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The Fed’s economic forecasts are all over the map, a sign of how uncertain these times are

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A trader at the New York Stock Exchange (NYSE) at Wall Street in New York City.

JOHANNES EISELE | AFP via Getty Images

The Federal Reserve’s economic outlook isn’t so much pessimistic as it is uncertain, with expectations running a wide gamut from a plodding recovery to a sharp rebound.

If that sounds a lot like the market lately, it’s probably not a coincidence.

Following its two-day meeting earlier this week, the Fed released its Summary of Economic Projections for GDP, unemployment, inflation and interest rates. The estimates largely reflected the current unprecedented downturn followed by expectations for varying levels of growth ahead. 

Specifically on GDP, which measures goods and services produced and is the broadest yardstick for economic growth, the median figures in each of the three years for which estimates were provided masked wide disparities of views from the policymaking Federal Open Market Committee’s 17 members.

For 2020, the median expectation was for a GDP decline of 6.5%. But that was merely the midpoint of forecasts that ranged all the way from -10% to -4.2%. 

The difference gets even more pronounced in 2021, where the median is a 5% gain but the range goes from -1% — in essence, a continuation of the recession that started in February 2020 — to a 7% gain, which would be the fastest one-year growth rate since 1984.

The outlook for unemployment and inflation all showed a substantial disparity of opinions.

Such wide spreads over what the future holds now seem written in the financial markets and particularly stocks, which on Thursday suffered their worst one-day plunge since late March and now suddenly look wobbly after a stunning 2½-month run higher. The surge came against a bevy of jaw-dropping economic numbers that showed how much damage the pandemic has caused.

“They’ve been pretty honest and straightforward about the high level of uncertainty that they see around how the economy’s progressing, which is nice,” Kathy Jones, head of fixed income for Charles Schwab, said of the Fed policymakers.

“We all know the second quarter is the trough and things will get better and the market is trying to discount that,” she added. “But I think the markets got pretty carried away.”

Powell notes ‘high level of uncertainty’

Indeed, Fed Chairman Jerome Powell has been emphasizing that even with all of the rescue funding that the central bank and Congress have been providing, the strength of the recovery is largely dependent on the path of the coronavirus. 

Powell even noted at the end of this week’s meeting that the SEP readings should be viewed cautiously. Because so much was unknown, the Fed declined to provide the quarterly summary at its main March policy meeting but elected to do so this week even with abundant questions about the future.

“Given the unusually high level of uncertainty about the outlook, many participants noted that they see a number of reasonably likely paths for the economy and that’s not possible to identify with confidence a single path as the most likely one,” Powell said Wednesday, noting that the SEP was “a full range of plausible outcomes and not one particular forecast.”

At a time when fears of a second round of Covid-19 infections are heightened, the Fed’s sketchy outlook helped precipitate a wicked Thursday market slide that was only partially offset by a Friday rally that continued to weaken as the day progressed. President Donald Trump weighed in Thursday, saying the Fed is “wrong so often” even though its 2021 forecast is for the fastest pace of growth since Ronald Reagan was president.

The Fed offered no additional policy tools to help guide the economy through what promises to be a murky road ahead, only assurances that short-term benchmark interest rates would remain anchored near zero through at least 2022.

The SEP “showed a remarkably wide range of potential outcomes for the American economy over the next 2 years,” wrote Nick Colas, co-founder of DataTrek Research. “Despite that, the Fed did not announce anything new [Wednesday] aside from some assurance that it will not employ negative interest rates.”

Markets for the moment are no longer pricing in a chance that the Fed in fact would go to negative rates anytime soon, despite persistent speculation that it might follow the example of Europe and Japan if things continued to deteriorate.

But the chasm of economic expectations between officials serves as a reminder of how in flux the future can be, even as investors continue to price in a best-case scenario.

“In the end, equity markets have made their bullish bet about future corporate profits specifically and the state of the US economy more generally,” Colas said. “Even a Federal Reserve with an unabashedly uncertain outlook will not change that much.”

Source: https://www.cnbc.com/2020/06/12/feds-economic-forecasts-are-all-over-the-map-a-sign-of-how-uncertain-these-times-are.html

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Pinterest is reportedly in talks to acquire VSCO

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So what can Pinterest do to jump higher up the list of social networking sites? According to a report by the New York Times, one possibility is acquiring the owner of VSCO, the app for editing / sharing photos and videos that has brought in-depth tools to mobile users for years. Neither side directly confirmed the negotiations, and there’s no word on a possible price, but maybe combining forces can bring some Instagram-like glow. 

As it is, Pinterest is still mostly known for planning and organizing, and as the NYT article points out, other than some recent acquisitions, VSCO is currently best known for the “VSCO girls” meme.

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Source: https://www.engadget.com/vsco-pinterest-014258107.html

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A sealed copy of ‘Super Mario Bros.’ just sold for $660,000

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A nearly perfect copy of Super Mario Bros. for the NES has sold for $660,000 at auction. In what turned out to be a 13-bidder contest, $550,000 went to the game’s original owner. The copy was one of the earliest shrink-wrapped versions of the games you could buy in the US (Super Mario Bros. eventually had 11 different box variants, according to WATA Games).

Heritage Auctions, the firm that oversaw the sale, told Ars Technica it dates back to late 1986. It was reportedly bought as a Christmas gift and sat unopened in a desk drawer for the better part of four decades. “I never thought anything about it,” the seller, who asked to remain anonymous, told the auction house.

The $660,000 this copy of Super Mario Bros. sold for is crazy when you consider the Nintendo PlayStation, a one-of-a-kind prototype representing a unique piece of gaming history, sold for $360,000 at auction last year. More recently, someone paid $156,000 to buy a pristine copy of Super Mario Bros. 3. It makes you wonder how much the owner would have walked away with had they simultaneously tried to cash in on the NFT craze somehow.

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Source: https://www.engadget.com/super-mario-bros-auction-000001095.html

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‘Lost Tapes of the 27 Club’ used Google AI to ‘write’ a new Nirvana song

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Were he still alive today, Nirvana frontman Kurt Cobain would be 52 years old. Every February 20th, on the day of his birthday, fans wonder what songs he would write if he hadn’t died of suicide nearly 30 years ago. While we’ll never know the answer to that question, an AI is attempting to fill the gap.

A mental health organization called Over the Bridge used Google’s Magenta AI and a generic neural network to examine more than two dozen songs by Nirvana to create a ‘new’ track from the band. “Drowned in the Sun” opens with reverb-soaked plucking before turning into an assault of distorted power chords. “I don’t care/I feel as one, drowned in the sun,” Nirvana tribute band frontman Eric Hogan sings in the chorus. In execution, it sounds not all that dissimilar from “You Know You’re Right,” one of the last songs Nirvana recorded before Cobain’s death in 1994.

Other than the voice of Hogan, everything you hear in the song was generated by the two AI programs Over the Bridge used. The organization first fed Magenta songs as MIDI files so that the software could learn the specific notes and harmonies that made the band’s tunes so iconic. Humorously, Cobain’s loose and aggressive guitar playing style gave Magenta some trouble, with the AI mostly outputting a wall of distortion instead of something akin to his signature melodies. “It was a lot of trial and error,” Over the Bridge board member Sean O’Connor told Rolling Stone. Once they had some musical and lyrical samples, the creative team picked the best bits to record. Most of the instrumentation you hear are MIDI tracks with different effects layered on top.

One thing neither AI gave direction on is how exactly Cobain would have sung the song. Outside of cadence and tone, Hogan had to interpret how the grunge star, who famously suffered from crippling stomach pain, would have channeled his anguish into the lyrics.

Over the Bridge isn’t the first group to use AI to emulate a dead artist. But the intent here is different from similar past projects. “Drowned in the Sun” is part of the organization’s Lost Tapes of the 27 Club initiative. They set out to record AI-generated songs by musicians who died at the age of 27 to raise awareness about mental health resources musicians, and people more generally, can turn to when they feel they need help. The Toronto-based non-profit has a Facebook page where it offers support. It also offers online sessions and workshops.

If you’re experiencing thoughts of suicide or self-harm, you can reach the National Suicide Prevention Hotline at 1-800-273-8255 or over an online chat.

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Source: https://www.engadget.com/over-the-bridge-lost-tapes-of-the-27-club-223000315.html

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Microsoft’s online-only Build conference starts on May 25th

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Spring is fully upon us, which means the calendar is starting to fill up with high-profile tech events. And the latest addition? Microsoft confirmed today that its online-only Build developer conference will run between May 25th and May 27th, though there’s still no word on when registration will open. (If last year is any indication, our money is on “the end of April.”)

“Microsoft Build is where developers, architects, start-ups, and students learn, connect, and code together, sharing knowledge and expanding their skillset, while exploring new ways of innovating for tomorrow,” the company’s events page explains. 

Unfortunately, Microsoft has yet to update its Build-specific webpage with information about this year’s priorities or schedule, but we’re almost certainly looking at another packed event. Last year, Microsoft went on (among other things) about improved collaboration tools for its suite of Office productivity apps, an AI-focused supercomputer running on its Azure cloud platform, and new cloud tools designed specifically for healthcare practitioners. 

Historically, spring and summer are been jam-packed with large, in-person events where app and software developers get their first glimpse at upcoming platform and strategy updates, attend workshops and code reviews, and generally mingle with their colleagues. Starting last year, though, the worldwide coronavirus pandemic has forced companies that stage these events to rapidly rethink their approaches.

Some, like Microsoft and Apple, quickly pivoted to informative online-only affairs that include full days worth of sessions, demos and fireside chats. (For what it’s worth, Apple announced this week that its own Worldwide Developer Conference will also proceed as an online-only event from June 7-11.) Meanwhile, Google has not yet confirmed whether it plans to stage its Google I/O developer conference at all this year — the company cancelled the show entirely in 2020, but said last month that it does plan to host some version of its annual Google Cloud Next event this October. 

Between a surge in COVID-19 vaccine production and news of relaxed restrictions for vaccinated travelers, Build 2021 may well be the last purely virtual developer conference Microsoft will ever need to put on. With any luck, devs will resume their pilgrimages to Seattle next year, and who knows — maybe those tiny emotional support horses from Build 2018 will show up again too.

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Source: https://www.engadget.com/microsoft-build-2021-may-25-to-27-developer-conference-official-212230206.html

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