From The Enlightened Economist:
Fortune Tellers by Walter Friedman is a provocative title for a book about economic forecasters – or perhaps not. For many people would agree about the resemblance between the two activities. Besides, this is the tale of the early forecasters who preceded or perhaps more charitably laid the foundations for the model-based, computerised macroeconomic forecasting of our own times.
The first character to stride onto the stage is literally a fortune teller. Evangeline Adams was an astrologer who offered stock market tips and predicted business trends for affluent New Yorkers in the early 20th century. Her enormous influence was cemented by the claim to have correctly forecast the 1929 stock market crash. Friedman writes: “Even in her own time, many regarded Evangeline Adams as a fraud and a scam artist. Her success, however, points to a profound anxiety about the future. Capitalism, after all, is a uniquely future-oriented economic system.” The other characters range from the more respectable Roger Babson, whose forecasts prefigured technical analysis, based on charts and trends, to the highly respectable Irving Fisher, who based his forecasts on theory and models, and John Moody, who collected masses of detailed data and analysed the figures, founding what would become the famous ratings agency.We've visited with Evangeline a few times:
The book is a great read, based as it is around the personalities of these early forecasters. A surprising number were sufferers from tuberculosis – it is hard to resist the amateur psychology of speculating that they particularly wanted to foresee the future, living as they did in the shadow of mortality. They were inventive and entrepreneurial. Babson (who founded Wellesley College) built the world’s largest relief map of the United States. Fisher patented a precursor to the Rolodex and invented a prize-winning tent to aid the treatment of tuberculosis. He also built a machine showing the circular flow of income in the economy, well before the famous Phillips Machine...MORE
UPDATED--Are You a Recent Graduate Who Hasn't Found a Job? Consider Becoming a Charlatan
Update: "Follow-up: Choosing the Charlatan Career Path".
Original post:
A field of human endeavor we have studied [some would say participated in -ed] for many years, links after the jump.
From the Stumbling and Mumbling blog:
The strong demand for charlatans
In the improbable event of ever being invited to give a commencement address,
my advice to graduates wanting a lucrative career would be: become a
charlatan. There has always been a strong demand for witchdoctors,
seers, quacks, pundits, mediums, tipsters and forecasters. A nice new paper by Nattavudh Powdthavee and Yohanes Riyanto shows how quickly such demand arises....
...One of my favorite examples comes from a "American Experience" episode, "The crash of 1929"See also:
(we linked to it in reference to Joe Kennedy's pool manipulation of RCA)*
1929 February: Astrologer Evangeline Adams, who counts Charlie Chaplin, Mary Pickford, and J. P. Morgan among her clients, predicts the market will rise in the coming months.
This is contradicted by her comment:
"In 1928 and 1929... it behooves everyone to be extremely cautious in investment and money matters, and be prepared for this threatening configuration of planets". The stock market crash occurred in October of 1929.Or it may just be an earlier version of the Cramer technique.
Ms. Adams was reputed to call the crash later that year based on the horoscope of Mr. Morgan's son Henry Sturgis (founder of Morgan Stanley).... "S.E.C. Charges Psychic With Securities Fraud"
Should have seen it coming....
Our Favorite Astrologer is Predicting a Market Crash
"Fake Astrology-Based Hedge Fund Threatens To Ruin Things For All The Legit Astrology-Based Hedge Funds Out There "
