This blogger has noticed that for at least one year, 95% of all data releases and economic news has included the phrase “worse than expected.” How is it possible that basically every forecaster, every CEO, every economist, every reporter, and every soothsayer of any sort is surprised by everything? Author (he uses much lengthier descriptive terms for himself) Nassim Taleb does not beat around the bush by stating that the entire idea of forecasting is bankrupt, and that the predictions of forecasters are so universally bad that nobody should ever do it again. I am starting to agree, except that it’s very entertaining to see the heads of all the gobbling turkeys turn simultaneously in reaction to every noise.
But I digress a bit from the actual “news” of the day:
“Economy much weaker than expected” – CNN/Money.com – Jan30, 2008 (“Gross domestic product slowed to a 0.6% growth rate in the fourth quarter… Economists surveyed by Briefing.com had forecast GDP would slow to a 1.2%.”)
“UBS Takes a $14 Billion Write-Off” – New York Times – Jan30, 2008 (“Once again this is a negative surprise,” said Andreas Weese, a banking analyst at UniCredit in
Since everything is worse than any of the experts expect, why don’t any of the experts take a wild leap of faith, put together their best guess, and then make it much worse. They might get jobs based on their brilliant market predicting abilities. Of course the only problem with that idea is that they already have jobs, and their current jobs pay them to make ridiculously optimistic forecasts, and then say things like “nobody expected,” and “even the experts couldn’t have predicted.” Ah, well. That’s why you come here for your news.
Coming next – What’s a Baby Boomer to do?
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