It looks as if Tamino has identified the provenance of the Marcott uptick, that it is partly an artifact, and that there is a way to remove most of the bias.
Note that whenever “warm” proxies drop out it tends to decrease the average immediately after that, and when “cool” proxies drop out there’s an increase in the average immediately after that. For instance, three proxy series end in the year 1900 and two of them are on the “warm” side at that time. Therefore what remains is not so warm so the following average (for 1920) is a bit lower than its predecessor. Five proxy series end in the year 1920, and four of those are on the “cool” side at that time. Therefore the following average (for 1940) is notably higher than its predecessor. In fact, the sign of every change in the average after 1800 matches what would be expected according to whether more “cool” or “warm” proxies drop out just before the change.
That, I believe, is the reason for such a large “uptick” at the end of the Marcott et al. standard reconstruction. The dropout of “cooler” proxies introduces an artificial warming into the result. The RegEM reconstructions infill the missing data, so they don’t suffer the same fate and don’t show the large uptick. They do show an uptick — but not nearly so large.
From what I’ve seen, this problem is only important at the end of the reconstruction. The outstanding agreement between the “standard” and “RegEM” reconstructions before then rules out any profound effect of proxy drop-out on the reconstruction prior to about the 20th century.
Incidentally, there’s another way to ameliorate the problem. Nothing can solve it perfectly, because proxies do drop out. But one partial solution is to transform the proxy data sets to their differences. Then at each time step we compute the average difference. Finally, we sum the average differences to get the average temperature. I did this using the Marcott proxies, and compared it to the result using a straight arithmetic average:
Not to steal his traffic: the comments at the end of the article are interesting to say the least. In short, McIntyre is completely on the wrong track.
Note also that Tamino says:
We also mentioned that the “uptick” at the end of their “main” (the “Standard 5×5″) reconstruction was much larger than in their RegEM reconstruction, and that they had expressed doubt about its robustness. The large uptick at the end (in 1940) is larger than indicated by the instrumental data — another reason to doubt its reality
which as far as I can see completely lets them off the hook as to having done anything inappropriate or inadvisable.