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Financial Forecasts: Maybe they get it right this quarter

Posted November 30, 2007

"Inflation-adjusted U.S. GDP increased at an annualized rate of 4.9% during the third quarter. That, my friend, is about twice the growth rate of the current European economic "resurgence".  And it accounts for subprime crisis and housing collapse, which deducted over a percentage point from the numbers." — J. Christoph Amberger

 

by J. Christoph Amberger, TFN

Baltimore — (TFN):     So far, it has not been a great year for forecasters of catastrophe and collapse. Hurricane Season officially ends to day. For the second year in a row, it had been predicted to slam the United States with horrendous storms.

Apparently, the mathematicals models that enable the climate specialists to accurately predict weather patters for twenty to fifty years out leave something to be desired in the short term.

National Oceanic and Atmospheric Administration scientists are now reviewing a set of dynamic weather patterns that yielded lower-than-expected hurricane activity. So should be the financial analysts whose typical knee-jerk reaction to forecasts like this is to bid oil prices up.

Equally inaccurate have been the calls for lower US GDP growth. In fact, the Commerce Department, too, was forced to revise its third-quarter gross domestic product growth higher. Inflation-adjusted U.S. GDP increased at an annualized rate of 4.9% during the third quarter.

That, my friend, is about twice the growth rate of the current European economic "resurgence".  And it accounts for subprime crisis and housing collapse, which deducted over a percentage point from the numbers.

The upward revision was due to substantial increases in private inventory estimates and exports — and a downward revision to imports.

Of course, the predictions are undauntedly bearish. Notwithstanding record retail sales, analysts are calling for Q4 GDP growth to come in at under 1%.

I’m sure they’ll be right this time around.


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Posted by J. Christoph Amberger · Filed Under News that Matters 

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