Re: Tomas Palley on China

[raghu <mraghu01@xxxxxxxxx>]

> Palley quotes Steve Roach of Morgan Stanley, of course. There ought
> to be a moratorium on this. Roach is a smart & thoughtful fellow, but
> he's a minority view on Wall Street, and his forecasting record isn't
> particularly outstanding. I understand the appeal of citing a Morgan
> Stanley guy, but if you think there's a 40% risk of a hard landing,
> make the argument yourself. An appeal to authority  of this sort
> won't cut it.


Using the language of probability theory to make predictions about the
economy is pretty much bogus anyway. How does one interpret Stephen
Roach's "40% risk of a hard landing in 2006"? Does it have scientific
validity in the sense of being a refutable prediction? Clearly not. (It is
impossible to verify even with hindsight that this number (40%) is the
right number.)

All Roach is saying is "there may or may not be a hard landing in 2006".
Which is not all that informative really.

--raghu.