I don’t know about you, but I have more idea who will win the 3.30 at Haydock Park than when interest rates are likely to go up. For the last goodness knows how long the Bank Of England, with its increasingly daft practice of ‘forward guidance’, has been trying to give the honest Johns and Jills a steer on when rates might shift upwards and a bit of belt-tightening might be in order to keep the exuberance rational.
Britain’s first interest rate rise will come no earlier than July next year but probably by the end of September, according to economists quizzed recently by Reuters. (It doesn’t take a genius to see that the government would be less than pleased to see an increase before the election next May. The feel-good factor is hard enough to stoke up in the Age of Rage, as it is.)
However, the report found that 32 of 50 mainly City, wiseguy economists forecast the Bank of England’s base rate will increase to 0.75% in the third quarter of 2015, six months later than previously thought. And that was six months later than was thought the time before that.
Certainly consumers with their mortgages to pay are pretty sure that a rate rise is not coming anytime soon. Consumer confidence and retail sales - spurred on by today’s Black Friday orchestrated mass hallucination - are expected to make for a buoyant Christmas. Those who have steady jobs and are receiving a touch above inflation in pay rises feel confident that a steep rise in monthly mortgage costs is not imminent.
Mark Carney doesn’t know, although he has the power, if the Monetary Policy Committee sings from his hymn sheet, to make the hike. It could have been a year back, it could have been now, it could have been early next year. Except it wasn’t and won’t be.
Maybe Carney believes that if he says something often enough he will create a reality. He can shape the future. The dismal science of the economist doesn't just fail to see the black swan paddling in its direction, but it can’t see oil prices falling through the floor to everyone’s amazement. It can’t see Putin marching into Ukraine and putting the wind right up German manufacturers.
We live in a weird new world with new rules at the moment with the liquidity fix of QE still coursing through our veins. We live in a unreal, looking glass world where companies like Uber are valued at $40 billion (£25.5bn). There is silly money flying about. And there is no way any sane person can believe the ‘disruptive’ taxi firm is worth such a sum.
Forecasting is, at best, a party game. Finger in the wind stuff. In truth we are in a mist and just have to hope we don’t collide with any unseen objects as we ease steadily forwards. Those in financial services pretend they are savvy, the smartest guys in the room who know where the hazards lie. (How else did they get to be so well paid compared to mere mortals like the rest of us?) But they aren’t.
In the meantime, here is the excellent and admirably sane Michael Lewis - who worked in that world - on the know-all Masters of the Universe from a recent Bloomberg column.
‘Anyone who works in finance will sense, at least at first, the pressure to pretend to know more than he does. It’s not just that people who pick stocks, or predict the future price of oil and gold, or select targets for corporate acquisitions, or persuade happy, well-run private companies to go public don’t know what they are talking about: what they pretend to know is unknowable.
‘Much of what Wall Street sells is less like engineering than like a forecasting service for a coin-flipping contest - except that no one mistakes a coin-flipping contest for a game of skill. To succeed in this environment you must believe, or at least pretend to believe, that you are an expert in matters where no expertise is possible.
‘I’m not sure it’s any easier to be a total fraud on Wall Street than in any other occupation, but on Wall Street you will be paid a lot more to forget your uneasy feelings.’