Close X Cookies are necessary for the proper functioning of By continuing your navigation on our website, you are accepting the use of cookies.
To learn more about cookies ...
Gold & Silver Prices in

Clouded by Knee-Jerk Relativism

IMG Auteur
Published : April 19th, 2012
615 words - Reading time : 1 - 2 minutes
( 1 vote, 5/5 )
Print article
  Article Comments Comment this article Rating All Articles  
Our Newsletter...
Category : Crisis Watch





Although relative comparisons are quite useful, the absolute numbers matter, too. In my experience, Wall Street "analysts" tends to give short shrift to the latter. That's why, for example, they can argue (with a straight face, no less) that stocks are cheap vs. bonds -- without making reference to the fact that bond yields are at artificially-depressed extremes as a result of unprecedented Federal Reserve assistance.

In "Don’t Be Fooled by These 10 Misleading Economic Indicators," The Philly Post's Gene Marks highlights a number of instances where knee-jerk relativism has clouded the bigger picture.

What reports like "consumer confidence" and "housing starts" really mean.

We all hear plenty of economic data every week. And recently, the news reports have been generally positive. Increased retail sales. Decreasing unemployment. A higher stock market. But it’s all relative. Sure, we’ve been seeing better numbers lately. But compared to what? The recession? A lot of the economic news is more than a little misleading. Let me give just a few examples, using data and charts from the very excellent Calculated Risk blog written by Bill McBride.

1. Gross Domestic Product
Gross Domestic Product, or GDP, is a measure of a country’s industrial output. During the recession, the U.S. had a negative GDP. So people are high-fiving because the Fed is predicting growth of 2 to 2.3 percent this year, which is up from the 1.7 percent growth recorded in 2011. This is not something to cheer about. China’s economic growth has slipped to (gasp!) only 8 percent! India is growing at a 7 percent rate. Even Sweden—Sweden, for God’s sake—is predicted to grow at more than 3 percent next year. How bad are we doing? If our economy’s projected growth rate doubles to 4 percent it would still be 30 percent behind its growth rate from
before the recession, and half of what it was back in the ’80s.

2. Housing Starts and 3. Home Sales
Did you know that housing starts are about to cap their
best quarter since 2008? Whoopee! But hold on a sec … let’s look a little closer. Yes, the real estate and construction industries are slowly starting to recover. But for small businesses in those places you’ve got a long, long way to go. For example, that fantastic housing starts number? It’s still at one-third the level of housing starts back in the mid-2000’s. Yes, you read right: one-third. New home sales are hovering around 300,000 per month compared to 1.4 million (yes, million) back in the mid 2000’s. And today’s existing home sales are about 35 percent less than they were back at the same time.

4. Unemployment Rate and 5. Weekly Unemployment Claims
People were
slightly concerned the other week when it was announced that the unemployment rate only fell to 8.2 percent. We should be very concerned. Ask any economist, and they’ll tell you that a “natural” rate of unemployment (where the supply of labor is near where the demand of labor is) should be about 6 percent. That’s because there will always be a percentage of people unemployed—seasonal employees, etc. Today, our unemployment rate is much higher than it should be. We still have more than five million people less employed than before the recession started. In early April, everyone was excited because weekly unemployment claims were at 375,000 … a four-year low. That’s really nothing to cheer. Before the recession, weekly unemployment claims were consistently below 300,000. Last month, the economy added 120,000 net new jobs. At that rate, it would take 42 months to get back to the level we were at before the recession. That’s three-and-a-half years!

Click here to read the rest.

Michael J. Panzner 


Data and Statistics for these countries : China | India | Sweden | All
Gold and Silver Prices for these countries : China | India | Sweden | All
<< Previous article
Rate : Average note :5 (1 vote)
>> Next article
Michael J. Panzner is a 25-year veteran of the global stock, bond, and currency markets and the author of Financial Armageddon: Protecting Your Future from Four Impending Catastrophes, published by Kaplan Publishing.
WebsiteSubscribe to his services
Comments closed
Latest comment posted for this article
Be the first to comment
Add your comment
Top articles
Latest Comments
Silver Bull Market in Force
22 OctS W.
Interesting tech analysis here. Good stuff as I have never looked at 'full bars' closing above or below a 20 bar MA. Only ever the close p...
The Fascist Threat
22 Octsam_site
Your idea that extreme right and left fascism meet is brought out in the Spanish Civil War. The globalists created right wing fascism in Germ...
Trump’s Best Debate Performance ...
21 OctThe Recusant0
Yes, this WAS his best debate performance! But for all the reasons you mentioned, he failed to deliver. And that's why he will be defeated next mon...
Trump VS. Clinton-Who’s “Better”...
21 OctDoom1
Uh...I'm not sure I understand the conclusion here.
Trump’s Best Debate Performance ...
20 OctS W.1
I have only watched the 3rd debate. I am not American. Clinton is a far more polished debater and was far better prepared than Trump. I agr...
Fifteen Years Into the Afghan Wa...
19 Octsam_site
Follow the money folks. Heroin production jumped 13X when the CIA globalists took over Afghan production. You'll never get the sheeple to see the...
My Most Passionate Warning Yet
17 Octstackerguy551
Thank you Mr. Hoffman. I am concerned by the tone of your article, it is pretty scary to say WWIII is probable, and, so it may be, considering some...
Fifteen Years Into the Afghan Wa...
17 OctRichard B.1
Mykey99, the heroin was the main reason we " liberated" Afganastan. The Taliban were burning down the poppy fields and denying our criminal governm...
Most commented articlesFavoritesMore...
World PM Newsflow