This Blog’s Readers May Be Liberal But Their Forecasts Are Conservative

crystalballA total of 25 responses were received by the deadline last Friday to my challenge to predict what will happen in 2006. There were only 8 responses to the supplementary questions about Canada, open only to Canadians.

Here are the questions and, in bold, the median answers of respondents. In cases where answers are not numeric, the most popular answer is noted in bold.

US and World Events:

  1. What will the S&P 500 stock index close at on the last day of trading in 2006 (it’s currently at 1271): (a) under 700, (b) 700-1000, (c) 1000-1300, (d) 1300-1600, (e) 1600-1800, (f) over 1800. — (c) 1200
  2. What will the NASDAQ stock index close at on the last day of trading in 2006 (it’s currently at 2274 and on a tear): (a) under 1500, (b) 1500-1900, (c) 1900-2300, (d) 2300-2700, (e) 2700-3000, (f) over 3000. — (c) 2250
  3. What will the 12-month change in the average US housing prices be at September 30, 2006 (using the OFHEO ‘purchase only’ data) (as at September 30, 2005 it was +10.95%): (a) decline of more than 20%, (b) decline of 10-20%, (c) decline of 0-10%, (d) increase of 0-5%, (e) increase of 5-10%, (f) increase of more than 10%. — (c) decline of 1%
  4. What will the US national debt be at the last reported date of 2006 per the US Treasury Dept. (at the end of 2005 it was $8.2 trillion, up almost 10% from a year earlier): (a) less than $8 trillion, (b) $8-8.5 trillion, (c) $8.5-9 trillion, (d) $9-9.5 trillion, (e) $9.5-10 trillion, (f) over $10 trillion. — (d) $9.2 trillion
  5. What will the annualized US trade deficit be as at the end of October 2006 per the Census Bureau (as at October 2005 it was $718 billion, up about 25% over the previous year’s deficit, pushing the accumulated deficit up over $9 trillion): (a) less than $600 billion, (b) $600-700 billion, (c) $700-800 billion, (d) $800-900 billion, (e) $900 billion to $1 trillion, (f) over $1 trillion. — (d) $840 billion
  6. What will the US average 15-year new mortgage rate be at the end of 2006 per Bloomberg (at the end of 2005 it was 5.25%, up from 4.76% a year earlier): (a) less than 5%, (b) 5-5.5%, (c) 5.5-6%, (d) 6-8%, (e) 8-10%, (f) over 10%. — (c) 5.9% 
  7. What will the US (CPI) inflation rate be for 2006 (the rate for 2005 was 3.4%): (a) negative, (b) 0-2%, (c) 2-4%, (d) 4-6%, (e) 6-10%, (f) over 10%. — (d) 4.3%
  8. What will be the value of the Real Broad Dollar Index of the US dollar versus other major currencies per the Fed at the end of 2006 (the rate at the end of 2005 was 110.8, down from 113.6 a year earlier and 126.7 in 2002): (a) less than 90, (b) 90-100, (c) 100-105, (d) 105-110, (e) 110-115, (f) over 115. — (d) 106
  9. How many US Senate seats will the Republicans hold after the 2006 mid-term elections (they currently hold 55, and 33 seats will be contested, about equally split between the two parties): (a) fewer than 48, (b) 48-50, (c) 51-53, (d) 54-56, (e) 57-59, (f) 60 or more. — (b) & (c) 51
  10. What will be the status of the Bush/Cheney presidency at the end of 2006: (a) both intact, (b) Cheney resigned or impeached, (c) Bush, or both Bush & Cheney, resigned or impeached, (d) grand jury appointed to look at impeachable offenses but still in progress, (e) letters of impeachment drawn up but not yet exercised. — (a) both intact
  11. What will be the status of Blair at the end of 2006: (a) still in power, (b) declared intention to resign, (c) resigned or removed from office. — (a) still in power
  12. What impact will natural disasters (hurricanes, tsunamis, volcanic eruptions, earthquakes, melting of the icecap etc.) have on our lives in 2006 by most accounts: (a) significantly less than 2005, (b) comparable to 2005, (c) significantly greater than 2005. — (a) significantly less than 2005
  13. Which of these countries will sign the Kyoto accord in 2006: (a) China, (b) the US, (c) both, (d) neither. — (d) neither
  14. What impact will influenza and other lethal viruses have on our lives in 2006: (a) a lull, with significantly less mention than in 2005, (b) continued sporadic outbreaks of concern, (c) local epidemics raising the global influenza death toll to over one million (twice the ‘normal’ rate), (d) a global pandemic killing more than ten million people. — (b) continued sporadic
  15. What impact will nuclear weapons threats have on our lives in 2006: (a) localized threats from Iran, Israel and/or North Korea, (b) significant threats to use nuclear weapons from additional countries, (c) actual detonation of one or more nuclear weapons as a hostile act rather than just a ‘test’. — (a) localized threats only
  16. What impact will biological and chemical weapons (or the blowing up of sites containing lethal chemical or biological substances) have on our lives in 2006: (a) nothing more than a few scares, (b) deliberate use of such weapons with 10 to 1000 fatalities, (c) deliberate use of such weapons by a group or nation with more than 1000 fatalities. — (a) nothing more than a few scares
  17. What will light crude futures be priced at at the end of 2006 (they are currently about $63/barrel, up 40% from a year earlier): (a) under $50/barrel, (b) $50-60/barrel, (c) $60-70/barrel, (d) $70-80/barrel, (e) $80-100/barrel, (f) over $100/barrel. — (d) $71
  18. Which of the following will occur in 2006: (a) Chavez will be overthrown in Venezuela, (b) Putin will be overthrown in Russia, (c) both, (d) neither. — (d) neither
  19. The most severe famine of 2006 (killing at least one million people) will occur in (a) East Africa, (b) Central or West Africa, (c) China, (d) elsewhere in Asia, (e) there will be no famine that bad. — (e) no famine that bad
  20. What will Bush do regarding Iran in 2006: (a) invade, (b) sporadic incursions, no-fly zones and similar ‘limited’ military action, (c) embargo or other economic action only, (d) just threats and demands. — (b) sporadic incursions only

Canadian Events: (Canadian respondents only)

  1. In the January 2006 election, how many seats will the Liberals win: (a) fewer than 90, (b) 90-99, (c) 100-109, (d) 110-114, (e) 115-120, (f) more than 120. — (f) 121
  2. In the January 2006 election, how many seats will the Conservatives win: (a) fewer than 90, (b) 90-99, (c) 100-109, (d) 110-114, (e) 115-120, (f) more than 120. — (c) 109
  3. In the January 2006 election, how many seats will the NDP win: (a) fewer than 10, (b) 10-14, (c) 15-19, (d) 20-24, (e) 25-29, (f) more than 29. — (c) 19
  4. In the January 2006 election, how many seats will the Bloq win: (a) fewer than 50, (b) 50-54, (c) 55-59, (d) 60-64, (e) 65-69, (f) more than 69. — (b) & (c) 55
  5. Who will win the Stanley Cup in 2006: (a) Ottawa, (b) another Canada-based team, (c) Detroit, (d) another US-based team in the Western Conference, (e) a US-based team in the Eastern Conference. — (a) Ottawa
  6. Which Canadian party leaders will still be party leaders at the end of 2006: (a) Martin, (b) Harper, (c) both, (d) neither. — (c) both
  7. When will the next Canadian election be after the one in January: (a) before the end of June 2006, (b) in the latter half of 2006, (c) date set for 2007 by the end of 2006, (d) not scheduled by the end of 2006. — (d) 2007
  8. Will Canada suffer a significant terrorist attack (scale of the London subway bombings or greater) during 2006: (a) yes, (b) no. — (b) no
  9. What will be the status of Quebec at the end of 2006: (a) referendum held, majority voted to separate, (b) referendum held, majority voted not to separate, (c) referendum scheduled but not yet held, (d) no referendum scheduled or held, but significant powers transferred to Quebec and other provinces by federal government, (e) none of the above. — (e) none of the above
  10. What will the value of the Canadian dollar be relative to the US dollar at the end of 2006 (it is currently at 86 cents): (a) below 80 cents, (b) 80-84 cents, (c) 84-88 cents, (d) 88-92 cents, (e) 92-96 cents, (f) over 96 cents. — (d) 88 cents
  11. What will be the status of Canada-US relations at the end of the year: (a) Canada or US has withdrawn from NAFTA, (b) Bush recognizes NAFTA court verdicts and repays illegal duties to Canada, improving relations, (c) Canadian litigation against US remains unresolved, relations remain sour, (d) federal government drops actions against US, and agrees to send Canadian troops to Iraq/Iran, (e) federal government drops actions against US, but does not agree to send Canadian troops to Iraq/Iran. — (c) still sour
  12. What will the TSX stock index close at on the last day of trading in 2006 (it’s currently at 11500 and on a tear): (a) under 9000, (b) 9000-10000, (c) 10000-11000, (d) 11000-12000, (e) 12000-14000, (f) over 14000. — (e) 12500

The overwhelming sense one gets from these answers is that most people think 2006 will be very much like 2005, with a continuation or a slight slowing of last year’s trends.

I had not promised to offer a prize for the most accurate predictor unless I got 50 responses, but I will offer a prize, in January next year, to the person who had the most correct answers to the US and World Events questions. There weren’t enough responses to the Canadian Events questions to offer a prize in that category.

The responses from Canadians mostly came after polls showed a surge in Conservative support, so I am surprised these responses still forecast a Liberal minority government. I hope they’re right. A projection of latest poll results suggests the Conservatives will get thirty seats more than our predictors forecast, almost enough for a majority, but still dependent on the separatist Bloc to stay in power.

Since I’m not eligible to win, I’ll go on record here with my predictions, as of the day I posted the poll (if you asked me again today I’d reverse my answers to Canadian questions 1. & 2.):

US & World Events: 1. (b) 950; 2. (c) 1950; 3. (b) decline of 10%; 4. (d) $9.1 trillion; 5. (e) $920 billion; 6. (e) 9.25%; 7. (d) 5.25%; 8. (b) 92; 9. (b) 50; 10. (a); 11. (b); 12. (b); 13. (d); 14. (b); 15. (b) Pakistan; 16. (b); 17. (d) $78; 18. (a) CIA will overthrow Chavez; 19 (a); 20 (b).

Canadian Events: 1. (e) 116; 2. (c) 108; 3. (c) 18; 4. (c) 66; 5. (a); 6. (d); 7. (b); 8. (b); 9. (c); 10. (d) 90 cents; 11. (c); 12. (b) 9500.

From time to time during the year I’ll report on how ‘the wisdom of crowds’ is faring, and how my guesses stack up by comparison.

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5 Responses to This Blog’s Readers May Be Liberal But Their Forecasts Are Conservative

  1. lugon says:

    Hi, I’d be interested in the percentages re 14. Thanks!

  2. B. Mills says:

    Just last night finished “The Wisdom of Crowds” by James Surowiecki. Took me very long to finish, and I’ll need to re-read to fully absorb it. Excellent concept, and it’s cool to see Dave putting wheels on this, even in a simple survey method. If you’ve not read that book, it’s on A9 (Amazon) used, in paperback, for $10.50 USD. I only wish there would have been, say, 500 respondants to the survey, we could have more accurately guessed how many jelly beans there really are in that um, plastic container ;)

  3. Chris Ball says:

    Two points: one, I did take the Canadian poll before the poll results were out (or at least before I was aware of them) that showed the Conservatives were likely to win. If I were to respond again today, I think my response would be very different. It’s looking now like the Tories might even get a majority! Scary stuff!Second, I think it should be noted that a lot of the prediction questions are about strongly correlated economic indicators, and are in some sense redundant. When I was thinking of my responses, I had the overwhelming feeling that there were three choices to consider for most questions: will there be strong economic growth in 2006, will there be minimal change, or will this be the year that the crash hits? I myself didn’t want to cry wolf and say this is the year the crash will hit; indeed, I’m not convinced that there WILL be a catastrophic crash, more likely a series of mini-crashes leading to long-term economic decline, and I’m not so bold as to predict precisely when that will happen.

  4. James Samuel says:

    I am reading Jared Diamond’s “Collapse – how societys succeed or fail” and wonder at the conservative responses. Are we really so determined to maintain status quo and ignore the trends and see the effects of our actions? I look forward to the perodic updates, but it is my pick that change will continue to appear to speed up, rather than plod along.

  5. Dave Pollard says:

    Lugon: 21 (84%) for (b), 2 (8%) for (c), 1 (4%) each for (a) and (d).B. Mills: Thanks for encouraging people to read a great book AND save trees in the process.Chris: Agreed, the ‘long emergency’ will happen in cascades, gradually worsening, rather than a single crash. But at least we dodged the bullet of a Harper majority.James: Yeah, I think so too.

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