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Great expectations

November 27, 2009

I've previously covered the danger of attributing meaning to a forecast which is obviously based on little or no information. In that case, it was the manufacturing survey, which one might dismiss as a more obscure measure. Recently, however, Ken Houghton has written a pair of posts on inflation forecasts that bring me back to […]

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Random forecasts (with echoes!)

June 15, 2009

And speaking of forecasts, I'm reminded today of one of my favorite forecasting errors: the echo. This morning, the manufacturing survey missed the forecasted amount, and many pundits commented that it contributed heavily to the market's fall. Here is a plot of the manufacturing survey level as reported each month in red (prior to any […]

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