th, 2009 at 7:42 am
For the ‘wisdom of crowds’ to work, each person giving an estimate must not know of any other estimates. This is very different to developing a consensus.
Mrs Thatcher had some words on political consensus: (“The Downing Street Years”, p. 167): “Consensus is the process of abandoning all beliefs, principles, values and policies in search of something in which no one believes, but to which no one objects; the process of avoiding the very issues that have to be solved, merely because you cannot (otherwise) get agreement on the way ahead”.
Michael Crichton was even ruder about scientific consensus.
http://online.wsj.com/article/SB122603134258207975.html
Michael Crichton was even ruder about scientific consensus.
and, w/this:
The Bilderberg Plan for 2009: Remaking the Global Political Economy
Someone needs to ask where ol’ TTT was that weekend, and why that scene was blacked-out by the US MSM..
~~
To the posts Query: Why?
b/c they Suck, and are often corrupted/ conflicted w/o disclosure of such..
~~
as an aside, is it True that NABE made their acronym from NAive ruBE ?
May 28th, 2009 at 9:38 am
The “wisdom of crowds” is the most latent oxymoron to make its way into financial/economic jargon in the last two decades. Crowds don’t now and never did have any wisdom. The whole idea of a crowd is that letting someone else do your thinking for you, i.e., following the herd, and it usually turns out that everyone in the crowd thought everyone else was thinking until they found out the whole reason for the crowd is that all of them had decided to quit thinking and start following.
When I hear someone use the “wisdom of the crowd” to describe a phenomenon, my brain always jumps to snark mode and imagines a herd of wildebeast following its “crowd” into a croc-infested river.
May 28th, 2009 at 9:38 am
The biggest increase in factory orders in 16 months, initial claims dropped again, and GM reached a surprise deal with the bondholders.
Green shoots, compadres. Green shoots!
May 28th, 2009 at 9:40 am
Hey franklin411:
http://www.calculatedriskblog.com/2009/05/unemployment-claims-continued-claims-at_28.html
May 28th, 2009 at 9:47 am
Franklin
When I read that you’ve written something like…
“US Government has set aside $50 billion to artificially prop-up equity prices (vis-a-vis the article link that ben gave us this morning in reference to Japan)” green shoots comrades!
Then I’ll start believing those green shoots!
Not that I’ll condone the behavior, but at least I’ll know I’m not being lied to…
May 28th, 2009 at 9:48 am
A lot of good things were written last fall/winter about the failure of economics — and in particular the Chicago School. Faux math and academic groupthink were cited, but you can’t discount the influence of advisory positions many “academic” economists hold in business/investment groups. There is a peculiar intellectual investment in the status quo that reinforces the blinders.
I have to say, though, that David Rosenberg’s writings have been a revelation to me. Reading his stuff as a financial layperson is like watching the craftsmen at work on “This Old House” — you get drawn in and forget that you really don’t know diddly about what you’re watching.
Speaking of getting drawn in . . .
Initial jobless claims drop unexpectedly (AP)
AP – The tally of newly laid-off people requesting jobless benefits fell last week, the government said Thursday, a sign that companies are cutting fewer workers.
*sigh*
May 28th, 2009 at 9:50 am
@ben22: It’s simple, really. If the GOP were running the show, then he’d think we’re headed for the crapper, but since HIS people (rah, rah, sis, boom bah!) are in charge, then all is well. Remind you of anything? Reminds me of the Bush Kool Aide drinkers, some of whom are STILL drinking that same poison well after the fact.
And I campaigned/knocked on doors for, gave money to, and voted for Obama (mostly due to my disillusionment with Bush and the GOP).
May 28th, 2009 at 9:51 am
@Transor: The spin continues unabated.
May 28th, 2009 at 9:53 am
Well… we have to have a dark moment when fear ruled… where we ran from our positions… I think did… the herd (sleeple…) retreated and sought safety… The crowd sought out infomation to confirm their believes (a spike in the big picture traffic)… I’m assuming the BP traffic spike was a result of people seeking out a believe for information to provide some evidence to confirm the herds move. And the reasons for the market heading south. Since the BP was all about negative and was objective on the market rather than being a pollyanne poodle mass media.
So the sheeple have move on to find the green shoots of hope. Orders… price increases… and on bloomberg… the cost of a Lativa hooker… and the increase use of websites to cheat on your spouse. We all know that the market will turn… but it’s hard to determine when. The forecasters are right… 2011 will be a nice 3% GDP growth… the rest of 2009 and 2010… that’s a harder to forecast.
But… we are in for better times. I find the big picture… less relative now.
May 28th, 2009 at 9:58 am
@Transor
RE: Initial claims
If you’re a small business that employs 20 people and you fire 25% of your workforce, you’re down to 15 employees…
That’s a loss of 5 jobs…
If you cut 25% of your workforce again from the new base, you’re down to 11.25 workers…
But you only cut 3.75 jobs…which shows up “better” on Franklins report…
Eventually you’ll get down to where you have zero people working…
When there is nobody left to fire (because everybody is already idling around getting their CONTINUING CLAIMS), then the INITIAL CLAIMS number will be zero…
Those will be some lovely green shoots there!
May 28th, 2009 at 10:00 am
@Mannwich,
I think you might be responding to Mitchn, but I agree with what you are saying there.
May 28th, 2009 at 10:01 am
@cvienne
The word for today is “compadres.” I’ll let you know when the Central Committee tells us to switch to “comrades.”
@Mannwich
“Green shoots” and “green rain forest” aren’t the same thing. Notice how the tenor of the comments has shifted over time. The “it’s the end of the world!!!” comments have been replaced by grumbling about how the “sheeple” will see that the bears (who are getting their clocks cleaned at the moment) were right all along. That’s a green shoot too!
May 28th, 2009 at 10:03 am
@ben22: No, I was responding to your comment to franklin411 about we bears and our perspective. It’s called intellectual honesty, something that gets lost when we wave political pom-poms on either side. Hoffer has pointed this out ad nauseum in the past. Maybe I wasn’t clear. Still waking up today. Battling a cold after running myself ragged in Boston last week.
May 28th, 2009 at 10:06 am
@franklin411: Actually, although we may have staved off complete disaster for the time being, all we’ve done is make other problems bigger that will ultimately hammer us all down the road (and maybe even sooner than you think). I’ve pointed out (as others have) that this debacle is going to unfold over years, not months.
Also, like otto used to do – you have a tendency to over-generalize. I don’t think all or even most of us were saying it was the “end of the world”. What we have been saying is we want these problems to be truly fixed, not made bigger and pushed down the road. Why can’t you make that distinction? Is it just easier to dismiss people who tell the truth?
May 28th, 2009 at 10:07 am
@arcticpup
When we get down to where we are a $10 trillion economy, then 3% growth won’t help us anymore than 2% growth would in a $15 trillion scenario…
But that 3% number will sure look “juicy” huh?…Politicians would be foaming at the mouth to spend the proceeds…
May 28th, 2009 at 10:07 am
@Mannwich
You can’t see how this statement isn’t an overgeneralization: “this debacle is going to unfold over years, not months?”
May 28th, 2009 at 10:08 am
@franklin411: How is that overgeneralizing? I’m giving you my perspective based on the facts.
May 28th, 2009 at 10:09 am
@franklin411 (10:01)
Got it…compadre…Спасибо большое ( Spasibo bolshoe)
May 28th, 2009 at 10:09 am
@franklin411 (10:01)
Got it…compadre…Спасибо большое ( Spasibo bolshoe)
May 28th, 2009 at 10:11 am
The market’s starting to look a little less green shooty these days. Quite the turn in the NAZ. Getting tired. Probably catching a cold like I did. Run down.
Bye bye bear market rally. Calling the PPT.
May 28th, 2009 at 10:13 am
The point of economics being a “sham science” isn’t quite correct. Economics is NOT a science at all.
In science, the use of the scientific method and the repeatability of experimental results by fellow researchers is what sets the hard sciences apart from other fields of inquiry. Predictive models must show “predictive skill” over and over again before they become accepted.
Economists can show no such skill. They depend on “consensus” to create “weight” behind that which is nothing more than mathematically informed guessing – what scientists and engineers call “SWAG” — Scientific Wild-Assed Guess.
This is why economists are the butt of ridicule among hard sciences.
For all of the ridicule we heap upon economists, I’m highly amused that more people don’t heap the same scorn upon climate hysterics – because they’re guilty of exactly the same things: trying to make forecasts based on past data-fitting to statistical models, without evidence of predictive skill, more valid by claiming “consensus.”
Here’s a clue to those here who have no background in science: in science, it does not matter how many people are behind a theory or idea. The people who have the correct explanation for a result are able to produce repeatable results that can be replicated by other researchers win. Period, end of discussion. Consensus in science is not only worthless, it usually is overturned by the one or two people who have the new idea that properly explains the experimental results. Darwin overturned “scientific consensus.” Borh overturned “consensus.” Copernicus overturned “consensus.”
When you’re looking for the “next new discovery” in science, you NEVER look for where the mob of “consensus” is — you look for the one or two guys off in the corner with the radical new idea.
May 28th, 2009 at 10:18 am
Ben22
Where did the quote about herding behavior in the previous thread come from?
May 28th, 2009 at 10:20 am
@Manny
On the topic of a “pullback”…
One of my big questions during this whole rally since March has been the following:
If the market is SO CONVINCED that we are out of the woods, that the economy “has stabilized” as Timmy put it, et al…
Why the reluctance to go down and do a TEST of 666?
I mean, if we are right on the edge of growth, the market should EASILY be able to weather that scenario, put in a “double bottom”, and we’d be off to the races from there RIGHT?
The ‘green shooters’ have yet to prove the WORTHINESS of their claims…Take it out for a spin – see how it does…See how CONFIDENT you are down at 666 again, then we’ll talk…
May 28th, 2009 at 10:28 am
@cvienne
when the US gets a GDP of $10T… the government will raise taxes. Obama will do what he said and well redistribute the wealth of the nation. And… remember the past, is not the future… and that’s why we live in most exciting time.
May 28th, 2009 at 10:29 am
cvienne Says:
May 28th, 2009 at 10:20 am
Why the reluctance to go down and do a TEST of 666?
I mean, if we are right on the edge of growth, the market should EASILY be able to weather that scenario, put in a “double bottom”, and we’d be off to the races from there RIGHT?
reply:
————
It’s probably become a jobs issue. If the markets can withstand normal market pressures, then maybe other aspects of the economy can now handle things without help. If so, then a lot of government workers will no longer be needed in their present capacities. Also, maybe free money will be withdrawn from the markets and those lucky enough to get their hands on it. In other words, the assistance program is morphing into institutionalized socialism and organized crime.
May 28th, 2009 at 10:31 am
The thing that eats posts really needs a makeover. You can swear like a motherfucker, but other ordinary words won’t fly.
May 28th, 2009 at 10:38 am
@arcticpup
Is that what you think is best? For the wealth of the nation to be re-distributed?
Actually is IS being re-distributed as we speak (so you’re correct)…At the moment the beneficiaries are the plutocrats…
May 28th, 2009 at 10:44 am
franklin,
Again buddy, your ignorance is everywhere. Just because people are bearish does not mean they are short (“the bears are getting killed right now”). Most bears, that recognized this whole thing, realize the general trend right now, and that probability is not on their side if short. Oh, btw, from 2/2/09 through yesterday the ror on the s&P was negative.
Just because you are bearish does not mean you are short, you might just be in cash, or perhaps like Bruce, in a CD, which BTW, is trending higher than the S&P 500 YTD.
May 28th, 2009 at 10:47 am
I have been an avid reader of several of you and am interested in signing up for Andy T’s daily commentary/analysis. Can anyone please advise what his email address is and/or how to sign up?
Thanks,
HRux
May 28th, 2009 at 10:48 am
RPH,
A friend of mine that is teaching me about Elliot Wave e-mailed it to me yesterday. Interesting isn’t it?
May 28th, 2009 at 10:53 am
hrux,
andystechnicals@gmail.com
May 28th, 2009 at 10:53 am
Pretty sure its andystechnicals@gmail.com
May 28th, 2009 at 11:00 am
it appears the OIH is tracing a 5 wave up from the march lows.
Saudi Oil minister says that the economy can handle $75 oil.
Oh, and they are not a cartel
hmmm.
Obama also took credit for the economic recovery in his speech last night. I didn’t realize we had one but maybe I haven’t seen the data he has.
snark.
May 28th, 2009 at 11:02 am
@cvienne
if poor had money to spend ie. non-walmart dollars, “downtown” owner-operatered dollars we see that they would spend the money and the velocity of capital would move through the system again.
Mary Ann from Tennessee would get her hair permed, the hairdresser would buy new scissors the manufacturer would buy steel, the steel maker would purchase iron ore… and… some engineer at the some far off Northern Territory in Canada would have a salary to buy Ritz’s Bailout Nation’s book from Amazon.ca
And everyone would pay income tax…
So yes… taking a nice wealth tax… targeting the fat-cats is probably the best approach… for the middle class to survive… unless… the aristocrats and plutocrats want to be the poor cousins in the global marketplace. The US will not be wealthy without all boats rising… so, yes cvienne… a fair redistribution of wealth is needed.
May 28th, 2009 at 11:05 am
dsawy,
you make a good point re: Economics. IOW, the Greatest perversion, of which, was the introduction of the “=” to its discourse..
Anyone who learned Econometrics, from an Honest Broker, learned that Rule #! was “Nothing equals Anything.”
May 28th, 2009 at 11:22 am
Forecasters think if you raise taxes on the rich, money is soon to follow..or maybe not.
http://finance.yahoo.com/banking-budgeting/article/107123/Millionaires-Go-Missing
Millionaires Go Missing
Maryland couldn’t balance its budget last year, so the state tried to close the shortfall by fleecing the wealthy. Politicians in Annapolis created a millionaire tax bracket, raising the top marginal income-tax rate to 6.25%. And because cities such as Baltimore and Bethesda also impose income taxes, the state-local tax rate can go as high as 9.45%. Governor Martin O’Malley, a dedicated class warrior, declared that these richest 0.3% of filers were “willing and able to pay their fair share.” The Baltimore Sun predicted the rich would “grin and bear it.”
One year later, nobody’s grinning. One-third of the millionaires have disappeared from Maryland tax rolls.
May 28th, 2009 at 11:24 am
@arcticpup
I just wanted to see where you stood on the subject…
Let’s all hope that Mary Ann from Tennessee decides to get her hair permed…
Otherwise, the whole food chain might be in danger of buckling…
Franklin…what do you think? Do you think Mary Ann should get her hair permed? Or do you think she should come get and education at your university?
May 28th, 2009 at 11:29 am
@Bruce: How about an onerous bailout tax on execs’ personal income of those companies? It’s the least we could do, no? Would also provide a big incentive for them to run their companies well.
May 28th, 2009 at 11:30 am
Ben22,
It would be especially interesting if backed by some sort of scientific study. I find Prechter’s socionomic model quite compelling and I am looking for some good empirical evidence to support it.
May 28th, 2009 at 11:31 am
Part of problem with economic forecasters is that too often they are employed by a political group that is trying to influence public opinion, or else employed by an investment firm that only goes “long” stocks.
In such cases, even if the economists in question were clairvoyant, they would still not offer a correct prediction.
May 28th, 2009 at 11:37 am
@Bruce in Tn (11:22)
I live in MD (as well as WVA)…
O’Malley is a joke (as well as just about any other former, or PRESENT Baltimore mayor)…His OTHER big revenue was to push for “slots” at the racing venues…So he not only FLEECES the rich, the FLEECES the poor as well…
SERIOUSLY – THE FOLLOWING IS A TRUE STORY
I was in a local liquor store this past Memorial Day weekend to pick up a bottle of wine…
There were these two guys standing in front of me in the line (both of them had on Obama HOPE shirts)…They strike up a conversation with each other…I’m paraphrasing here but the conversation basically went like this…
guy #1
Howz it goin’ my man’, you workin’ yet (apparently they were casually acquainted with each other)
guy#2
Naw man, you know, the ECONOMY…u?
guy#1
same s*** brotha…
I don’t need to go on…
By the way…Guy #1 was buying 10 lottery tickets and 2 packs of cigarettes…Guy #2 was with his fat wife/girlfriend…I couldn’t see what was in the bag, except for a pack of MICKEY wide-mouths and an extra large bag of cheetos…
Maybe I should send them over to Tennessee (per arcticpup)…It seems the REAL ECONOMY starts with an anynomous hair dresser there…
May 28th, 2009 at 11:41 am
RPH,
Yeah I totally agree. I have no medical or science background so I didn’t know what to make of it but it def. got the wheels turning.
May 28th, 2009 at 11:49 am
Actually, I wonder , Franklin, that by definition since you are unemployed, how do you feel about your upcoming job chances?
May 28th, 2009 at 11:50 am
ben22 @ 11:00
“it appears the OIH is tracing a 5 wave up from the march lows”
Does seem to be very much a two-way market. Weak sectors include transports and retail.
Strong ETF’s include OIH, XME, EWZ and emerging markets generally.
Go long the strong, short the weak? Might work for several more days.
May 28th, 2009 at 12:18 pm
My recent experience with forecasters echoes the other comments. Typically with a highly credentialed university or company “known for their deep thinking and integrity”. Shortly after their articulate pontification of all the factors and issues and the rosy outcome forecast, all retire to the cocktail hour before dinner. Professor lapdogs woo the donors and patrons espousing their deep gratitude for their generous support of their groundbreaking studies and research. And the administrators begin putting a gentle touch on the crowd for more.
May 28th, 2009 at 12:20 pm
Here’s an old business saying: you attract more bees with honey than vinegar.
May 28th, 2009 at 12:32 pm
usphoenix Says:
May 28th, 2009 at 12:20 pm
Here’s an old business saying: you attract more bees with honey than vinegar.
reply:
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Nailed it in one.