John Mauldin takes down the business of economic forecasting in his new weekly letter.
“If you look at the history of the last three recessions in the United States, you will see that the inability of economists and central bankers to understand the state of the economy was so bad that you might be tempted to say they couldn’t find their derrieres with both hands,” wrote Mauldin. “Economists have yet to correctly call a recession.”
For those who don’t have time to read Mauldin’s lengthy letter, there’s one chart that sums up his thesis nicely. It comes from Societe Generale, and it shows economists’ consensus forecasts for GDP growth. As you can see, it never goes negative during this 35 year span.
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