Best of the Week
Most Popular
1. Best Cash ISA Savings Account for Soaring UK Inflation - February 2018 - Nadeem_Walayat
2.Gold Price Forecast 2018 - February Update - Nadeem_Walayat
3.Bitcoin Crypto Currencies Crash 2018, Are We Near the Bottom? - Nadeem_Walayat
4.Trump Bubble Bursts, Stock Market Panic Dow 1175 Point Crash Analysis - Nadeem_Walayat
5.Gold Corrects, Bitcoin Markets Crash, Whilst Stocks Plunge - Nadeem_Walayat
6.US Treasury Bonds: Fuse to Light the Bonfire - Jim_Willie_CB
7.Dow Falls 666 Points As Cryptocurrencies Crash And Krugman Emerges From His Van - Jeff_Berwick
8.Stock Market Roller Coaster Crash Ride Down to Dow Forecast 23,000 - Nadeem_Walayat
9.Trading the Shadows - Oil, Dollar, Stocks, Gold Trend Analysis - B.R. Hollister
10.Stock Market Analysis: Baying for Blood - Abalgorithm
Last 7 days
4% US 10-year Treasury Note Yield Will Be a Floor Not a Ceiling - 20th Feb 18
Governments Are LYING about Their Gold Activities while Mining Companies Cower - 20th Feb 18
No Silver Lining Here - 20th Feb 18
Semi Conductor Stocks SEMI Bearish? - 20th Feb 18
The Prisoner Promised Land - 20th Feb 18
Best Car Dash Cam Review: Z-Edge S3 Dual Dash Cam - UNBOXING (1) - 20th Feb 18
How Inflation Reduces The Real Value Of Social Security Net Of Medicare Premiums - 19th Feb 18
Could Stellar Lumens be a Challenger to Bitcoin for International Payments? - 19th Feb 18
US-China Trade War Escalates As Further Measures Are Taken - 19th Feb 18
How To Trade Gold Stocks with Momentum - 19th Feb 18
Is a New Gold Bull Market on the Horizon? - 19th Feb 18
Stock Market Decision Point! - 19th Feb 18
An Inflation Indicator to Watch, Part 1 - 18th Feb 18
Get on Top Of Debt Before It Gets on Top of You - 18th Feb 18
Will the Stock Market Make a Double Bottom? - 18th Feb 18
5 Reasons Why Commodities Are the Investment Place to be in 2018 - 18th Feb 18
1 Week Later, Stock, Bond Market Risk Remains ‘On’ as 2 of 3 Amigos Ride On - 17th Feb 18
Crude Oil Prices: A Case of Dueling Narratives? - 17th Feb 18
Free 1000 Youtube Subscribers Services - YTpals, Subpals, SubmeNow Test - 17th Feb 18
How to Trade as We Near March Stock Market Top - 16th Feb 18
Bitcoin as Poison - 16th Feb 18
GDX Gold ETF Weathers Stock Market Selloff - 16th Feb 18
Casino Statistics and Demographics - 16th Feb 18
IS Today Thee Stock Market Turn Day? - 16th Feb 18
Huge SMIGGLE Shopping HAUL, Pencil Cases, Drinks Bottles, Back Packs, Toys.... - 16th Feb 18
Tesla Cash Keeps Burning at $320 a Share - 15th Feb 18
Big Conflict Ahead in the Financial Markets - 15th Feb 18
Stocks Extend Rally Off Friday's Low, But Short-Term Exhaustion Near - 15th Feb 18
Stock Market Out on a Limb... - 15th Feb 18
Things Only a True Friend Would Say About Gold - 14th Feb 18
Global Debt Crisis II Cometh - 14th Feb 18
Understanding Crude Oil Behavior - 14th Feb 18
Stock Market is Getting Scary... - 14th Feb 18

Market Oracle FREE Newsletter

Urgent Stock Market Message

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

© 2005-2018 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

6 Critical Money Making Rules