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threegee

...the stock market won't even notice Brexit

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Pretty much the opinion of all the investors I know, and they too have a rather dim view of professional economists.

http://www.telegraph.co.uk/investing/shares/why-the-stock-market-wont-even-notice-brexit/

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My opinion is that, in the short term, there would be a little disruption but nothing of real significance. In the long term, I believe the British economy would do better out of the EU.

How do I dare go against the forecasts of these bodies, stuffed as they are with people who got Firsts in economics at Cambridge or who are among the clever elite in Paris who studied at the École Polytechnique? Surely they know best, don’t they?

As those of you who have followed the history of economic forecasts will know, actually they don’t know best. Our elite, brilliant economists have a solid record of getting it wrong. 

One of the many occasions I could list was when Olivier Blanchard, then chief economist of the IMF, warned in 2013 that the deficit reduction programme proposed by George Osborne was “playing with fire”.

The following year, Britain had the fastest-growing major economy in the world.

Mr Blanchard subsequently tried to explain how economists such as him got things so badly wrong. He said they looked at the wrong facts.

Ah yes! The “wrong facts”!

In the case of Brexit, these bodies are not looking at facts at all, even wrong ones. They have simply put gloomy assumptions into their computer models and, lo and behold, out have come gloomy figures. 

If they put in assumptions of a different sort – less regulation, new trade deals around the world, lower taxes than otherwise, reduced costs of food that the EU has barriers against, renewal of our fishing industry, recovery of our auction industry, more flexibility in financial services, for example – hey presto!  Their computers would dutifully come out with a prosperous future.

I think economists are like doctors in the 18th century. They still don’t really understand how things work.

Seems to me that not only don't economists understand how things work, but the chattering classes are in for a few lessons too.

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The Stock Market is a Chaotic system. Someone with experience may be able to give a reasonable prediction of tomorrow's events but will stand no chance of an accurate prediction in a month's time. Bit like weather forecasting, or predicting global warming! :D

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Talking about economists: I fail to understand why anyone would want to devote their working life to toiling away within a Ponzi scheme that could (and will!) collapse at any moment in time.

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7 minutes ago, webtrekker said:

Talking about economists: I fail to understand why anyone would want to devote their working life to toiling away within a Ponzi scheme that could (and will!) collapse at any moment in time.

The same reason primitive societies have witch doctors: in the absence of anything genuinely scientific it pays well!

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30 minutes ago, webtrekker said:

The Stock Market is a Chaotic system. Someone with experience may be able to give a reasonable prediction of tomorrow's events but will stand no chance of an accurate prediction in a month's time. Bit like weather forecasting, or predicting global warming! :D

Not even a few minutes hence - so those weather people have a distinct edge! This was very simply explained to me many years ago by a friend who worked at Lehman Brothers NY.  The truth is that if anyone (and that includes financial analysts and economists) knew significantly more than the market on a consistent basis then the market wouldn't function.  The armies of financial workers make their living from fixed commissions on other people's money, and telling their employers what their employers want to hear - not by having any unique insights into what's really going to happen.

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