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Will 92% Of Economists Be Wrong Again?
Three months ago, when looking at the predictive track record of US economists, we said that "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."
We furher explained 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.
Back then we were specifically looking at economist's predictions about the Fed's first rate hike, which based on a WSJ survey of "respected" economists, nearly 95% said the Fed would hike by September.
It did not... once again showing just how truly clueless about a binary event a short 9 months in the future, economists truly are.
* * *
Where are we now? Here is the latest WSJ poll:
About 92% of the business and academic economists polled by The Wall Street Journal in recent days said they expected the Fed to raise its benchmark federal-funds rate at its Dec. 15-16 policy meeting. Some 5% said the Fed would stay on hold until March and 3% predicted the Fed would keep rates at near-zero even longer.
Charted:
To summarize: in January, 95% of economists were wrong in their forecast about a binary event 9 months into the future.
And now we have an even better bogey: should the Fed not hike rates on December 16, then we will know with certainty that over 90% of economists are unable to accurately forecast a simple yes/no event, which is due to take place in just over a month.
No pressure.
We, for one, can't wait: should Yellen pull the rug on everyone again, it won't be the Fed whose credibility will be terminally crushed: it has been for years. It will be that of the army of Fed sycophants, the sad souls whose job it is to perpetuate a failed and dying system, known as economists.
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Yes, they should raise rates. No, they won't raise rates. The longer they wait the larger they blow the bubble that WILL pop.
Rates are going NEGATIVE
Unconventional Monetary Policies Likely Mean Rate Hikes Nearly Complete...Not Just Starting
http://econimica.blogspot.com/2015/11/unconventional-monetary-policies-likely.html
This article is dumb.
They clearly poll the 'dont-knows' or the 'dont-tells'. You really think Dimon and Soros and Blankfein dont know? They do and have just shorted the proper segment of the market.
Ecommunist and Central Planner is always surprise because of own arrogance. Pure and is simple.
Since September roughly 5% have gone against the "belief" that rates are going raised. Maybe because they require no belief because they know.
They are not going to raise rates.
Unless it has been predicted by economists!
They already are for the common person and have been since 2007. What you mean is they are now going to charge for having debt notes backed by hot-air.
This only makes me sleepy...
You don't look sleepy; hate to see what you look like awake. :)
their job is to mislead people
Being wrong 90% of the time is the very definition of an economist.
I've gotta make more bets come December. When this ole IT guy knows more than the WSJ-reading finance fools, it makes for some fun times around the office.
Especially when I pull my silver dollar out of my pocket and explain to them what money is and isn't.
No, Their job is to keep their job and not that difficult given the fixes that the sheep need as well as a whole army of suspect talents who need their feeds to keep their job.
Will 92% of eCONomists be wrong again?
Depends on which fortune cookie they get with their meal.
They are not going to raise rates...it's all bullshit- I've been looking for bets all year long. WE ARE JAPAN.
A little over a week ago....http://thecivillibertarian.blogspot.com/2015/11/getting-ready-for-one-bi...
Ask the economists again, one day before the Fed announcement. Half of them will get it right---because they were tipped off.
Well, jeezus, if the Fed doesn't know wtf it is doing how's some economist going to figure them out?
The Fed is damned if it does, damned if it doesn't, and has damned us all in any case.
Fuck it and the government it rode in on.
Well you know, the wages, a thing you earn or use to, of sinful behavior is damnation and many have earned the right and many more are entering in. Many really sweat at earning that right of passage, they work real hard at it believing all is well & headed for hell. The road was marked heaven, but the devil marked it.
Funny how there is no back in life, only through. Ponzis not excepted.
Honestly, I'll give some of them a pass. I forecast (microecon, not macro) for a living, and pre-2008 had a pretty respectable record. Post 2008, it's been complete shit due to garbage-in, garbage-out issues. I've run around looking for reliable data sources but it's a game of whack-a-mole, once one is discovered by TPTB it gets corrupted, pronto.
So if you've got a legit econ guy (say at at fortune 500 doing build planning, like the people I work with) kicking out bad forecasts, well, there's a reason that's happening.
If you have central planning (which fucking sucks, but that's a different rant) the single most important thing you can be isn't good, but predicatable. A fucked-up but centrally planned economy can be managed if the planners are predictable. Once that's gone, it's a crapshoot and hugely negative for growth (no one knows what to do with capital if you can't count on conditions being as planned in a month.) Here's where the Fed nuking their credibility has probably done more damage than the bullshit ZIRP has, and that's saying something.
This is why I read the comments. Excellent.
TThe fed may dip a toe in the rate hike pool (.0005) basis points, but they will soon run squealing back to qe, nirp and helicopter drops.
It's like a fat guy who keeps saying he is going to start dieting tomorrow, right after he polishes off a large bucket of chicken. Tomorrow never comes.
can you imagine 0.25% on 60 trillion?!
-.25% is much easier to swallow on 60 tril.
Let the NIRP games begin.
!%= .6 trillion or 600 billion.
Each .25 is worth an additional 150 billion in interest. However I do not know where you got the 60T figure. The debt (they finance) is currently 18.5 trillion and they refinance about 1/2 of that each year into the shortest maturities. You are probably referencing all of the other off balance sheet debt and upcoming payments. That's my guess.
Wasn't me that came up with that number. Anyway , off-blance and dark pools , your looking into the quadrillions. Only the Fed knows the exact number , 60 Tril could just be a rounding error. If the true number was ever revealed the game would be up overnight ... If they go NIRP they could generate a reverse income from the debt itself , that would cause more deflation , leading to more NIRP , death spiral !
the graphics are not very good. they are about as self explanatory as mud.
I suspect the NFP report for Nov will be soft, and the Oct will be revised downwards. Hence cover for no change. Not that i see it in the graphics, I am surpised 92% of doctors surveryed recommend Dependz.
They won't raise rates, but who gives a shit if banks have to borrow from other banks .125-.25% higher. Eventually they'll just get moar money via QE4, 5 and 6.
Economists have been wrong longer than I have, which is saying a lot. I thought this shitshow would have collapsed 2 years ago. Then again I don't lie through my teeth for a living, and without seasonally, seasonally adjusting everything, the economists as aholes have been wrong for the majority of my life.
Indeed. QE to infinity.
Since when have economists been right on any prediction? Like the old saying they have predicted, successfully, 11 out of the last 3 recessions. If they ever get better than 50% then maybe they can do the weather.
Another FED headfake to goose the markets, but no rate raise in December.
Fed sucks n' blows smoke up the asses of Ivory Tower Economists every quarter. QE Infinity means QE Infinity and the cocksuckers in the Ivory Tower know it.
Economists are responsible for 92% of sales of Magic 8 balls.
IMF says "no" to higher rates.
The Fed will move the rate raise again, and again. Maybe they'll just stop talking it.
Imo the economists can't be blamed as the Fed was, is and always will be manipulating the data for their own (Goldman Suck's )goods. Just dismantle the Fed or put some trustworthy people in there.
"Just dismantle the Fed or put some trustworthy people in there."
You mean like economists?
Economists already run the Fed... [wait for it] ...right into the ground.
They won't raise rates. Janet Yellen is protecting Obama from an economic collapse on his watch.
Hard to argue. Never seen such a worthless mf'er get a free pass from everyone.
It depends on the economic weather. No kidding, anyone can predict the high temp tomorrow in the mid-planes in an August day when the big picture is static. Just like today.
Other times are more challenging. Weathermen can still do better than random in those times, but economists can't. That is because economics only has correlation data to build its theories on, while weathermen have all of physics and chemistry and oceanography.
But you will never hear anything more sophisticated than sound bytes in a Presidential debate and 2 minutes of a news segments on any of this. This is the end of the pre-net era and politicians who don't understand real community and leadership in a peer-to-peer world.
https://thinkpatriot.wordpress.com/2015/11/13/why-not-presidential-debat...
The fed will NOT raise rates/
So we are saying the Fed KNOWS it will not / cannot raise rates (without a bunch of short-term economic and political damage), but somehow 95% of 'economists' don't know this? The economists at the Fed are smarter? The lot of 'em are a bunch of keyneisan quasi-socialists. So why does the Fed know what the others do not? (and by the way, all us ZH'ers DO know.)
So we’ve got all the usual suspects out there calling for a rate rise, Yeah, do it, please do it, please do it. These imbeci**s obviously don’t know sh** from cl*y. Do we have to put up with this crap for another month? NO WE DO NOT HAVE TO. We need to tell them (“THEM”) to “DO IT” no more “DATA SIGNALS”. The last time the markets gave the FED data signals the ass fell out of the markets and they S*** themselves.
If the FED raises interest rates it will strengthen the already strong DOLLAR and strangle your exports, thus contracting your economy and sending it into a DEPRESSION.
The U.S. has wonderful numbers, What is the score now, About 60% on food stamps, (whatever that is). Sounds like a socialist utopia HEH, HEH, HEH. In Australia it is called the New Start Allowance. We in AUSTRALIA call it the No Start Allowance because it is just a way to hide the true unemployed and give them a subsistence allowance and keep violence off the streets. My sympathies to all of you in the U.S.A. who believed in the “DREAM” of home ownership and independence.
To anyone who would like to get out of this PONZI scheme there must be a precious metals store nearby.
There is a choice of keeping your life’s labour in airy fairy paper (“PET PAPER”) in which most of the thieves have told you they want to steal (through inflation) at least 2% of your wealth from you.
– If there is deflation you get to keep most of your work (value), If there is the thieves inflation, they get to skim the 2% or whatever off the top, DO NOT FORGET THAT “THEY” CAN TURN ON THE SPIGGOTS TO 10% OR 20% OR WHATEVER and just steal that amount of your life’s work from you.
Or you can convert your excess labour into HARD OBJECTS,
LAND, (can be taxed),
BUILDINGS, (can be taxed),
CARS, (can be taxed and subject to depreciated value),
ART OBJECTS, (subject to personal preferences),
BUSINESSES, (usually valued in (“PET PAPER”) and subject to the honesty of management, ETC.) YEAH, RIGHT. We know all about that don’t we?
Getting back to the difference between “PET ROCKS” and “PET PAPER” and now – wait for it – “PET DIGITALS”. I nearly p****d myself when I heard you can give up your life’s work to (invest) in “PET DIGITALS” HEH, HEH, HEH. _YEAH RIGHT.
Give me a break. Do you think I’m a complete F*** W***.
Sorry about the rant folks, but you seem to give a few others a bit of leeway, and it was a good bottle of Muscat liqueur.
As far as investing in “PET ROCKS” or “PET PAPER” or “PET DIGITALS”, maybe you should ask the _Indians, Chinese, Russians, Germans (sorry you can have your GOLD back in ??? years) _because I am not licensed to give investment advice.
I loved to spill my guts after only 6 months of posting. Best to you all _JOHNLGALT
"Will 92% Of Economists Be Wrong Again?"
Why not? Apparently, 97% of climate scientists were.
There is ONE law of economics I learned a long time ago:
TANSTAAFL
May be someone should tell the FOMC voting members...
Please define which 'wrong' they will be again. But the simple and short answer is YES...
That's why I never shed any sympathy to any homeless economists or people study economics couldn't find a job. They ask for it.
100% of economists will be wrong.
Federal reserve will announce QE4ever.
@ honestann We are all economists now. _JOHNLGALT Who is John Galt?