CNBC Market Pros Vs. Some 5 Year Olds

Well David Stockman summed it up pretty well yesterday on CNBC.  And so to those who have been asking, this is why I’ve been less driven to write in what may seem to be the moment of vindication for us so called ‘Contrarians’.  You see, I’m not one for victory laps and profiting from my research was never my motive.

My objective in providing research starting back in 2014 was driven by my disgust for the lack of integrity from the so called market ‘pros’.  So while I enjoy watching those who are making a living by preaching a better gospel I believe no further arguments are needed.  The proofs have been provided.  The economy is doing exactly what us honest (non-PhD) economists predicted and markets have also now fallen in line with predictions.

Now I’ll give the Steve Liesmans and Mark Zandi’s of the world credit for their relentless rambling about the Fed’s omnipotence and Fischer’s brilliance but sometimes just a little common sense is really all you need.  Let me give you an example.  I provided a simple visual to a group of 5 yr olds to see what sheer instinctive common sense would make of it.  All of the children separately arrived at the same conclusion.

Let’s have a look at my little experiment.  I showed each child the following chart and asked them to pretend the solid blue line was moving and to draw a line to where they think it would go next. The dashed line is the direction every child drew.

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Now if the line ends up reversing and moving to new all time highs I will openly admit that these 5 years olds are not more proficient at predicting markets than the CNBC market ‘pros’.  However, if these kids are correct using just a little basic pre-school common sense, I will expect the Zandi’s and Liesmans of the world to openly admit these 5 years olds are more proficient at predicting markets than the CNBC market ‘pros’.

Fellas, you want to play us for fools… well we’ll see who gets the last laugh…. The bets are in and the game starts now; CNBC Market Pros vs The 5 year olds.

For those of you looking to wager, let me give you a tip from Nov 26, 2007.  Tell me if any of this rings familiar…..

So despite concerns over oil, materials, uncertainty in financials, too many bearish investors and a global economic slowdown, in late 2007, the bull market meme was still being pushed based on Fed accommodation and strong economic ‘momentum’.  To be clear that CNBC segment is representative of just about every market pro interview prior to Bear Stearns collapsing in March 2008.

And so just to complete the moral of the story let’s look at how the market actually performed over the 16 months directly following that Nov 2007 CNBC market pros interview.  About a 50% decline before finally bottoming in March 2009….

Screen Shot 2016-02-20 at 12.07.41 AM

Now then…. who’s taking the Market Pros??

 

David Stockman's Contra Corner is the only place where mainstream delusions and cant about the Warfare State, the Bailout State, Bubble Finance and Beltway Banditry are ripped, refuted and rebuked. Subscribe now to receive David Stockman’s latest posts by email each day as well as his model portfolio, Lee Adler’s Daily Data Dive and David’s personally curated insights and analysis from leading contrarian thinkers.

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