Conflicting Opinions

What can we make of the huge variations in economic predictions by quite reasonable analysts? I briefly touch on the topic from my perch in Halifax where I am cool, if not calm or collected. We then go on to Part Two of Art Cashin's excellent essay on how the world of economics really works.

For the last few days, I have been catching up with the reports which accumulated in my email inbox while I was in Cape Breton with my bride. I have been struck by the veritable chasm between analysts for whom I have a great deal of respect. I am not talking about market cheerleaders or professional bears, but those who simply try to sort out the ying and yang of the economy, with no axe to grind. There are those who see the economy recovering sharply and those who are clearly worried about future prospects. In a conversation with Dennis Gartman, no slouch himself at the forecasting game, I told him I could not remember a time when competent analysts disagreed so much.

He averred that he could. In fact, he could remember two such times: 1974 and 1980. I will defer to his clear seniority in this matter, as I was parsing Greek verbs in the former period and was still trying to learn to simply spell analyst in the second.

With that said, let me see if I can help us peer through the forecasting fog, which at times is as dense as…