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Why You Shouldn't Trust Tomorrow's BLS Number

Tyler Durden's picture




 

While much has been written on the revisions, adjustments, and just-plain-guesses that make up the BLS' non-farm-payroll data, the frustration levels are building in the Bay Area as Charles Biderman provides the most in-depth discussion of why we need a better press corps. The simple truth, as Charles notes, is that even the BLS doesn't believe its own hype (in its footnotes) and while mainstream media and talking heads will quote the unemployment rate or NFP change as if it was transcribed by the hand of God, it is in fact an extremely ill-formed, very narrow survey with such huge statistical noise as to be entirely useless. However, while every human should watch this brief clip before buying that 100-lot ES milliseconds after the release tomorrow, we suspect, as usual, it will be algos-gone-wild no matter how many sigma we beat or miss.

 

 

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Thu, 05/03/2012 - 12:59 | 2394265 Paul Atreides
Paul Atreides's picture

The entire movie can be found here.

Thu, 05/03/2012 - 13:58 | 2394577 Pladizow
Pladizow's picture

Yet I should buy TIPS?!?

Thu, 05/03/2012 - 13:23 | 2394371 vast-dom
vast-dom's picture

the real bad news is that assholes trade the erroneous data, knowingly.

 

 

Thu, 05/03/2012 - 16:03 | 2395016 Max Hunter
Max Hunter's picture

it's all self-fulfilling.. Just like trend lines on charts..

Thu, 05/03/2012 - 14:06 | 2394624 Betty Swallsack
Betty Swallsack's picture

Why I shouldn't believe the US govt's B[L]S numbers...

Hmmm. 

Oh, oh, oh, I know this one!

....because this is the same gov't that 'tells the truth' [nudge, nudge, wink, wink] about  terrorists, the mortgage backed securities ponzi scheme, Saddam's 'nookular' weapons, Iran's nuclear weapons, when-pigs-fly-flu, Gulf of Mexico oil spill and the necessity of current wars of conquest and imperialism.

That's why.

http://www.examiner.com/article/us-lies-yes-dead-on-lies-about-war-iraq-afghanistan-continues-crimes-against-humanity

Thu, 05/03/2012 - 12:53 | 2394218 q99x2
q99x2's picture

The BLS is dependent upon a Technical Note that relieves them of responsibility and they do take FB pre-IPO if offered.

Thu, 05/03/2012 - 14:54 | 2394801 Hansel
Hansel's picture

Here's the link to the technical note.  Like Biderman said, the note has been around forever.

http://www.bls.gov/news.release/empsit.tn.htm

There is about a 90-percent chance, or level of confidence, that an estimate based on a sample will differ by no more than 1.6 standard errors from the "true" population value because of sampling error. BLS analyses are generally conducted at the 90-percent level of confidence.

For example, the confidence interval for the monthly change in total nonfarm employment from the establishment survey is on the order of plus or minus 100,000. Suppose the estimate of nonfarm employment increases by 50,000 from one month to the next. The 90-percent confidence interval on the monthly change would range from -50,000 to +150,000 (50,000 +/- 100,000).

Thu, 05/03/2012 - 12:48 | 2394219 fuu
fuu's picture

How is farm payroll doing these days?

Thu, 05/03/2012 - 12:59 | 2394269 SoCalBusted
SoCalBusted's picture

ex kids working on farm?

Thu, 05/03/2012 - 13:25 | 2394387 Gully Foyle
Gully Foyle's picture

"Maggie's Farm"

I ain't gonna work on Maggie's farm no more
No, I aint gonna work on Maggie's farm no more
Well, I wake up in the morning
Fold my hands and pray for rain
I got a head full of ideas
That are drivin' me insane
It's a shame the way she makes me scrub the floor
I ain't gonna work on Maggie's farm no more.

I ain't gonna work for Maggie's brother no more
No, I aint gonna work for Maggie's brother no more
Well, he hands you a nickel
He hands you a dime
He asks you with a grin
If you're havin' a good time
Then he fines you every time you slam the door
I ain't gonna work for Maggie's brother more.

I ain't gonna work for Maggie's pa no more
No, I aint gonna work for Maggie's pa no more
Well, he puts his cigar
Out in your face just for kicks
His bedroom window
It is made out of bricks
The National Guard stands around his door
Ah, I ain't gonna work for Maggie's pa no more.

I ain't gonna work for Maggie's ma no more
No, I ain't gonna work for Maggie's ma no more
Well, when she talks to all the servants
About man and God and law
Everybody says
She's the brains behind pa
She's sixty-eight, but she says she's twenty-four
I ain't gonna work for Maggie's ma no more.

I ain't gonna work on Maggie's farm no more
I aint gonna work on Maggie's farm no more
Well, I try my best
To be just like I am
But everybody wants you
To be just like them
They say sing while you slave and I just get bored
I ain't gonna work on Maggie's farm no more.

Thu, 05/03/2012 - 12:51 | 2394241 kralizec
kralizec's picture

I don't need anymore reasons to not trust these asshats anymore!  Their mere existence assures it.

Thu, 05/03/2012 - 12:53 | 2394244 carbonmutant
carbonmutant's picture

Because I don't trust the current BLS numbers...?

Thu, 05/03/2012 - 12:56 | 2394247 fiddler_on_the_roof
fiddler_on_the_roof's picture

if you do as Biderman tells, you surely lose money.

He was the idiot who told us all to get out of the stock market in June 2009 which I promptly ignored.

Thu, 05/03/2012 - 12:56 | 2394259 SheepDog-One
SheepDog-One's picture

Sorry, Biderman said equity markets will go up.

Thu, 05/03/2012 - 13:02 | 2394288 fonzannoon
fonzannoon's picture

This changed my mind about Biderman.

http://www.youtube.com/watch?v=MIFGfgKHrwU&feature=related

Thu, 05/03/2012 - 14:10 | 2394643 Pladizow
Pladizow's picture

Thanks, nice to find a Peter video I havnt seen before.

Thu, 05/03/2012 - 14:15 | 2394671 fonzannoon
fonzannoon's picture

Yeah funny I am just paying it forward....someone else put it on yesterday

Thu, 05/03/2012 - 18:14 | 2395354 VonManstein
VonManstein's picture

why we never see Schiff mentioned on ZH.. any ideas?

Fri, 05/04/2012 - 02:54 | 2395980 TWSceptic
TWSceptic's picture

He has been, just not that frequently.

Thu, 05/03/2012 - 13:21 | 2394302 fiddler_on_the_roof
fiddler_on_the_roof's picture

Ba Ba Black sheep,

you enjoy being sheared ? now you start lying.

 

http://www.youtube.com/watch?v=z0Tu3tsn3QI

look at time 3:14 in this video. He is saying it was a bubble since April 2009..

you need to get your facts correct before you start bleating here.

Thu, 05/03/2012 - 13:23 | 2394364 SheepDog-One
SheepDog-One's picture

3:50 in the video he says 'This market can go up until the bubble breaks!'  I dont know what youre refering to here, he didnt say equities are going down or short the market at all! He's again just saying the data is BS!

Thu, 05/03/2012 - 13:27 | 2394385 fiddler_on_the_roof
fiddler_on_the_roof's picture

He did not say short - but said to get out of the market in APRIL 2009. what more do you want ?

He made several "disgraceful" appearances during summer 2009 to repeat that BS.

Starting 3:14 on OCT 2009 -  he accepts he has been wrong about stocks for past 5 months. what more do you want.

I can find other quotes also he made.

I guess all ZH also encouraged that - search for Biderman in ZH.

 

Thu, 05/03/2012 - 13:36 | 2394408 SheepDog-One
SheepDog-One's picture

I never said Biderman was right about anything, stating that 'he has been wrong'...so what? All he did in your video was state the BLS numbers are BS and that the market bubble can go higher.

And also Ive never done anything in a market as someone else told me to do anyway, so its irrelevant to me.

Thu, 05/03/2012 - 13:41 | 2394440 fiddler_on_the_roof
fiddler_on_the_roof's picture

No, he stated that he was wrong about the stock market for 5 months. ie he was wrong in his assessment that stocks will go down since April 2009. Also he says he was short right at the trough of stocks.

Also that comment - "All market bubbles can go high until it pops" is a useless comment. How long is long  - 50 years, 10 years or 1 week ?

He and other likes you(including ZH) have been so wrong about stocks for 3 years and you still don't know what hit you.

I am not here to debate you - but to show how foolish it was to follow them. Now he may become correct again in a couple of months, but then a dead clock is

right twice a day.

 

Adios

Thu, 05/03/2012 - 14:12 | 2394658 Pladizow
Pladizow's picture

Im Ok with being wrong about the stcok market for the last 3 years, as I've been right about the metals for 10!

Thu, 05/03/2012 - 21:12 | 2395601 economics9698
economics9698's picture

The current money bubble will take about three to five years to play out.  We are in year 3 plus 7 months.  If Biderman did his homework he would know this.  Year 4 will suck.

Thu, 05/03/2012 - 15:41 | 2394939 FlyoverCountryS...
FlyoverCountrySchmuck's picture

"He and other likes you(including ZH) have been so wrong about stocks for 3 years and you still don't know what hit you."

 

Bob Janjuah: "Markets Are So Rigged By Policy Makers That I Have No Meaningful Insights To Offer"

Zerohedge- 2/20/12

http://www.zerohedge.com/news/bob-janjuah-markets-are-so-rigged-policy-m...

 

Keep buyin', sucker...

Just don't expect a bailout or sympathy when it all comes crashing down upon your head on, or about, Jan 1, 2013.

Thu, 05/03/2012 - 12:57 | 2394256 Shizzmoney
Shizzmoney's picture

Wow, learned alot here. 

I mean, at some point, reality sets in here for folks even on Wall Street, right? (Oh wait, most of the trading is done by computers in the virtual world, I forgot).

Thu, 05/03/2012 - 12:57 | 2394257 Boilermaker
Boilermaker's picture

The propoganda isn't intended to dupe the 10%, it's meant to dupe the 90%.

It does just that.

Thu, 05/03/2012 - 13:01 | 2394286 SheepDog-One
SheepDog-One's picture

Even though the 90% cant buy stocks with their EBT cards, the propaganda does serve to keep them baffled with BS and comforted that they can safely consume more, for today at least.

Thu, 05/03/2012 - 13:13 | 2394336 niktamere
niktamere's picture

get that consumer confidence up!

or ws that consumer comfort....

Thu, 05/03/2012 - 13:29 | 2394397 Boilermaker
Boilermaker's picture

constipation

Thu, 05/03/2012 - 12:59 | 2394267 niktamere
niktamere's picture

comments on this thread were moderately better than expected

Thu, 05/03/2012 - 13:29 | 2394309 Boilermaker
Boilermaker's picture

It's the warm weather effect, to my understanding of what someone else told me.

Thu, 05/03/2012 - 12:59 | 2394268 km4
km4's picture

DAVID STOCKMAN: It's True, The BLS Data Is Made Up - Business Insider http://read.bi/yabCJS

 

 

Thu, 05/03/2012 - 13:00 | 2394280 km4
km4's picture

Bottom Line on Feb 7, 9:55 AM said:
@save_the_rustbelt
Over 2 million unemployed longer than 6 months 3 years ago, now over 5 million in that boat. Folks there's the elephant in the room they are trying to hide.


Thumbs Up +122

Thumbs down - 2

Thu, 05/03/2012 - 13:01 | 2394283 SAME AS IT EVER WAS
SAME AS IT EVER WAS's picture

NFP = Gov't work by Gov't employees.
Is it any wonder?

Thu, 05/03/2012 - 13:02 | 2394287 ZippyBananaPants
ZippyBananaPants's picture

So basically, these numbers are used to move the sheep in one direction or another!

Thu, 05/03/2012 - 13:15 | 2394339 niktamere
niktamere's picture

baaaaaaaa (nkofamerica)

Thu, 05/03/2012 - 13:06 | 2394290 SheepDog-One
SheepDog-One's picture

So we know its just made up and not to pay attention to any number the propaganda machine puts out. But we can learn a bit about their intended direction of further easing or no easing. I think theyre going with 'no easing' myself, we'll see if thats true with a 'surprise big beat' tomorrow, which will of course signal the junkies arent getting a fix antime soon.

Thu, 05/03/2012 - 13:46 | 2394502 farmerjohn2112
farmerjohn2112's picture

'We' all know, cuz we're smart - otherwise we wouldn't hang out on ZH for 'real' news... it's the sheeple that worry me. I watched an episode of nightly propaganda the other night and was truly horrified at what was fed to the DWTS crowd: Obummer in Afghansitan popping up two more years of occupation, a feature on what happens when you walk away from the valet (Bueller?) and fluff about how everyone's 401k is upUpUP! Meanwhile, I'm making shotgun shells and growing my own food because I can no longer afford the grocery. Go figure.

Thu, 05/03/2012 - 13:04 | 2394295 junkyardjack
junkyardjack's picture

So it could be that things are way better than the data that they are putting out shows.  Interesting

Thu, 05/03/2012 - 13:08 | 2394303 SheepDog-One
SheepDog-One's picture

Youre saying they want to make things seem worse than what they really are?

Thu, 05/03/2012 - 13:10 | 2394321 insanelysane
insanelysane's picture

Print will be 7.9%, book it.

Thu, 05/03/2012 - 13:15 | 2394342 niktamere
niktamere's picture

howd you like to win a super cool cnbc baseball cap?

Thu, 05/03/2012 - 13:37 | 2394435 insanelysane
insanelysane's picture

Only if signed by my idol Cramer<sarc>  This week's number is crazy low in order to set up the "math" behind a drop in the unemployment rate.  Next week, this number is going to be jacked up but the unemployment rate will stay at 7.9 for the month and then lowered.  We will be around 6.8 by November with at least another 1 million jobs disappearing.

Thu, 05/03/2012 - 13:42 | 2394475 niktamere
niktamere's picture

bad print = qe expectations = shoot into green

good print = shoot into green

happy scalping!

Thu, 05/03/2012 - 14:05 | 2394613 insanelysane
insanelysane's picture

The next QE won't be called QE.  The Fed is strategizing a new method for dumping money to the banksters.  They are going to go underground till after the election.  In the footnotes of the banksters financial reports, we will see nonsensical comments about how their balances have increase.

Thu, 05/03/2012 - 14:08 | 2394635 niktamere
niktamere's picture

y= wealth from interest charged on war appropriations

Z= devaluation of money

 

X = Y + Z

What is X?

 

credit: gangland

Thu, 05/03/2012 - 13:13 | 2394327 realtick
realtick's picture

The long term NFP chart is another disaster in the making: http://i49.tinypic.com/b3kk8w.png

 

Thu, 05/03/2012 - 13:14 | 2394329 TooBearish
TooBearish's picture

Of course NFP will be a beat and the ES will test recent highs - of chrissake anyone using charts or heaven forbid some FLOW of funds analysis will get killed BUY NOW !

Thu, 05/03/2012 - 13:25 | 2394384 SheepDog-One
SheepDog-One's picture

Just wondering when the QEasing the market junkies are craving for will be reflected by 'data'....tomorrow? Why knows what curve balls theyll throw.

Thu, 05/03/2012 - 13:28 | 2394396 andrewunknown
andrewunknown's picture

Intellectually interesting, but you continue speaking of traders, Charles, as though a) they're human, and b) for those that are human, that they care about how the headline statistics are derived.  Government economic data is propagandized, intentionally obscurantist and methodologically sloppy: we get it. 

But now that's established, speaking pragmatically: talking about from an armchair is one thing, but actively trading in this environment is another; and quite honestly, the scandal of criminally shoddy data releases does not matter to the second guy.  NFP +500k or -500k, the trader goes long or short - or both - and wins or loses.  Or they can let "the scandal" so bewitch them they either a) decide not to trade at all; or b) make some entrenched self-righteous fundamental macro stand with their capital because "the statistics" are being mucked about with and end up getting their face ripped off. 

So it's bad data, and maybe intentionally.  This a widely-held position with significant basis in fact and there ought to be recourse to bring the BLS to account and enforce the use of an honest, transparent methodology.  All well-and-good; but tomorrow at 0830ET, it means nothing. 

Thu, 05/03/2012 - 13:32 | 2394418 SheepDog-One
SheepDog-One's picture

BLS data to me is only an indicator of whether their course is set for more easing or no easing.

Thu, 05/03/2012 - 13:34 | 2394426 Walt D.
Walt D.'s picture

Unemployment below 8% by election day!

http://apnews.myway.com/article/20120503/D9UH39VO0.html

Simple - the BLS can publish any number they want the week before the election and revise it back up following the election. 

"There are lies, damn lies, and BLS statistics"

Thu, 05/03/2012 - 13:37 | 2394436 orangegeek
orangegeek's picture

It doesn't seem to matter what the news is, the market keeps incrementing up on lower and lower volume.

Thu, 05/03/2012 - 13:37 | 2394441 Anarchyteez
Anarchyteez's picture

Just look at what we do know. We be fucked.

Our armed forces should have the potus, most of congres, and these
flippin bankers on death row. WTF?

Thu, 05/03/2012 - 13:37 | 2394447 akak
akak's picture

Someone please send this article to Robert Bruschetta.

Thu, 05/03/2012 - 13:38 | 2394449 yogibear
yogibear's picture

Most people realize the BLS numbers are garbage. Who cares, everyone trades on it.  

Thu, 05/03/2012 - 13:40 | 2394463 Vince Clortho
Vince Clortho's picture

Bucket of Lukewarm Spit

Thu, 05/03/2012 - 13:43 | 2394485 Father Lucifer
Father Lucifer's picture

Man what a view he's got.

Thu, 05/03/2012 - 13:46 | 2394498 fiddler_on_the_roof
fiddler_on_the_roof's picture

My bet is stocks start to rally here - I could be wrong but I am posiitoned as such for a long time.

Thu, 05/03/2012 - 13:51 | 2394529 sbenard
sbenard's picture

I just LOVE this guy! No nonsense, straight-talking! Nothing esoteric about him!

Thu, 05/03/2012 - 14:20 | 2394691 Alpine
Alpine's picture

The usual scenario of the Gold takedown the day prior to the BLS numbers release, this time by -$20 seems to indicate that the numbers can't be sufficiently massaged.

Thu, 05/03/2012 - 14:55 | 2394815 devo
devo's picture

What if the number is bad, then should we trust it?

Thu, 05/03/2012 - 17:52 | 2395308 Racer
Racer's picture

There will be a reason why it is 'bad'

Thu, 05/03/2012 - 17:51 | 2395306 Racer
Racer's picture

Trust anything out of the US??? You are kidding.... Heard on radio recently that a visiting US slave thought the orange juice in the UK was 'too strong'....

 

uh maybe because it was ....just... orange juice... and no water or any other junk put in it...

over here orange juice is just that.....

 

Well maybe that's the only thing that is real... uh ,,,, maybe..??????

Fri, 05/04/2012 - 00:51 | 2395886 hermes trismegistos
hermes trismegistos's picture

why worry soo much!!! Trade what ever number comes out, and use the accumulated profit for hard assets.

Fri, 05/04/2012 - 02:52 | 2395977 TWSceptic
TWSceptic's picture

the BLS is that the bullshit department, oh wait they're all bs.

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