I got up this morning and checked some financial news websites. A report on the economy’s leading economic indicators (LEIs) was due out at 10 o’clock. I then got off-line and went to breakfast with Kay, my life associate.
Over bowls of cereal and side orders of kiwi fruit, I asked Kay what she thought the LEI report would show, how much it would change.
“Beats me. Eat your Kiwi,” said Kay.
“Guess,” I prodded.
“O.K.,” she replied. “I think it will go up .2 percent.”
“Boy this is good Kiwi,” I said. “I’m guessing it will go up…let’s see…go up .5 percent.”
Doing some quick math, this made the median average of the Kay and Mike LEI expectation .35
Dozens of highly paid economists are polled regularly by various Wall Street trackers. The closely watched “analyst expectations,” a median average of these experts’ prognosticating, move literally billions of dollars in the markets. The economists polled by MarketWatch, according to its website, forecast a .3 percent increase in the LEI. The economists surveyed by Bloomberg, according to its website, forecast a .2 percent increase.
The actual increase in the LEI reported at 10 o’clock this morning was .6. We all got it wrong. But the projection of Kay, a painter and graphic novelist, and Mike, who writes financial verse and comic novels, concocted in less than a minute over breakfast, beat the best-and-brightest on Wall Street in predicting this important economic number.
Here’s two possible conclusions to be drawn from this:
Stock markets these days are moved, often dramatically and in ways involving billions and billions of dollars, by things that are at best well meant guesswork, and at worst sheer nonsense meant to give an appearance of plausibility to the endless finagling of the financial system by Wall Street market fixers.
Or:
That Kay and Mike are unrecognized economic and financial geniuses who deserve wads of contributions for their heroic efforts bringing new profound insights to the markets.
If you believe the former, contact your congressional reps and tell them to support the Brown-Vitter bill that seeks to limit the dangers to our economy of too-big-to-fail Wall Street banks. If you believe the latter, contact me at [email protected], and receive instructions about where to send large contributions to Kay and me in the form of fiat money (all major currencies accepted), gold bullion, or Bitcoins.
(Michael Silverstein’s comic novels, Fifteen Feet Beneath Manhattan, The Bellman’s Revenge and Murder At Bernstein’s, are all available from Amazon.)