Economist's Says . . .!

A mathematician, an accountant and an economist apply for the same job.
The interviewer calls in the mathematician and asks "What do two plus two equal?" The mathematician replies "Four." The interviewer asks "Four, exactly?" The mathematician looks at the interviewer incredulously and says "Yes, four, exactly."
Then the interviewer calls in the accountant and asks the same question "What do two plus two equal?" The accountant says "On average, four - give or take ten percent, but on average, four."
Then the interviewer calls in the economist and poses the same question "What do two plus two equal?" The economist gets up, locks the door, closes the shade, sits down next to the interviewer and says, "What do you want it to equal"?

I cannot take credit for the joke but the best part is I think it reveals a bit of truth; economists give us what we want to hear, and right now that is anything but reality. Their jobs may be short-lived if they spoke the truth. For example:

The durable goods orders came out this morning and the bookings increased .3 percent, which is just a smiiiiiidge below (as in one tenth of) the 3% median of economists' forecasts based on a Bloomberry survey of 75 economists.


http://noir.bloomberg.com/apps/news?pid=20601087&sid=acPSIQI5pXfw&pos=2

Indeed, it was just a smiiiidge below every single economist forecast of the 75 surveyed by Bloomberry, who ranged from 1.2 to 6.8%. Imagine that, even the most pessimistic economist was off by 400%. I wish they would post the names of the surveyed economists as I would sure like to see who said 6.8%. He got some splainin' to do.

So you think this is an isolated incident, well let's talk about the new housing sales number out today. Sales fell 12% to an annual pace of 276,000. I like the Bloomberry headline:

"Sales of U.S. New Homes Unexpectedly Declined to a Record Low Last Month"

http://noir.bloomberg.com/apps/news?pid=20601087&sid=aMPHz7m3ZYq0&pos=2

So this was "unexpected"? By who, might you ask. Well, you got it, economists. Bloomberry surveyed 74 on this topic and the median was 330,000, just a smiiidge over 276,000. Now, admitedly, it would be rare for an economist to predict a number that would be the worst ever result on record. So rare, in fact, that not one of the 74 surveyed economist was even close. The lowest forecast was 291,000. And some economist who apparently lives in a cave with no access to the outside world forecast 355,000.

By the way, henceforth I am referring to Bloomberg as Bloomberry. I like the sound of it.

Update: Out this morning is the weekly jobless claims report came in with initial applications at 473,000. Econmists predicted a worse number. So I suspect an apology is in order. But before I do so, let me note that every one of the 48 economists surveyed by Bloomberry had more pessimistic numbers than what was being reported, though one economist at 475,000 was darn close. So I apologize. Let me also note the weekly numbers are quite volatile and most folks prefer to focus on the four week moving average.

http://noir.bloomberg.com/apps/news?pid=20601087&sid=aIdbC83.n6KM&pos=1


Disclosures: None.