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Bunches of Economists Speculate about 2016
#1
I though this was a fun read. Politico asked a bunch of prominent economists to speculate about how the economy will fare in 2016. As I read the first few answers, I found myself evaluating the merits of the specific arguments. But as I read more and more of them, the diversity of opinion and disagreement and axe-grinding just became an amusing collage of opinion.

Only a couple of times did the respondents acknowledge the futility of the question. Robert Reich amusingly stated that "Economic forecasters exist to make astrologers look good, but I’ll hazard a guess...."
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#2
Sort of like the old saying that "economists predicted 8 out of the last 5 recessions". Interesting read but, you're right, everyone had their own opinions.

I'm not sure that there's a set of empirical facts to predict anything as large and complex as a national, let alone world, economy. For example, sometimes tax cuts stimulate spending and other times they stimulate deleveraging. Too many variables to come up with with a definitive answer.
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#3
Predicting the economy is tough. If I had to make a prediction, I think the biggest threats to the US economy are weakening emerging markets. I would not be surprised if we saw a couple 5-10% market corrections and maybe even a 20%+ market correction. We might be in the beginning a correction right now. I plan to keep some cash available to take advantage of these potential opportunities.

Predicting the economy reminds me of an old joke:
A mathematician, accountant, and economist are interviewing for a job.
The interviewer asks the mathematician, "What is 2+2?"
The mathematician replies "4."
The interviewer asks the accountant, "What is 2+2?"
The accountant replies "4 plus or minus 5%."
The interviewer asks the economist, "What is 2+2?"
The economist replies "What do you want it to be?"
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#4
I read an article recently saying the majority of well paid market forecasters are wrong and had a fun graph comparing their deviation from the historical mean. I can find it at the moment, but the bottom line is you're not going to guess the market so just keep putting money in and ride the wave. Mathematically it'll eventually turn out in your favor.
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#5
(01-06-2016, 08:41 AM)Caversham Wrote: The interviewer asks the accountant, "What is 2+2?"
The accountant replies "4 plus or minus 5%."
The interviewer asks the economist, "What is 2+2?"
The economist replies "What do you want it to be?"

Usually, corporate accountants are the ones who can make EPS whatever they need it to be.
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