Best of the Week
Most Popular
1.Putin’s World: Why Russia’s Showdown with the West Will Worsen - John_Mauldin
2. Stocks Bull Market Grinds Bears into Dust, Is Santa Rally Sustainable? - Nadeem_Walayat
3. Gold and Silver 2015 Trend Forecasts, Prices to Go BOOM - Austin_Galt
4.Gold Price Golden Bottom? - Toby_Connor
5.Gold Price and Miners Soar on Huge Volume - P_Radomski_CFA
6.Stock Market and the Jaws of Life or Death? - Rambus_Chartology
7.Gold Price 2015 - EWI
8.Manipulated Stock Market Short Squeezes to Another All Time High - The China Syndrome - Nadeem_Walayat
9.Gold, Silver, Crude and S&P Ending Wedge Patterns - DeviantInvestor
10.Is the Gold And Silver Golden Rule Broken? - Michael_Noonan
Last 5 days
Gold Stocks to Shine in 2015 - 19th Dec 14
Why Alibaba Stock Shares Are a Screaming Buy - 19th Dec 14
China, Dollar, Japan, Europe Burning Questions for 2015 - 19th Dec 14
U.S. Economy is in a Sweet Spot! - 19th Dec 14
US Dollar and the Gold Fairy Tale - 19th Dec 14
Show Me The Money (Flow)! Tracking Money-Flow Through Value Shifts In Stock Markets - 19th Dec 14
The Commodities Market Is Not Dying, It’s Just Hibernating - 19th Dec 14
The Price Of Gold And The Art Of War - 18th Dec 14
Euro Succumbs to ECB QE Expectations and FOMC - 18th Dec 14
John Williams: A Downhill Run for the U.S. Dollar in 2015 - 18th Dec 14
Outrage at Taliban Islamic Fundamentalists Massacre of 132 Pakistani School Children in the Name of God - 18th Dec 14
How Inflation Changes Retirement Benefit Choices - 17th Dec 14
The Real Reason It's Tough to Beat the Stock Market - 17th Dec 14
Russian Currency Crisis and Debt Defaults Could Create Contagion in West - 17th Dec 14
How to Profit From Russia's Stock Market Crash - 17th Dec 14
Russia Crisis - If You Put Your Money in the Bank Will You Get it Back? - 17th Dec 14
Crude Oil Price Crash, U.S. Employment and Economic Growth - 17th Dec 14
Opposing Forces At Play In Gold and Silver Precious Metals Complex - 17th Dec 14
Wall Street Will Always Find An Excuse For Not Raising U.S. Interest Rates - 17th Dec 14
Torture, Terror And Elite Schizophrenia In The UK - 16th Dec 14
Eurozone Conflict Will Bring a Major Stocks Buying Opportunity - 16th Dec 14
Viewing Russia From the Inside - 16th Dec 14
Gold and Silver Stocks Bottom - Are We There Yet? - 16th Dec 14
The Financial Industry Pigmen Win Again - 16th Dec 14
Crude Oil Price Epic Blowout - 16th Dec 14
Asian Stocks Markets: Sand In The Gears Of The Bull Market - 16th Dec 14
U.S. Dollar Trend Forecast 2015 - Video - 16th Dec 14
Silver Price Bottom? - 15th Dec 14
Gold Price Base Building Bullish Pattern - 15th Dec 14
Stock Market Probable Pop-n-Crash Today - 15th Dec 14
Stock Market Time for a Bounce - 15th Dec 14
Stock Market Euphoria: The Mother of All Ponzi Schemes - 15th Dec 14
Gold - The Weight of Time as Trend - 15th Dec 14
U.S. Dollar Collapse? USD Index Trend Forecast 2015 - 14th Dec 14
The Rushing Stocks Bear Market and How to Prepare - 14th Dec 14
Gold and Silver Dreaming of a White Christmas - 14th Dec 14

Free Instant Analysis

Free Instant Technical Analysis


Market Oracle FREE Newsletter

Dramatic Stock Market Selloff

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

© 2005-2014 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

Free Report - Financial Markets 2014