Monday, February 13, 2017

Paul Krugman's myopic market prediction

I'm not a fan of Paul Krugman. His political bias keeps him from making objective economic analysis but in truth, it's his arrogance and smug attitude that makes me really dislike the guy. As such, I've really enjoyed seeing him eat a little crow regarding his 11/09/16 New York Times blog post. Written the day after Trump was elected president, with the Dow closing at 18,332.74, he says:
"If the question is when markets will recover, a first-pass answer is never...So we are very probably looking at a global recession, with no end in sight. I suppose we could get lucky somehow. But on economics, as on everything else, a terrible thing has just happened."
It didn't take long for Krugman to be proven wrong as the very next day the Dow closed at 18,589.69. Two weeks after the election it closed above 19,000 for the first time in its 120 year history. Then on January 25th it broke above 20,000. As of right now it is at 20,380.81.

I have no idea whether or not the market will remain strong. Given Trump's somewhat anti-free trade noise I'm a little skeptical. Regardless, it's nice to see Krugman quickly proven so completely wrong.

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