Wednesday, Aug 11, 2010
What is the point of forecsts?
Guardian: Bank of England expected to cut UK growth forecasts
Tell me this. What is the point of forecasts for the economy, particularly those 6, 12, 18 months into the future or maybe more, if they are going to be constantly updated, changed, tweeked, cut, extended etc.?
I remember less than a week ago the media were wetting their pants with joy as the CEBR were telling us that we all had it wrong and underestimated the supply demand imbalance effect! Prices were rising circa 4% p.a. in the coming few years I believe!
Maybe it's the CEBRs "unrivalled ability to communicate the impacts of the wider economy" or maybe its just their VI or just guessing. I suspect it is a load of people congratulating themselves for being evenmore intelligent thatn teyalready thought they were. Whenever they are proven wrong, I am sure it will be the snow etc.
27 Comments
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1. rumble said...
Amen. The whole point of an invisible hand is that it organises the system at a higher level than our primitive minds are capable of doing with our backward central command and control. Not controlled does not mean disorganised. Too many variables. Chaos. Priests, psychiatrists, economists...
2. brickormortis said...
Sorry about the terrible typos. I don't know what came over me. Now let me just call in the MI5 to try to decode this recaptha. What a f*cking joke!
"268 dugnte" I think. Let's see...
Nope..
"lancedif itterance" I think. Let's see...
3. Wickedw said...
This forecast about a changer to the current forecast is only 'likely' to be true though! I'd give it 50/50, and my invoice for this is in the post.
- Bank of England "expected" to cut UK growth forecasts
- Bank's quarterly inflation report "likely" to reflect concerns that public sector cuts and tax rises will dampen demand
4. mark wadsworth said...
BM, you know perfectly well what these optimistic forecasts are for - they are to try and stampede people like you into buying a house.
The BoE is just another arm of the Home-Owner-Ist coalition, they'll talk up house prices, they'll depress interest rates, anything just to keep those random transfers of wealth going from productive economy to people who own land and buildings.
5. rumble said...
MI5? Or the economists.
I've been getting fractions, exponents, ...a house with a garden path?!
6. mr g said...
"What is the point of forecsts?"
To keep an army of parasites in the City of London, and elsewhere, in highly remunerated non-jobs, I'm not against high rewards for genuine ability and achievement but these barstewards are simply extracting the urine from the majority of us and keeping the culture of reward for failure alive and well.
I'm no fan of the public sector but if this constant supply of drivel was being produced by, lets say the NHS or councils, there would be one almighty outcry whereas these "experts" continue to talk cr*p, and get away with it.
7. another alan said...
Watching Mervyn's speech: ducking questions and talking in very cautious, general terms.
The fraud of monetary policty continues...
8. mark said...
the BOE and Merv have lost all respect from both the people and market
How the hell can i enter that captcha I dont even have the shapes on my keyboard, get rid of this annoying thing
9. brickormortis said...
MW - You know I think it is more than about house prices at every corner. I think these guys really do believe that they are forecasting and that their skills and intelligence have given them some golden, mystical insight into the future.
Regarding "The BoE is just another arm of the Home-Owner-Ist coalition, they'll talk up house prices, they'll depress interest rates, anything just to keep those random transfers of wealth going from productive economy to people who own land and buildings."
Is that not a reasonable incentive to buy a house? The house I am looking at is reasonably priced, in a high demand, quallity area and being pegged down by the stamo duty threshold. My offer is well below valutations.
I repeat that I am not happy about it entirely but Waiting 8 years is long enough. I need to unpack boxes from parents attic!
10. mark said...
Mervyn King you are an idiot, reading your statement makes you an even bigger idiot, a child in a sandpit can make better decisions than you Mr King and probably explain them better too
11. another alan said...
His biggest lie, paraphrased because I can't fully remember it: 'the 2% target is paramount' in response to a question from one of the journalists, most of whom gave him an easy ride. He needed a much bigger battering on the performance of the MPC and BoE. Look back at past predictions for now: ho ho ho.
Obfuscation and justification...
12. timmy t said...
It is a pretty sad state of affairs when an octopus can make more accurate predictions about football than the boss of the central bank of one of the world's largest economies can about economic growth.
13. techieman said...
timmy .... i am no fan of merv the swerve but really :). The BoE has to deal with loads of variables whereas the octopus only had to deal with 25 (players plus the officials), oh ok plus the pitch 26, plus the weather 27, plus the fans 28, the managers 30,... plus , er on second thoughts,,,, fair point!
14. estrader said...
brickormortis said "The house I am looking at is reasonably priced, in a high demand, quallity area"
Now you know why people are "stubbornly" refusing to lower their asking prices. "The house I am selling is reasonably priced, in a high demand, quallity area"
Everyone is a property expert apparently.
15. wiltshire said...
Re: the growing controversy of ReCaptcha. What's the point of it being all wavy? It's not like they're using words that you'd possibly guess anyway but then they make them really hard to read too.
(This is getting ridiculous, there are actual blobs appearing in them now).
16. Sj032 said...
try the audio capture, its like a game lol
17. sibley's love child said...
Off-topic but this Recaptcha is beyond the joke; i'm getting the Greek alphabet now.
18. techieman said...
i have reported comments on another thread (including mine) that discuss the reCaptcha debacle. Once you have posted a comment on it - maybe thats the way to go - report the comment until they submit!
Seriously though i do think it is stiffleing some debate.
talking of debacles...EsTrader - what d'you reckon at the moment?
19. mark said...
who was it that said buy unilever at £16.91 oh yeh thats right it was me, price just hit £17.10
ok i am just trying to learn mandarin so i can enter the captcha GET RID OF CAPTCHA CAMPAIGN
20. This comment has been removed as it was found to be in breach of our Blog Policies.
21. techieman said...
Mark - impressed you have picked the only share in the world thats blue / green today! After dealing costs though and a few grey hairs is it worth it?
22. mark said...
techieman
thank you, yes it is worth it, dealing costs on the barx system are pretty good, I make money out of it, I have three rules
buy and sell quickly
if stock goes down only sell when it comes back up never sell at a loss
never get greedy
23. techieman said...
well i think you are a braver man than me - never sell at a loss.... hmm good luck with that one! No really.
24. mark said...
easy jet are looking cheap at £3.62
it needs nerves of steel when I say don't sell at a loss, because it happened once when i bought 70k worth of barclays at 3.28 then shot down to 55p if i remember correctly, I was in panic mode, luckily my partner held my hand and said they will come back up, buy more now, i didnt buy more, i sold them when they went back up at 3.64, but she was right we would have made a packet, but there was no way I was dropping 50k into them when they where near total destruction, the financial system was days from collapse at the time and i figured better keep some money to one side..lol
best buy ever was LDP the other week they shot up near to 40% in around a week, sold them, they are risky ones on the aim market though
25. techieman said...
well i dont trade individual shares for the reasons you say. I have been warning on here that we were getting close to a downturn and that short etfs should be bought and if it went higher geared short etfs. Am actually short a fair bit, but really wanted to see S&P 1140 and FTSE 5500 before just selling it all.
If you do asearch for "techieman" and "etf". you will see. In summary im a dollar bull and equity bear.
Your partner was right, because if BRCL had gone t*ts up it wouldnt have mattered anyway!! :).
I have NEVER met a trader who doesnt use stops, but fair play to you.
26. mark said...
thank you..
yeh she was right really..
27. techieman said...
But generally "to average a loss is to compound stupidity" :).