A Trader's Angry Rant "Economic Numbers Don’t Mean Anything Anymore"

Tyler Durden's picture

By Bloomberg's Richard Breslow

Economic Numbers Don’t Mean Anything Anymore

It may be August and the dog days of summer for trading interest, but the economic numbers this week are important. At least for now. They’ll determine how we spend the balance of the month characterizing the economy. Whether September has any relevance for Fed fund futures traders. And if the mindless buying of equities and risk continues apace.

Weak numbers follow strong ones, ad seriatum, and no one seems to have any credible idea why. The economic surprise index is knocking the cover off the ball, while mixed in we get the odd and horrific non-farm payroll report or GDP print.

Confidence in economic projections is low. That makes data dependence a dangerous conceit. Signal quality is bad, unreliable and with no shelf life.

Given the season, it’s hard not to worry whether the economy has caught the equivalent of the “sweating sickness.” Merry at breakfast, dead by dinner. And nary a soul could name a cause nor a cure. And that remains true 500 years later. Of course in matters economic we’ll get explanations by lunch time and everyone will have seen it coming, if only they’d been listened to.

Last week’s 2Q GDP guess came in at less than half the expert forecast. The market sliced a quick 10% off pricing for a rate-hike at the next meeting and left December at a paltry 35%.

Cue the Fed speakers. Williams, Kaplan and Dudley said what’s one number, don’t rule out a hike. That’s a real problem. No one understands the numbers so numbers don’t mean anything. But that’s how we’re meant to measure the economy and make investment decisions They need to spend more time trying to understand why no one “gets” the economy than where they hope its going. Finger-crossing shouldn’t be an input to an econometric model.

The ISM surveys and Friday’s payroll report will do a lot to script how Fed Chair Janet Yellen writes her Jackson Hole presentation and tell us how to trade the next few weeks. At least until the next set of data.

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Cognitive Dissonance's picture

"No one understands the numbers so numbers don’t mean anything."

"They" understand the numbers perfectly. Pavlov's dog always knows when dinner time is.

<And central banks sure know when to ring the dinner bell. Ding...ding...ding...>

Cognitive Dissonance's picture

I get so tired hearing about 'when' the central banks lose credibility. As long as they can print, and have the will to print, the market's will dance.....right into their graves if need be.

The addict will always chase the next high regardless if the juice is not as good as the good old days. It is only when the addict refuses to chase and acknowledges it's inability to control its addiction does the pusher no longer control the addict.

Wall street is still fully addicted to the juice of the printing pusher. I see no signs Wall Strret is questioning itself in this macabre dance with death. They are only now beginning to question the pusher.

Wall Street will never admit it has a problem because it never accepts it is the problem. It's the economy, the government, the Fed, the laws, the taxes, the regulations, the competition, the dark markets, the algos, the HFT's, the savers, inflation, deflation etc etc etc.

Ding...ding...ding...come and get it Wall Street.

Dutti's picture

Great Britain - wasn't BREMAIN/BREXIT also a foregone conclusion? Did not both parties and the central bank tell people what kind of vote would be good for them with a much higher budget and the support of billionaires (Soros etc.)
Surprise!

Cognitive Dissonance's picture

Brexit was/is the perfect excuse for the world's central banks to ramp up the printing press...again. Doing so helps the politicians, the MIC, the banksters, international corporations and the 1% on so many levels.

So is it your view that TPTB didn't want Brexit? Or maybe, just maybe, it was the greatest show on Earth. Markets world wide are higher. CB's are pumping even harder than before. The can has been kicked a few more weeks/months down the road.

Ignore what they say. Watch what they do.

Dutti's picture

"So is it your view that TPTB didn't want Brexit"

Correct, a weakening of supranational power is not in the interest of the TPTB, multinationals, Soros etc.

 

Cognitive Dissonance's picture

There has been no exit. Therefore no supranational power was lost. There is only the illusion that something important has happened. And I contend there will be no exit. Excuse after excuse not to leave will be given.

Dutti's picture

Yes, OK. My point was only that there was a surprise outcome of an election.

However, I realized that I somehow posted my initial comment at the wrong place. I meant to post in the following article,

"In US Elections, Money Matters"

Sorry for the confusion CD! I actually fully agree with your original comment. Maybe one too many gin and tonics involved on my side.

sun tzu's picture

My bet is they will pull the rug out from underneath Trump if he wins. If Hitlery wins, the market will eventually pull the rug out from under them in the next 8 years. Either way, the presstitutes will blame Trump or the Tea Party.

Yen Cross's picture

  Well done CD.  Excellent comment!

   Most of the employees of trading firms have NEVER seen rates (short term over 1.00%)

 They can't read charts or manage risk, because they've been tucked in every night by their friendly Central Bank.  <TRUTH>

 How are financial firms going to maintain credit lines if rates go negative.

  They have to keep a percentage of cash on the books to borrow against. ( for trading and a cash buffer for unforseen withdrawals)

 Do you actually think banks are going to pay hedge funds for borrowing against their credit lines? [Negative rates]

 How's those negative rate real estate loans in the Nordic countries working out? --- Crickets

 

 

Sky flyer's picture

Oil drops about 25% in a month therefore the Stock market remain near all time highs. Those numbers are pretty easy to understand.

TradingIsLifeBrah's picture
TradingIsLifeBrah (not verified) Sky flyer Aug 1, 2016 8:36 PM

<When oil drops>

Cheap oil = Good for the consumer

<When oil rebounds>

Expensive oil = good for consumer in oil industry

Vlad the Inhaler's picture

Cheap oil hides inflation, taking pressure off the Fed, lower for longer.

sun tzu's picture

As if it mattered. We had $100 oil from 2011-2014 and rates were still ZIRP. No matter what the real inflation numbers, the jagoffs will claim it's under 2%

max2205's picture

Hahahahahahahahqhqhqhqh*#**'**&$^/^$&&$&÷&&×&#^^'%%#&÷&#&*#*÷&÷...

GRDguy's picture

Stealin' requires lyin', especially when it comes to financial promises.

TradingIsLifeBrah's picture
TradingIsLifeBrah (not verified) Aug 1, 2016 8:34 PM

These "one traders" are going from "confused" to "angry" to pretty soon "psychotic".  If you know any "One Traders", I would suggest avoiding interacting with them in person, its only a matter of time before they completely snap and go postal.  If tragically the "One Trader" you know is a loved one, please suggest that they BTFD as it may be the only means to save them from their own bad trades.  

NoPension's picture

The real trading is being done by software bots. Programs and algorithms. And done in milliseconds ( or faster!).
If you are a human ( haha, of course you are!), and trying to trade against a machine....you lose.
If you don't have the shortest, fastest fiber optic connection, right to the "floor", ( the market's machine) ......you lose.

"Trader" is still a profession?

ft65's picture

You are muddling various profit centres. The "HFT algo's" scam a few fractions of a penny off the top, traders still get their commission when working for a client (they are all just front-run for a bit). Then there are people (investors) who hold for a while, finally institutional investors who hold even longer. What's the big deal, all have an edge. When the word processor and spreadsheets were invented many accountants, financial clerks, secretaries, filing clerks etc. lost their jobs. Part of the second wave of the "electronics revolution". The third wave is well in progress with the "Internet of Things" (IoT).

Computers have made many professions obsolete and fundamentally changed many more. There are  plenty more to go in the years ahead if the Ponzi can be held together. Strangely people accept destruction by expensive means of bombs and bullets delivery, however the same people consider similar economic warfare and destruction as an impossible thought, where home industries are dismantled by their own side rather than by the the enemy's delivery of mass pyrotechnics. 

sun tzu's picture

Hopefully they go down to the local FRB to do whatever and leave us victims alone.

cart00ner's picture

I think that's what ZH has been saying for years...

PhiBetaZappa's picture

It sounds like the trader has finally accepted and loves Big Brother. 

nmewn's picture

"Confidence in economic projections is low. That makes data dependence a dangerous conceit. Signal quality is bad, unreliable and with no shelf life."

So, just whistling past Janets & Draghis (and the politburo's) graveyard of paper fiat they go!

The music will stop again. Everyone will be surprised and stunned! Moar laws & regs will be passed to address the obvious, by the very same people who caused/allowed the obvious to happen. A great sigh of relief will waft across the land now that "some-body-has-done-something". 

What I wanna know is, if debt really doesn't matter, why is that only the "regular folks" stuff is seized, they even perhaps, might be thrown in jail, why is debt tracked, why are there credit scores anyways...are the accused "folks" convicted of nefarious activity not doing the very same thing they are? 

Questions questions questions.

Perhaps I'll just go sit under the shade tree and watch everyone else work after all, for a "change" and see how that works out ;-)

NoPension's picture

My strategy. I don't know if it's right or wrong, but it feels right. I've stopped playing the game, to the extant I can. No new cars. No going out. I work for myself ( that's a hustle in itself). Fuck the IRS. Fuck Facebook. And fuck the useless materialistic bitch I married 33 years ago. As soon as I find a way to dump her useless ass, mission accomplished. Then, just live out the last miserable years, laying low...staying out of the shitshow.
I can dream, can't I?

SillySalesmanQuestion's picture

+1. I did and am still doing every thing you mentioned, except my wife is an angel...I'm lucky she hasn't gotten rid of me. :-)

Chippewa Partners's picture

Did somebody from Bloomberg interview Gartman?

Infield_Fly's picture
Infield_Fly (not verified) Aug 1, 2016 8:46 PM

Economic numbers have been cooked for years - that's why they're now called Big-Nig-Nomics numbers.

snakehead's picture

Here's your explanation.

The Fed is market driven. The market is Fed driven.  Nothing has to make sense.  It just needs a good story with a shelf life of a few hours.

Youri Carma's picture

The are flaunting 'they don't know why' or we are smarter because we know exactly why MARKET RIGGING via QE, HFT.

joego1's picture

"Economic Numbers Don’t Mean Anything Anymore"

Hint- Time to create your own job from a real skill and dump the trader or picture youself with a shopping cart and nothing.

NoPension's picture

Trump's on Hannity.

Don Sunset's picture

Once rigged,.........forever rigged until all involved with the rigging are purged (and the rigging stops).

theeseer's picture

Once Hillary is elected the crooked Fed and the Central Bank Mafia will have no time to celebrate as the the only thing that will have value are wheelbarrows and Tee shirts with the slogan Wiemar economics made me what I am today! Tulips anyone?  

robnume's picture

Crank out the hookers and blow...all is well, my brothers...

Cabreado's picture

What's yer 535 up to these days, America?

Ah... you don't know, and you don't care.

That's what the End of America looks like.

oklaboy's picture

and I though was the only confused

yogibear's picture

Corruption and rigging.

Rinse and repeat, just greater each cycle.

Eventually these banksters just outright seize the small people's accounts.

 

Vlad the Inhaler's picture

Sounds like someone didn't BTFD this last time around.

Iconoclast421's picture

Of course economic numbers dont mean anything. They havent meant anything for a long loooong time. Central banks print trillions for the 0.1% and just barely enough of all this printing has trickled into GDP to keep GDP positive. Subtract out the 0.1% and we are in a deep deep depression and have been for a long time. But no one talks about it. Hell, half the population is knocking each other over to be the first in line to vote for eight more frickin years of it. This country is begging to be raped. Even after all these years of rape and abuse, they still want more of it. At what point do you stop defending or caring about what is obviously a crack whore? That is what this country is, one giant crack whore. You cant help a crack whore who cares for nothing except the next fix.

nsurf9's picture

"The numbers don't matter any more"

Number metrics are so passe!  Perhaps understanding that when the market truly has gone to "hell in a hand-basket," in all likelihood, it will more likely go UP rather than down, may help with your orientation.  Think Venezuela or Zimbabwa. 

Ok yes, there's also that - stealing the buying power out of the money in your bank account and wallet without due process and redistributed to the .01% insiders nuisance.  But, don't give any mind.

any_mouse's picture

Someone just woke up? And sure is cranky.

Rip van Winkle?

Ink Pusher's picture

The numbers are everything, we simply just don't fucking trust them anymore.

Nobody can afford to buy the bullshit and everyone is buying the indecision.

Anyone buying into  bonds or derivatives had better stock up on KY because it's still gonna hurt like hell when they inflate and pop their hot air filled QE branded condoms in your butts.

 

Pareto's picture

We've lived with $40 oil and less for the better part of 25 years. The problem is that there is a full generation of folks who've never seen it. They still think their salary is worth 100k per annum. Its all they know and sadly its what they depend on. Price depreciation (especially salary) no one wants to see. 

The result is going to be that piblic sector and some private sector will retain their bloated incomes while the majority will be struggling for full employment. 

People have to start getting used to this. I have not seen it yet. Behaviour has changed little and expectations are as robust and without economic calculus as they ever were. 

I was reminiscing with a neigjbor about how things were markedly different when we were growing up in the 70s. Fuck. Everybody was poor it seemed. Actually it was just that we did without unless we could pay for it. And we worked. Fuck we worked. And we did so because thats what you did. And you were thankful for what you had. And you sure as hell didnt pine on and on "gimme gimme gimme", else you got a boot up the ass or a measured cuff across the back of the head. 

Those little things have sure turned out to be big things now that i am older. Glad i went through that period. Glad i learned skills that i could trade. Glad i learned to work and learn the value of a dollar in exchange for the sweat i gave up. 

Perspective is everything i suppose. But so very glad i was never raised with a silver spoon. The clarity that that kind of life instilled back then remains as true today as it did back then. I am thankful i had parents who encouraged me to work and allowed me to take on different shit so long as i wasnt fucking up in school. 

God damn i was and remain a lucky man. 

neutrino3's picture

Just evocation of the folks old mantra. When somebody feels scattered all across the universe, and needs prompt "whhhoooooop" (air inhaled) to regain his common sense and cozy dot position:

Some elder, in certain point of his life, gets frequent and nasty diarrhea attacks.

Very much concerned, he visits his doctor (govt?).

"Peace of cake. I'll prescript the simple cure."

Unfortunately the medsis (FED?) swapped his prescription, so he got tranquilizers.

Months latter, the doctor meets him on the street: "How is it now, better?"

Much,much better. I'm creaming my pants all the time  ... but I really don't care.

 

PS Characters may be freely substituted. But that elder character, on my life time line, is reserved only for me ... you? .. him?.