Re: Tomas Palley on China

[Doug Henwood <dhenwood@xxxxxxxxx>]

raghu wrote:

> > 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.

Couldn't agree more.

>  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.

It's a quantitative way of saying the odds are strong, but not
overwhelming. A noneconomist would probably say a "decent chance."
I'm sure there's a sports analogy, but I'm the wrong guy to ask about
that.

Doug