The monthly survey of blue chip economists came out today. I wonder what it takes to become a BLUE CHIP ECONOMIST. From what I can gather, your forecasts need to be so bad that they make weathermen forecasts look great. Most of these morons are employed by Wall Street. If the economy grows, the stock market usually goes up and more clueless bastards give their money to these Wall Street firms. I don't see any potential conflict of interest, do you?
Surprisingly, they predict a recovery in the 2nd half of 2009 following through to 2010. If the 51 smartest economists in the country says it's so, it must be. Being the skeptical son of a bitch that I am, I went back to September 2008 and September 2007 to see what these "brilliant" blue chippers had to say then. The articles I found are below.
In September 2007 these esteemed financial brains only saw a 33% chance of a recession in the next 12 months. The recession started 3 months later and has been the worst since the Great Depression. In September 2008 in the middle of the 3rd Quarter their GDP growth predictions were:
3Q 08 4Q 08 1Q 09 2Q 09
Blue Chip Forecast 1.0% 0.2% 1.1% 2.0%
Actual Result -2.7% -5.4% -6.4% -1.0%
Based on the BLUE CHIPPERS, the GDP of the US should be $15.1 trillion. It is actually $14.1 trillion. They only missed by $1 trillion. Not bad for a banker or a government bureaucrat.
Whatever you do, do not listen to these morons and fools. Half of them graduated from Harvard. That should tell you enough.
|1||Gross domestic product||-0.7||1.5||-2.7||-5.4||-6.4||-1.0|
|2||Personal consumption expenditures||-0.6||0.1||-3.5||-3.1||0.6||-1.2|
|7||Gross private domestic investment||-7.4||-10.4||-6.9||-24.2||-50.5||-20.4|
|11||Equipment and software||-0.5||-5.0||-9.4||-25.9||-36.4||-9.0|
|13||Change in private inventories||---||---||---||---||---||---|
|14||Net exports of goods and services||---||---||---||---||---||---|
|21||Government consumption expenditures
and gross investment
|25||State and local||-0.5||1.2||0.1||-2.0||-1.5||2.4|
WASHINGTON (MarketWatch) -- Most economic forecasters say the recession will end this quarter, but most also believe a U.S. recovery will be subdued, according to the monthly survey of economists published Monday by Blue Chip Economic Indicators.
The panel of 51 economists predicts that the economy will contract 2.6% in 2009 and that gross domestic product will grow 2.3% in 2010, according to the median forecast.
About one-sixth of the group believes the recovery will be robust, resembling a V-shape on chart, as it typically does after a deep recession. Another one-sixth believes the recovery will look like a W, with a further period of weakness next year after a period of strength over the final six months of 2009.
The others -- about two-thirds of the group -- expect a U-shaped recovery, with below-trend growth until late next year.
Consumer spending is likely to be weak through 2010, the economists said.
Most of the forecasters look for subdued inflation and stubbornly high unemployment through the end of 2010.
Specifically, the consumer price index is expected to rise 1.9% next year.
And the nation's unemployment rate should average 9.9% next year, they said. The jobless rate stood at 9.4% during July, government data reported last Friday showed.
US economists boost 2008 GDP forecast-Blue Chip
WASHINGTON: A sharp upward revision in U.S. gross domestic product
The September forecast for 2009 remains unchanged at 1.5 percent from August and after falling for seven consecutive months, results of the survey conducted Sept. 6-7 showed. The Commerce Department said in late August its preliminary estimate of GDP showed the economy growing by 3.3 percent in the second quarter, much faster than first thought. The month before it originally said GDP had expanded at a 1.9 percent rate in the quarter.
However, previous support from strong exports and consumer spending aided by government stimulus checks will diminish and instead become a drag on growth in the second half of the year, the survey said. Exports will continue to aid GDP over the next two quarters, but at a reduced rate due to markedly slower economic growth abroad, a rebounding U.S. dollar and high transportation costs, the economists said in the survey.
Growth will slip to 1.0 percent in the third quarter from 1.2 percent forecast in August and to a meager 0.2 percent in the fourth quarter from 0.3 percent forecast in August. Growth will slowly pick up speed through 2009, starting with 1.1 percent growth forecast for the first quarter and ending the year with 2.7 percent growth in the fourth quarter, unchanged from the August predictions. Consumer spending -- more than two-thirds of the GDP -- now is predicted by the consensus to register its first back-to-back quarterly contractions since 1990.
"Deteriorating conditions in the labor markets and a significant tightening of credit have added to worries about consumer spending going forward." survey said. Overall business investment is expected to add somewhat to growth in the second half, but not much, the survey showed. While the U.S. economy will likely escape a full-blown recession, the odds of entering a recession in 2008 now stand at more than 60 percent amid a weakening labor market and pullback in consumer spending.
"Most broad growth measures show much more weakness than the official GDP data, but even the weakness of those measures show a relatively modest rate of decline," said James O'Sullivan, an economist for UBS in New York. The percentage of economists who believe the U.S. economy is in, or will be in, a recession this year rose to 61.7 percent, surpassing the 55.8 percent predicted in August and above the May peak of 60 percent.
A majority of the economists believe the credit crisis has played a bigger role in dampening U.S. economic growth over the past year than sharply higher food and energy prices and say it will weigh most on growth in the coming year. Of those responding, 57.8 percent say the credit crisis played a bigger role than prices in tamping down growth over the past year, while 82.6 percent say it will weigh most on growth over the coming year.
Fed Can Help U.S. Avoid Recession: Economists
Economists are clearly worried about the U.S. falling into a recession, but they also believe the Federal Reserve can help prevent one by cutting interest rates.
A survey by the National Association of Business Economics showed economists believe recession is the biggest risk to the economy right now and that the Fed will cut rates by half a percentage point by March in the face of sluggish economic growth.
A separate survey by the Blue Chip Economic Indicators newsletter also said the chances of a recession are increasing as troubles in the housing sector and credit markets take their toll.
"Over 60 percent of the respondents cited recession as the major risk facing the economy over the next year, while only a third cited inflation as the greatest problem," the NABE said.
Those most concerned about a recession tended to cite problems in the subprime mortgage market and potential declines in home values as likely triggers.
Can Be Avoided
Still, many thought that recession, while a risk, could most likely be avoided -- with some help from the Fed. The survey, reflecting the estimates of 46 economists, was taken Aug 2-23.
That period began with relative calm before descending into a global credit meltdown capped by a cut to the Fed's discount rate and the issuance of a special Federal Open Market Committee statement that effectively shifted the bank to rate-cutting bias.
Only a third of respondents guessed that "domino effects" were under way where losses in the subprime mortgage market would spread to many other sectors.
The panel trimmed its outlook for 2008 consumer spending growth to 2.5 percent from 2.8 percent and also cut its estimate for business fixed investment.
The economists forecast a 50-basis-point cut in the federal funds rate by the end of the first quarter of 2008, up from May's forecast of 25 basis points.
Meanwhile, the Blue Chip survey put the odds of a recession in the next 12 months at one-in-three. A month earlier, the odds were at one-in-four.
The survey of about 50 private-sector economists was taken Wednesday and Thursday, just ahead of the government's release of August employment data on Friday, which showed the first decline in payrolls four years.
The newsletter stated that this dismal employment picture did not impact an already-weak growth outlook but it did solidify expectations for an interest rate cut from the Federal
The economists lowered their forecasts for growth due to concerns about credit market turmoil spilling into the economy. The panelists said they expect GDP growth to remain modestly below trend through the first half of next year.
Amid the turmoil from a troubled housing market and tightening credit, the consumer may rein in a bit on spending, the economists forecast.
Consumer spending, adjusted for inflation, is expected to grow at the slowest pace in four years during 2007 and slow further in 2008.
At the same time, the economists forecast that disposable personal income will outpace spending, the first time since 2002.
"Underlying this development is a belief among our panelists that households will attempt to rebuild savings in the face of increased uncertainty about job growth, the value of their homes and possibly the worth of their equity portfolios," the newsletter wrote.