Fuzzy Numbers

Interesting discussion on some of my favorite pet peeves: CPI, Unemployment, NFP, etc. via Chris Martenson’s Crash Course.

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  1. Steve Barry commented on Aug 12

    Thanks…now I’m even more scared…the chart that shows debt per GDP is even WORSE in reality since GDP has been overstated. My call for a depression will be right, but the fuzzy numbers will probably turn it into a boom.

  2. trackerman commented on Aug 12

    One has to wonder why Obama does not use the “real” statistics to bolster his claims that we need “real change”….unless he also realizes he will need to use these same fuzzy numbers when and if he becomes president?? It is a shame that all the politicians are really from the same fraternity and there will never he any “real change”.

  3. CNBC Sucks commented on Aug 12

    I am glad I tuned in for this. Thanks Barry and bravo to Chris Martenson. As I switched political parties, I saw some leftist versions of the same argument, but Martenson puts it in ways that are more confident and authoritative Streetwise. I have said on my own site my long-term predictions for the economy and this presentation confirms quite a few of the suspicions I have had. Gotta pay that piper sometime.

    As for Obama, I think he has to be careful, since the GOP have become masters of political manipulation with a largely uneducated and unengaged electorate and the Democrats are babes in the woods by comparison. I thought oil at $147 would be a huge advantage for the Democrats until McCain, Bush, etc. turned it into an uninformed referendum on offshore drilling. If Obama were to cite these types of more realistic economic statistics, the Republicans would find a way to turn it around to their advantage. Obama is a superior politician to McCain, but his Democratic proxies as a whole (even Larry Summers) are too afraid to let America know they are gonna give it a swift and very hard kick in the rear it so sorely needs…high taxes for you especially, Larry Kudlow.

  4. Peter commented on Aug 12

    The world might be entering a depression, but if the screens say its a boom, it must be a boom. We are in a virtual reality world.

  5. Jojo commented on Aug 12

    A very nice presentation summarizing the problem.

    It it clear that it is to the government’s advantage to manipulate GDP, inflation, unemployment, etc. numbers and that they have been and are doing so.

    Manipulated numbers are one potential reason why the market seems illogical so often – because people are reacting to false information.

    However, and this is what is lacking in the presentation, what is the solution? How do we get the government to stop tricking the numbers when the consequences of doing so are so great (paying more for SS & Medicare, for example)? How do we get Wall Street to stop believing and reacting to the false numbers? How do we get big media to question government numbers? In short, how do we return these numbers back to reality?

  6. Jojo commented on Aug 12

    Also, another thought.

    Do [all] other major countries manipulate their numbers the same way that we do?

  7. NOR commented on Aug 12

    I am sorry to say, but after watching just half of the crashcourse, I came to the conclusion that
    your government should be arrested, prosecuted and sentenced for life.

    Thats just AMAZING!!!!!!!!!!!!!!!!!!!

  8. jmf commented on Aug 12

    Thanks from Germany!

    It is amazing that there are still enough foreigners willing to buy $ dominated assets….

    I´m staying with gold…..

  9. CaptiousNut commented on Aug 12

    You clowns irate over fraudulent gov’t statistics aren’t as smart as you think.

    Instead of demanding *truth*, you should be demanding that the pols get out of the macroeconomic data business altogether. It costs hundreds of millions, such numbers will always be manipulated, and they are just a Trojan horse for the gov’t to interject itself between the free trading of private parties.

    It’s probably been decades since class-baiters have had as much ammo at their disposal as they do today. Thank God they are so profoundly inept (e.g. Obama) at firing it.

    Then again, if they were a little more competent, we probably wouldn’t have to bear the *bailouts*, the inflation, etc. we’re getting today.

  10. John commented on Aug 12

    All this shows is that BLS employees are frugal shoppers and can find bargains!

  11. DownSouth commented on Aug 12

    We’re definitely having a Don Quixote moment:

    “It was in this atmosphere of desengaño, of national disillusionment, that Cervantes wrote his Don Quixote, of which the first part appeared in 1605 and the second in 1614. Here, among many other parables, was the parable of a nation which had set out on its crusade only to learn that it was tilting at windmills. In the end was the desengaño, for ultimately the reality would always break in on the illusion. The events of the 1590s had suddenly brought home to more thoughtful Castilians the harsh truth about their native land–its poverty in the midst of riches, its power that had shown itself impotent. Brought face to face with the terrible paradoxes of the Castile of Philip III, a host of public-spirited figures–such men as Gonzalez de Cellorgigo and Sancho de Moncada–set themselves to analyse the ills of an ailing society. It is these men, known as arbitristas (projectors), who give the Castilian crisis of the turn of the century its special character. For this was not only a time of crisis, but a time also of the awareness of crisis–of bitter realization that things had gone wrong. It was under the influence of the arbitristas that early seventeenth-century Castile surrendered itself to an orgy of national introspection, desperately attempting to discover at what point reality had been exchanged for illusion.”

    J.H. Elliott, “Imperial Spain: 1469-1716”

  12. Donny commented on Aug 12

    What’s the old saying … “A picture says a thousand words”!

  13. GulfCoastJim commented on Aug 12

    Anyone who thinks that politicians and/or bureaucrats will devise any effective solutions to the growing avalanche of problems is truly a starry-eyed dreamer.

    9/11 taught us that until something ‘hits the fan’, the sheeple don’t know or don’t care.

    Great video, thanks Barry.

  14. Steve Barry commented on Aug 12

    I have posted this credit bubble chart several times. Thanks to this video, we know it is worse than the chart indicates, if possible. First, the chart ends in 2006 and debt soared into 2007. Now we also know GDP has been overstated for years, making debt/GDP that much higher. This will be a crushing deflationary debt crash. The Fed’s only option is to inflate out of it, but it is futile.

  15. Francois commented on Aug 12

    Barry and the gang,

    I have a question: Assuming institutional and international investors are aware of all the fakery with go-vermin numbers, why do they keep investing here?

    I have a couple of ideas as to why, but my guesses are as good as the next door neighbor.

    1) It is worse in other countries
    2) There is so much cash that need a place to invest that they can’t do otherwise
    3) There something they know that even John Williams doesn’t.
    4) This whole thing only affect the middle and low income wages and does not impact corporate earnings. (Well, try to convince retailers of that)
    5) The numbers fakery isn’t that bad after all.

    Thoughts and comments welcome.

  16. Schnormal commented on Aug 12

    hey DownSouth, that’s a great quote, thank you!

  17. CNBC Sucks commented on Aug 12

    I am disappointed there are only 16 comments on this particular thread. Not enough attention span for a 16-minute video?

    To Francois, I think your points 1 and 2 are correct, although I would say that the biggest reasons international investors invest here are (a) the stable political system (watch the incredibly peaceful ideological revolution that will take place when Obama wins in November), (b) the huge amounts of paper $$$ that we have given these foreigners in exchange for cars, TVs, oil, other goods and raw materials, and (c) the most voracious consumers in the world are here. THEM foreigners have to do SOMETHING with all those $$$ (think of all the foreign investment that went to dust when the US housing bubble popped, investment that went in on the basis that housing is the biggest component of American personal consumption). So in effect, the brilliant political system invented by the Founding Fathers has given us a license to trade processed wood (paper $ and debt) for precious material and human energy from elsewhere. Hopefully, we can ramp down this system harmoniously with Obama and not have the delicate geopolitical and economic balloon pop into a truly ugly mess as it will with clumsy John McCain.

  18. Jeff commented on Aug 12

    I too am a bit surprised by the lack of commentary on this video clip. It’s quite an amazing and instructive video if one watches start to finish (I know, 15 minutes is a long time for our constant-partial-attention culture).

    @CNBC Sucks: Well put. Couldn’t have said it better myself.

  19. Charlie commented on Aug 12

    Outstanding presentation by Martenson, will have to look a bit further at the Shadowstats.com site…am anxiously waiting for the “Peak Oil” presentation.


    If the numbers that Martenson suggested for the REAL GDP and REAL CPI are used to look at the current economy, it would seem that the US has been in recession for several quarters.
    What do you say?????

    Also, if we were to use the unvarnished figures shown by Martenson, taking the lipstick off the pig, would we have seen that the recession started in mid 2007??

  20. tejat commented on Aug 12

    I’ve just finished watching the whole 16 chapters. Nice attempt to present a coherent view of economics, energy, environment. Great presentations. Some shortcomings though. Many undefined terms, a bit too much reliance on technical analysis. Too bad he doesn’t discuss financial derivatives in his chapters “bubbles” or the “brief history of US money”. I think he overemphasizes the importance of the currency being “gold-backed”.

  21. algernon commented on Aug 12

    fantastic post! Thanks Barry.

    Francois, foreign investors these days are dominantly foreign central banks.

  22. Jojo commented on Aug 12

    Could the U.S. government be sued to force them to produce non-massaged statistics?

  23. CNBC Sucks commented on Aug 12

    Thanks, Jeff.

    I will read up more on Martenson’s wonderful analytical stuff, but let me raise something about his view of the world. He says that he is preparing for the worst with things like “grow a garden every year; preserve food; and know how to brew beer & wine, raise chickens, and slaughter sheep”. Being somewhat of a peak oiler myself, I have seen this “back to the old days” / permaculture / survivalist clap trap. It’s good to think you are gonna survive while others struggle, but friends, lemme tell you something: If disasters like rapid post-peak oil depletion and a global economic meltdown happen, we are ALL GOING TO SUFFER TOGETHER. Civilization is not reversible, at least not reversible without violence and chaos. Being able to slaughter sheep isn’t going to do you any good if a gang of starving and armed biker-rapists is circling your little compound.

    My point? GET THIS ELECTION RIGHT, my friends. I have a really, REALLY bad feeling about this John McCain and I think many of you do too.

  24. STS commented on Aug 12


    That is a fascinating parallel you draw to Cervantes’ era Spain — that’s roughly where the US is on it’s “global hegemony” trajectory. You’ve probably read your Paul Kennedy. Anybody doing macro investing should read him.

  25. winslow commented on Aug 13

    “As for Obama, I think he has to be careful, since the GOP have become masters of political manipulation with a largely uneducated and unengaged electorate and the Democrats are babes in the woods by comparison.”

    The name of America today is to be vicious. Americans tend to think of themselves as being smart but the rest of the world has caught-on. I have not seen a true “leader” anywhere in America. The entire system and society needs to be re-vamped. Tell this to a Republican and they will say you are unpatriotic. Of course, anyone in power will say that. The Republicans are deathly afraid of the masses organizing.

  26. Nick Athens commented on Aug 13

    i truly apreciate you bringing sensibility to to the current housing situation, however even you are underestimating how bad it will be. here’s why… demographics!

    take any assumption you like starting in 2009 or 2010, then figure at best 2 years already to work off inventory. that is best case! now 50 million boomers want to decide to retire beginnibg in 2012. their entire retirement plan was not 401k, but home equity. they have seen 30% of their equity (not price, you should check this)
    disappear, and will see another 20% (10% decline in price is about 20% equity). you tell me what do you think is gonna happen?

    thanks, i wish your analysis would address this…

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