Wednesday, August 11, 2021

US #Economic Review #GDP #Stocks #Investing

Economy Review

Much of today's economic data, time series centralized collected and produced, are highly unreliable. Statisticians employ well-documented techniques such as geometric smoothing, seasonal adjustments, substitution, double counting, and "hedonic" to adjust outcomes of economic time series as far back as the 1980’s. As long as the public accepts the description of the economic backdrop by this data, and assumes politicians and central bankers are fully responsible for setting direction of them, the drive to massage, spin, and/or manufacture data driven outcomes remains high. Administrations as far back as the 1980s have utilized heavily modified and revised economic data for political gain.

Experienced teaches us that data can be whatever it wants to be in the short term. Statistical techniques, i.e. tricks, are often reversed through data revisions when nobody is looking. Revisions take place when Administrations or Administration’s goals change.

Subscriber Comments

A Dow Industrials lead rally is not spilling over into the broader market. The longer the Dow leads, the more it reflects safe haven capital flows from Europe to the US.  A large portion of those flows are parking in the large multi-nationals that populate indices such as the Dow Industrials Index.

Get ready for more bailouts and stimulus, because large multi-national corporations employ only a fraction of the total workforce.

The failure of the NYSE AD to post new highs also defines concentration of the rally (Line 62 Column D). Safe haven capital flows seek liquidity above all. It doesn't care about employment, or politics. It's reluctant to park in anything but short term Treasuries so far.

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