2008 Recession Odds Plummet On Intrade to 17.4%
Odds of a 2008 U.S. recession have fallen to 17.4% on Intrade.com, from 70% in mid-April, and from about 33% just a week ago (see chart above, click to enlarge). CARPE DIEM
Professor Mark J. Perry's Blog for Economics and Finance
Monday, July 21, 2008
Odds of a 2008 U.S. recession have fallen to 17.4% on Intrade.com, from 70% in mid-April, and from about 33% just a week ago (see chart above, click to enlarge). About Me
- Name: Mark J. Perry
- Location: Washington, D.C., United States
Dr. Mark J. Perry is a professor of economics and finance in the School of Management at the Flint campus of the University of Michigan. Perry holds two graduate degrees in economics (M.A. and Ph.D.) from George Mason University near Washington, D.C. In addition, he holds an MBA degree in finance from the Curtis L. Carlson School of Management at the University of Minnesota. In addition to a faculty appointment at the University of Michigan-Flint, Perry is also a visiting scholar at The American Enterprise Institute in Washington, D.C.
Previous Posts
- Second Quarter Real GDP = +3%
- Cancer Survival Rates
- Freedom and Consumer Greed Are The Keys to Wal-Mar...
- Cartoon of the Day
- Demand Curves Slope Downward
- Russia Becomes #1 Car Market in Europe
- U.S. Exports More Than China or Japan
- Zimbabwe Introduces $100 Billion Banknotes
- Renegade Parents Teach Old Math on the Sly
- Citizens More Taxed Now Than Under King George
7 Comments:
I take that as a contrarian indicator
Well, there are only 2 quarters left in 2008. Both would have to show negative growth. You'd probably be better off betting on a recession in 2009 (because of the contract rules), even though that price is at 55.
Aren't you a believer in free markets? Why would you prefer the phoney-baloney numbers spouted by a self-interested government to the forward looking wisdom of the market?
It seems to me like a whole lot of so called free-market economists turn into government loving socialists when things turn bad.
Bail us out! Tell us how great inflation is, and how growth is so fabulous!
Harpers had an excellent piece on how most of this government stats are completely fraudulent.
If you truly believe in free markets you'd be well advised to read that article.
Uh, volume? Predictive markets need more participants, particularly of differing types, including blind investors, trend followers, etc to be able to have enough volume and noise to get a good result. My take is that inTrade is losing that (or maybe never quite got it). That said, if you can get enough people in the game, the predictive markets can be excellent.
Hey anon @ 6:51 PM, could you tell me what was supposedly excellent about that Kevin Phillips bit?
Kevin Phillips worked for the the wage & price controls king, Richard Nixon, right?
Didn't a Wall Street Journal editorial once describe Kevin Phillips as a country & western Marxist?
There is absolutely no information here due to the ludicrous contract specifications (two consecutive quarters of negative GDP growth, the second of which must occur in 2008). That means (with q1 in the bank as positive, and q2 apparently positive as well) a specific wager on both q3 and q4 coming in negative.
If they had used a sensible definition (something like "the Business Cycle Dating Committee of the NBER establishes a recession that contains at least one month in 2008"), the contract would probably trade for about 80.
Hey Professor Mark, the fine folks over at Investor's Business Daily's editorial offices must be reading your posts...
Note this July 23, 2008 4:20 PM PT posting by them...:-)
Post a Comment
<< Home