Claims

Prediction · Economics and markets

“The irony may well be that just as nine months of weak economic data this year has been accompanied by a very strong market, so the strong economic data next year is likely to be accompanied by a weak stock market.”

Jeremy Grantham, GMO letter author · October 2009 · Jeremy Grantham GMO letter 3Q 2009: Just Desserts and Markets Being Silly Again (Scribd)

This quote could not be matched word for word to the source page.

The irony may well be that strong economic data in 2010 is likely to be accompanied by a weak stock market.

Resolved false The record shows it did not happen or was not so.

Said for an organisation they lead or work for; it counts on both records.

What would count as true or false

Judge for calendar 2010 against two parts: (a) strong US economic data in 2010, e.g. real GDP growth clearly above the 2009 level and near or above trend (about 2.5–3% or more), with improving indicators such as industrial production and earnings; and (b) a weak stock market, meaning the S&P 500 (or a broad US index) had a negative or roughly flat price return for 2010 (below about +5%). True: both hold. Mostly true: both hold in substance, but one is borderline, e.g. the economy was only moderately strong or the market return was slightly positive but clearly subdued. Mixed: only one of the two parts holds, e.g. strong data with a merely average market. Mostly false: the market posted a solid gain for the year, with weakness limited to an interim correction. False: the market rose strongly (roughly a double-digit gain), or the economic data were weak, so the predicted pairing did not occur.

Evidence

1. Main navigation Bureau of Economic Analysis · 11 January 2019

   “Real GDP increased 2.9 percent in 2010 (that is, from the 2009 annual level to the 2010 annual level), in contrast to a decrease of 2.6 percent in 2009.”

2. 2010 Stock Market Returns - The Numbers CBS News · 31 December 2010

   “The 15.1 percent total return for the S&P 500 is comprised of 12.8 percentage points from price appreciation, and 2.3 percentage points from dividends and reinvestment of those dividends.”

3. Economic Report of the President (2011) Council of Economic Advisers / US Government Printing Office

   “Composite Index-rose 13 percent in 2010, following a 23 percent gain in 2009.”

Reasoning

E1 shows real GDP rose 2.9 percent in 2010 after a 2.6 percent decline in 2009, so the strong-economy part of the prediction held. E2, published 2010-12-31 and titled for 2010 stock market returns, reports a 12.8 percentage-point price gain for the S&P 500 in 2010 (15.1 percent total return). That is roughly a double-digit rise, not the weak market the prediction called for. E3's 13 percent composite index gain lacks a clear label, so it was not relied on. Under the criteria, a strong market rise means the predicted pairing did not occur, so the claim is resolved false.

Cite this claim

Jeremy Grantham, “The irony may well be that strong economic data in 2010 is likely to be accompanied by a weak stock market.” (said October 2009). Verdict: resolved false. Reliability API, claim c_e2327ca10560, method 0.1.0+28da144b. https://epistacklabs.com/claims/c_e2327ca10560