I liked Jerry's point in ope-l 3767 about the futility of trying to predict
market prices. Let me add that it is especially futile to use vertically
integrated labor coefficients to try to predict the market prices of real
estate and securities.
Jerry's point about a correlation not allowing one to say one of the
correlated variables is a predictor of the other is also well taken. Anyone
who takes the .93 --- now up to .98 and .99 --- correlations too seriously
should remember that the vertically integrated labor coefficients are DERIVED
from the very market prices they are supposed to predict. It is much more
correct to say that the market prices are predictors of the vertically
integrated labor coefficients. So much for "values" being determined
completely independently of prices.
Andrew Kliman