How Quickly Things Change

Floyd Norris has a nice, short little piece in The New York Times today that points out the perils of predicting the future.

Which of the following would have seemed most unreasonable to most people as a forecast in November 2005?

1. The next president would be a black man.
2. The next time home sales rose on a year-over-year basis, sales would still be off by a quarter from the rate in November 2005.
3. By the time home sales rose again, the median prices of both single-family homes and condos would be down by more than 20 percent across the country.

Few would have thought any of them could occur. All, of course, did.

Now, the prevailing wisdom is that the economy has bottomed, but, as Mr. Bernanke said today, β€œThe economic recovery is likely to be relatively slow at first.”

I tend to think he is right. But I wonder whether one part or the other of that forecast β€” whether the economy has bottomed, or the recovery will be slow β€” will seem similarly foolish a few years from now.

So the next time you see me pontificating about what may happen, you are perfectly free to refer me back to this post.

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