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Charting The Fed's Abysmal Recent Predictive Track Record

Tyler Durden's picture




 

The Fed's atrocious predictive track record is nothing new: just recall the famous clip that put together all of his horrendous calls on the economy in the pre-credit bubble years. Everybody knows how those turned out (the clip can be found here). Well cut the guy some slack, Fed apologists may say: after all how many could possibly foresee the X-sigma events that marked the 2008 market crash. Fair enough (and the answer to that question is many, but that is the topic of another post). So, in order to keep it apples to apples, from the stand of a post "Great Financial Crash", instead we have compiled the FOMC projections from the last 6 Fed meetings, in terms of GDP, unemployment and inflation projections: the three key metrics that the Fed tracks and attempts to estimate. We present the results below. They are quite self-explanatory.

FOMC 2011 GDP projections:

FOMC 2012 GDP projections:

FOMC 2011 Unemployment projections:

FOMC 2012 Unemployment projections:

FOMC 2011 PCE Inflation projections:

FOMC 2012 PCE Inflation projections:

Bottom line: in just the last year, the Fed's predictive record has been constantly wrong, flipping diametrically within the span of 2 months, but never in doubt, although with a spread so wide, Goldman would have a trillion $+ market cap if these were CDS bid/asks.

 

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Thu, 06/23/2011 - 21:08 | 1397174 gwar5
gwar5's picture

Doh!

The Bernank famously missed the 2007-2008 downturn and banking crisis despite his predecessor, Greenspan, coming out and sounding the alarm for 9 months leading up to the collapse. Evil geniuses or just stupid?

Thu, 06/23/2011 - 21:28 | 1397230 Rynak
Rynak's picture

Evil geniuses or just stupid?

Umm, broadly speaking, there are two kinds of accomplishments, which i would consider "(evil) genius":

1. Managing to deceive/beat all significant opposition, in an amazingly simple yet effficient way, which others did not consider.

2. Solving something seemingly impossible, in an amazingly simple yet efficient way, which others did not consider.

Both can be rather hard to distinguish, for people not familiar with how this stuff works. The current breed of TPTB, is none of both.... they just managed to stupidify the majority so much, that they could (so far) get away even with doing a crappy job.

There is nothing "amazing" about how "they" do stuff.... it just worked so far, because people are naive and stupid, and because they hide things behind obscurity via complexity.

Thu, 06/23/2011 - 22:06 | 1397299 gwar5
gwar5's picture

Agree, these greaseballs ceased to amaze a long time ago. As a reminder to self, I looked up what John Law did printing notes in France 1715-20 before he got ran out of the country as the most hated man in France.

The Fed clowns are just doing exactly same thing. In three hundred years we've put a man on the moon but haven't learned to call bullshit on the fiat money-changers until the damage is done.    

Thu, 06/23/2011 - 22:09 | 1397301 Raincheck
Raincheck's picture

Just stupid.

Thu, 06/23/2011 - 21:06 | 1397176 Corn1945
Corn1945's picture

It's not "predicting" when you are making shit up.

 

How people can have confidence in a guy who has been wrong about everything is beyond me.

Thu, 06/23/2011 - 21:14 | 1397188 carbonmutant
carbonmutant's picture

Essentially what you have is a bunch of Eurocentric academics prostituting their PhDs for a political agenda.

Thu, 06/23/2011 - 21:19 | 1397211 buzzsaw99
buzzsaw99's picture

conundrum

contained

transitory

 

Thu, 06/23/2011 - 21:23 | 1397212 Re-Discovery
Re-Discovery's picture

something just gapped euro downward.  maybe realistic traders.

Thu, 06/23/2011 - 21:25 | 1397214 baby_BLYTHE
baby_BLYTHE's picture

Don't understand what makes the money printer hate on those that wish to form capital and save... Egg Head Academia must have somewhere along the line taught him that wealth is created by savings.

Why is it he wishes not for Americans to save? Does he really feel that these big banks are worth it to rob Americans of a tremendous about of wealth in the process?... especially when he admits absolutely "extraordinary measures" were undertaken just to get marginally back to level playing ground. 

I dare you Bernank, raise interest rates. Be a man. Prove your central planning operation has some BALLZ. Or else, be prepared to be America's last ever Federal Reserve chairman

Thu, 06/23/2011 - 21:28 | 1397237 buzzsaw99
buzzsaw99's picture

The Bernank can't be bargained with. It can't be reasoned with. It doesn't feel pity, or remorse, or fear. And it absolutely will not stop, ever, until the middle class is dead.

Thu, 06/23/2011 - 21:53 | 1397277 baby_BLYTHE
baby_BLYTHE's picture

spot on

Just as his predacessor who basically admitted his operations were fradulent post-FED chairmanship

Huge 'Tell', posted previously by ZH:

http://www.youtube.com/watch?v=yRJs5yL62BA

The worst of this crisis is still to come. Even Greenspan knows it this time!

Thu, 06/23/2011 - 22:44 | 1397367 spiral_eyes
spiral_eyes's picture

economy is aggregate demand. fed is raise aggregate demand. savings is not raise aggregate demand. savings is evil.

Thu, 06/23/2011 - 21:20 | 1397216 element115
element115's picture

These charts suck. What are we looking at? There is no legend and both plots are the same line color and style?

 

Thu, 06/23/2011 - 21:42 | 1397244 FOC 1183
Thu, 06/23/2011 - 21:37 | 1397247 Tyler Durden
Tyler Durden's picture

There is bolded intro and a chart title, not to mention a % index with ranges. Perhaps if you had seen what a typical fed projection looks like it would be more understandable. You can see the one presented on Zero Hedge yesterday here.

Thu, 06/23/2011 - 22:09 | 1397294 Brian
Brian's picture

Sorry Tyler, I don't understand these charts either.  Is the top line the prediction and the bottom line the actual?  I guess that can't be since the charts plot into 2012, so you are just highlighting the large spread in the fed estimates?

Thu, 06/23/2011 - 22:16 | 1397312 Tyler Durden
Tyler Durden's picture

Fed estimates always have a lower and upper range.

Thu, 06/23/2011 - 22:37 | 1397348 Rynak
Rynak's picture

Translation: Their predictions are so broad, that they cannot fail - master of the obvious. Though, they will of course publize the "best possible case" the most.

So, if you think i'm right, everything is great - and if i'm wrong, i'm not actually wrong, because it's still in the lower bound.

Did i misunderstand something?

Fri, 06/24/2011 - 00:50 | 1397612 Anonymouse
Anonymouse's picture

All correct, except that even with the wide band, they still failed in their predictions.

Thu, 06/23/2011 - 22:56 | 1397388 Brian
Brian's picture

Ahhh, now I get it.  TYVM!

Fri, 06/24/2011 - 04:37 | 1397806 dcb
dcb's picture

Yeah, I had trouble with the charts as well, I understand them now, but on the graph should be the actual result as well. That way we can see if in range, out of range, etc. Also I'd like to know things like the standard deviation etc.

Fri, 06/24/2011 - 04:38 | 1397807 dcb
dcb's picture

Yeah, I had trouble with the charts as well, I understand them now, but on the graph should be the actual result as well. That way we can see if in range, out of range, etc. Also I'd like to know things like the standard deviation etc.

Thu, 06/23/2011 - 21:22 | 1397218 Everybodys All ...
Everybodys All American's picture

"That being said" ... "It's transitory." The Bernank

 

Looks like he's getting better at it. Only in government could you be this big of a failure and get "Time man of the Year". Unbelievable.

Thu, 06/23/2011 - 21:26 | 1397219 Misean
Misean's picture

Are YOU a PHckD Ebubblegnomist!!!!!??!?!1/!?!/? I think not. Only properly degreed and trained people can read such data properly. Your presentation only serves to prove this.

Thu, 06/23/2011 - 21:26 | 1397229 flyr1710
flyr1710's picture

no wonder he doesn't have an explanation

Thu, 06/23/2011 - 21:34 | 1397250 T-NUTZ
T-NUTZ's picture

Sub-prime is well contained, BITCHEZ!!!

Thu, 06/23/2011 - 21:35 | 1397251 Hedge Jobs
Hedge Jobs's picture

dont worry, The Bernank is "100% certain" that his forcasts are always wrong.

Thu, 06/23/2011 - 21:36 | 1397255 Derpin USA
Derpin USA's picture

What do you expect them to do? Tell the truth and turn it into an ever worse self-fulfilling prophecy? If the Fed were to realistically project negative GDP, what kind of psychological effects do you think that'd have on the market and the economy?

Thu, 06/23/2011 - 21:46 | 1397260 Rynak
Rynak's picture

In an "ideal" world where the fed and gov is seperate:

The fed should report the truth, and the gov should promptly implement policies that solve the causes.

In an "ideal" world where the fed is part of the gov:

The gov should report the truth, and promptly implement policies to fix the causes.

In an "ideal" world where there is no fed, but a gov:

The gov should have reported the truth 20 years ago, and implemented policies to fix the causes. Therefore, everything is good now.

In the current world:

The system is fucked anyways. Only thing left is to lie and pretend.

Thu, 06/23/2011 - 21:44 | 1397266 scratch_and_sniff
Thu, 06/23/2011 - 21:46 | 1397269 Bartanist
Bartanist's picture

A. the Fed and its employees are hopelessly incompetent

B. the Fed and its employees are a pathological liars

C. Both A and B above

I am thinking that with only the three choices above, the United States of America (the republic, not the corporation) is better off without the Fed and its minions, than with them.

Thu, 06/23/2011 - 21:52 | 1397271 sangell
sangell's picture

I was always curious why witches were put to death most horribly. I think I know now. Crystal balls and steaming cauldrons were no better at predicting the future than a Ph.d from an Ivy League school

Thu, 06/23/2011 - 21:54 | 1397274 vegas
vegas's picture

Well, it's a documented fact that what the Fed should do is consult Shrillary. After all, this crooked bitch, er smartest woman on earth business success story is just the kind of thing turdballs at the Fed would eat up with a spoon.

 

It's easy: just consult the WSJ for fundamentals, trade cattle futures [or whatever], and go pick up the money. GDP forecasts, no problem! Need to know where unemployment is going: again no problemo!! Hillary Clinton knows all. C'mon Bernank, get with the program  for cryin' out loud.

 

How can you guys / gals [and other types] in government not use this national treasure for our benefit?

Thu, 06/23/2011 - 21:56 | 1397279 Pure Evil
Pure Evil's picture

Testing, testing, is this retro USSR microphone on?

Thu, 06/23/2011 - 21:54 | 1397283 Cdad
Cdad's picture

You know, that abysmal GDP chart really takes it for me, considering the $7 trillion in fiscal and monetary stimulus we blew to get here.

OK...anyone ready to suggest a replacement for Mr. Bernanke?  Anyone in Congress...you know, now that he has entirely blown it?

Thu, 06/23/2011 - 22:11 | 1397298 Rynak
Rynak's picture

- make fed gov-owned..... now that it is monetizing at near 0%, whats the point of pretending anymore?

- append constitution, to mention that inflation is taxation of every dollar holder

- append constitution to let population by direct vote veto any gov program it chooses

- appoint whomever you want as fed chairman, and let him wince in fear

Thu, 06/23/2011 - 21:58 | 1397284 djsmps
djsmps's picture

Obama inherited all this from Bush. It's not his fault. It takes time to fix this. You can't fix these kinds of problems in just one term. He's doing the best the best he can. But, look, at least he killed Osama bin Laden and Whitey Bulger.

Thu, 06/23/2011 - 22:09 | 1397305 Rynak
Rynak's picture

you need to add </sarcasm> to prevent people with a quick finger from junking sarcasm.

 

You were being sarcastic, right?..... right?

Thu, 06/23/2011 - 22:30 | 1397314 Pure Evil
Pure Evil's picture

So are you implying he'll have all these problems he inherited from Bush fixed by his second term?

Great resume stuffer:

It's not my fault the country got flushed down the crapper.

I inherited the toliet from Bush.

I wasn't exactly sure what the little handle did, but Berskank said to push down, and then whoosh!

But, at least I got Bin Laden and 'Whitey'!

Thu, 06/23/2011 - 23:33 | 1397449 Sambo
Sambo's picture

Bulger? ...his brother knew where he was. Why should Obama get credit for the don's capture?

As for Osama, I am not sure if he is dead.

Its a Wall St govt. You cannot fix a problem created by Wall St by letting the Wall St crooks to handle the affairs of the govt.

Thu, 06/23/2011 - 22:24 | 1397326 sasebo
sasebo's picture

Practically speaking -

Until they start teaching the Ph.D. economist at Princeton that it takes stuff to produce more stuff and that money doesn't produce stuff, we're in deep shit as long as delusional asshole Bernanke has access to a paper money printer. And paper money is not to be used as gambling chips, but as a medium of exchange to supply stuff to those who want to produce more stuff & create jobs.   

Thu, 06/23/2011 - 22:39 | 1397364 Herbert_guthrie
Herbert_guthrie's picture

Since misdirection and lies are required for the FED to smoothly operate, this is not a huge shock to me that their predictions prove untrustworthy.

Thu, 06/23/2011 - 23:13 | 1397412 trainrobbery
trainrobbery's picture

That is a cool chart...I will have to look that up in Excel.

Fri, 06/24/2011 - 02:11 | 1397702 DrLamer
DrLamer's picture

Do you need P_R_E_D_I_C_T_I_O_N_S?

How about these:

Explanation of antiChrist as a hexadecimal coding and as a pentium X86 processor as a king of world's interconnected
computer system (from a year 1993), written on 16-Aug-2006 (in russian):
http://www.cirota.ru/forum/view.php?subj=58898&fullview=1&order=asc
More antiChrist explanation on 27-Aug-2006 (in russian):
http://www.cirota.ru/forum/view.php?subj=58898&order=asc&pg=7

Warning warning about coming world financial super-crisis - written on modern Israel's forum on 19-March-2007 (in russian):
http://forum.souz.co.il/viewtopic.php?p=1500490

Second warning about world financial super-crisis on 09-Aug-2007 (in russian):
http://forum.souz.co.il/viewtopic.php?t=70900

Third warning about world financial super-crisis on 13-Aug-2007(in russian):
http://forum.souz.co.il/viewtopic.php?t=70900

Fourth warning about world financial crisis on 19-Aug-2007(in russian):
http://forum.souz.co.il/viewtopic.php?p=1660775

Fifth warning about world financial crisis on 02-Apr-2008 (in russian):
http://forum.souz.co.il/viewtopic.php?t=77410

Warning (on 15-jan-2007) about rockets coming from Gaza to Kiryat-Gat due to the Intel's fab in Israel (30+ km):
http://forum.souz.co.il/viewtopic.php?p=1455061&start=300

It was partly fulfilled by the "official" prediction on 15-Jan-2008, (in rissian):
http://cursorinfo.co.il/news/novosti/2008/05/15/ashdod/

Fullfilled on 28-Dec-2008 (link in russian):
http://cursorinfo.co.il/news/mivzakim/2008/12/30/15-44/

First warning (on 27-Mar-2007) about coming drought in Israel due to the Intel's fab in Israel (in russian):
http://forum.souz.co.il/viewtopic.php?t=65641&start=50

Second warning (on 23-Apr-2008) about drought, warning about earthquakes, drought, war (in russian):
http://forum.souz.co.il/viewtopic.php?t=65641&start=100

Third warning (on 14-May-2008) about Intel's fab, attention to China' earthquake NEAR Intel's fab in China (in russian):
http://forum.souz.co.il/viewtopic.php?t=65641&start=150

Fourth warning (on 25-May-2008) about drought (in russian):
http://forum.souz.co.il/viewtopic.php?t=65641&start=100

Now, in 2011, recent new HIDDEN tax on water due to drought in Israel (in russian):
http://cursorinfo.co.il/news/busines/2011/05/22/water/

Isabella Belfer trial (20-Dec-2007), 104+ pages discussion, (started on 09-Feb-2008, in russian and hebrew):
http://forum.souz.co.il/viewtopic.php?t=75772
The decision of BAGAZ court on Belfer trial was made on 15-SEPTEMBER-2008 (The start day of World Financial crisis).

Comment under article on Smartmoney.com on 22-Sep-2008, in English:
"Ultimate Cost of Bailout Could Be Capitalism "
http://www.smartmoney.com/invest/stocks/ultimate-cost-of-bailout-could-b...
All comments to this article are removed now by Smartmoney.com.
You can read this comment on ZeroHedge, re-posted on 15-July-2010:
http://www.zerohedge.com/article/oxford-research-group-concludes-israeli...

Do You need links to hundreds of my explanations and predictions on MarketWatch.com Board from 2008 to 2010?
http://www.marketwatch.com/Community/Lamer
Bio:
About me: Used to be a "Professional lamer". About you: (this was written in late 2008) USA got deep long economic crisis.
It will be like unavoidable slow sliding into the dark abyss, like Titanic. You americans have your own "terrorists"
in the highest economic circles, bearing degree in economics. You have been listening to false prophets for the
decades: Alan Greenspan, Bill Gates, Oprah. What is the reason of all this mess? There are two main global problems of
modern society: (a) total oil idolatry (in economics and politics) and (b) computer idolatry (in business and economics).
USA is a champion on both of them. This is the cause. This is a court: God vs. USA.

Fri, 06/24/2011 - 01:57 | 1397711 bakken
bakken's picture

Lest we Americans forget, the war for independence was based on FIAT. The US Federal Gov't ran much of the civil war, with FIAT.

Both of those instances saw very shaky acceptance of the paper notes. But those currencies were issued during potentially nation ending wars. After the Civil War, the fight between silver and gold standards was simply a metaphor for class warfare between the peons (silver backers) and the plutocrats(gold standard backers).

Today, plutocrats favor FIAT. Of course, since unlike Gold, FIAT is infinitely expandable! And, plutocrats control the printing presses, so to speak. They also control institutions of armed forces. THEY WIN!

Fri, 06/24/2011 - 08:04 | 1398015 earnulf
earnulf's picture

Just to point out that the fact that the Fed has now pegged the GDP well below CBO estimates means that total national debt to GDP will rise above 100% once our congress stops the sideshow and raises the debt limit. (Remember we are adding billions to the debt that has to be replaced once the limit is raised.) That will show up on the public debt side of the ledger. Of course the next downgrade in GDP will further push us to the debt side.

Fri, 06/24/2011 - 08:29 | 1398059 overmedicatedun...
overmedicatedundersexed's picture

a lot of racial unrest not being reported, from chicago to baltimore.. mostly black on white and black on asian..as the ecomomy falls the US society is going towards citizens fighting each other this will take heat away from government ..bernak is just there to keep it a a slow boil..anyone want to project the impact of debt is on race relations here?

Fri, 06/24/2011 - 15:38 | 1399511 AldoHux_IV
AldoHux_IV's picture

And yet they control the economy and the markets-- shocking and very perverse.

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