Markets Are Correct a Lot More Than Economists

alhambra investment partners ^ | May 25, 2015 | Joseph Y. Calhoun

[expat_panama]

If man is not to do more harm than good in his efforts to improve the social order, he will have to learn that in this, as in all other fields where essential complexity of an organized kind prevails, he cannot acquire the full knowledge which would make mastery of the events possible. He will therefore have to use what knowledge he can achieve, not to shape the results as the craftsman shapes his handiwork, but rather to cultivate a growth by providing the appropriate environment, in the manner in which the gardener does this for his plants.

Friedrich Hayek, The Pretence of Knowledge, Nobel Prize Lecture, 1974

The very weak initial estimate of first-quarter real GDP growth this year surprised many forecasters, in part because it was at odds with other fairly positive data, including solid employment gains over the past six months. We show that, although the BEA adjusts for seasonal movements at a disaggregated level, the published real GDP data still exhibit calendar-based fluctuations—that is, residual seasonality. After we apply a second round of seasonal adjustment directly to the published aggregate data, we estimate much faster real GDP growth in the first quarter of this year. We conclude that there is a good chance that underlying economic growth so far this year was substantially stronger than reported.

[expat_panama]

Slow read (too many big words) but a number of very good points.

[expat_panama]

Greetings from the Texas flood zone --talk about 'underwater' mortgages!   Solid rebound in stocks yesterday looking forward to flat  (ish) trading today.  Also today:

8:30 AM Continuing Claims
10:00 AM Pending Home Sales
10:30 AM Natural Gas Inventories
11:00 AM Crude Inventories
 

[taxcontrol]

Not to mention that the light grey text makes it hard to read.

[Lurkina.n.Learnin]

You in the middle of that flood? Hope you guys are OK.

[expat_panama]

thanks, we're ok as far as safety and wetness goes (for which I am grateful) but it's really messed up our shced. We couldn't shop when we wanted and finding a new appt for my daughter was sure complicated by the fact that 400 units were flooded out before this latest flood.

np, we're set now, couldn't have done it w/o a good sense of humor...

[Diana in Wisconsin]

Glad to hear you’re keeping your sense of humor; that’s HUGE in these situations. We had close to 3” of rain in 2 days this past week. Wet basement, but that’s not unusual for, ‘This Old Dump.’ *Rolleyes*

I need Gold back up to $1,200.00/oz and Silver around $30/oz. I will settle for higher, of course, LOL!

See what you can do, OK? ;)

[Diana in Wisconsin]

I clicked through to their bi-weekly economic review. Easier to read, and succinct:

http://www.alhambrapartners.com/wp-content/uploads/2015/05/bi-weekly-economic-review-5-25-15.pdf