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The Economissed Track Record: In January 75% Of Experts Said The Fed Would Have Hiked By Now
If PhD economists were serious about getting things right, they would have a tough job. That goes double for PhD economists charged with making policy decisions based on their conclusions.
That’s because economics (like sociology and political science and astrology) isn’t a real science. It’s a pseudo-science. And as is the case with other pseudo-sciences, it’s flat out impossible to discover laws and immutable truths, no matter what anyone told you in your undergrad economics course.
Of course PhD economists aren’t really serious about getting things right, which means that in reality, their jobs are remarkably easy. Here’s the job description: make predictions that are almost never right and then make up any reason you want to explain away the fact that you were wrong. These explanations run the gamut from intentional obfuscation via opaque statistical tinkering (“residual seasonality”) to comically absurd attempts to turn common sense into an excuse for poor outcomes (“snow in the winter”).
And while economists by the very nature of their jobs are already predisposed to getting it wrong almost all the time, that tendency is amplified when economists try to predict what other economists are going to do. We might call this “stupidity squared”, and it’s readily observable in its natural habitat when economists attempt to predict when the Fed will raise rates.
When “forecasters” are surveyed on the timing of a Fed hike (or cut) what you get is one group of economists trying to guess at what another group of economists mistakenly thinks about the direction of the economy, and as you can see from the graph shown below, this is definitely not a case where two wrongs make a right.
Some color from WSJ:
An overwhelming majority of private forecasters polled think the Federal Reserve will begin raising short-term interest rates next month, capping a historic era of unprecedented monetary stimulus.
About 82% of economists surveyed Friday through Tuesday by The Wall Street Journal said the Fed’s first rate increase will come in September, versus 13% who said the central bank will wait until December.
“I don’t think there’s unanimity, by any means, on the [rate-setting Federal Open Market] Committee,” said Joel Naroff, president of Naroff Economic
Advisors, who said he expects a liftoff in September. But, he said, “I think there’s a general consensus that they need to go as soon as possible.”
Last month, 82% of economists predicted a September liftoff and 15% said the U.S. central bank would wait until December.
In June, 72% said the first rate increase would come in September versus 9% who expected a first move in December.
Summing up everything discussed above is WSJ's Ben Leubsdorf:
Back in January, 75% of economists thought the Fed would have raised rates by now http://t.co/ED29B2vv2n pic.twitter.com/WQ5B3xdo5w
— Ben Leubsdorf (@BenLeubsdorf) August 13, 2015
And finally, a video representation of economists responding to poor "forecasting"... "I make the weather...":
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Any day now... any day....
china just gave us the definit answer, for the past 3 days
In other words, the Fed/Hilsenrath has done a damn fine job of "managing expectations" (which is their only achievable goal).
And how many times in the last few years has Gerad Celente made predictions that have not happened?
For those that don't know what an expert is....... its someone from out of town
This article captured my attention. Ahem.
I'm glad we have experts to guide us.
Exspurts.Has been drips under pressure.
Experts, my ass!
If they were experts, they would not be selling fake services sitting behind a computer inside an airconditioned office wearing nice suits using blow and hookers!
Superstition is better, at least you have something to work with, which is : NOTHING!
If bankers and financial advisors knew something, they would quit their jobs today and walk away, right now!
But since they don't, they need to be told...that it is time to leave. It's done, game over, everything is shut, gone, finished, kaput!!
80,000 banking job cuts by just 3 British banks in the last 65 days! This is same number of firings by each bank as the total jobs fired by all these banks over the last 7 years individually!
I believe the banks are sending us a signal, aside from the oil companies and the retail sector, that something bad is coming and hence they are fortifying their balance sheets. Plus we have the commodities that have plunged to 10 year lows except 2009 when they swiftly rose back within months and the large industrials like IBM, Siemens, Marubeni, Hitachi, Intel etc sending us the same signals.
Standard Chartered Cuts 4,000 Jobs, Hints at More
Barclays plans to cut more than 30,000 jobs: The Times
HSBC to shed 50,000 jobs in quest for higher payouts
Fucking clever this lot.
Economissed I Lol'd
Economists provide support for the prevailing administration's confirmation bias...
A bunch of overpaid PT Barnums
Experts, gotta love them. Even if they knew how to make a solid guess, it wouldn't work. Yellen and her posse decide when, where and how and they don't use economic theory to base their decisions on, they use the banks and the markets in the form of the big players. If the rates were going to be raised it would of been a long time ago. FED pronouncements are just propaganda to bend the markets.....
Economics under the extant conditions of money printing is, indeed, a pseudo-science.
But it is no fault of economics that most people whom call themselves economists are drooling sycophantic imbeciles.
Syphalitic imbeciles from the hookers and blow.
Experts
Question is, has the Tyler who keeps saying that the Fed has to raise rates still of the same opinion?
Its a credibility issue now.
Not that any here think they have any. to lose.
Correction, macro economics is pseudo science. Micro economics is real science. The problem is that fake economists (anyone with a Phd), believe that the laws of micro economics (supply/demand) can be obviated by macro economics B.S. like QE. They cannot. Temporarily maybe (much like an airplane can defy gravity for a while), but eventually it runs out of fuel and crashes back to Earth. The reason the Fed hasn't raised rates is because they know that if they do there will be a crash that will make 1929 look like a minor recession. If they don't, they may keep the thing airborne long enough for someone else to take the blame before the whole thing blows up like the Hindenberg.
If you laid every economist alive or dead end to end they still wouldn't reach a conclusion.
The forecasting business is as old as civilization itself, regardless of race/geography. Below, you can see a complete city for the priviledged who made a living off forecasting cycles. They had their own port, access to goods tax free and could resell them to the idiots who believed them, in the interior of Yucatan: http://zkahlina.ca/eng/wp-content/uploads/2011/05/DSC_070.jpg
And 100% said we were in a recovery which was absloute bullshit too!
How can you say we are not in a recovery? Is the economy as bad as it was in December 08-February 09? Are companies crashing every night? Are we panicked that the Fed will nationalize the banks?
I have a friend who is an economist that lectures at university and I value his predictions highly. I always take the opposite position of what he predicts and it works like a charm.
God bless them......lol
According to most "experts" circa 2010 we should be at 3% by now. According to most "experts" circa 2012 we should be at 2% by now.
When I see the word "expert" I laugh. I know that 3% will never happen again in my lifetime. If I does it will mean as I've said before debt jubilee, a new currency and 6-8% rates.
What's the difference between an economist and a raving lunatic? The economist has a calculator.
What is an economist? Someone who will tell you tomorrow why the things he predicted yesterday didn't come true today.
Woulda. Shoulda. Coulda.
Check in in another three years and still no rate hike? There are a enough black swans, geese, ugly ducklings, and dead pigeons out there to turn ZIRP in ZIRPP (Zero Interest Rate Perpetual Program).
Actual Experts made a killing and always make a killing. Insider knowledge is key.