NABE Is At It Again – We Still Don’t Believe Them
Source: http://feedproxy.google.com/~r/smallcappulse/feed/~3/rLgrRkjy2qk/Posted on Thursday, May 28th, 2009 | In Market Commentary, Small & Micro Cap
May 27, 2009 – This morning the National Association of Business Economists, a group of lsquo;leadingrsquo; economic forecasters reported that 90% of its flock expect the recession to end in 2009, with about 74% thinking the recession will end in Q3. And on unemployment they expect unemployment to average 9.1%. The fact that this group of economic quacks even still has a forum is ridiculous, and we have been vocal critics of their prognostications for years now.
Back in May, 2008, we criticized NABE for positing that ldquo;the worst of the credit crunch is coming to an end.rdquo; In February, 2008, only 45% of NABE economists thought there would be a recession. This group has been notoriously myopic about the state of the economy and we donrsquo;t see any reason to take their forecasts seriously. Even in the midst of the crisis, they have continued to get it wrong.
They are now forecasting the economy to contract by 2.8% this year, which is significantly higher than the 1.9% contraction that they had forecast back in February, 2009. We think their forecast of 0.7% growth in Q3 and 1.8% growth in 1.8% depends on unrealistic assumptions coming to reality in so short of period. But then, we havenrsquo;t seen NABErsquo;s forecast align with reality in years.
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