Why do we pay any attention to predictions?

We make predictions constantly in our daily lives about the future actions of other people and the consequences of our own; we condition our new predictions with the successes and failures of the old. We navigate the world this way in matters large and small--is that bowl too hot to pick up 30 seconds out of the microwave? Will the lady do that if I act like this? We act in this predictive fashion in both primitive and modern cultures, a sort of near-instinctive common sense cognition that lays the ground for science.So a prediction creates suspense, a big prediction great suspense; and we love suspense. An economic prediction creates new risks and rewards: the risk of ignoring a true prediction, or believing a false one; the reward of attending to a true prediction, or ignoring a false one. Economic predictions are also wagers, with all of gambling's thrills.Making persuasive predictions is an exercise of power. The making of a prediction by a presumably authoritative source can change what actually happens.The oil price graph in the OP failed, at least in part, because it didn't take into account OPEC's determination to maintain output--despite falling prices--in order to wrest market share from shale oil producers. Minus Isaac Asimov's Institute, and their equations for mapping human social, political and economic behavior, such predictions will often fail due to unexpected human behaviors.I think many economic predictions fail, paradoxically, because economists want to be scientists and thus postulate rational markets. I postulate that mob psychology moves the markets at least as much as rational decision-making, and make my investments in an intuitive manner based on predicting the reactions of a mob of nervous, greedy people to the same news, numbers and predictions that I see. I regularly beat the markets.

Let's not forget that Isaac Asimov's Institute was somewhat of a sham. Their predictions remained on target because the Institute included a bunch of behind the scenes fixers with mind control powers that steered around any x factors that popped up.Edited by NoNukes, : minor grammar correction