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The "Economissed" Track Record Revisited: Last Month, 82% Of "Experts" Expected A September Fed Hike
Last month, when economists were still banging their heads against the wall trying to determine if the turmoil unfolding in China’s equity markets would play a role in the Fed’s decision making come September 16/17, we took a look at how forecasters have fared when it comes to accurately predicting the timing of “liftoff.”
By way of introduction, we said the following:
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. The economist’s job description looks something like this: 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”).
Economists’ collective inability to accurately forecast economic outcomes is exacerbated when they try to predict what other economists think about said economic outcomes or, as we put it previously, “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. We might call this ‘stupidity squared.’”
Now that the Fed has officially admitted that “data dependency” is at least to some extent a myth, meaning the market is, as Deutsche Bank amusingly put it over the weekend, “now observing itself from another angle as an observer of the observer of the observers,” it’s worth taking another look at the following graph from WSJ:
Note that in the August survey (so just one month out) around 82% of economists were sure that "liftoff" would come at the September meeting.
We close with the following chart from The New York Times which largely speaks for itself:
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To all landlords. Go get a real job. Stop living off the backs of others. I feel sorry for your soon to be losses, not, lol I am really, really looking forward to you savy investors take a huge bath when the housing market drops off. I can not wait. My Wife and I jsut got an RV and put it on my friends 38 acres. Scam landlords can suck it and this trend will continue. You are going to be stuck with some huge liabilities. Homes were made to be lived in not speculated on or finacialized. Go Galt on thiese shitty landlords. You are going to get worse and worse renters.
You got one of them good womens.
*accidental down vote*
Yes I did. She gets it. She is hot, has a good job and likes guns. She loves camping, she cooks, cleans and does my laundry.
Wait, you let your wife cook and clean your smelly shorts? I want to party with you, dude.
Where's your camper?
The party train has left the building. Sorry, you'll have to find your own ride.
Step 1: Buy home you aren't going to live in and get a $1200 a month mortgage
Step 2: Register the home with HUD
Step 3: Find an illegal mexican
Step 4: Move the illegal in for $200 a month and set the rent at $2000
Step 5: Bill the government for the $1800 difference
Step 6: Pocket $600 a month
Step 7: Find another home and do it all over again
Step 8: laugh at the young white families trying to buy a house
"To all landlords. Go get a real job. Stop living off the backs of others. I feel sorry for your soon to be losses"
Fed and other CBs will continue to bail out home owners. Now about those depositors, 401Ks, Pensions: Kiss those goodbye! Landlords are the equivalent to PM owners, by converting Paper assets into tangible assets (ie land, rental properties). The downside with rentals, is you still have to pay property taxes, maintenance, and worry about deadbeat renters.
Tyler: "Because the only people worse at their jobs than weathermen are economists "
Weathermen: at least get some forcasts right, and do their best to warn you of danager (hurricanes, Tornados, flooding, etc). On the other hand, economist prefer to steer you into danager, by promoting risk, by telling you everything is going to be peachy when a major crisis or correction is about to happen.
LOL...you are so simple....here is what happens http://www.motherjones.com/politics/2014/01/blackstone-rental-homes-bund...
Bankers loan you too much money...then when you stopped paying they took the house back with their access to unlimited ZERO RATE MONEY. Then large money managers with access to ZERO RATE Money bought the houses....and waited...know that the weak were duped out of their houses. So instetad of letting the price fall they borrowed ZERO RATE MONEY(See with zero interest you can wait a LONG TIME)...then people need houses...BOOM all the low stuff is rented...then they start jacking the rates....what are you going to buy a $500k house? HAHAHA
This is like the SERFs of old. You are a tenant worker for bankers....they own everything...and you are allowed to exist in their house for a high price...or go live in a homeless camp. Which I am sure are doing well.
As Dimon said...it has never been better to be rich in America! Obama is their boy! They better outlaw those guns faster.
As a former TV meteorologist, I have to say that I am HIGHLY offended !!
How dare you compare a legitimate science based endeavor to the entrail reading antics of economics.......I.....I......
.....oh, hell. You're right. Sorry.
Physics is 3rd for "most scientific?" Who in the fuck are they polling? Really surprised to see Economics beating out History as well.
And medicine is the most sceintific? Hahahahahaha!
Economists = modern day Alchemists. They turn Gold into paper.
All they need are pointy hats and some incense to complete the picture.
Pardon me. Did somebody mention a sale on tapered hats?
SO when do the market moving algos figure it out?
They can't raise rates or the economy is fucked. They can't raise rates because the economy is fucked.
HELLO, McFLY!!!!! BOTH PATHS LEAD TO BEING FUCKED.
You can't have a market near all time highs if the economy is dead. Figure it out guys. Not raising rates means the FED has admitted the economy has been flushed down the toilet.
The algo's bend the system instead of working with it.......
Modern medicine is about as scientific as banking. Both simply strive for the greatest profit at the expense of others.
Depending on exactly how you define it, medicine is mostly mechanics and snake oil.......
Paid to be wrong, good work if you can get it...
That's a lot of Ph.D eggheads skipping the Macro Ponzinomics course in skool.
When I was taught monetary policy in college in the early 70's they made no mention that the FED was a private institution formulated by the financial elite. All they taught was theory that has no relevance whatsoever today anyway. Granted I never proceeded beyond a B.A. in Economics - but it's probably just as well as I was able to keep an open mind for later valuable learning.
Where's the sweet science? Boxing.
http://boxing.isport.com/boxing-guides/why-boxing-is-called-the-sweet-sc...
There's heavy weight, cruiser and Harry Reid Tune-Up weight
Well, not everybody can be an asshole all the time.
but everyone can be an asshole some of the time
And Jamie Dimon and Lady Gaga were just born that way.
Economists are bad enough when there is a functioning economy and market to apply their (principles) toward. As bad as they are anyway, they have no shot whatsoever in a planned economy that is stock market price driven.
BTW, the PPT is now doubling up on its responsibilities because they know the world looks at the US market and they have to consider the global implications of falling US stock prices as well.
All would readily be revealed in a true forensic audit.
So 82% of economists are bought n paid for, where's the secret again?
Penguins.
All is well : Jack in the Box stock just went up 2% after announcing a stock buyback.
Now that is true economic growth !!!!!
pack animals
No they didn't...everyone know they can't....they have failed. Japan is going to completely fail with a year or two...then you are going to see UGLY!
Peter Schiff was right.
All your numbers are 82% cooked.... The 1% is selling the "recovery story" to itself as the 99 "checked out" a long time ago.
Who cares about the 82% Neo Classicals, Austrians, MMTers or who knows fuck what; bring on the 18% who predicted correctly and publish their names and economic religion. My guess is people like Keen and Hudson who follow and have expanded on Minsky's theories of capitalism's basic instability got it right. Economic prediction is just like predicting the weather where complexity theory modelling is the only way to be accurate with any sort of repeatability.
That's because most economist simply look at headline numbers of unemployment and consistent job creation. Fed first suggested unemployment number 6% or lower being a factor in deciding lift rates, which was passed up in favor of other types of data. Fed is basically leading people on about the true state of the economy. They won't admit the economy is bad and they can't raise rates. People who see underneath the headlines and see things like leverage, incomes, type of jobs, etc will see that rate hike was very improbable, at best a minor probability of a tiny rate raise of 0.25%. What data will catch the Fed's eye coming next several months? They rather not risk a rate raise. They would of raised rates already before September. As to why eocnomist picked September I have no idea. Inflation isn't 2% or higher. 2% inflation (Fed goal) will likely only not occur when wages are flat and unless workers join the worforce having actual full time jobs. I think 2% inflation is bunch of BS anyways.
Continous GDP doesn't support rate hike, or anything else other than headline unemployment. Fed knows that's it magic can't be removed without repercusions. They wanted ZIRP and QEs to create a heated economy, but did not happen in a satisfying manner to which they can proudly lift rates up. Plus they wanted a stock market bubble, but a stock market bubble means you have to twist the economy in general in a bad way in which rates can't be raised without the economy untwisting itself regardless of headline inflation says. Fed is looking for inflation from employment, consumer spending, and general spending to push up prices. Even if they get what they want, that alone doesn't mean the Fed can raise rates. So 2% inflation rate is the last goal post standing which I think will be ignored anyways like the discarded unemployment rate.
I am DEFINATELY NOT an expert.....
But even I know the FED can not and will not raise rates, not now, not ever. And by a rate rise, I certainly mean more than a fairies phart, which is all the Club FED can do, pharts. If they raised rates everything will collapse, if they don't raised raised they just make a bigger artificial bubble that will eventually burst.
The only way out is WAR to absolve all debts, and they are in the process of organising that right now. The last curtain call for a FIAT currency.