Take the housing market. Plenty of people out there have a vested interest in it picking up again. But plenty of other people have an interest in it staying down. I get it. Some people are underwater and want/need it to go up again. And plenty of other people would like to buy and want it to go down even further to make that easier. Or just want to be right in their feeling that the market is still overinflated.
Take Michael David White, over at HousingStory.net. Here's his graph for where he thinks prices are going:
Case-Schiller has only been collecting data since 1986. I grabbed the data from my hometown county, which looks pretty similar to his curve fit but might be more representative of living in a higher cost of living than looking at the whole nation averaged together. If you assume from about 1997 and on is an abberation, and do a linear fit from 1986 to 1997 and extrapolate it on into the future you get a line that looks very similar to what White came up with.
Clearly that would mean a huge drop in home prices if you were looking only at the first 10 years of data. That yellow line is inflation, this fit would seem to say inflation should rise faster than home prices. Well what if you fit the whole thing?
And that's the danger of data extrapolation. It's plenty fun to graph some data and draw some lines. If you have a specific agenda, it's not hard to find something to back it up. But truth is it's just not a good way to make a conclusion. I expect Mr. White gets a lot of press and blog hits from people who want to buy right now and are really hoping prices will drop even more. They might or they might not. But these lines could tell any story you wanted them to.