On Failed Predictions: Throwing it All in the Bin
by meep
Let me thank my linkers first:
Howdy to whoever came from the OECD site. It doesn’t look like they came via a link.
FUN FAILED PREDICTION: NOBEL PRIZE
Before I get into my own failed predictions, let’s look at a fun one.
Who Will Win the 2016 Nobel Prize in Literature?
Not Bob Dylan, that’s for sure.
Bob Dylan 100 percent is not going to win. Stop saying Bob Dylan should win the Nobel Prize.
Post-mortem of the failed prediction of non-win.
I guess I’ll explain my methodology though, because why not? My assumption was that Dylan was a gambler’s candidate, one whose odds were based more or less entirely on Baby Boomer self-regard. I also assumed that the Swedish Academy took itself a lot more seriously than it apparently does. (I overlooked its mischievous streak—the smile on the woman who read the announcement today is an image I will never forget.) But also my Nobel piece was about the silliness of punditry—the Nobel Prize is designed to bring out the worst in a lot of otherwise sharp people—so I tried to have some fun with it. And that means making big, dumb predictions.
Two other things: One is that I am happy that Bob Dylan won because I am a big fan of his music. The other is that I also assumed that he wouldn’t win the Nobel Prize because the Swedish Academy wouldn’t be able to justify giving it to him over perennial American favorites like Philip Roth and Don DeLillo, who both now almost certainly have no chance of ever winning the prize.
Oh, let’s put Roth down for next year’s prize, then.
REMEMBER THESE PREDICTIONS?
My experience is that you get better at predictions only if you revisit your predictions and see how close they were to reality.
So let’s take a look.
Predictions for 2016 (Mostly Not Me) :
ELECTION PREDICTIONS
Larry Correia:
My prediction is that the republican nominee will be Ted Cruz. The democrat nominee will be Hillary Clinton.
Prediction was made in August 2015.
Scott Adams:
Prediction: I’ll put the odds at 75% that we learn of an important Clinton health issue before the general election.
Correia: wrong and right. The one he got right wasn’t a difficult prediction to make.
Adams: I don’t know that “pneumonia” collapse counts. The explanation didn’t really make it important, so I’ll say no for now. We’ve still got a few weeks to go.
ECONOMIC PREDICTIONS
Saxo Bank has a bunch:
My “Real” 2016 Outlook
US Dollar will weaken – It will follow the “normal path” of weaker US$ post the first hike.
….
Inflation will be higher next year – higher than expectations: El Nino adds 0.2%, base effect another 0.2% and then some demand pull and more credit flow.
Federal Reserve HikesFed says four hikes, market says maximum two – I’m with the Fed.
Saxo Bank: Dollar has strengthened against euro a little since Dec 2015, inflation probably:
And unless the Fed really gets active, I’m not seeing that last one.
From the same post, Mish has a few:
It’s likely the dollar has peaked, or will soon do so, but not necessarily for the same reason Steen suggests. I doubt the Fed actually gets in four hikes. But if they do, I expect them to be unwound at a far faster pace than they rose.
I suggest a second-half collapse is more likely than a second-half surge in US equities, but that depends on where things go and how fast in the first half.
Too soon to tell.
From me:
But I agree with him that stocks are overvalued more now than 2000 or 2007. Prices seem to have been defying gravity.
I would like to see 4 Fed hikes, btw, but the one thing I’m looking for is an upswing in bond defaults.
Not really predictions, but this is what’s been happening:
Well, wait for the election I guess.
Mish prediction from different post:
My prediction: A recession will arrive in 2016, assuming it has not already started.
Again, too soon to tell.
MY PREDICTIONS
So here comes the embarrassing part.
1. Medicare and Social Security become huge issues in the general election race.
Forget about my reasoning. I was wrong.
Jim Geraghty on a nation in denial:
The easiest way to deal with a problem is to ignore it. The trouble is that the problem usually gets worse while it’s ignored, so that by the time we’re done ignoring it, most good options are no longer available. This election appears poised to end a long period of American political and cultural denial. Whatever comes next, it won’t be painless.
If Ted Cruz had been the nominee, heck, if anybody but Trump were the nominee, we probably would have been hearing about Medicare and Social Security a lot more.
But nobody wants to think about numbers and all that far away stuff (that’s not quite so far away now that the oldest Boomers are 70.)
2. Public pensions will be big battles in statehouses… not so much on the federal stage.
Not quite sure how to measure this. I definitely have not had any problem filling up this blog with public pension stories.
But here:
There will be no federal bailouts, even of Puerto Rico, this year. Even if a law allowing PR to declare bankruptcy gets through Congress, I bet Obama would veto it.
There’s definitely nothing allowing PR to declare bankruptcy, nothing of that sort got through Congress and even the Supreme Court cases didn’t say there could be bankruptcy.
This is the most recent story I could find:
Fiscal Board Imposes New Rules on Puerto Rico Amid Crisis
A new federal control board overseeing Puerto Rico’s finances amid a dire economic crisis voted on Friday to expand its powers and require indebted public agencies to be more accountable as members grilled the island’s governor for the first time about the U.S. territory’s economy.
The board said no Puerto Rico government agency can proceed with any non-routine transaction without its permission, such as issuing debt.
It also demanded that six public agencies including the Government Development Bank, the island’s largest public university and its utility companies submit their own fiscal plans for the first time.
…..
The federal control board was created in late June after U.S. President Barack Obama signed a rescue package that in part aims to restructure some of the island’s nearly $70 billion public debt and temporarily protect it from creditor lawsuits seeking to recover millions of dollars invested in local government bonds.
Those creditors have since sued to recover their money and a judge is mulling over the case.
“Restructure debt” is not the same as a bailout. So I will give myself a win there for now.
Anyway, as I noted earlier this year, the predictions really aren’t faring well overall.
WHEN WILL I EVER LEARN? WHEN WILL I EVER LEARN?
Never, probably. I will likely make predictions for 2017 as well.
Come on, Social Security and Medicare are really going to be biting into federal budgets more and more, so we gotta run into this as an issue eventually.
As for public pensions… well, I’ll still be watching.
