Reliably Predicting the Future

This Zach Weiner comic from Saturday Morning Breakfast Cereal says pretty much everything that needs to be said about most economic prognostication.

DESCRIPTIONCredit: Zach Weiner of Saturday Morning Breakfast Cereal

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  1. Garvit Sah says:

    Also heard – Economics is where two persons speaking exactly the opposite can both be right at the same time.

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  2. Drill-Baby-Drill Drill Team says:

    The problem with the Future is that it is difficult to predict.

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  3. Drill-Baby-Drill Drill Team says:

    It is not just knowing the future, but whether you can gain actionable intelligence and use your knowledge for gain.

    We KNOW how to lose weight: Eat less and Exercise More.
    We know how to become wealthy: Spend less and Save more.
    But despite this knowledge, most of us remain Overweight. And few of us are rich. Knowledge does not lead to an improved outcome.

    Corollary 1: I will state with some certainty that Oil will run out in the lifetime of a child alive today. The earth is not making anymore and a century of depletion has used most of it up. So the future involves less oil; Gasoline cars will disappear. But how will we arrive at this petroleum free future? Knowing the ‘What’, still leaves the How, When and Why? We are all improvisors and innovators. when necessary.

    Corollary2: Global Warming will result in rising ocean levels. Melting polar Glaciers are causing rising levels today at a rate that can be extrapolated.

    Corollary3:, China will play a dominant role in the World Economy. But what does that imply for an average American?

    Knowing the future trends, obliges us to prepare for implications: Corollary 1: Live close to city centers, live on a reliable mass transit corridor, own a small sustainable home, buy a Scooter or at least a Bicycle.

    Part2: Avoid beachfront property. Move inland to higher ground. Invest in a Northern passage shipping concern. Move to suddenly tropical Canada.

    Perhaps for Part 3: teach your children Mandarin Chinese; invest in a Chinese Overseas Fund, Visit the Forbidden City. Open a business in China to sell to the newly rich Chinese.

    Unless we make a resource committment of time or money or both, predicting or even knowing the future is an empty Pollyana exercise. We have to preempt the future we expect to succeed. And that is the hard part.

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  4. Gary L. Kaplan says:

    Economists have hid their failure and kept their jobs by saying no one could have seen this coming. Krugman and Shiller have written articles saying that current economics have no theory.
    There is one theory left standing after years of economic turmoil, that has withstood the test of time and the test of money. Robert Prechter using The Elliott Wave Theory has predicted most of the current economic environment. He has called many of the major market turns (not all). The theory holds that changes in social mood are endogenous and control the direction of the markets, the economy and social trends. In other words changes in social mood make the news not the other way around. The news media and most academics assume the the news controls the markets and the times. The crash of Oct.87 and the recent flash crash proved that news events are not needed for very large market moves. The herd will stampede even if they did not watch TV, the internet of the newspapers.
    Acceptance of this point of view would invalidate most economists Ph.d’s and the news media reporting of X did Y and then the markets went up, down or sideways.
    Eliminate all the economists that did not see the crash of 2007- 2008 or he rally of 2009-2010 coming and no theory making predictions except the Elliott Wave Theory is left.
    Sherlock Holmes quoted this father on the way to solve a mystery as saying ,” You eliminate the impossible and whatever is left, no mater how improbable is the truth”.

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  5. raybansonmyface says:

    The economist Nouriel Roubini predicted the recent crash quite accurately back in 2005. Apparently, economic theory did predict the collapse. And despite the rhetoric from fools such as Zach Weiner and others who posit the study of economics as anecdotes and hearsay, economists base their predictions off of pools of economic data and indicators. Economic predictions are hard to get right. Don’t forget that NASA rocket scientists design rockets and space shuttles that accidentally blow up every once in a while. When that happens, the scientists say “whoops”, then figure out what exactly went wrong and then learn from their mistakes. Economists catch a lot of heat from critics, even though it’s not economists fault that these crashes happen. The fault lies with people that engaged in the moral hazard, i.e. quants on Wall Street to the people that made bad loans to the people that intentionally defaulted on their mortgages. Economists are just a scapegoat during these rough times because us asshole American’s don’t want to accept responsibility for our follies and just look to pin the blame on someone else.


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  6. buck says:

    add to that:

    “At one point, the past will be different than what we think it is to some degree more or less. And the present may or may not be remembered as we think it will, but the moon is still made of green cheese, ancedotally speaking of course.”

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  7. Eric M. Jones says:

    Everybody has a prediction. But then the “NewScientist” magazine publishes an article detailing the puzzling changes in the Sun called “What’s wrong with the Sun?”

    Apparently all the models of solar cycles have been tossed into the dust bin. The Sun is behaving “badly”…Uh-Oh…!

    Actually it’s behaving exactly like it did during the start of the “Little Ice Age”, the Maunder Minimum from 1645 to 1715, when one could skate across the Hudson.

    Now won’t that be special?

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  8. matt says:

    who was it that said economics is “less of an exact science and more of a performing art”?

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