One of the important factors behind the fluctuation between bull and bear markets, between booms and crashes and bubbles, is that investor memory has to fail us – and fail universally – in order for the extremes to be reached. – Howard Marks Most people are familiar with Carl Menger because he was one of the initiators of the "Marginal Revolution," along with Leon Walras and William Stanley Jevons. Their finding that the price of a good is influenced by the value that consumers attribute to its last available unit was groundbreaking in the history of economics.
But Fabian, that exactness is critical for so many mindsets. I think it is shown best by the Atlanta Fed's GDPNow forecast which goes out 2 decimal places for an estimate of GDP, clearly ridiculous. as many have said before me, trees don't grow to the sky, and I agree, the economy will reverse course at some point. however, it is abundantly clear that the parties in power are going to spend as much as they can and think necessary to prevent any downturn before the key elections upcoming this year.
I agree, and that’s the thing with forecasts. It is primarily extrapolating input variables into the future works, astonishingly enough, extremely specific. But one cannot forecast changes in human action, although, in retrospect, things often seem obvious. Thus, one can have sound economic thinking but still have terrible market timing.
But Fabian, that exactness is critical for so many mindsets. I think it is shown best by the Atlanta Fed's GDPNow forecast which goes out 2 decimal places for an estimate of GDP, clearly ridiculous. as many have said before me, trees don't grow to the sky, and I agree, the economy will reverse course at some point. however, it is abundantly clear that the parties in power are going to spend as much as they can and think necessary to prevent any downturn before the key elections upcoming this year.
good weekend
I agree, and that’s the thing with forecasts. It is primarily extrapolating input variables into the future works, astonishingly enough, extremely specific. But one cannot forecast changes in human action, although, in retrospect, things often seem obvious. Thus, one can have sound economic thinking but still have terrible market timing.
Enjoy your Sunday, Andy!