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Doom & Gloom Sells
By EconMatters
Improving Economic Data
We have noticed that despite an improvement in the economic fundamentals of the United States as per the robust manufacturing numbers, automobile sales data, and upbeat employment numbers in 2014 many go out of their way to find negatives in every economic report instead of focusing on the relativeness of the data. In other words, are we doing better in these areas than two years ago on an “apples to apples comparison” basis?
‘Relative Improvement’ versus ‘Relative Perfection’
Sure there are things in most economic reports that could be better in an ideal world, and this world is far from ideal, and is coming back from a tough period after a structurally significant deleveraging process due to the cyclical natures of economies and business.
But to just pick apart negative aspects of a good econ report because growth isn`t as fast as it could be, or employment isn`t perfect compared to the 1950`s boom is shortsighted and misses the real point of these reports, which is to show the trend in relation to the past six years. The relative improvement in the data over an annual basis compared to the previous three years, two years, and a year ago levels. Is the trend still in place, what is this trend, has a new trend emerged? This is what we are looking for in the data comparisons, and not whether the econ reports are ‘perfect’!
For instance take the employment reports, we just had the fourth straight 200k plus Employment Report, a trend we haven`t had since the year 2000, yes 14 years, and in even good and bad economic cycles, and people could point to the level of participation as their sole focus if so inclined.
I think there are many structural issues behind the participation rate that are much more complex than the simplistic view that there are simply not enough good paying jobs so these workers have given up hope. But regardless, first we have to employ the individuals who are in the job market, and we are doing a pretty damn good job of that right now “relatively speaking” to two years ago when 80k was the norm, remember it is all about ‘relative improvement’, and not ‘relative perfection’ in the data.
Read More >> The Party Is Over In The Treasury Market
Negativism & Cultural Influence
However, I think this cynical enduring pessimism goes far beyond economic reports, and is really a reflection of culture spawned through the modern news media and online dialogue that is message boards, blogs and social & political commentary.
It just has been hip, financially beneficial and downright uncreatively easy to take the negative angle regarding any subject for the last decade. Now I am not saying that one should ignore reality at all costs, read Dr. Norman Vincent Peale`s The Power of Positive Thinking, and think everything is rosy in the world that we live in. But by the same token it seems equally, and even less beneficial in some respects to always look real hard for negatives at the expense of acknowledging the complete picture in any thorough going analysis.
Read More >> U.S. Job Market Is Gaining Traction
For instance, these are strengths in the report, these are the weaknesses of the report, but overall the big picture is telling us that this is a good economic report. Versus the trend today is too ignore anything good in an economic report, find a negative, push this angle for all it`s worth, and celebrate one`s ‘critical thinking’ abilities, and maybe even make a name for oneself in the all-important media landscape.
Negative Behavioralism
In short, one can always look hard enough and point out some kind of negative, because as negatives go, they often are the result of necessary tradeoffs for the positives in this world, even in highly productive and efficient operating systems.
It isn`t lost the fact that people seem to like to hear negative stuff, they seem to revel in it at times, it sure seems to sell by the news produced in this country for the last 50 years, it almost provides entertainment drama that somehow is lacking in people`s daily lives.
However, the evolutionary goal for humans is to best understand how their environment is actually functioning, in order to better adapt to this environment, or change this environment where possible, and improve quality of life as a species and civilization.
So you’re a rebel, a real devil`s advocate, go against the grain for the sake of going against the grain type individual, yep you found the negative, good for you! But is your analysis the best approximation for what is going on in the world, or has it become second nature to always see the negative in everything that you analyze from a behavioral standpoint?
Have you become conditioned to always see the negative at the expense of missing the bigger picture? By focusing solely on the negative, is your world view the best explanation for what is actually occurring in the world? Has your ‘Negativeness’ become reflexive and ‘lazy intellectualism’?
Five Consecutive 200k Employment Reports
I don`t know about you but I will sure cheer another 200k plus employment report hitting the wire next month, things are looking up in the economy, and better times are ahead for many Americans! Society and the world is going to move forward, with or without you; it overcomes setbacks and strives to make improvements in progress towards greater goals.
Unremittingly stuck in ‘Negative Land’ may be socially chic, but it sure doesn`t capture what is the essence of human creativity and innovation, and it sure limits possibilities.
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I think there is a huge difference between being a pessimist and a pragmatist or Realist. The idea that you can change how things are measured to better fit a narrative or change rules and pretend that's its all OK is not only stupid it fraud. Its all make believe. We know its make believe and yet we use this Number that is a survey, that will be revised years even decades later like it means shit today. The only thing I know is that real incomes are down. Real inflations is higher and if people really believe that the baby boomers will receive health care that their parents have I have a bridge to sell you. If people think you can pay debt of with more debt I would love it if you would loan me some money, and when I can't pay you back lend me some more. I agree that the world won't end, I like to think that once the glass is empty humanity will fill it again, we are resilient chimps. This planet at this point cannot grow its way out of debt. Unless we have an new energy supply that oil was to the 20th century its not going to happen. A nation can't spend 17% of its GDP on healthcare, the majority of which is spent in the final 2 years of ones life. Sooner or later the bubble will pop always has always does. That's not doom and gloom that's just the truth.
Me in 2007: It's going to blow.
Me in 2008: It did blow.
Me in 2009: They didn't fix the structural problems and it's going to blow again even bigger.
Me in 2010: Rinse, wash, repeat
Me in 2011: Rinse, wash, repeat
Me in 2012: World economy didn't implode, still here.
Me in 2013: Stopped mainlining the doom and gloom. Began a policy of only worrying about things in my control. Much better.
Me in 2014: Still here. Macro problems still exist. Back in the money. Ready to adjust come what may.
Can't control what others do but I can control what I do. Lot's of psychology involved in constantly focusing on the negative and really sad if you let it control you.
So hte structural problems you alluded to in 2009 have been fixed now?
Or did you just give in to the manipulation and got lucky?
I recognize many of the same issues as you, I just choose to react differently. Hand wringing does me no good. And no, I don't think the structural issues have been fixed. Do I think it will blow up again? Likely given the circumstances. Can I control that by writing angry posts on Zero Hedge? No.
All I can do is adjust the best I can, plan for the best and prepare for the worst. If you want to spend your time bitching and complaining about things out of your control, by all means proceed.
Thanks for the fluff and dry
of my asshole.
What does 200K represent in Manhours worked ? At an 32 hours average per man per week we have 164K of manhours worked per period. The next stunt will be to forbid the use of wrenches, longer lunch breaks and more OJT. Why do we have such difficulty in speaking the truth? Because the truth in economics is that we should be counting votes cast if we wish to understand policy Obozo wants just raw numbers, big raw numbers.
Things are not better, but just more distorted.
Being negative is sometimes rational.
Call me when my discretionary income stops dropping.
Guess I'm "missing the bigger picture".
Yep Econclown is smarter than the rest of us. s/
EconMatters you pump monkey.
Just tell us direclty the stocks you are hoping to ditch and eliminate this unnessesary subterfuge.
jb
Good on you EconMatters, being challenged in our views is vastly more significant than any amount of consensus puke. Obviously not all is up in the US, not even close, the market is so over bought it makes one dizzy, and global 4 year macro trend is sick and sicker, debt is up the whazoo everywhere, but overall, what little relief and opportunity that comes now should not be pooed-away but welcomed, for when do people expect to see it again if the market tanked 65% in Jan 2015?
Make hay while you can.
I believe the issue is bang for buck stimulus.
Each of these dollars spent does have a price, which we will feel. The benefit of the dollars has dwindled to almost nothing, so we are getting essentially nothing for these dollars.....
Is this a joke article?
EconMatters you ignorant slut, a single number like this only has meaning if fifty other things are taken to be normal ("ceteris paribus"), but in case you haven't picked up a newspaper since 2008, this is absolutely not the case these days.
Virtually all the "improvements" since 2008, including these feeble jobs numbers, are little more than a dead cat bounce and not EVEN that if you look at the wage levels, even discounted only by the equally fallacious and misleading government inflation numbers, and THESE only in the shadow of trillions of dollars of Fed "stimulus".
http://data.bls.gov/timeseries/CES0000000001?output_view=net_1mth
Gets you the jobs numbers, you can get it for years back. Yes, four consecutive 200k months in a row is rare, even strong years tend to have glitches - which makes today's numbers even more suspect.
We have about 8 million more workers today than in 2008, so a "recovery" of the lost jobs, at much lower real wages, means nothing at all. Trillions in QE and six years later we are still in a deep hole. That is the neutral, objective facts, jack.
--
That all said, there is something of a tendency to look for the hidden rather than the obvious, and to look for the truth rather than follow the lies. I keep seeing how crowded the highways are with expensive cars, and wondering wtf it would look like if the economy were doing well. And thinking hey, maybe even if the economy is doing "badly", it's maybe not as bad as we like to make it out, we could all be in Afghanistan riding goats and shooting each other.
Their site needs more click ads...
The gov't manipulating data suggests an improving economy!
Who the hell is he talking about? The minority of people that visit zero hedge? Because as far as I can tell the MSM is celebrating economic 'victory' and government success every day. He wants more?
http://marketsanity.com/doug-casey-future-u-s-economy/
http://marketsanity.com/peter-schiff-economy-continues-deteriorate/
If the world is so rosy why is the Fed still printing $45B (or >5% of the pre-2008 money supply that took 100 years for the Fed to inflate) PER MONTH??? For the fun of it? I want to see Mr Sunshine when that inflation timebomb goes off. We have not seen the full extent of this policy nightmare by the "PhD Standard" of monetary management.
Oh and besides the Fed f-ups, we have a commie in the WH or did you miss that too.
http://www.prisonplanet.com/more-phantom-jobs-created-all-in-the-wrong-p...
The economy just has to work perfectly for the relative handful of oligarchs who own everything. For the rest of us we are lucky, either through skill or hard work, to be able to see some personal economic growth and accumulate enough wealth to retire or leave to descendants. Not only are all markets manipulated, but so are the data the media publically reports.
Fantasyland good. If you have a weak mind and can't handle the truth.
Wasn't this an old sketch on SNL? Something like 'Lowered Expectations'? Is this a joke piece, or is the author sincerely encouraging us to celebrate mediocrity? As it is now the best we can do?
And if one thinks about it the author is being a contrarian also in this particular venue by posting this piece. But that is a good thing because the bottom line reality or not if it is getting people to actually use their brains and critically think and ask questions then that is good thing glass full of piss, water, half empty or half full. You can't solve problems unless you can define what it is in the first place you are trying to solve.
Well Econclown,we had the tech bubbe,housing bubble and now those 2 plus more bubbles combined.So where's the good news ?
Negetivity stems from future costs incurred in printing huge indebtedness to be repayed by our children contrasted with meager positive results achieved so far. In addition there sre the longer term trends dealing with resource depletion, global trade imbalances, fiscal and monetary contradictions revealing a goofy model of capitalism that cannot continue indefinatly without major bubble upheavals. Faith in an entitled society can go just so far before a Minsky moment. In the meantime keep partying !?
I get where the author is coming from here. But reality is reality.
There are 3 types of people in the world.
Those that say the glass is half full.
Those that say the glass is half empty.
Those that point out the liquid in the glass happens to be piss and not water.
This article illustrates the type of mindset that doesn't like when glass #3 is the problem and tries to gloss it over by blaming it on glass #2 insteading of dealing with the problem and solving it by emptying the glass and filling it back up with water.
It is like the old saying putting lipstick on a pig doesn't change the fact it is still a pig.
na
the economy is not great, but just OK.
Stocks are too high for "just OK", however.
And if you think the corporate media is painting a negative picture, then I have just one thing to say: what color is the sky in your world?
I must be living in a parallel universe because all the mainstream media seem to me to focus relentlessly on the positives and to gloss over, dismiss or simply ignore any negatives. BTFATH!
The author obviously received his Econ degree from Steve Liesman at CNBC University. First, congratulations on the very valuable education you received. Second, now that I have read this I can rest assured that government reported economic data is not only error free, but is in no way biased in any way shape or form especially in a mid-term election year. Third, I hope you make your money in a way other than the gems you periodically post here. Your insights are easily purchased from government and banker approved used textbooks for around $19.95 plus a cable TV subscription with CNBC included at no charge.
If you had done any homework at all, you would realize that the payroll numbers you mention multiple times are currently the most manipulated data series of anything issued by the US government. And that, my friend, is saying something.
Yeah - all I can say is "wow." Between the "Detroit-turning-from-livable-to-ruin-in-only-4 years" thread, and the pain I felt in my ass the last time I filled-up my car - it should be pretty obvious we've got big problems. I don't care what the govt. massaged numbers are tweaked to say.
Positive feelings aren't going to put money in anybodies bank account.
Peaches and cream. I feel better now. Think I will go out and buy me a brand new gigantic gas guzzlin' pick up truck and a new macmansion with an oversized four car garage to park it in. Hell, I might even spot for some more of them upscale tighty whities.
There's this moronic financial advisor at the gym where I go that only knows one word: buy buy buy.
Rubbish! ;-D
I'm going to piss myself laughing, the blog's author notes -
"... We have noticed that despite an improvement in the economic fundamentals .... many go out of their way to find negatives in every economic report.."
And right off the bat, the first two comments are about Fed pumping too much stimulus ..and then something about deceit, dark shadows watching your soul and death, or, something.
Your a Purveyor of this filthy paper called money; that people have been trained to think its worth something. Just too control theirminds. I know what at heart; it's really all about and, it isn't even trully what most humans want...
When a man lives in a world full of deceit and with dark shadows watching over your soul…. You begin to witness wrongs that must be righted. This is The Death By Cold Steel Report
I had to double check the date to see if it was April 1. The government has pumped in umpteen trillion dollars of stimulus and not surprisingly it got a 'slight' improvement, and we are told we should stop being so negative and celebrate this 'relative' prosperity. Ummmm, sorry, no. The participation rate is not just an irrelevent contrarian data point. It is the essense of what is wrong with this entire empty recovery. It is not 'structural' in the sense of demographics as older people are coming back to work, not retiring enmasse. The new jobs that have been created are low-wage and part-time. There is nothing to celebrate here given the massive amount of new debt created to bring us this slight improvement over a five year period.
I had to double check if I was at the right website. Positive spin, really?