Back in January, while still employed by the Tribune, I wrote the following in a Polk County News Blog post headlined A Modest Wager on Dow 16,000″:
I’m not an economist, but I play one from time to time on PCNB.
The Lakeland Chamber held its annual fundraiser/economic forecast breakfast this week. I noted with great interest that “renowned” economist Brian Wesbury predicted the Dow blue chip stock index will reach 16,000 by the end of 2008. Assuming my math is correct, (always dangerous) that would be a 33 percent rally in just less than a year’s time. I was heartened to learn that Wesbury also predicted our beloved Devil Rays would win the World Series. (Not really, that’s a joke.)
Anyway, given the drumbeat of bad economic news and the growing possibility that major bond insurers may go pffft, Wesbury’s prediction is certainly bold and counterintuitive. Because I am an optimist by nature, I also predict the Dow will rise. But I think 13,000 is a more likely number. As a good free market conservative, I’m sure that Wesbury believes in accountability. So I suggest we play a little closest to the pin and propose a non-monetary wager on the outcome.
The Chamber seems to invite Wesbury to its event every year, so I expect he’ll be back next year. If Wesbury wins, and the Dow ends 2008 closer to 16,000 than 13,000, I will attend on my own dime and subject myself to public ridicule. If I win, I propose that Wesbury invite me to the stage to give the economic forecast for 2009.
I think this is an exceedingly appropriate day to revisit this wager, especially given that our beloved
Devil Rays can clinch a playoff berth with a win today. Who would have thought the example I used to mock poor Mr. Wesbury’s prediction about the stock market, was, in fact, the far more plausible outcome? Irony truly is dead.
Anyway, the Dow, now backed the full socialist might of the U.S. taxpayer and protected like a girlie-market from those pernicious, mean short sellers, sits today at 11,388. There’s still time for Wesbury’s massive rally to occur, but….what do you think?
I think it’s unlikely. So I’m letting the Chamber and Mr. Wesbury know in advance that I will take the day off from work to make sure I can attend come next January. And I’ll bone up on my macroeconomics and powerpoint skills so as put on the dog and pony show in a most dazzling way.
One last thing: I fully admit the difficulties of linking causation and correlation, but do you think considering clowns like Mr. Wesbury as market/economic experts might have something to do with the state we’re in? Just asking.