Exhibit A: Late 2015 Gas Prices Still believe in economic forecasting? Find me one analyst, less than 3 years ago, who got both or just one of the following right — and correctly forecast the economic effect of same: One. Wholesale gas prices will collapse. Retail prices (what consumers pay at the pump) will plummet more...Read More
Lies, Damn Lies, and Housing Predictions “Government statistics are often questionable and sometimes turn out to have been highly misleading. Unfortunately for policy makers, such errors are most likely to be severe at precisely the time that the economy is turning around.” –Floyd Norris, “Doubting the Economic Data? Consider the Source”; The NYT (11/6/2014) “It’s...Read More
The “Alice in Wonderland” Stock Market; or, Figuring Out What the Fed Will Do “The next level analysis is [determining] whether . . . good news is bad (meaning less accommodation) or good (economic improvement); or conversely, whether bad news is good (meaning more accommodation) or bad (economic deterioration).” –Barry Ritholtz, “Predicting Jobs Data is Hard...Read More
Going to the Mall, the Movies (& McDonald’s) With Black Friday (and Cyber Monday) rapidly approaching, much attention is now focused on how robust consumer spending will be. The premise is that holiday shopping reflects consumers’ moods (and pocketbooks) — and therefore is an accurate gauge (if not harbinger) of the economy’s strength. But what if...Read More
Flash Floods & Run-Off Tired of all the “green shoots” metaphors? As in, “the weak-but-recovering economy is starting to sprout green shoots.” My alternative analogy: the economy is likely to remain cool and soggy. That’s what you get when you combine unprecedented monetary and fiscal stimulus (water), and cool conditions (recession). At some point, the...Read More
Pick Your (Economic) Metaphor The real question is, now what? Government interventions are only meant to light a fire under the real economy and unleash what John Maynard Keynes called our “animal spirits.” But government dollars can’t sustain growth. Like it or not, the stock market is bigger than the Federal Reserve and the U.S....Read More
