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

FORBES: Fear itself

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

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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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