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Market-Based Predictions for 2009

Predictions for 2009 derived from people who put their money where their mouth is:

1 GM to announce a merger with another major auto manufacturer: 35%
2 More than US$25 billion to be injected into the big 3 auto-makers: 60%
3 Caroline Kennedy to replace Hillary Clinton in the US Senate: 53%
4 Guantanamo Bay Detention Camp to be closed in 2009: 84%
5 The US in Recession in 2009: 85%
6 An air strike against Iran before end of 2009: 21%
7 US unemployment rate at or above 8% in December 2009: 50%
8 Robert Mugabe to depart as President of Zimbabwe in 2009: 50%
9 Slumdog Millionaire to win Academy Award for Best Picture: 52%

As at 7am EST 12/29/2008.

posted on 30 December 2008 by skirchner in Economics, Financial Markets

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Comments

Interesting how Intrade has the probability of the US going into a “depression” (which they define as a cumulative GDP fall of at least 10% over 4 consecutive quarters) in 2009 at 30%. This is up from about 15% in late November when the stock market was plummetting. Yet the market has rallied somewhat and stabilised since late November. Something doesn’t seem right. I wonder if the problem is that the contract rules are misleading. They refer to the sum of quarterly GDP figures adding up to more (sic) than -10. But as you’ve noted before, quarterly GDP data are reported as annualised rates. To get a 10% fall in GDP, the sum of 4 quarterly figures must be less than -40, not -10.

Posted by .(JavaScript must be enabled to view this email address)  on  12/30  at  10:58 PM


On that basis, the US economy has expanded 3% since the recession began in Q4 07.

It’s a screwy contract definition, but does highlight the rather inconvenient fact that US GDP was higher in Q3 08 than when the recession supposedly commenced in Q4 07:

http://research.stlouisfed.org/fred2/fredgraph?chart_type=line&s[1][id]=GDPC96&s[1][range]=5yrs

Posted by skirchner  on  12/31  at  03:15 AM


What are the odds of China going into recession?  (A real recession, not the so-called “growth recession” of anything less than 5% growth).

Posted by .(JavaScript must be enabled to view this email address)  on  01/02  at  03:58 AM



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