About once a month, I put together a MarketWrap commentary for Financial Sense Online, a long-time favorite of mine.
In today's edition, entitled "Gotta Wonder," I touched on a statistical series that appears to have gotten some bulls all juiced up:
This morning, the Conference Board reported that its index of U.S. leading indicators rose in July for a fourth straight month. Although the measure came in slightly short of estimates, optimists were quick to hail the recent trend as proof that “government efforts to stem the financial crisis and revive the economy are paying off,” according to Bloomberg. Being the cynic that I am, the first question that popped into my mind is which “government efforts” are they referring to? Do they mean the trillions in taxpayer funds being spent to bail out their friends on Wall Street (and elsewhere)? Or are they talking about the spinning and propagandizing that has been going on since the crisis began? Then again, maybe they are referring to something else -- like playing games with the numbers and the markets? How else, for instance, can one explain the mind-boggling divergence between current conditions and the outlook for the months ahead highlighted in the following graph?
Gee, Michael, you don't think someone's manipulating the markets, do you?
I wonder: http://amoleintheground.blogspot.com/
Posted by: DocG | August 21, 2009 at 02:29 PM
Question;
The leading indicators looked pretty good up until the last gdp dump. Any ideas why?
Why did it just stop working on the last cycle after being predictive for over 40 years? What changed?
Posted by: jon | August 21, 2009 at 09:18 PM
I wonder what the average differential is between the Leading indicator and the CEI? How far out of range is the differential today? Inquiring minds want to know.
Posted by: Bill H | August 22, 2009 at 08:16 PM