Tag Archive 'economists'

May 14 2010

The c-word is back

Published by under Opinion,Top Stories

When the economic environment changes too fast for economists to follow, that’s always a bit disappointing to me – big economist fan that I am.  [Read on]

One response so far

Mar 20 2009

You can’t keep a good man down

Published by under More News,Opinion

Being self-employed is fun. Only problem: When one gets something right, there is no boss to say “well done”. So, I have to praise myself. 

Bear with me. It’s about the same old topic, namely forecasting the economy (business cycle) with nothing but experience, gut feel, observing what’s going on around me and reading (a lot).

In economically unstable times (as we’ve had since about the middle of 2007), the econometric models of economists have limited use. In fact, when the going gets as tough as it has in the last 12 months, these sophisticated models have zero value and (maybe) even negative value (to those who are so silly to keep on budgeting on them).    

In times like these, my way (the read-observe-gut-feel way) runs circles around the economists’ way. Since the 3rd quarter of last year I’ve consistently “out-forecasted” ALL the economists in Germany, both on being first and on accurateness – simply by reading my newspapers. (For some reason, economists are so married to their models, that they can’t pack them away when they must…)

In the 3rd quarter I suggested there would be negative growth in Germany in 2009, when everyone was still forecasting positive growth. On 20 November last year I said it might, in fact, be worse than -1% when everyone was still saying zero. On 11 December I said it’ll be worse than -2% (it’s in the comments below the story), when private sector economists said it would be -2%. On 6 February I said we might have a depression on our hands, as defined by The Economist’ (-10% or more over a period of two years or more), at a time when all economists were still saying the economy will start recovering at the end of 2009 – and definitely NO depression.  

This morning (roughly six weeks later) the FTD reported that private sector economists have revised their forecasts for 2009 to “as bad as minus 5%” and have pushed back their turnaround date into 2010. 

So, I’m feeling good (about this bad news). Outstanding forecasts still to be tested? For Germany, the one about the -10% over a period of more years (above) and the one about Germany getting a third stimulation package (once there is consensus that number one and two have been “too little, too late”).

For South Africa, the one that property prices still have a long way to fall (as much as -30% on top of what we’ve already seen). (Again, in the comments.)

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Feb 19 2009

Famous last words?

Published by under More News,Opinion

Anyone who is so confident in uncertain times and sees the road so clearly in the storm, can only fall on his nose.

4 responses so far