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Goldman: Forget (Plunging) GDP As A Tracker Of US Growth, Meet Goldman's Current Activity Indicator (TM)
When data don't go your way, just change the rules, move the limits, or, best of all, introduce brand new data that will validate your assumptions. This has been demonstrated very well in Fukushima over the past month. Now it is coming out from Goldman's economic team, which is finding GDP to not be quite as amenable to "presenting" for client indoctrination purposes, due to its recent plunge from expectations (especially those of young master Hatzius, discussed here). As a result the Hatzius et al team have decided to launch an experiment in scrapping GDP as the key indicator of economic growth (or lack thereof) for those periods in which it is dropping, and instead will focus on the CAI, or the Current Activity Indicator: a synthetic Made In Goldman bogus indicator, which ignores the weak data, and emphasizes the good stuff. Brilliant. Goldman's recent addition to its economic team Zach Pandl explains. Elsewhere, Zero Hedge is launching a contest for the best abuse of the CAI acronym to explain what it really means...
CAI: A Measure for Tracking US Growth
GDP is the most common summary measure of activity, but it has several flaws. Most importantly, it excludes many important indicators (e.g. industrial production, ISM, payroll employment) and is not very timely. Alternative summary measures may be more valuable from a market perspective.
With this in mind, we have created a Current Activity Indicator (CAI), and find that it complements our other tools. In statistical jargon, the measure is defined as the “first principal component” of 24 real activity indicators, expressed in GDP-equivalent terms.
At present, the current activity measure carries a clear message: US growth likely had considerable momentum in late Q1. According to the CAI approach, the positive signal from the business surveys and from a few of the other “hard” indicators (e.g. hours worked) dominates negative news from expenditure-related data—consistent with our forecast that GDP growth will accelerate again in the second quarter.
Gross Domestic Product (GDP) is the most widely used summary measure of economic activity. GDP underpins governments’ budgets and provides the structure for most macroeconometric models. Data watchers spend considerable effort “tracking” its progress through time. But GDP has some serious flaws: it is only available quarterly and released at least a month after activity took place; initial estimates are based on incomplete data and therefore heavily revised; it is based primarily on expenditure figures even though other series, such as income-related data, may provide more reliable estimates; and “noise” in a few components, like trade and inventories, can have a large affect on short-term trends.
Given these drawbacks, other summary measures of current activity may be useful as well, particularly from a market perspective. With this in mind, we have created a US Current Activity Indicator (CAI), and find that it complements our existing tools.
We construct the CAI in three steps:
1. Model high-frequency indicators. Summary measures of economic activity are usually only available with a long lag. Because they incorporate data from many different sources, they are only as timely as the slowest indicator. For example, a proper measure of monthly GDP can only be calculated 6-7 weeks after the end of the month when the Census Bureau releases data on retail inventories. However, while we sometimes lack actual values for certain indicators, we always have expectations for those variables based on current information. Before the release of nonfarm payrolls, weekly jobless claims reports provide a rough sense of labor market conditions. Daily gas price data inform our views on the CPI, and chain-store results our expectation for retail sales. Our assessment of current conditions becomes less uncertain with the release of additional data, but even before that we are not completely in the dark.
We exploit this simple idea for our CAI. As a first step, we model the interrelationships between 24 weekly and monthly real activity indicators for the US economy. We then use this system to forecast each variable for periods when actual values are not yet available. The table below lists the indicators we include. There are three types: surveys, measures of real expenditures (which are used to calculate GDP), and other “hard” indicators. A few others (e.g. the Empire State index and gasoline prices) are included in the forecasting system but not in the final CAI.
2. Calculate common component. Variation in real activity indicators can be thought of as the sum of two parts: 1) a component common to all measures, which likely relates to the business cycle; and 2) an idiosyncratic component particular to each indicator. For example, both the ISM index and real disposable income vary over the business cycle, but only the latter is directly affected by changes in the tax code (at least over the short run). To capture this common trend, we calculate the first principal component of the 24 indicators. The first principal component is the time series that minimizes the proportion of the variation in the sample that is explained by idiosyncratic factors. The resulting principal component is a weighted average of the indicators expressed as normalized scores (i.e. with zero mean and unit standard deviation). Before complete data is available for all indicators, the principal component reflects a blend of actual values and model-based expectations.
3. Express in GDP-equivalent terms. GDP may have flaws, but it is still the way in which most people think about growth. In contrast, the units of our first principal component are not immediately intuitive. Therefore, as a final step, we express the first principal component in GDP-equivalent terms. The goal is not to forecast GDP – for which we think our “bean-count” modeling still works better – but to present the series in recognizable units. We first average the principal component into quarterly values and then regress it on real GDP growth and a constant (note that we use fully revised GDP growth, not originally reported/unrevised figures). We then apply the estimated coefficients to the monthly estimate of the first principal component. This final measure is our Current Activity Indicator: the first principal component of 24 indicators, expressed in GDP terms. The exhibit below shows the CAI along with quarterly GDP growth.
There is already a large literature on alternative summary measures of US activity. Our series is most akin to the Chicago Fed National Activity Indicator (CFNAI), originally developed by James Stock and Mark Watson (“Forecasting Inflation”, Journal of Monetary Economics, October 1999). The CFNAI is the first principal component of 85 real activity indicators related to production and output, the labor market, real expenditures and income, and business conditions. The simple correlation between the CFNAI and our measure is 92%. Differences include: 1) the specific indicators in the sample; 2) the fact that we express the series in GDP-equivalent terms; and 3) that we can calculate our indicator at any time. The CFNAI is published monthly around four weeks after the end of the reference month.
Other measures more loosely related to our CAI include the US Treasury’s Real-Time Forecasting System (RTFS) and the Arouba-Diebold-Scotti (ADS) Business Conditions Index published by the Philadelphia Fed (for RTFS, see “Real-Time Forecasting in Practice”, Business Economics, October 2003; for ADS, see “Real-Time Measure of Business Conditions”, Journal of Business and Economic Statistics, October 2009).
The CAI has a few notable statistical properties. First, it is dominated by surveys: the six component indicators with the largest weight are all surveys. Expenditure data and other “hard” indicators matter, but they are also influenced by more idiosyncratic factors – weather, worker strikes, tax law changes, seasonal adjustment distortions, etc. The typical “hard” indicator has about half the weight of the best of the surveys. In practice, this means that a one standard deviation change in a highly weighted survey indicator (e.g. the ISM) is worth about a two standard deviation change in a hard indicator (e.g. imports or consumer spending). Second, the CAI is a moderately better predictor of future GDP growth than current GDP, at least in-sample (at a one-quarter horizon, the regression standard error is 10% smaller). Academic research, such as the Stock and Watson paper cited above, has generally found favorable properties in principal component-based indicators (see also Ben Bernanke and Jean Boivin, “Monetary Policy in a Data-Rich Environment”, Journal of Monetary Economics, April 2003). Third, the CAI can be revised, both because its components are revised and, for the latest month, because we replace forecasted values with actual results as they are released.
At present, the current activity measure carries a clear message: US growth likely had considerable momentum in late Q1. Although our “bean-count” model of Q1 GDP suggests growth of 2.5% or lower, the CAI showed growth of 3.6% in February. For March the index is currently tracking growth of more than 4%, because available surveys remain strong and declines in other indicators (e.g. imports and housing starts) look likely to reverse. According to the CAI approach, the positive signal from the business surveys and from a few of the other “hard” indicators (e.g. hours worked) dominates negative news from expenditure-related data—consistent with our forecast that GDP growth will accelerate again in the second quarter.
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Are they going to count interest on credit card debt in the "CAI" like they do for GDP ?
Good one, you clearly understand the components of GDP better than 99.9% of Americans.
My fav is the imputed rent homeowners pay themselves.
Is THIS how they are going to save ES 1500 this year?
Rose tinted spectacle itis, the national malaise.
Awsome in its potential, frightening to those few Americans not involved in perpetual naval gazing......
Obfuscation and theft go on. What do they need to fudge to get qe3? Because we can't have a selloff of the market, oh no.
Calling All Idiots
Done.
+any amount of Benny Bucks you want. Fantastic, catches the mood and zeitgeist perfectly.
+1
Enron Economy 101
Belgian City Withdraws EUR30 Million In Bank Bonuses Protest http://www.entendance.com/forums/viewtopic.php?f=7&t=788&p=16599#p16599
a kick in the only place it hurts ..well done Belgium, with Iceland are we starting on a roll here?!!!
Collection of Asinine Information.
CAI = Cheating all idiots
Still love WTF - Winning the Future. Argh!
Hey, maybe they can remove the companies that either don't grow profits and share price, and the companies that get sick or die, also, from the major indexes, in to order dramatically skew index performance to the upside...
...you know, re-jigger the indexes to put lipstick on pigs.
Oh, wait.
They do that all the time.
My bad.
(Has anyone ever done a study of what index returns would have looked like if they re-manipulated indexes every decade or so instead of on a continual basis? I'd bet it would be horrendous)
Or use this ..... 96.5, we are back to 2006 levels on the index.
The Ceridian-UCLA Pulse of Commerce Index™ (PCI), a real-time measure of the flow of goods to U.S. factories, retailers and consumers, rose 2.7% on a seasonally and workday adjusted basis in March, more than offsetting the 0.3% decline in January and the 1.5% decline in February. On a quarter over quarter basis, the PCI is up 3.9% at an annualized rate, a welcome acceleration from the relatively weak growth of the PCI experienced in the second half of 2010. Over time, the PCI has shown a substantial correlation with Industrial Production. Last month, the PCI correctly suggested Industrial Production for February would come in flat to slightly down at .02%. The strong March PCI suggests a 0.8% gain in industrial production for March when that data are released by the Federal Reserve on April 15.
“March represents the sixteenth consecutive month of year-over-year growth in the index,” explained Craig Manson, senior vice president and index expert for Ceridian. “This is particularly encouraging because the first six months of last year were strong, and the index posted solid growth despite the difficult year-over-year comparison. Continuation of this trend is welcome news, because like the overall economy, the PCI has been growing since it first turned positive in December of 2009.”
http://www.ceridianindex.com/
central agency intelligence
Corruption aggregator index
Criminal Accusation Immunity
Crowd Activity Instigator
Cacophony Adjustment Invention
Crafty Asset Influence
Probably all of the above.
Create Artificial Incentive
CAI stands for (C)We (A)Fuck (I) You, the CA and I are all silent
Who is this for the buyer or the seller?
CAI Boner
Completely asinine index
Crap, you beat me to it.
Frigging captcha longer than 2 characters.
So, they just invented their own bullshit indicator to denote GDP at +4%?! Is this a joke?
The thing I am confused is why they created another name? I mean just change the way the GDP is calculated and say the new way is a "better indicator of growth" like they did with CPI.
Growth problem solved!!
Did anyone at Goldman get served with a subpoena today?
Commencing
Another
Illusion
HA good one.
Good one!
Followed by Commencing Anal Intrusion. LOL.
Excellent .
Don't worry, soon a massive uptick in the purchases of shotguns and pitchforks will raise the CAI for them.
Run you Goldman bastards!
Now you need to upgrade from hip waders to chest wader boots to slog thru the economic BS dump daily.
"model high frequency indicators", sounds like they're just making stuff up now.
They're beginning to sound like special interest groups that use "empirical evidence" to shake the government down for money. "7 out of 10 female university students don't feel good about their body image therefore we need a 25MM grant to study this further and provide them with effective services."
When the world becomes one big social science class the endgame is near.
Too bad that GDP is based on hot money. Therefore, everything downstream is bullshit. Bummer.
CAI - Cover Ass to Infinity
Crap Anal Intelligence
Crappy Associative Idiocy
Criminal Assistence Index ....say everythings rosey while you rob/rape what's left of the economy
Everything is 'perception' to be 'managed' (manipulated) by fraudsters Goldman Sachs. AAA is actually shit, the ACI is another sugar coating for turds ..the frauds are at it again
According to Goldman, GDP should be measured exclusively by the number of $1000 per hour escorts buying a brand new Benz each quarter.
Another excuse to drive consumer discretionary stocks up even faster.
Sheesh, so many are going totally parabolic, its crazy.
So is gold and silver. Immune from paper wildfire soon.
Futures are skying! Sell gold, buy bank stocks!
RobotTrader - Fri, Apr 15, 2011 - 08:38 AM
LOL, I told all the anarchists at ZH last night, warning them of a rotation out of GLD and SLV into XLF......
I've been hearing about plunging GDP since Q3 2009. Every quarter we will "really have the double dip now".
Sooner or later the GDP bears will be right, let's not forget they have been brutally wrong for so long now. Hilarious.
'GDP bears'? Who gives a shit about GDP, that number is now as phony and data chery picked as anything else...fiat Ponzi bears will be proven totaly right when the streets are suddenly running with blood. And who cares if youre right then?
Crap Asset Investment
Can't Admit Inflation
Now that the economy has been totally converted to a hyper-leveraged Ponzi casino, GDP is irrelevant (if not practically non-existent).
Just keep track of the Russell 2000. No need to measure anything else.
Casinos dont have windows or clocks for a reason.
And this one doesn't have any exits.
You are forced to keep "playing".
+1
Whats the saying - "When all else fails, manipulate the data". The only ones who give a shit about JPM/Citi/Bank of Merril/Wells/etc are the MSM anyway.
CAI = Crooks Abusing Investors
Con Activity Indicator.
"Current Activity Indicator: a synthetic Made In Goldman bogus indicator, which ignores the weak data, and emphasizes the good stuff."
So....did they use this new CAI in coming up with their recent commodities downgrade??
What a bunch of scam artists....who in their right mind would believe any of this??
Thats the thing that baffles me, who in their right mind is out there believing any of this crap?
I guess it really boils down to 'Well, things havent imploded totaly in on ME yet, therefore, whatever'.
The same fund managers who bought Pets.com based on "eyeballs"
When the pain of watching your investments go down doesn't hurt enough. So I decided to do something and just read every site and headline I didn't agree with....forcing me to wise up a bit. I was that guy watching MSM bullshit several years ago - you guys were the freaks.....now I'm a freak and feel like I'm in the matrix. There had to a time when you were a sheeple, right?
dub
confiscate all income
Corrected Adverse Indicators
Regardless - no QE3 till the elites make a bundle w/puts & shorts. Then, and only then, Ben will be begged to print. Thats when I'm backing up the PM truck.
Agreed, intentional crash coming in a few months, followed by more printing.
"The pause that refreshes" Wall Street's wealth.
The Association of American Railroads (AAR) reported record gains in rail traffic for the week ending April 2, 2011, with U.S. railroads originating 305,905 carloads, up 5.7 percent compared with the same week last year. Intermodal volume for the week was also up 19.4 percent compared with the same week last year, totaling 234,308 trailers and containers. This week's carload total is the highest since late 2008. The comparison week from 2010 includes the Good Friday holiday.
http://www.powderbulksolids.com/editorial/news-detail.php?id=5356
Do you know anything about container ships from Asia - slowing down?, I think Tyler called it "windspeed". Rail I get - trucks can't compete.
Tyler was wrong. Also the drop is also happening because of the slowdown in China. You can print out the Dry-Bulk Index and line your bird cage with it or wipe your ass, it has no bearing on the growth in the USA. Huge overcapacity in the container ship sector. This post and the one above that tracks trucking shows the real movement of goods around the USA.
A Cargill International executive said in Singapore that dry cargo ships totaling 106 million dwt would be delivered this year.
The cascade of new capacity would boost the world’s fleet by 17 percent, while the dry bulk market was only expected to grow by 7.5 percent. This relatively low market growth estimate is a result of China’s attempts to cool its runaway economy. The mainland is facing fast rising inflation and has placed harsh curbs on bank lending. This will see fewer property and manufacturing developments, which will lead to slowing demand for dry bulk raw materials such as iron ore and coal.
Chief concern to ship owners is the drop in freight rates. The South China Morning Post reports that average rates for a 180,000 dwt dry cargo capsize ship carrying iron ore from Brazil to China is now at US$21,000 per day compared to the $48,000 per day that was being earned last year.
Still, when your shipping fleet is growing at more than double the rate of the market, it is probably time to get worried. Or at least splash a little more scotch over your rocks.
http://www.maritimeprofessional.com/Blogs/Far-East-Maritime/April-2011/D...
You forgot to add that you can "line your bird cage and wipe your ass "with "the slowdown in China." It has no bearing on the growth of the USA. In fact nothing does. Perhaps all that intermodal is needed to move trillions in Fedbux from Point A to Point B?
Nope, the USA GDP is driven by the consumer 70%, as Chanos suggest in a link I have post for months on China the USA will be least affected by a slowdown in China.
I have been posting about the China crash as she raises rates since day one on ZH. I know you have talked about this also but thats why all the talk of China being the next big thing i.e. • " reserve currency " was so laughable. She's twenty years maybe more from this feat.
Video •
Chanos: 'China's real problem'
Hedge fund manager Jim Chanos says China's credit grows 3 to 4 times as fast as its economy expands.
http://www.itulip.com/forums/showthread.php/17311-China-Crash-2011-Part-...
Also Eric Janszen is always ahead of the game. He said to by gold in 2002 and he talked about the China bubble ( 10-3-2010 ) You should follow him he's always ahead of the game .....
It’s China’s turn to pop a world-class asset bubble and smash the global economy
• China tried to pop its property bubble once before but the global economic catastrophe caused the US financial crisis aborted the effort in 2008
• This week China re-launched the crash phase of its Greenspan Credit Bubble with Chinese Characteristics
• Watch out for flying bricks
Why don’t central banks, and the governments they front for, ever learn? The only way to prevent macro-economic damage from a collapsed asset bubble is to not allow a bubble to develop in the first place. Once a government takes the path of winning popular favor with the temporary prosperity that’s produced by asset price inflation, there is no easy way out, as Japan re-discovered in the 1990s, the US found out again in the 2000s, and China will experience soon enough. As part of our project to map out the coming decade, this week we investigate the prospect of the collapse of the Greenspan Credit Bubble with Chinese Characteristics.
Monday China embarked anew on a treacherous program of rate hikes to end a property bubble that took root there in 2005.
Here is a game readers can play at home to simulate the genius of a central bank managing an asset bubble down via interest rate hikes.
Find a cinder block and a bungee chord. Place the cinder block on the far end of your kitchen table. Attach one end of the bungee chord to the cinder block and put the other end between your teeth. Kneel down so that your face is level with the tabletop and pull the chord until it is taught.
Now it’s time to begin “tightening” the way central banks try to, bit by bit, to bring an asset bubble to a benign end, or so they believe.
Pull ¼ of an inch. If nothing happens then pull another ¼ inch. If nothing happens then do it again, and again.
Silly game, you’re thinking. A child can see how this will turn out. Sooner or later that concrete brick will sing across the table and smash your face.
As obvious as the outcome might be to a 10-year-old, the brick-in-the-face lesson remains lost on central banks. They must be slow learners because repeat it over and over. Or perhaps there is a common institutional neurosis shared among central banker’s that compels them to repeat the same mistake, to recreate the experience of concrete on teeth.
For years I’ve referred to China’s asset bubble economy as a Greenspan Credit Bubble with Chinese characteristics. This week we find that not only the policies that created China’s bubbles but even the policy responses to attempt to tame them mirror Greenspan’s.
Are you confused? So the US is not part of the "global economy" that will be smashed when China's asset bubble bursts?
For the record, I don't think any of it matters - the only thing that matters right now is the size of the Fed's balance sheet, and changes in that size.
"Nope, the USA GDP is driven by the consumer 70%, as Chanos suggest in a link I have post for months on China the USA will be least affected by a slowdown in China."
"It’s China’s turn to pop a world-class asset bubble and smash the global economy"
Not confused, we will not be blasted as bad as the rest ..... See the Chanos video, I like his take on things. And I do not think China will crash as bad as the US asset bubble. The people are not levered up like joe six and wendy wine cooler ....
Cargo traffic slows at L.A., Long Beach ports
- ratien
- January 20th, 20:53
The World Fleet in service has grown by 10.1% in terms of carrying capacity, and amounts 1.39bil tones compared to 1.26bil tones in 2009. The largest year on year increase was evidenced In the Dry Bulk sector with a 15.6% increase that has pushed the Dry bulk carrying capy to 623mil tons compared to 539mil tons in 2009. The Tanker sector increased by 6% and has 514mil tons compared to 484mil tons in 2009.The Container sector increased by 7.4% & sums 186mil dwt, 160mil GT, 14.2mil TEU, compared to 174mil dwt, 148mil GT & 13.3mil TEU in 2009. The Newbuilding orderbook has decreased overall in 2010. There are 5771 ships/units on order and these are scheduled to be delivered by
2014. These ships on order compared to the 6727 ships that construed the orderbook one year ago, are ?14.2% in terms of ships and ?7% in tems of carrying capcity dwt. The total carrying capacity of the orderbook amounts to 416mil tons, and that is 32mil ton less than last year's
total that exceeded 448mil tons.
The newbuilding orderbook in the Bulker sector decreased by 7% in terms of ships or 4.6% in terms of dwt, & we have a total of 255mil tons of extra carrying capacity that will join the active fleet from today until 2014. The Tanker ships on order have decreased by 24.8% in terms of units and 9% in terms of carrying capacity. There are 1208 ships of 113mil tons scheduled to be delivered until 2014 compared to 16000 ships and 124mil tons in 2009. The Containers on order decreased by 29.3% in terms of ships/units and 16% In terms of carrying capacity. The ships on order amount to 560 units & these total 42mil DWT, 38mil GT, 3.65mil TEU compared to 792 ships of 50.3mil DWT, 47.5mil GT, 4.2mil TEU.
The newbuilds that were delivered in 2010 were in total 3900 ships of 149.5mil tons dwt, while in 2009 we had more ships, 4100 of less dwt 119mil tons dwt. The 3900 ships delivered this year only were, 940 Bulkers of 73mil tons, 340 General Cargo ships of 4mil dwt and 15 Ore?Carriers of 4mil tons dwt. 690 Tankers of 43.5mil tons were delivered this year, while, 85 LNG/LPG ships of 3.2mil tons were also delivered in 2010. 260 Containers of 16.3mil dwt 14.5mil GT and 1.4mil TEU were also delivered during 2010. http://ratien.livejournal.com/56391.html
Where in the above link was there a discussion of dry bulk?
You have posted about the dry bulk index before and respond to one of my post using this data. I was front running.
Higher gas prices probably make rail a more attractive transport option than trucks. Worth looking into for verification, but makes sense to me.
TPOG
Obama wants higher fuel costs to push his fascist green agenda.
Both Warren Buffett and George Soros front-ran Obama with this knowledge
Crass
Arrogant
Idiots
Oh, wait...the idiom is NOT to describe the f'tards who came up with it...gimme a few.
This CAI merits a LOL.
Currency Abuse Index
The clocks ticking!!!!
Thats right, they can phony-up any BS index they like, but bottom line the fuze is lit and burning fast.
USO Targets:::
http://markettechnicals-jonak.blogspot.com
CAI = Contrived Artificial Information
CAI : Client Aphrodisiac Indicator
CAI = Cranial Asshole Insertion
Con Artists Inc.
Nice.
Completely Arbitrary Index
+10 Completely Arbitrary Index (depending on what we need, thank you, signed The Manipulators at GS)
Even better..
Cull All Idiots
Can't Admit Insolvency
Cancelling Accrued Inflation
Creating Acute Idiocracy
C is certainly "Certified" or some variation.
There was some fool from UBS on Bloomberg this morning talking about the vastly improved employment picture, the record-breaking drop in the unemployment rate. With the host nodding her head vigorously. I just turned off the TV and logged into ZH... They don't want to know.
Cranial Anal Insertion
Crapy activity indicator
Criminals Active Inside
Corrupted Agency Information (CAI)
Corrupted Administration Index (CAI)
This really is a masterstroke for the guys at Goldman in so many different ways.
1) Replace a measure with which you have limited control over, GDP, with something in which you control the inputs.
2) Reduces expenses immensely, as the firm no longer has to pay to get the numbers before they are released. Obviously, they will know the numbers first and possibly earlier than the purchase route, easing the ability to get their trades on, and of course leading their customers to get even more hammered than is the norm.
3)Increases commissions dramatically. Pay to play stalwart hedge funds (Paulson), would love to do even more business with Goldie, for that all important conference call on release day -1.
Masterstroke..
Kind of worthless as a forecasting tool. All it tell you is what is currently happening......monkey's work.
Conceal Actual Information
Cover Ass Index- the more it goes up the more they are covering their asses .
Note to GS: If you can't explain your formula such that a ten-year-old can identify its strengths and weaknesses, then one of the following must be true, either 1) you don't understand your own formula, 2) you are trying to hide something, or 3) the ten-year-old is a product of the US education system.
Collective Apeshit Instrument
I love the humour on this site. What a bunch of weird twisted individuals we are.....and we all love gold and silver
Cognitive Arresting Incentive
"if it offend thine eye,thou shalt cut it out."
..so sayeth the wise man.
CAI = Crash And Inflate
or
CAI = Crash Acquire Inflate
btw, this BAC earnings trade worked like a charm: http://www.hedgefundlive.com/blog/trading-bank-of-america-bac-earnings Posted on zerohedge before.
created as instructed
Capitalist Abomination Index
Certified Asswipe Index
Completely Artificial Index
Cover-up America's Insolvency
Cancel All Intelligence
Cover-up All Inflation
Corporate Asshole Indicator
Corrupt American Innovation
Capture Another Investor
Contains Asshole Intelligence
Certified Annihilation Indicator
Contrived Asset Incubator
Creative American Imaginings
T.E.I.N. everyone!
CAI = Crony Alpha Index
Consume And Implode
Cunting Asshole Imbeciles
This sounds mentally retarded. The goal is to track GDP. We construct something that tracks GDP well.
But then GDP does not behave well. Our new measure does. It shows encuraging signs.
Does anyone in GS have any sense of logic?
Man I have got to admire the balls on these GS guys. This takes real chutzpah. GS doesn't watch the economy, GS is the economy.
Cup And Inhale.
If you take a careful look, this is a lagging indicator, not a leading one.
Further: they are adding up levels and deltas? WTF?
Finally: if you want to really do this right, cash flows are everything.
Meh.