Future shock

"The only function of economic forecasting is to make astrology look respectable."

That's a quote from John Kenneth Galbraith, cute, witty, and to some extent it feels like the truth. Published economic forecasts generally stay within a narrow range and rarely project the unexpected. They are for the most part of little real predictive value because they are merely taking what is known today and adjusting trends based on that knowledge. As has often been said here when projecting the performance of an equity holding, "all things being equal" the stock will... In fact all things rarely remain "equal". So much for my stock forecasts, although they usually work until they don't.

Some outlying economists do stick with provocative forecasts, but they are less forecasts than stubbornly held opinions which may eventually turn out to be right. As they say, even a broken clock is right twice each day.

What Galbraith's long quoted comment refers to, in this observer's opinion, is what we see in the public domain. That is especially true today. What we don't see is where the risk is being taken and where some economists and market players have an informational or intelligence edge. With the boom in private equity markets and the insular networks of information and opinion that are within the hedge fund and the high net worth communities, much of the valuable and more accurate forecasting and much of the true wealth creation is no longer public.

Galbriath's pithy quote sounds good, but there are some really smart people around, for the most part just not on CNBC or in the business pages for all of us to see.