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The tricky thing about predictions made by public entity or persona is that, the fact that they are making public predictions creates a major influence on the o
by claw-el 2mo ago
The tricky thing about predictions made by public entity or persona is that, the fact that they are making public predictions creates a major influence on the outcome itself. People react to predictions made by them.
- CGMthrowaway 2mo agoA major reason why the new Fed chair is refusing to provide forward guidance, in a major departure from all(?) previous Fed chairs and will likely require textbooks to be rewritten.
- VladVladikoff 2mo agoStrange to eschew the only actual power they have. Interesting times.
- claw-el 2mo agoYes, one can see it this way, therefore they don’t want to provide forward guidance. One can also see it another way that ‘their job’ is to purposely use forward guidance to impact direction. Not sure which is the right way.
- doctorpangloss 2mo agoimo, its purpose is to be independent, because raising rates (combating inflation) is unpopular. otherwise, its job is pretty simple, it does't take much expertise, gravitas or technology to choose the number or to say no to the president.
- deleted 2mo ago[deleted]
- jjmarr 2mo agoAlan Greenspan (fed chair from 1987-2006) was famous for deliberately confusing forward guidance. Ben Bernanke and Janet Yellen are the historical anomalies for clearly communicating their intent. https://en.wikipedia.org/wiki/Fedspeak https://en.wikipedia.org/wiki/Fedspeak Quote from Greenspan himself: > As Fed chairman, every time I expressed a view, I added or subtracted 10 basis points from the credit market. That was not helpful. But I nonetheless had to testify before Congress. On questions that were too market-sensitive to answer, 'no comment' was indeed an answer. And so you construct what we used to call Fed-speak. I would hypothetically think of a little plate in front of my eyes, which was the Washington Post, the following morning's headline, and I would catch myself in the middle of a sentence. Then, instead of just stopping, I would continue on resolving the sentence in some obscure way which made it incomprehensible. But nobody was quite sure I wasn't saying something profound when I wasn't. And that became the so-called Fed-speak which I became an expert on over the years. It's a self-protection mechanism ... when you're in an environment where people are shooting questions at you, and you've got to be very careful about the nuances of what you're going to say and what you don't say.
- doodlesarefun 2mo agoWhen I studied economics and finance, I thought it was very dumb that we created a position where an individual's words can have that kind of power.
- mrandish 2mo agoI think the better Greenspan quote is from one of his earlier congressional testimony sessions: "Since becoming a central banker, I have learned to mumble with great incoherence. If I seem unduly clear to you, you must have misunderstood what I said."
- CGMthrowaway 2mo agoGreenspan himself coined the term "Fed speak"
- reenorap 2mo agoNo, only since Bernanke. So it’s very recent and not something that was historically done by Fed chairs.
- CalChris 2mo agoIt started with Greenspan but ramped up under Bernanke. https://www.richmondfed.org/publications/research/econ_focus/2022/q4_federal_reserve https://www.richmondfed.org/publications/research/econ_focus...
- CGMthrowaway 2mo agoNot quite. "Notably, in 1974, Federal Reserve chair Arthur Burns felt it necessary to make clear that high nominal interest rates would need to continue “for a time” as an anti-inflation measure;" "A later chair, Paul Volcker, having presided over a period of very restrictive monetary policy, chose in March 1982 to make an explicit indication that nominal interest rates would and should fall in the period ahead." https://www.federalreserve.gov/econres/feds/files/2021033pap.pdf https://www.federalreserve.gov/econres/feds/files/2021033pap...
- Animats 2mo agoThe Fed is tasked with keeping inflation down and employment up. But they only have one knob.
- CGMthrowaway 2mo agohttps://www.federalreserve.gov/monetarypolicy/policytools.htm https://www.federalreserve.gov/monetarypolicy/policytools.ht...
- Mistletoe 2mo agoI don’t think The Economist has that kind of power. More likely that when they make covers like these every normie feels that way and it’s going the other way soon, as it has exhausted every buyer or seller and it has reached the ends of your earth and your Mom and Dad even feel that way. https://www.readtrung.com/p/the-economist-cover-curse-explained https://www.readtrung.com/p/the-economist-cover-curse-explai...
- CursedSilicon 2mo agoSorry, but ...Normie? What does that even mean in this context
- allthetime 2mo agoSomeone without a deeper understanding of markets who is just reacting superficially to news, headlines, mainstream information etc.
- junkaccount 2mo agoIt does not by itself but it is often just siding with a narrative that lot of other media houses and political parties are supporting as well.
- Spooky23 2mo agoThe thing with the Economist is that they have a style that’s like an erudite version of the old Time magazine — that is stories written to say what the editors want. Except the economist is way more dogmatic. I used to read it regularly. I can’t imagine anyone looking to them for predictions, as even a casual reader could probably outline the magazine’s views on most any topic. Let me skim 4-5 recent issues, and I could probably replicate anything they would predict with like 85% accuracy! I will say that my favorite part of the magazine was the wacky ads for big shots working for African countries, various UN things, NGOs, etc.
- Joker_vD 2mo agoYep. That's why predicting the future of a system you're a part of is sometimes literally impossible; it boils, fundamentally, to the fact that logical negation doesn't have a fixed point.
- ngruhn 2mo agoThat's a beautifully simple characterization. I've never heard of of that. What keywords do I need to find more on this topic?
- Joker_vD 2mo agoGame theory? Imagine a simple game of hunter and prey. There are two locations that they need to chose from. If they both chose the same location, the hunter wins. If they chose differently, the prey wins. Now, if the hunter can accurately predict the prey's choice, they obviously simply need to select that same choice to always win. The similar logic works for the prey; but this means they can't both be perfect predictors of the future — if the hunter predicts that the prey will choose T, they will choose T as well, but that means the the prey will predict the hunter choosing T and will choose F instead, so the hunter has actually to predict that the prey will choose F, and so they will choose F as well, but that means the the prey will predict the hunter choosing F and will choose T instead...
- eru 2mo agoJust copy and paste the sentence you admire into your favourite LLM and then ask the question you had?
- Arkhaine_kupo 2mo agoWhy ask a human being who might have the exact knowledge you are looking for when you can ask the "dumb machine of making things up and getting things wrong" instead. Now being serious, LLMs are nondeterministic loosy compression algorithm which return "what a plausible answer to that question would be". They have no world model, no truth verification and formally will be excellent while having no verifiable content.