by Jeff Miller, A Dash of Insight
We welcome the return of the Survey of Leading Economic Bloggers. Tim Kane spearheaded the survey during his Kauffman Foundation tenure. Tim has moved to the Hudson Institute, where he has busily been writing books [with important policy implications according to this NYT review – the OldProf has this on the reading list, but is still catching up], and has now brought back the survey.
I am a long-time fan of this survey. Most investors focus on a few specific blogs. The survey helps them to put the conclusions in a better context. It also introduces them to other valuable sources. The Kauffman Foundation has continued to support the annual Conference of Economic Bloggers, which is a very valuable resource. (More on that soon). There is a change in the survey participants, but no more so than you would see in the panel for the highly-regarded University of Michigan consumer sentiment survey!
My marketing team tells me that the title of this post is a little …..Modest. I should try for something more attention-grabbing.
That is the problem! Pseudo-excitement does not lead to great investing. The consensus advice from this group is much, much better than the daily news stream. Don’t believe me? Take a look at my key points from the survey two years ago. Assume that you had used this information as part of your investment planning.
I am going to highlight some of the results I find most interesting, adding my own take. The survey has many interesting questions, including a few innovative entries. I encourage readers to look for other reports as well.
The Word Cloud
The hallmark of the survey is the word cloud. Respondents are asked to provide five adjectives to describe the current economy. This innovative, open-ended approach provides a unique insight.
Let us contrast this with the cloud from two years ago.
Uncertainty still reigns, but the adjectives seem a little more positive.
Economic bloggers see continuing prospects for growth, albeit modest.
This question provides an interesting combination of economic and political forecasting.
There is logic to this approach. Economic prospects are inextricably linked to fiscal policy.
The blogging community sees only modest chance of a recession.
This is a little higher than my own group of forecasters who focus on the recession issue in my WTWA economic updates, but it is much more encouraging than the pundit parade you see in the media.
End of QE
What will happen if the Fed quits buying bonds? The question was stated in terms of the 30-year bond. (My own suggestion was a focus on the ten-year note, but this is OK). The expectations are pretty dramatic.
My own view is that the impact would be quite modest. The results expected by my blogging colleagues are more consistent with a complete unwind and selling of the entire Fed balance sheet. There is research on the current QE effects, which are more like 15-20 bps on the ten-year note. Clearly I need to write more on this topic!
And so much more
I have focused on the conclusions most relevant to investors. There are several questions geared to important policy issues including debt limits and ObamaCare. This group takes no prisoners when it comes to hard-headed analysis. The overall conclusions are interesting, and pretty tough.
While my own work avoids policy advocacy – great investors are political agnostics – I know that many readers will enjoy looking at the results from the entire survey.
Editor’s note: Nearly 200 participated in the survey, but only 33 are mentioned by name in the report. Eleven of these have contributed to Global Economic Inetrsection. In addition to the author here, Jeff Miller, and GEI managing editor John Lounsbury the other nine are Dean Baker, Menzie Chinn, James Hamilton, Peter Nielsen, Mark Perry, James Picerno, Doug Short, Mark Thoma and Steven Waldman.