The bottom line is FHA uses a faulty econometric model that vastly underestimates defaults to forecast losses.

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But Yardeni admits there is no econometric model behind his forecast, "It is more art than science, " he says.

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Intriguingly, countries that host the Olympics do better than the econometric model forecasts as, to a lesser extent, do neighbouring countries.

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After World War II, he constructed the first econometric model of the United States, a visual model combining statistics and economic theory.

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The Forecast Model builds upon the output of the Stock Valuation Model and combines this data with econometric and simulation techniques to output target prices for one, three, and six-month and one, two, and three-year time horizons.

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