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« A Bad Dream | Main | Reality Check: Productivity »

April 15, 2007



Thanks to everyone for their comments and great points on this topic.

I had the Mauboussin piece in mind when writing it. It deserves a separate and more extensive treatment -- as does most of his work -- so it is on my (ever-growing) list.



"Re"posting above link:


Mauboussin on the limitations of experts in solving problems of only intermediate complexity, and the wisdom of crowds when conditions such as diversity, aggregation and incentives are met


Business Week has a brief article on how weak capex domestically provides a misleading picture on how much US companies are really spending:


The public is correct to discount the professional economists, but that doesn't mean that a poll of grandmas at the mall is a better predictor of recessions.
The big professional challenge for economists is the shift away from treating economics as a behavior science (i.e., a social science) and towards treating it as a hard, mathematical science. It seems like new economists today are just kids with a supercomputer who have no idea how market participants will react to (or anticipate) changes in the economic environment.

Barry Ritholtz

Before you blame the media, note they have been trumpeting new stock market highs, unemployment at record lows, global stock market boom, and inflation is contained -- so I doubt its that.

"How are we doing? Great! We haven't spent our home equity on consumer goods, we are not in debt, and our income has kept up with inflation. But we expect a recession, anyway. Yeah, that's the ticket!"

What's wrong with that picture?


This is a great post. I guess as long as the Fed continues to lower the gross market interest rate by running their repo scheme they can almost guarantee capex spending won't tail off too bad.

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