Best of the Week
Most Popular
1.US Paving the Way for Massive First Strike on North Korea Nuclear and Missile Infrastructure - Nadeem_Walayat
2.Trump Reset: US War With China, North Korea Nuclear Flashpoint - Video - Nadeem_Walayat
3.Silver Junior Mining Stocks 2017 Q2 Fundamentals - Zeal_LLC
4.Soaring Inflation Plunges UK Economy Into Stagflation, Triggers Government Pay Cap Panic! - Nadeem_Walayat
5.The Bitcoin Blueprint To Your Financial Freedom - Sean Keyes
6.North Korea 'Begging for War', 'Enough is Enough', is a US Nuclear Strike Imminent? - Nadeem_Walayat
7.Bitcoin Hits All-Time High and Smashes Through $5,000 As Gold Shows Continued Strength - Jeff_Berwick
8.2017 is NOT "Just Another Year" for the Stock Market: Here's Why - EWI
9.Gold : The Anatomy of the Bottoming Process - Rambus_Chartology
10.Bitcoin Falls 20% as Mobius and Chinese Regulators Warn - GoldCore
Last 7 days
Comfortably Numb: Surviving the Assault on Silver - 17th Oct 17
Are Amey Street Tree Felling's Devaluing Sheffield House Prices? - 17th Oct 17
12 Real-Life Techniques That Will Make You a Better Trader Now - 17th Oct 17
Warren Buffett Predicting Dow One Million - Being Bold Or Overly Cautious? - 17th Oct 17
Globalization is Poverty - 17th Oct 17
Boomers Are Not Saving Enough for Retirement, Neither Is the Government - 16th Oct 17
Stock Market Trading Dow Theory - 16th Oct 17
Stocks Slightly Higher as They Set New Record Highs - 16th Oct 17
Why is Big Data is so Important for Casino Player Acquisition and Retention - 16th Oct 17
How Investors Can Play The Bitcoin Boom - 16th Oct 17
Who Will Be the Next Fed Chief - And Why It Matters  - 16th Oct 17
Stock Market Only Minor Top Ahead - 16th Oct 17
Precious Metals Sector is on Major Buy Signal - 16th Oct 17
Really Bad Ideas - The Fed Should Have And Defend An Inflation Target - 16th Oct 17
The Bullish Chartology for Gold - 15th Oct 17
Wikileaks Mocking US Government Over Bitcoin Shows Why There Is No Stopping Bitcoin - 15th Oct 17
How to Wipe Out Puerto Rico's Debt Without Hurting Bondholders - 15th Oct 17
Gold And Silver – Think Prices Are Manipulated? Look In The Mirror! - 15th Oct 17
Q4 Pivot View for Stocks and Gold - 14th Oct 17
Gold Mining Stocks Q3’17 Preview - 14th Oct 17
U.S. Mint Gold Coin Sales and VIX Point To Increased Market Volatility and Higher Gold - 14th Oct 17
Yuan and Gold - 14th Oct 17
Tips for Avoiding a Debt Meltdown - 14th Oct 17
Bitcoin Hits New All-Time High Above $5,000 As Lagarde Concedes Defeat and Jamie Demon Shuts Up - 13th Oct 17
Golden Age for GOLD, Dark Age for the Stock Market - 13th Oct 17
The Struggle for Bolivia Is About to Begin - 13th Oct 17
3 Reasons to Take Your Invoicing Process Mobile - 13th Oct 17
What Happens When Amey Fells All of a Streets Trees (Sheffield Tree Fellings) - Video - 13th Oct 17
Stock Market Charts Show Smart Money And Dumb Money Are Moving In Opposite Directions—Here’s Why - 12th Oct 17
Your Pension Is a Lie: There’s $210 Trillion of Liabilities Our Government Can’t Fulfill - 12th Oct 17
Two Highly Recommended Books from Bob Prechter - 12th Oct 17
Turning Point Nations On The Stage - 11th Oct 17
The Profoundly Personal Impact Of The National Debt On Our Retirements - 11th Oct 17
Gold and Silver Report – Several Interesting Charts - 10th Oct 17
London House Prices Are Falling – Time to Buckle Up - 10th Oct 17
The S&P Is A Bloated Corpse - 10th Oct 17
Are Gold and the US Dollar Rallying Together? - 10th Oct 17

Market Oracle FREE Newsletter

3 Videos + 8 Charts = Opportunities You Need to See - Free

Inconvenient Truth About Government Economic Statistics

Economics / Recession 2008 - 2010 Jul 20, 2009 - 09:29 AM GMT

By: Adrian_Ash

Economics

Best Financial Markets Analysis ArticleLarry Summers: I'm Feeling Lucky - Type "rubbish economist" into Google. Then hit "I'm Feeling Lucky"...

The INCOVENIENT TRUTH about statistics, as Al Gore would no doubt confess if you threatened to stop him flying, is they look backwards, not forwards – and not even quite to the present.


That's as true of last-quarter earnings as it is of GDP. You're left guessing what today's outcome will be, right up until it becomes historic and you can try to claim it as fact. Even "up-to-the-minute" inputs have to exclude the very minute we're in, and corduroy-patch models like Greg Mankiw at Harvard should know this. So too should his chum, the White House's own Larry Summers.
 
Yet Summers – formerly head of Bill Clinton's Treasury and also of Harvard University, before coming back as Obama's chief economic advisor – used a speech on Friday to highlight a statistic that suggests he's forgotten the basics of empirical research. (Previous gaffes already said he'd forgotten to use sound judgment in public.) Bundling himself into blind fortune's get-away car, he told the Peterson Institute for International Economics that it shows "the economic free-fall has ended."
 
What is this killer stat? "The number of people searching for the term 'economic depression' on Google is down to normal levels," he's quoted by Politico.com.



Hurray for Larry!

As you can see, searches for the term "economic depression" were apparently four times their typical level coming into 2009, as Summers noted at the start of the year.

The search-engine depression was greater still as Larry dusted off his Team America badge ahead of last November's election. But now, "The recent shift goes to show consumer confidence is higher," he claimed last week.

"If we were at the brink of catastrophe at the beginning of the year, we have walked some substantial distance back from the abyss."

Now, let's forget how absurd it might be to base an economic conclusion on the broad pattern of Google searches. Never mind that on Summers' logic, Led Zeppelin were never so popular as in late 2007...demand for food stamps is now in a secular bull market...and the campaign to "free viagra" – that famous political prisoner – hasn't been this hot since 2004.

(Larry himself shows a very erratic pattern on Google Trends, but unlike him, we guess here at BullionVault that it doesn't mean much.)

No, the real trouble with Summers' thesis is that the data series has yet to end.



Ooops! Just look what's crept into the data since Larry last checked and the start of July entered Google's query results.

Yes, Summers' own comments helped push that spike higher, of course. Google Trends confirms it on a 30-day chart. But he was only adding on Friday to a clear new uptrend in people searching for the dread phrase. And besides, Obama's advisor is only driving us back to the abyss himself, back to the brink of catastrophe, if he really believes this marker counts for something.

Better leave that forced march to the Treasury and Fed instead.

By Adrian Ash
BullionVault.com

Gold price chart, no delay | Free Report: 5 Myths of the Gold Market
City correspondent for The Daily Reckoning in London and a regular contributor to MoneyWeek magazine, Adrian Ash is the editor of Gold News and head of research at www.BullionVault.com , giving you direct access to investment gold, vaulted in Zurich , on $3 spreads and 0.8% dealing fees.

(c) BullionVault 2009

Please Note: This article is to inform your thinking, not lead it. Only you can decide the best place for your money, and any decision you make will put your money at risk. Information or data included here may have already been overtaken by events – and must be verified elsewhere – should you choose to act on it.

Adrian Ash Archive

© 2005-2017 http://www.MarketOracle.co.uk - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.


Post Comment

Only logged in users are allowed to post comments. Register/ Log in

Catching a Falling Financial Knife