Friday, December 12, 2014

Predictions for 2015 (With 80% Confidence)

If you make 5 predictions and are 80% confident in each one, then the following chart shows what you can expect.

Click to enlarge.

December 10, 2014
Credit Bubble Stocks: Predictions For 2015 From The Readership (80% Confidence Edition)

Reader Stagflationary Mark predicts:

• The Fed Funds rate will not increase in 2015.

• The 30-year treasury will remain below 3%.

• Full year exports of goods to China will not increase from 2014 to 2015.

• Full year department store sales will fall from 2014 to 2015.

• Although continuing to claim that hyperinflation is imminent, ShadowStats will remain unwilling to raise its annual subscription price of $175. ;)

The ideal outcome would be 4 out of 5 correct. I want my 80% confidence predictions to be right 80% of the time. That's the goal. As seen in the chart, I would be relatively comfortable with 3 to 5 right though.

Few think the Fed will wait until 2016. I'm not so sure on that. For the past 5 years, predictions about the Fed's ability to raise rates have continuously been way too optimistic. Now that oil has fallen, I'm going to stick with what works. It's like the Murphy's Law of monetary policy theory. The time needed to raise rates will always be twice as long as you think it will be, unless you factor that in. Then it would take four times as long, lol. Sigh.

As for the 30-year treasury, I've certainly built up a bit of a cushion in the past 2 days. 2.74% today? Nice drop. However, I'm not liking all this volatility (even in my favor). The last thing I need to see is a bounce back to 3.01% in January. That would be game over for me. I need it to stay under 3% for the entire year.

The exports of goods from the United States to China may be my weakest link. Other than glossing over a very noisy chart and combining that with a gut feel (not seen in the chart), I believe there is a parabola lurking that will work in my favor. I probably should have checked before making the prediction, but I'm not going to change it. What's done is done.

As for department store sales, they've been in a downtrend since 2000. I just need a dollar! One dollar less. That's all I'm asking. Jeff Bezos, you got my back?

And lastly, ShadowStats is my ringer. If they raise their subscription price from $175.00 to $175.01 then all hope is lost for me. These predictions could all go very, very wrong! On the other hand, I will strongly suspect that ShadowStats reads my blog, so perhaps it won't be a total loss. In fact, I'm willing to taunt! That's how confident I am.

Hyperinflation imminent! Each and every year! Even as oil prices crash again! Count on it!

Dare you to raise the subscription price a penny in sharp defiance! Dare you! Or better still, go to $500!

Hyperinflation, baby. That's what I'm talking about. Not.


Luke The Debtor said...

Predicting 2015's exponential trend failures. We still have a little less than three weeks to go. I'll start with electricity production in China.

Stagflationary Mark said...

Bold prediction!

I'm going to suggest, with 80% confidence, that you don't expect 2015 to be all that good for the global economy. D'oh!