Posted on 10/04/2009 8:07:36 AM PDT by blam
This Recession Ain’t Over
by: Steven Hansen
October 03, 2009
With so much at stake, you will not be surprised to know that, over the years, many very smart people have applied the most sophisticated statistical and modeling tools available to try to better divine the economic future. But the results, unfortunately, have more often than not been underwhelming. Like weather forecasters, economic forecasters must deal with a system that is extraordinarily complex, that is subject to random shocks, and about which our data and understanding will always be imperfect. In some ways, predicting the economy is even more difficult than forecasting the weather, because an economy is not made up of molecules whose behavior is subject to the laws of physics, but rather of human beings who are themselves thinking about the future and whose behavior may be influenced by the forecasts that they or others make. – Fed Chairman Ben Bernanke on May 22, 2009
Yet we continue to have many intelligent people trying to analyze economic reports and indexes produced by these methods - and then try to interpret what is meant using simple and complex analytical analysis. How accurate can any analysis of reports that contain methodology / logic mistakes, imperfect extrapolations and data errors be?
Averaging Out the Speed Bumps
The Federal Reserve’s economic indicator reports generally utilize better methodology than their cousins in the Commerce and Labor Departments.
[snip]
A pig or chicken can pick stocks better than these superidiots and their math models. These are the same idiots that put us into this economic mess and now they want us to view them as the supersmart guys who will get us out of it??
This is all about market manipulation for someone’s profit. It always was and it still is.
I cashed out an old 401K to pay off my car. I’ll take the 10% hit to get out of the market (yeah, I know long term blah blah blah and I still have 30 years to retirement) and not have the car payment. (Ex has been out of a job for 9 months now..child support still coming but for how long- and my company has been doing rolling lay-offs since last December.)
Ping for Later
You coulda knocked me down with a feather.
Yes, market manipulation for profit AND to install a fascist in the White House. This is all working out very well for someone, somewhere.
I have found auguring pigeon entrails my most accurate means of determining when to put extremely large sums of money into play. Like when I need a new pair of shoes.
My dwindling pigeon flock is getting more and more skittish when I enter the loft, though.
Has anyone thought of auguring, I mean really auguring, with bernanke?
EVERY mathematical model of a complex physical (or economic) system is an extreme simplification of the system that it purports to represent.
These models (generally) represent processes by continuous equations, and (generally) represent very large input data sets by averages, medians, or other data reduction techniques.
For instance, weather models divide the atmosphere and the surface into cells, both horizontal and vertical, and use a single (multi-dimensional) data point to represent each. This tends to eliminate many clouds, local heat islands on the ground, and other concentrated local phenomena that clearly have direct effects on real-system behavior.
Economic models - particularly the “ECON-101” macro models - virtually ignore the economic decisions made by individuals, EACH of which is based on the individual’s own utility for the specific exchange.
This last is a pet peeve of mine. I believe that we teach economics “upside-down.” Immersing students in this Keynesian “aggregationism” before introducing the economics of individual decisions perverts their thinking.
In many cases the individual data points - including the extreme values - are critical components of system behavior rather than discardable outliers that pollute the nice, clean, macro models.
I wish you well, but I don't applaud your decision. It might be correct, IF you anticipate losing your income in the very near future. But in fact, debt is an ADVANTAGE in the face of high inflation because you will be paying it off in cheaper dollars - and unless the interest rate is adjustable, the lender will not be able to recover the full value of the loan.
Also, there has been quite a bit of talk about appropriating IRA’s and other such accounts into the Social Security system, which has been hemorrhaging money for years. The seizure might be "sweetened" by restoring the balance to its level just before the debacle, but I believe that would be a drop in the bucket compared to the losses going forward with the current clowns in charge
"We’ve said it before and we’ll say it again. As a matter of national accounting, the domestic private sector cannot increase savings unless and until foreign or government sectors increase deficits."
What an EFFING moron.
Cheers!
Yes, with my ex-husband out of work for 9 months, I anticipate that either I will eventually lose child support completely when he runs out of unemployment or get it drastically cut back if he takes a job making much less than he was (he was a Teamster making much more than he was worth based on his education and skills). Also, I work for a company that has been laying for almost 9 months now, as well. So far, I have dodged the bullet, but if a couple of things don't turn for them, the cuts are going to go much deeper.
I figure now is the time to bail out on the (not so big) 401K to pay off one piece of debt (I still have my house, which is thankfully still above water), because if either of those come to pass, and the market catches up to reality, then I won't have the option of cashing out and paying off the car.
Economics / Recession 2008 - 2010
Oct 03, 2009 - 07:05 PM
By: Andrew_G_Marshall
War is Peace, Freedom is Slavery, Ignorance is Strength, and Debt is Recovery
In light of the ever-present and unyieldingly persistent exclamations of ‘an end’ to the recession, a ‘solution’ to the crisis, and a ‘recovery’ of the economy; we must remember that we are being told this by the very same people and institutions which told us, in years past, that there was ‘nothing to worry about,’ that ‘the fundamentals are fine,’ and that there was ‘no danger’ of an economic crisis.
Why do we continue to believe the same people that have, in both statements and choices, been nothing but wrong? Who should we believe and turn to for more accurate information and analysis? Perhaps a useful source would be those at the epicenter of the crisis, in the heart of the shadowy world of central banking, at the global banking regulator, and the “most prestigious financial institution in the world,” which accurately predicted the crisis thus far: The Bank for International Settlements (BIS). This would be a good place to start.
The economic crisis is anything but over, the “solutions” have been akin to putting a band-aid on an amputated arm. The Bank for International Settlements (BIS), the central bank to the world’s central banks, has warned and continues to warn against such misplaced hopes.
[snip]
Disclaimer: Opinions posted on Free Republic are those of the individual posters and do not necessarily represent the opinion of Free Republic or its management. All materials posted herein are protected by copyright law and the exemption for fair use of copyrighted works.