Intrigue and Trade

An economic forecast rests on a foundation of assumptions about politics. They are assumptions, not expectations, because politics is not an area where economists have a discernible edge. Recent trade news, the US federal budget, national security, and election results make clear that the political ground has been shifting under our forecast. We are likely to have company in this confusion, if changes in equity prices are a reliable signal of macroeconomic mayhem to come (a big if). A short list is sufficient to establish that the world is a risky place.