Monday, July 27, 2009
The Wenzel Wager: A Call for Disinterested Analysis
In light of our recent wrestling match, I decided to look up the terms of the wager I had made with Robert Wenzel (see here and here). Back in January we agreed that the winner (someone who gets 2/3 or 3/3 out of the following) would get a dinner of up to $350 from the loser in the winner's city of residence. The 3 conditions were:
* Murphy says CPI (not the "core" number) will rise by at least 8% during 2009; Wenzel says it won't.
* Murphy says unemployment will be higher at end of 2009 than at start; Wenzel says no.
* Murphy says real GDP growth will be flat or negative for 2009; Wenzel says it will be positive.
I'm feeling great about the unemployment call, I'm optimistic about the CPI call, and I'm not at all confident about the real GDP call, especially because suppressed inflation numbers would artificially boost the official real GDP figures (which we have no choice but to use for our bet).
But here's the problem: If you follow the links, and especially if you read other Wenzel posts from January, you'll see that the reason he made the case for optimism (which prompted me to disagree and then our bet) was that M2 was growing at double-digit rates. Nowhere in our bet did we say "assuming Bernanke keeps up the money printing."
So what do the judicious readers of Free Advice (both of you*) think? Do I give Wenzel the opportunity to cancel the wager since the basis for his views has now collapsed?
* I mean that only two readers are judicious; I have way more than two readers.
* Murphy says CPI (not the "core" number) will rise by at least 8% during 2009; Wenzel says it won't.
* Murphy says unemployment will be higher at end of 2009 than at start; Wenzel says no.
* Murphy says real GDP growth will be flat or negative for 2009; Wenzel says it will be positive.
I'm feeling great about the unemployment call, I'm optimistic about the CPI call, and I'm not at all confident about the real GDP call, especially because suppressed inflation numbers would artificially boost the official real GDP figures (which we have no choice but to use for our bet).
But here's the problem: If you follow the links, and especially if you read other Wenzel posts from January, you'll see that the reason he made the case for optimism (which prompted me to disagree and then our bet) was that M2 was growing at double-digit rates. Nowhere in our bet did we say "assuming Bernanke keeps up the money printing."
So what do the judicious readers of Free Advice (both of you*) think? Do I give Wenzel the opportunity to cancel the wager since the basis for his views has now collapsed?
* I mean that only two readers are judicious; I have way more than two readers.
Comments:
No. If you've gotten an advantage, box him in. He should have taken into account Ben Bizzle's decisions at the Fed.
Bob, OT, but have you ever read James Burnham?
I think you'd be very interested in him if you haven't read him already, judging from some of your posts on the elite class and their operations behind the scenes.
I think you'd be very interested in him if you haven't read him already, judging from some of your posts on the elite class and their operations behind the scenes.
# posted by 
: July 27, 2009 at 6:08 AM
: July 27, 2009 at 6:08 AM
Hi Bob,
Glad to see you make such a generous offer based on, LOL, having me "boxed in".
Where exactly in the two posts you link to does anyone talk about "core" CPI?
As far as CPI itself, here's a quote from the current BLS release:
Over the last 12 months the index has fallen 1.4 percent...
Nice try sliping "core" in, Nixon would be proud. "Core" was created by him for some monkey business of his own.
Over the last six months, CPI has grown at roughly an annualized rate of 2.8%. This means in the second half, you are going to need an annualized rate of over 13% to come in at 8% for the year.
I'm real glad you feel comfortable about that.
As for my winning GDP growth also. I think you are right, which means I'll get 2 out of 3. Since you were so generous in your offer, please allow me to do the same.
I'll fimd a joint that serves crow. IF you order it, I won't order anything for myself. I'll just watch you eat:)
Glad to see you make such a generous offer based on, LOL, having me "boxed in".
Where exactly in the two posts you link to does anyone talk about "core" CPI?
As far as CPI itself, here's a quote from the current BLS release:
Over the last 12 months the index has fallen 1.4 percent...
Nice try sliping "core" in, Nixon would be proud. "Core" was created by him for some monkey business of his own.
Over the last six months, CPI has grown at roughly an annualized rate of 2.8%. This means in the second half, you are going to need an annualized rate of over 13% to come in at 8% for the year.
I'm real glad you feel comfortable about that.
As for my winning GDP growth also. I think you are right, which means I'll get 2 out of 3. Since you were so generous in your offer, please allow me to do the same.
I'll fimd a joint that serves crow. IF you order it, I won't order anything for myself. I'll just watch you eat:)
Crow? Get the filet mignon.
Nevertheless, this reminds me of Jesus Huerta de Soto's exquisite elaboration of the history of fractional reserve banking and how jurists conflated deposit contracts and loan contracts and misunderstood terms of agreement. If the terms of the dinner wager are unclear, than there is no contract, i.e, core CPI or just CPI.
Nevertheless, this reminds me of Jesus Huerta de Soto's exquisite elaboration of the history of fractional reserve banking and how jurists conflated deposit contracts and loan contracts and misunderstood terms of agreement. If the terms of the dinner wager are unclear, than there is no contract, i.e, core CPI or just CPI.
@ Michael Labeit
The terms are clear. In both my post and Murphy's we state CPI (urban). There is no reference to "core."
This is just a desperate attempt by Murphy to pick up 200 to 300 basis points.
The terms are clear. In both my post and Murphy's we state CPI (urban). There is no reference to "core."
This is just a desperate attempt by Murphy to pick up 200 to 300 basis points.
Oooooo *instigating taunt noise*
Well, if that's the case then you had better make up your mind on whether you'd prefer medium or medium rare.
Well, if that's the case then you had better make up your mind on whether you'd prefer medium or medium rare.
Wenzel, what in the heck are you talking about? I was being clear that we were NOT talking about the core number; that's why I put the word "not" in my post.
I'm saying that because if and when inflation kicks in, I expect them to deploy every trick in the book, such as emphasizing the core number (which they will probably redefine in September).
OK the bet's on. I don't care if Bernanke lets M2 drop by 50% between now and Christmas, you are committed to your predictions.
I'm saying that because if and when inflation kicks in, I expect them to deploy every trick in the book, such as emphasizing the core number (which they will probably redefine in September).
OK the bet's on. I don't care if Bernanke lets M2 drop by 50% between now and Christmas, you are committed to your predictions.
Furthermore Wenzel, the core number is up less this year than the regular number, isn't it? Isn't the surge in oil one of the main drivers of non-core CPI this year?
So not only are you accusing me of being dishonest, but also of being an idiot. I'm flattered.
So not only are you accusing me of being dishonest, but also of being an idiot. I'm flattered.
I should be clear by "stuff" I meant that post I read fast, not all your posts.
I had a busy morning eavesdropping on Howard Gutman.
But, I still don't see how yopu are going to win CPI.
I had a busy morning eavesdropping on Howard Gutman.
But, I still don't see how yopu are going to win CPI.
Robert, it's possible Murphy appended that NOT when you called him out, to save his face. Don't let him get away with this! *ducks* ;)
# posted by : July 27, 2009 at 9:58 PM
: July 27, 2009 at 9:58 PM
Bob
Whether or not you win will be secondary, as will who pays the bill. By the time of the meal, thinge will be in such a mess you will have the smug satisfaction of a moral victory...
Whether or not you win will be secondary, as will who pays the bill. By the time of the meal, thinge will be in such a mess you will have the smug satisfaction of a moral victory...
# posted by : July 28, 2009 at 3:07 AM
: July 28, 2009 at 3:07 AM
Next Thursday it will rain, and the next card is the ten of clubs.
# posted by : July 28, 2009 at 8:12 AM
: July 28, 2009 at 8:12 AM
@BlackSheep
Nah, Murph didn't cheat. If you look at this Google cache http://tinyurl.com/l4f8mv. You can see it was picked up before any comments were made, and the "not" is already there.
Nah, Murph didn't cheat. If you look at this Google cache http://tinyurl.com/l4f8mv. You can see it was picked up before any comments were made, and the "not" is already there.
LOL, yes with M2 not growing at double digits Wenzel may believe his bet has been undermined (though it doesn't seem so). The problem is, your bet actually has been. Nice try with the Jedi mind trick though.
# posted by : July 28, 2009 at 10:26 AM
: July 28, 2009 at 10:26 AM
Hi,
I have read your texts concerning the discussion about whether the issuance of credit is inflationary or not. I do not share your point of view. Here is why.
http://flavianopolis.blogspot.com/2009/07/is-issuance-of-credit-inflationary.html
I have read your texts concerning the discussion about whether the issuance of credit is inflationary or not. I do not share your point of view. Here is why.
http://flavianopolis.blogspot.com/2009/07/is-issuance-of-credit-inflationary.html
all wagers are made on incomplete knowledge. "If I had only known the horse would break its legal coming out of the gate, I wouldn't have bet on it!" Sorry, all bets are final.
Post a Comment
Subscribe to Post Comments [Atom]
<< Home
Subscribe to Posts [Atom]