Don't Laugh

Grossly Distorted Prediction (GDP)

The GDPNow forecast brought to you by the fine folks at the Atlanta Fed is based on formulas.  Some adjusting is done but a at the end of the day if you feed crap into the formula you get crap out.  And thus, as of August 5, 2016, the formulas forecast third quarter GDP at an annualized rate of 3.8%. 

https://www.frbatlanta.org/cqer/research/gdpnow.aspx?panel=1

Hold it.  Keep holding it.  Don't you dare laugh. Okay, what the hell, go ahead and laugh.  This forecast should be from the Federal Reserve Bank of Denver, if there were one.  At least there you have a reason to be high.

 Really, they are trying to be accurate but look at the crap they are given.  I mean did you see the recent jobs numbers with the slight adjustments by the BLS?  Feel free, apparently, to drop the "L."

Here we are a few days later and thankfully the Atlanta Fed has taken the forecast down a notch to 3.7%.    I for one will be surprised if the quarter ends with a reading even half of where they are presently.

[8/12/16 Update:  Forecast revised down to 3.5% due to underwhelming retail sales numbers]

Wish I Had Thought of That

I posted a few weeks ago on the concept that with rising automation and utilization of robots to replace human jobs, perhaps socialism is inevitable.  It was not a recommendation, just a question to chew on.  Well, one billionaire sees the same problem but has a different possible outcome to consider. 

http://www.bloomberg.com/news/articles/2016-08-04/mexico-s-richest-man-wants-a-three-day-workweek

I think Mr. Slim has an idea worth real consideration.  While at first blush it seems like paying someone a full salary for three days a week of work is foolish, is it any more foolish than supporting him through social programs for not working at all?  If there is simply not enough work to employ everyone 40 hours a week, better to have them work some and have some skin in the game and self-respect than not working at all.  Sure, there are some wrinkles to work out, but I think it is worth serious consideration.

A Pence for Your Travel

Apparently since Brexit, travel has surged in Britain, which many are attributing to a weakened pound.

http://www.zerohedge.com/news/2016-08-09/brexit-bonanza-international-visitors-uk-jump-thanks-weaker-pound

Well, that could well be the main culprit, but perhaps, just maybe, tourists consider Britain to be the safer travel destination in Europe at the moment.  After all, it is balking at refugees while many countries who accepted refugees are having repeat issues with terrorism and other crime.  Certainly the terrorism has to be putting a damper on travel plans to France, but other crimes are getting a lot of press and likewise are dissuading tourism.  For example, rape and sexual assault are at extreme levels in many European countries.

http://www.zerohedge.com/news/2016-08-09/germanys-migrant-rape-crisis-spirals-out-control

So why wouldn't you want to vacation instead in a place that just got cheaper and is arguably safer?