BREXIT - Is This Really Still Rumbling On? 😴

rick_chasey

Stevo_666 said:

rick_chasey said:

TheBlueBean said:

drhaggis said:

For those in doubt: it's pretty obvious that Stevo understands neither modelling nor chaos.

That may be true, but it would be better to assert why you do not believe that there is chaos in economics.

I’ve posted an article from the FT about 5 times which shows how accurate the pre ref Brexit forecasts were.

All the serious organisations were correct within a small margin of error.

Over what period?

It's worth pointing out that we haven't actually left yet, so what scenario were they actually forecasting?

I’ve posted it directly in relation to your posts multiple times.

It’s all in the article.

It’s not my fault you chose not to read it, after multiple chances.

coopster_the_1st

rjsterry said:

According to what I can find the last tranche of BoE QE was August 2016. ECB stopped in December 2018. The Fed in October 2014, but recently considered restarting their programme; Japan: December 2017. I'll have to look back on a bigger screen to see if those events match the graph.

UK QE ended in July 2012 bar the panic Aug 2016 tranche.

ECB were injecting €80b a month from March 2016.

The GDP graph you referenced stated the UK GDP was £170b lower. However the ECB injected this into the Euro zone every 3 months (keeping numbers simple). Demonstrates the distortion in play here.

surrey_commuter

coopster_the_1st said:

rjsterry said:

According to what I can find the last tranche of BoE QE was August 2016. ECB stopped in December 2018. The Fed in October 2014, but recently considered restarting their programme; Japan: December 2017. I'll have to look back on a bigger screen to see if those events match the graph.

UK QE ended in July 2012 bar the panic Aug 2016 tranche.

ECB were injecting €80b a month from March 2016.

The GDP graph you referenced stated the UK GDP was £170b lower. However the ECB injected this into the Euro zone every 3 months (keeping numbers simple). Demonstrates the distortion in play here.

Get your career to Google “has UK, QE ended”

drhaggis

Stevo_666 said:

drhaggis said:

I never said I believed there is no chaos in economics. After all, chaos emerges readily from seemingly simple systes (e.g. a double pendulum) or the baker's map. It seems to me quite reasonable that if you have any sort of complex model constructed without "due care & attention", chaotic regimes will exist.

Having said that, Stevo doesn't understand either chaos or modelling because he constantly regurgitates "butterfly effect" without any further thought. Yeah, sure, solutions diverge exponentially, but conservation laws will restrict the available phase-space to the solutions and dynamical systems tend to have stability regions (attractors, limit cycles).

He then goes on to fallaciously compare the weather on 2020/11/20 (For the record: It'll be hot and sunny, with a 26 C maximum, but a nippy 10 C at night. In Adrar, Algeria) with the economic progression that has known performance markers. SC correctly points out that he's mixing a single solution prediction with ensemble averages. Ensemble averages for which we have more information (we didn't know about Gillets Jaunes back in 2016, did we?). And how does Stevo reply? Predictably, butterfly effect.

Quod erat demonstrandum.

The chip is doing rather well, by the way, judging by its growth rate. I call it Ben.

PS: Stevo, the Solar system is also chaotic. Tell me now you don't believe in modelling its evolution. Some people even do it without, gasp, symplectic integrators.

You are assuming too much and then compounding the error by trying to be a smartarse. Just because I haven't gone into the detail of 'the butterfly effect' does not mean there is no further thought behind it. However if you understand the butterfly effect then it should be self evident what the consequences are.

Since you call me a smartarse, and try to refute my post by quoting the B.E. twice without adding any information, yes, I'm going by my original statement, kid.

rjsterry

So the last BoE QE was £70bn. The graph shows UK GDP going from 107.5 to 109 (based on Q1 2008 = 100). 1.5% of £2.89tn is £43.35bn. 🤔

Stevo_666

surrey_commuter said:

Stevo_666 said:

briantrumpet said:

Stevo_666 said:

briantrumpet said:

Stevo_666 said:

The weather forecasting example backs up my point very well - specifically that accurate longer term forecasts are not possible. Thanks for raising that one Brian.

You neatly overlook the climate science point... i.e., what is happening has been predicted.

And, of course, they still do do longer range forecasts, even if the results are variable. That's rather different from your "don't bother" suggestion.

Brian you are mixing up two different things and trying to equate the two.

While it can be predicted that large amounts of greenhouse gases continuously present in the atmosphere will tend to increase temperature, can you let me know what the weather will be like on, say, 20th November this year? You can't, can you.

And I never said dont bother, I just said that reasonably accurate long term forecasts of the type I mention are not possible.

Same applies for long term economic forecasts for the good reasons given above.

Nope, I'm not mixing up the two, though of course the two are related: the sort of weather patterns we're seeing now (e.g. Australia) are the result of, and have been predicted by the climate change scientists.

Somewhere in the middle is what the Met Office call long-range predictions, and that is very much part of their remit. https://www.metoffice.gov.uk/research/climate/seasonal-to-decadal/long-range/user-guide

"As a result, the forecast is useful to assess likelihood and risk, but not for warning of definite events." The sort of thing you might do for an economy...

You definitely are - as mentioned above, one is an input variable into the other.

So, about the weather on 20th November? Any predictions? Same point applies for what our GDP might be in 10 years time if we had never left the EU. You simply don't know.

Oh, you really don’t understand macro economic modelling.

Dont be patronising. You clearly don't understand the principles behind the behaviour of complex systems.

ballysmate

rjsterry said:

ballysmate said:

surrey_commuter said:

ballysmate said:

rick_chasey said:

What’s really embarrassing is the cost to the tax man of the loss of growth is more than what the U.K. has ever given the EU.

That is assuming that the prediction was correct, no?
Can't be proved either way.

You really should read up on macro-economic modelling.

Why do you think Boris/Mogg/Farage all accept that the referendum has had a negative economic impact?

They may believe something that can't be proved as fact.

The majority of available evidence strongly supports that case. Feel free to dig out some evidence that shows a positive impact.

Why? That would be equally facile.
Look, I voted remain on the sole basis that we would be better off that way. Still believe that.
My point is that the forecast/projections are just opinions that are being masqueraded as facts. Nobody has any way of showing what would have happened had things been different.

rick_chasey

They’re really not.

The arrogance to think that you know the same as those models.

surrey_commuter

rick_chasey said:

They’re really not.

The arrogance to think that you know the same as those models.

It is ignorance not arrogance

ballysmate

rick_chasey said:

They’re really not.

The arrogance to think that you know the same as those models.

'Know' implies certainty doesn't it?
That is the point - nobody 'knows'
We are talking about measuring a known quantity against something that isn't just unknown, it never actually happened.
To me, the arrogance is preportional to the certainty you attach to such models.

rjsterry

ballysmate said:

rick_chasey said:

They’re really not.

The arrogance to think that you know the same as those models.

'Know' implies certainty doesn't it?
That is the point - nobody 'knows'
We are talking about measuring a known quantity against something that isn't just unknown, it never actually happened.
To me, the arrogance is preportional to the certainty you attach to such models.

No. I know that there is a 60% chance of rain at 13.00 today in Carshalton. Knowledge does not imply certainty. We are all aware that models and predictions have a probability of less than 1.

TheBigBean

drhaggis said:

I never said I believed there is no chaos in economics. After all, chaos emerges readily from seemingly simple systes (e.g. a double pendulum) or the baker's map. It seems to me quite reasonable that if you have any sort of complex model constructed without "due care & attention", chaotic regimes will exist.

Having said that, Stevo doesn't understand either chaos or modelling because he constantly regurgitates "butterfly effect" without any further thought. Yeah, sure, solutions diverge exponentially, but conservation laws will restrict the available phase-space to the solutions and dynamical systems tend to have stability regions (attractors, limit cycles).

He then goes on to fallaciously compare the weather on 2020/11/20 (For the record: It'll be hot and sunny, with a 26 C maximum, but a nippy 10 C at night. In Adrar, Algeria) with the economic progression that has known performance markers. SC correctly points out that he's mixing a single solution prediction with ensemble averages. Ensemble averages for which we have more information (we didn't know about Gillets Jaunes back in 2016, did we?). And how does Stevo reply? Predictably, butterfly effect.

Quod erat demonstrandum.

The chip is doing rather well, by the way, judging by its growth rate. I call it Ben.

PS: Stevo, the Solar system is also chaotic. Tell me now you don't believe in modelling its evolution. Some people even do it without, gasp, symplectic integrators.

The solar system has a Lyapunov time of 4-5 million years whereas weather has one of only a few days. I'd imagine economic forecasting has one somewhere in between. Therefore, a one year forecast of the solar system is going to be a lot more accurate than economic forecasting which in turn will be more accurate than weather forecasting.

You haven't really addressed the point of whether you believe long term forecasting of economics, which you acknowledged is chaotic, is sensible. You seem to believe that the gravity models being used will mitigate a lot of the issues, but if you read about them, then I don't think that is true.

For example, here is a paper on the main ones. For example, the treasury model does not consider migration and uses an average of EU trade as opposed to UK specific trade. This is more a point on junk in junk out than chaos though.

https://www.cbr.cam.ac.uk/fileadmin/user_upload/centre-for-business-research/downloads/working-papers/wp490.pdf

You do raise an interesting point about forecasting the Gillets Jaunes. This is the economic impact of a political situation. The same as electing Trump, voting for Brexit or letting London burn. Do you think this is included in the gravity models? I don't think it is something that averages out either.

TheBigBean

surrey_commuter said:

rjsterry said:

According to what I can find the last tranche of BoE QE was August 2016. ECB stopped in December 2018. The Fed in October 2014, but recently considered restarting their programme; Japan: December 2017. I'll have to look back on a bigger screen to see if those events match the graph.

They may have stopped adding to the problem but they have certainly not commenced unwinding their position. Having dug their hole they have no idea how to exit it

I'm struggling with your views on this. You are forever going on about the national debt, but consistently neglect to net off the QE stuff. Now you are now concerned that the BoE owns lots of the UK government's debt on behalf of the treasury? It could just be written off.

drhaggis

TheBlueBean said:

drhaggis said:

I never said I believed there is no chaos in economics. After all, chaos emerges readily from seemingly simple systes (e.g. a double pendulum) or the baker's map. It seems to me quite reasonable that if you have any sort of complex model constructed without "due care & attention", chaotic regimes will exist.

Having said that, Stevo doesn't understand either chaos or modelling because he constantly regurgitates "butterfly effect" without any further thought. Yeah, sure, solutions diverge exponentially, but conservation laws will restrict the available phase-space to the solutions and dynamical systems tend to have stability regions (attractors, limit cycles).

He then goes on to fallaciously compare the weather on 2020/11/20 (For the record: It'll be hot and sunny, with a 26 C maximum, but a nippy 10 C at night. In Adrar, Algeria) with the economic progression that has known performance markers. SC correctly points out that he's mixing a single solution prediction with ensemble averages. Ensemble averages for which we have more information (we didn't know about Gillets Jaunes back in 2016, did we?). And how does Stevo reply? Predictably, butterfly effect.

Quod erat demonstrandum.

The chip is doing rather well, by the way, judging by its growth rate. I call it Ben.

PS: Stevo, the Solar system is also chaotic. Tell me now you don't believe in modelling its evolution. Some people even do it without, gasp, symplectic integrators.

The solar system has a Lyapunov time of 4-5 million years whereas weather has one of only a few days. I'd imagine economic forecasting has one somewhere in between. Therefore, a one year forecast of the solar system is going to be a lot more accurate than economic forecasting which in turn will be more accurate than weather forecasting.

You haven't really addressed the point of whether you believe long term forecasting of economics, which you acknowledged is chaotic, is sensible. You seem to believe that the gravity models being used will mitigate a lot of the issues, but if you read about them, then I don't think that is true.

For example, here is a paper on the main ones. For example, the treasury model does not consider migration and uses an average of EU trade as opposed to UK specific trade. This is more a point on junk in junk out than chaos though.

https://www.cbr.cam.ac.uk/fileadmin/user_upload/centre-for-business-research/downloads/working-papers/wp490.pdf

You do raise an interesting point about forecasting the Gillets Jaunes. This is the economic impact of a political situation. The same as electing Trump, voting for Brexit or letting London burn. Do you think this is included in the gravity models? I don't think it is something that averages out either.

I mentioned several hundred pages ago I don't really know anything about economics, so the following is a layman's answer: disregarding economic forecasts is just as stupid as following them blindly. We're neither random walkers nor devoid of free will. Using forecasts properly requires knowing the assumptions that go into the model and the numerics of the simulation.

You probably consider this a copout. Again, from what little I know, I'd start taking forecasts with a pinch of salt once my ensemble solutions start diverging. And using models for one thing, while unjustifiedly disregarding them for others looks to me like either deceit or religion.

tailwindhome

The ripple effect of 'Getting Brexit Done' continues
Ireland will have a general election on 8th Feb

TheBigBean

drhaggis said:

TheBlueBean said:

drhaggis said:

I never said I believed there is no chaos in economics. After all, chaos emerges readily from seemingly simple systes (e.g. a double pendulum) or the baker's map. It seems to me quite reasonable that if you have any sort of complex model constructed without "due care & attention", chaotic regimes will exist.

Having said that, Stevo doesn't understand either chaos or modelling because he constantly regurgitates "butterfly effect" without any further thought. Yeah, sure, solutions diverge exponentially, but conservation laws will restrict the available phase-space to the solutions and dynamical systems tend to have stability regions (attractors, limit cycles).

He then goes on to fallaciously compare the weather on 2020/11/20 (For the record: It'll be hot and sunny, with a 26 C maximum, but a nippy 10 C at night. In Adrar, Algeria) with the economic progression that has known performance markers. SC correctly points out that he's mixing a single solution prediction with ensemble averages. Ensemble averages for which we have more information (we didn't know about Gillets Jaunes back in 2016, did we?). And how does Stevo reply? Predictably, butterfly effect.

Quod erat demonstrandum.

The chip is doing rather well, by the way, judging by its growth rate. I call it Ben.

PS: Stevo, the Solar system is also chaotic. Tell me now you don't believe in modelling its evolution. Some people even do it without, gasp, symplectic integrators.

The solar system has a Lyapunov time of 4-5 million years whereas weather has one of only a few days. I'd imagine economic forecasting has one somewhere in between. Therefore, a one year forecast of the solar system is going to be a lot more accurate than economic forecasting which in turn will be more accurate than weather forecasting.

You haven't really addressed the point of whether you believe long term forecasting of economics, which you acknowledged is chaotic, is sensible. You seem to believe that the gravity models being used will mitigate a lot of the issues, but if you read about them, then I don't think that is true.

For example, here is a paper on the main ones. For example, the treasury model does not consider migration and uses an average of EU trade as opposed to UK specific trade. This is more a point on junk in junk out than chaos though.

https://www.cbr.cam.ac.uk/fileadmin/user_upload/centre-for-business-research/downloads/working-papers/wp490.pdf

You do raise an interesting point about forecasting the Gillets Jaunes. This is the economic impact of a political situation. The same as electing Trump, voting for Brexit or letting London burn. Do you think this is included in the gravity models? I don't think it is something that averages out either.

I mentioned several hundred pages ago I don't really know anything about economics, so the following is a layman's answer: disregarding economic forecasts is just as stupid as following them blindly. We're neither random walkers nor devoid of free will. Using forecasts properly requires knowing the assumptions that go into the model and the numerics of the simulation.

You probably consider this a copout. Again, from what little I know, I'd start taking forecasts with a pinch of salt once my ensemble solutions start diverging. And using models for one thing, while unjustifiedly disregarding them for others looks to me like either deceit or religion.

I mentioned several hundred pages ago about a survey which assessed various professionals' ability to assign a probability to a certain outcome. The top profession for this was weather forecasting. The worst profession was doctors (90% confident about something they were right about 10% of the time). The second worst profession was finance. It is a sector that exudes over confidence.

You are right though. A forecast should not be blindly followed or blindly accepted. Especially a financial one. I don't think it is deceitful though to have a lot less faith in a long term economic forecast than in a short term one.

I think you are wrong though to dismiss the layman's term butterfly effect. I would much rather people were aware of the randomness, unpredictability and overconfidence of the finance industry as a whole. It is worth noting that in 2008, despite some of the most advanced pricing models which assigned ratings of AAA, thousands of CDOs were changed to being junk almost overnight. Anyway, CDOs are back, but it is different now, so I am told.

surrey_commuter

TheBigBean said:

surrey_commuter said:

rjsterry said:

According to what I can find the last tranche of BoE QE was August 2016. ECB stopped in December 2018. The Fed in October 2014, but recently considered restarting their programme; Japan: December 2017. I'll have to look back on a bigger screen to see if those events match the graph.

They may have stopped adding to the problem but they have certainly not commenced unwinding their position. Having dug their hole they have no idea how to exit it

I'm struggling with your views on this. You are forever going on about the national debt, but consistently neglect to net off the QE stuff. Now you are now concerned that the BoE owns lots of the UK government's debt on behalf of the treasury? It could just be written off.

my understanding is that there is no consensus on how you undo QE and that many think it will become permanent. Do you have sources for "just writing it off"

Always see my views through a prism of the least Govt interference the better

TheBigBean

surrey_commuter said:

TheBigBean said:

surrey_commuter said:

rjsterry said:

According to what I can find the last tranche of BoE QE was August 2016. ECB stopped in December 2018. The Fed in October 2014, but recently considered restarting their programme; Japan: December 2017. I'll have to look back on a bigger screen to see if those events match the graph.

They may have stopped adding to the problem but they have certainly not commenced unwinding their position. Having dug their hole they have no idea how to exit it

I'm struggling with your views on this. You are forever going on about the national debt, but consistently neglect to net off the QE stuff. Now you are now concerned that the BoE owns lots of the UK government's debt on behalf of the treasury? It could just be written off.

my understanding is that there is no consensus on how you undo QE and that many think it will become permanent. Do you have sources for "just writing it off"

Always see my views through a prism of the least Govt interference the better

It is undone by selling the bonds/gilts back into the market. It has not been done because the economic conditions have not merited it, and when some contractionary monetary policy has been required they have gone with a minor upping of interest rates.

I think not writing them off is in part political. People such as yourself like to be aghast at the size of the national debt, so a higher number is better if you want to reduce government expenditure for political reasons. There is also the concern that QE may have become inflationary and holding onto its QE holdings gives the BoE an extra string in its bow to manage this. Such distant dreams of growth and inflation are considered sufficiently unlikely that it looks like it is permanent and therefore writing it off could be considered. No source.

kingstongraham

Crowdfunding might get us a Big Ben Brexit Bong. Only £500,000 needed.

If ever more proof were needed that this country has gone a bit weird.

surrey_commuter

TheBigBean said:

surrey_commuter said:

TheBigBean said:

surrey_commuter said:

rjsterry said:

According to what I can find the last tranche of BoE QE was August 2016. ECB stopped in December 2018. The Fed in October 2014, but recently considered restarting their programme; Japan: December 2017. I'll have to look back on a bigger screen to see if those events match the graph.

They may have stopped adding to the problem but they have certainly not commenced unwinding their position. Having dug their hole they have no idea how to exit it

I'm struggling with your views on this. You are forever going on about the national debt, but consistently neglect to net off the QE stuff. Now you are now concerned that the BoE owns lots of the UK government's debt on behalf of the treasury? It could just be written off.

my understanding is that there is no consensus on how you undo QE and that many think it will become permanent. Do you have sources for "just writing it off"

Always see my views through a prism of the least Govt interference the better

It is undone by selling the bonds/gilts back into the market. It has not been done because the economic conditions have not merited it, and when some contractionary monetary policy has been required they have gone with a minor upping of interest rates.

I think not writing them off is in part political. People such as yourself like to be aghast at the size of the national debt, so a higher number is better if you want to reduce government expenditure for political reasons. There is also the concern that QE may have become inflationary and holding onto its QE holdings gives the BoE an extra string in its bow to manage this. Such distant dreams of growth and inflation are considered sufficiently unlikely that it looks like it is permanent and therefore writing it off could be considered. No source.

interesting theory that the lowly numbers of people bothered about the national debt are being boosted by charlatans only interested in reducing spending for ideological reasons

ballysmate

rjsterry said:

ballysmate said:

rick_chasey said:

They’re really not.

The arrogance to think that you know the same as those models.

'Know' implies certainty doesn't it?
That is the point - nobody 'knows'
We are talking about measuring a known quantity against something that isn't just unknown, it never actually happened.
To me, the arrogance is preportional to the certainty you attach to such models.

No. I know that there is a 60% chance of rain at 13.00 today in Carshalton. Knowledge does not imply certainty. We are all aware that models and predictions have a probability of less than 1.

It appears that we do not all share the same awareness.
RC for one, appeared to attach certainty. ie A probability of 1.
The projections start out with assumptions. The more assumptions, the greater degree of error.
That is basically what I and others were saying.
And as you say knowledge does not imply certainty.

Stevo_666

drhaggis said:

Since you call me a smartarse, and try to refute my post by quoting the B.E. twice without adding any information, yes, I'm going by my original statement, kid.

I tell it how it is.

If you have read read the book Chaos, the best example of a practical application (rather than the stuff you were spouting above to sound clever) is the Lorenz modelling of weather patters which initially showed the importance of sensitivity to initial conditions as his computer model contained tiny roundings of the data which led to large divergences over 'time' in his model. As I'm sure you know this is a central part of what is termed the butterfly effect - that tiny differences can have a material impact in complex systems.

The work of Lorenz and the end result - which is the point I am making that it is inherently not feasible to make accurate long term predictions about complex systems such as weather and the economy is backed up by articles such as this:-
stsci.edu/~lbradley/seminar/butterfly.html

Here's a bit more from Wiki on Lorenz, who is regarded as the Father of Chaos theory, and his work:
https://en.wikipedia.org/wiki/Edward_Norton_Lorenz

Stevo_666

drhaggis said:

<
I don't really know anything about economics

Can't disagree with that.

coopster_the_1st

tailwindhome said:

The ripple effect of 'Getting Brexit Done' continues
Ireland will have a general election on 8th Feb

What are the different party views on how they are going to approach the negotiations and future relationship with the UK?

bompington

ballysmate said:

RC for one, appeared to attach certainty. ie A probability of 1

Only to an idiot, or someone who's deliberately trying to misrepresent what he said so they can feel like they're winning the argument

ballysmate

bompington said:

ballysmate said:

RC for one, appeared to attach certainty. ie A probability of 1

Only to an idiot, or someone who's deliberately trying to misrepresent what he said so they can feel like they're winning the argument

He was not alone, just the most recent example to mind.
He used the phrase 'Know the same as those models' did he not? Which implies certainty.
As Rjs said, the models reflect probability.
Misrepresentation? Where?

Stevo_666

For Bompington's benefit here is a recent quote by Rick stating as a fact that the loss of tax revenues due to Brexit will exceed all past UK contributions to the EU:

rick_chasey said:

What’s really embarrassing is the cost to the tax man of the loss of growth is more than what the U.K. has ever given the EU.

I think we can rule out time travel.

Stevo_666

And talking of leaving or not, Boris told Wee Jimmy Krankie to jog on and forget a second 'indyref':
https://bbc.co.uk/news/uk-scotland-scotland-politics-51106796

rjsterry

All your arguments have been about long term forecasts. This is a question of 3.5years with actual data for both our economy and our peers. Of course you can't put a precise figure on it but again, we're not looking for a precise figure. Nearest order of magnitude will do. And there will be a probability attached to the comparative estimate of 'without Brexit' performance. I don't know what that is, but I'd hazard a guess that it's well into the more-likely-than-not range. Take those two bits of information and you can establish with a reasonable degree of (but not absolute) certainty whether the difference in tax revenues between the actual and modelled performance is greater than, less than, or roughly comparable with payments to the EU. No time machine needed.

rjsterry

kingstongraham said:

Crowdfunding might get us a Big Ben Brexit Bong. Only £500,000 needed.

If ever more proof were needed that this country has gone a bit weird.

Turns out that Johnson made this up. Imagine that! There is no fund for people to donate to and it's not going to be publicly funded.

Perhaps to keep Stevo and Bally happy I should ascribe a probability of accuracy to this post. Let's say 0.9.