It amuses me when relatively new branches of study with poor to non-existent predictive modeling capability criticize "arm-chair" experts on accuracy/predictive aspects. Criticize methodology, data, or conclusions, not authority. This should be applied even in very well established domains.
The fact is, there really are no good predictive models yet. There are a lot of very good and legitimate reasons why there are no good predictive models dealing with complexity, scale, and an inherent connection to human behavior.
Now, this doesn't mean we throw our hands up and anything goes: we should still provide rationale and people should continue to study these systems methodically as they can. At this point, much of professional economics vs armchair economics isn't too far separated from chemistry:alchemy or astronomy:astrology hundreds of years ago. Obviously, there was great merit in the work early chemists, astronomers, etc. took on since we can now stand on their shoulders. Economics shouldn't be belittled, yet at the same time, it should be recognized for what it is: still not very predictive.
Not sure your fact is correct. I saw this linked on HN recently:
"We find that financial cycle measures have significant forecasting power both in and out of sample, even for a three-year horizon. Moreover, they outperform the term spread in nearly all specifications. These results are robust to different recession specifications."
The authors of that paper are not nearly as convinced in overall applicable recession predictability using their proxy measures as the abstract excerpt that lures the reader in:
"These results suggest that financial cycle proxies may be another indicator that could be useful to policymakers, professional forecasters and market participants more generally."
Emphasis added is mine. That's double the coverage of uncertainty propogation.
Unfortunately, I suspect, like most working in modern research and academic settings, papers have to inflate success as much as possible or the researchers lose future funding even though this type of work is high risk of failure. This is partly to blame for the reproducibility crisis we're encountering across the board.
I don't blame the authors (I feel their pain), but I do blame the poorly structured incentive/disincentive system creeping ever-further into academic research.
Even 'experts' aren't experts. In fact, it's a running joke in my city that the top senior meteorologist has made the exact wrong prediction every year for the last decade on winter weather. That's very hard to do. Flip a coin and guess the right (or wrong) side back to back nearly 10 times. Mind blowing. It is very good pay as a glorified fortune teller. It is too complex a problem right now.
Obviously the markets can’t go up forever without a correction, and overleveraging will happen and add up in the financial system. Negative interest rates are a sign of this insane stimulus.
The difference in the US this time around is that the public will have no say in bailouts of banks. It will be done all hush-hush with the world dollar reserves and demand for the greenback as the final backstop:
Isn't that the beauty of economy and meteorology? That everyone is an expert?