Economombo – scoring the soothsayers.
By way of something diverting, I thought it would be fun to throw in some light-hearted observations on behavior of very large groups from time to time.
The group I find to be the most amusing is of prognosticating economists. They certainly get a lot of air time. It’s as if the weather isn’t interesting enough, perhaps because none of us are farmers. Or perhaps it’s because we have some misguided notion that economists have something to do with the stock market, and we are interested in the stock market because that’s where our retirement dollars live.
But what’s most amusing to me is that no-one ever takes them to task for making their predictions. Routinely they come up with wonderfully convoluted and semi-convincing arguments for why their prediction will undoubtedly be the best one. But come the future, and where do we find these dark science laureate wannabees? Hiding their faces in the next near future event.
Here’s the news that got my scorecard unction up. It’s from Bloomberg, a relatively innocuous source of news, whose slant isn’t too much greater than a gentle wind from the right.
Japanese, Hong Kong Stock Futures Rise on U.S. Economic Data By Adam Haigh – May 28, 2013 7:08 PM ET
U.S. consumer confidence climbed in May to the highest level in more than five years, a Conference Board report showed yesterday. The index rose to 76.2, the strongest since February 2008 and exceeding the highest estimate in a Bloomberg survey of economists.
Separate data showed that U.S. house prices rose in the 12 months through March by the most in seven years as the recovery in residential real estate gained momentum. The S&P/Case-Shiller index of property values increased 10.9 percent from March 2012, the biggest 12-month gain since April 2006, after advancing 9.4 percent in February.
On the other hand, our business has seen a significant drop in orders, our salesmen have much more time to talk, and the proportion of orders for spare parts compared to whole units has also increased. All these signs point to a slowdown in the economy.
And on top of all that, my own personal econo-meter is showing a double down trend. The last time it’s done that was in November of 2008 – right after Lehman brothers decided to cash in their chips.
What happens next? Who knows? But at least I have this little reminder that, according to the pundits of today, things should be getting better. I hope they’re right!