Prediction markets suggest no recession?

[snousle]

The Intrade prediction market has shown a precipitous drop in the value of contracts that pay off if there's a recession in '08. In other words, most traders in this prediction market (who are putting up actual money on the question rather than merely blathering about it) believe, in aggregate, that a recession has less than a 30% chance of occuring in '08.

So... all of you that are so sure that we're on the edge of a recession, this is your chance to not just prove that you were right, but to make a lot of money on your prediction. Seriously. If you really, truly believe that there will be a recession in '08, you can triple your investment within a year for almost no effort. Not to mention earning unlimited gloating rights for your prescience.

Any takers?

Anyone? Anyone?

Comments

[snousle.livejournal.com]

[eyeroll]

The Wikipedia article on the subject addresses how recessions are defined and declared.

It's not that easy to manipulate the definition of recession. The most one can do through manipulation would be to shift it back or forward in time a little - maybe a quarter or two. And frankly I see no reason to believe that happens.

But of course, if one wishes to dismiss even the most basic economic indicators as propaganda, then there is no reason to discuss them at all. You would have no basis for evaluating the economy whatsoever, whether positively or negatively.

[kevynjacobs.livejournal.com]

Don't be too hard on albadger. His cynicism, given the current Orwellian doublespeak and crass propaganda that is going on in this culture -- the way the ruling class talks to the lower classes -- is understandable.

"Who gets to define recession?" is a perfectly reasonable question.

[snousle.livejournal.com]

Yeah, it's a reasonable question. But I'm somewhat worked up on the subject these days, and conspiracy theories make me testy for various reasons.

[tmaher.livejournal.com]

I dismiss the Dow Jones average all the time - it's not accurately weighted like the NASDAQ composite or S&P 500 or anything else. Yet it's consistently cited as one of the most basic economic indicators, and certainly used in a propagandistic fashion.

May I continue to evaluate the economy?

[snousle.livejournal.com]

YOU CAN HAS ECONOMIC EVALUATION.

The DJI is what it is; it's just a stock index, and as far as I know there is nothing in its formulation that is overtly or deliberately deceptive. So it is a basic indicator, it's just that it's not the sole or even primary indicator of overall American well-being.

To say "Dow Jones up, good, Dow Jones down, bad" is common, but silly, and is rightfully dismissed in that context. I don't know why the media fetishizes that number, and not, say, the Gini coefficient. That still does not invalidate the usefuless of the index to those who trade stocks, even if they are a distict minority.