4 ms·

I find all the economic prodigies here entertaining. People who's day job is to predict this stuff can't even make good predictions. I guess I never knew that t

by carc 11y ago

I find all the economic prodigies here entertaining. People who's day job is to predict this stuff can't even make good predictions. I guess I never knew that techies were better economists than the economists

adventured 11y ago
When the dollar soared, a crash in emerging markets was extremely obvious. It has happened several times before under similar circumstances. It doesn't take a prodigy to understand how it works, it requires not putting your head into the sand and pretending fake good times (paid for via massive piles of debt and endless rounds of currency debasement) last forever. Who's to say most economists are any good at their jobs? Did you see what many of them were saying during the obnoxiously obvious real-estate bubble of 2004-2007? The dotcom bubble? And so on.
- dpc59 11y ago
  The thing is that a lot of economists have a vested interest in markets going up and bubbles inflating, because their jobs at financial institutions depend on that, so when things start going bad they just block their ears, pretend everything is alright and hope that the markets don't suffer from too much panic.
etherael 11y ago
Plenty of people were better alchemists than alchemists back in the day, too.
- clock_tower 11y ago
  And plenty of people were better doctors than doctors were. Theodore Dalrymple had a column proving that Shakespeare did _not_ have a formal medical education, because he described symptoms correctly. (He contrasted this with a book by a practicing doctor from the time, who described patients purely in terms of the four humors -- creating fanciful descriptions unrecognizable to a modern practitioner.) Come to think of it, there was also a book published a few years ago about US president James Garfield's death in the late 19th century. He didn't die of being shot in the back; he died of receiving the best medical care in the world.
crdoconnor 11y ago
>People who's day job is to predict this stuff can't even make good predictions. When you get paid for lending academic legitimacy to politically 'useful' recommendations, accuracy isn't necessarily priority #1.
spangry 11y ago
Do you have anything to back that statement up, other than 20/20 hindsight? I'll admit that few economists get timing right on big macro events, but please don't tar us all with the same brush: https://news.ycombinator.com/item?id=10166958 https://news.ycombinator.com/item?id=10166958 If you want to see some decent economic commentary, look here: http://www.macrobusiness.com.au/ http://www.macrobusiness.com.au/ . These guys have been screaming bloody murder for at least the past year.
- dandelany 11y ago
  How about the fact that index funds consistently outperform actively managed funds?
  - spangry 11y ago
    And the relevance of this is...?
    - dandelany 11y ago
      You asked for evidence backing up the statement "People whose day job is to predict this stuff can't even make good predictions". Managers of active mutual funds are exactly these people. The fact that they can't beat the market is clear evidence they can't make good predictions. Of course you could say "well, the good managers beat the market, even though on average they don't". But you could also say that the few people who correctly predict three coin flips in a row are "good at predicting coin flips" - it's easy to say this in retrospect but impossible to predict who the "good ones" are upfront.
- Throwaway23412 11y ago
  The whole concept of "being good at prediction" is extraordinarily difficult to back up. If you were even a few percentage points better at prediction (especially economic predictions) than the average person, your life is pretty much made. You would literally be better than the average person at seeing into the future. There is a 1% of people (Warren Buffett and James Harris Simons for example) who are significantly better than the average person at predictions, but chances are some random Australian on a tech forum is not part of that 1%.
nostrademons 11y ago
"People who's day job is to predict this stuff can't even make good predictions." That's probably a good part of why everyone has an opinion - when the "experts" are so clearly clueless, everybody's an expert. "If we've got data, let's look at data. If all we have are opinions, let's go with mine." -- Jim Barksdale
- zzalpha 11y ago
  Or it's just good ol' Dunning-Kruger...
- perseusprime11 11y ago
  Here's another quote: "Opinions are like assholes, everyone has one and they stink"
gozur88 11y ago
I don't see how random people off the street can be worse economists than economists. Was there ever a profession that was wrong so often and still generally heeded? Nutritionists, maybe.

by carc 11y ago

adventured 11y ago

When the dollar soared, a crash in emerging markets was extremely obvious. It has happened several times before under similar circumstances. It doesn't take a prodigy to understand how it works, it requires not putting your head into the sand and pretending fake good times (paid for via massive piles of debt and endless rounds of currency debasement) last forever. Who's to say most economists are any good at their jobs? Did you see what many of them were saying during the obnoxiously obvious real-estate bubble of 2004-2007? The dotcom bubble? And so on.

dpc59 11y ago
The thing is that a lot of economists have a vested interest in markets going up and bubbles inflating, because their jobs at financial institutions depend on that, so when things start going bad they just block their ears, pretend everything is alright and hope that the markets don't suffer from too much panic.

etherael 11y ago

Plenty of people were better alchemists than alchemists back in the day, too.

clock_tower 11y ago
And plenty of people were better doctors than doctors were. Theodore Dalrymple had a column proving that Shakespeare did _not_ have a formal medical education, because he described symptoms correctly. (He contrasted this with a book by a practicing doctor from the time, who described patients purely in terms of the four humors -- creating fanciful descriptions unrecognizable to a modern practitioner.) Come to think of it, there was also a book published a few years ago about US president James Garfield's death in the late 19th century. He didn't die of being shot in the back; he died of receiving the best medical care in the world.

crdoconnor 11y ago

>People who's day job is to predict this stuff can't even make good predictions. When you get paid for lending academic legitimacy to politically 'useful' recommendations, accuracy isn't necessarily priority #1.

spangry 11y ago

Do you have anything to back that statement up, other than 20/20 hindsight? I'll admit that few economists get timing right on big macro events, but please don't tar us all with the same brush: https://news.ycombinator.com/item?id=10166958 https://news.ycombinator.com/item?id=10166958 If you want to see some decent economic commentary, look here: http://www.macrobusiness.com.au/ http://www.macrobusiness.com.au/ . These guys have been screaming bloody murder for at least the past year.

dandelany 11y ago
How about the fact that index funds consistently outperform actively managed funds?
- spangry 11y ago
  And the relevance of this is...?
  - dandelany 11y ago
    You asked for evidence backing up the statement "People whose day job is to predict this stuff can't even make good predictions". Managers of active mutual funds are exactly these people. The fact that they can't beat the market is clear evidence they can't make good predictions. Of course you could say "well, the good managers beat the market, even though on average they don't". But you could also say that the few people who correctly predict three coin flips in a row are "good at predicting coin flips" - it's easy to say this in retrospect but impossible to predict who the "good ones" are upfront.
Throwaway23412 11y ago
The whole concept of "being good at prediction" is extraordinarily difficult to back up. If you were even a few percentage points better at prediction (especially economic predictions) than the average person, your life is pretty much made. You would literally be better than the average person at seeing into the future. There is a 1% of people (Warren Buffett and James Harris Simons for example) who are significantly better than the average person at predictions, but chances are some random Australian on a tech forum is not part of that 1%.

nostrademons 11y ago

"People who's day job is to predict this stuff can't even make good predictions." That's probably a good part of why everyone has an opinion - when the "experts" are so clearly clueless, everybody's an expert. "If we've got data, let's look at data. If all we have are opinions, let's go with mine." -- Jim Barksdale

zzalpha 11y ago
Or it's just good ol' Dunning-Kruger...
perseusprime11 11y ago
Here's another quote: "Opinions are like assholes, everyone has one and they stink"

gozur88 11y ago

I don't see how random people off the street can be worse economists than economists. Was there ever a profession that was wrong so often and still generally heeded? Nutritionists, maybe.