Posts filed under “Mathematics”
Bill King notes in the Think Tank that GDP was actually worse than consensus expected.
How is a minus 1% worse than a minus 1.5% ? He looks at the first half of 2009, and blames the Q1 revisions:
“We will again utilize basic math to illustrate the scam. If Q4 08 GDP was 100 units, and Q1 09 was reported at -5.5% and Q2 09 GDP was expected to be -1.5%, the expectation was for GDP of 100 units minus 5.5% or 94.5 units, minus 1.5% or 93.08 units.
With the revision of Q1 09 GDP to -6.4% the Q1 GDP units become 100 minus 6.4% or 93.6 units. So Q2 is minus 1% or 92.664. Ergo aggregate GDP was worse than expected!”
The 0.5% GDP beat comes on top of a 0.9% downward revision. Hence, the net surprise was a compounded negative 0.4%.
And that’s before the likely downward revisions to Q2 . . .
> The GDP report last Friday evinces the folly of US government economic statistics and Wall Street consensus analysis. Most of the Street heralded the 1% decline in Q2 GDP because it was 0.5 better than consensus – even though the US government admitted in the release that its GDP estimates over the past several…Read More
I notice that Jim Cramer is yowling on TheStreet.com today, pounding the table on US Bancorp (NYSE:USB) and Webster Savings Bank (NYSE:WBS). Jim, how much you want to buy? These institutions are going to be shoveling money into the furnace for another 3-4 quarters. We’ll have a post up on TBP tomorrow on our view…Read More
Make that belatedly. America’s previously neutered accountants — traditionally, green-visored chickenshit-cowards who have rolled over for their belly rubs from America’s CEOs and CFOs, giving them all of the bullshit they asked for over the past 2 decades — seem to be developing a spine of sorts. Recall that in the midst of the credit…Read More
“The total potential federal government support could reach up to $23.7 trillion.” -Neil Barofsky > Yesterday, we noted that the 23 Trillion dollar bailout was a “WTF number.” The statement above really turns on your definition of the word “Support” — this is not the actual costs, but more of a measure of the total…Read More
No, Michael Jackson did not sell 750 million albums. A funny thing happened to Michael Jackson’s sales figures over the past few years: They seemed to have more than tripled: “In the last three years of his life, long after the release of his final original album, Michael Jackson’s career album sales took a curious…Read More
Encouraging comments from SEC chair Mary Schapiro: “The Securities and Exchange Commission has created a new group of examiners to oversee credit rating agencies, which came under sharp criticism for their role during the financial crisis. The SEC has already adopted a number of measures to increase transparency at credit rating agencies, which are paid…Read More
Look, let’s not beat around the bush: Wall Street economists, as a group, well, they suck. Most of them did not see the crisis coming; many were deep in denial about the recession long after it started. They missed the housing boom and bust, the credit crisis. They continued to see phantom bottoms and false…Read More
There has been a lot of recent chatter along the lines of Bill Miller is back in the WSJ, Investor’s Business Daily, Bloomberg, etc. This turns out to be a simple case of bad mathematical analysis — like declaring Fannie Mae (FNM), AIG or Citibank (C) buy & hold owners were back because they were…Read More
Michael (Jeff Goldblum): I don’t know anyone who could get through the day without two or three juicy rationalizations. They’re more important than sex. Sam (Tom Berenger): Ah, come on. Nothing’s more important than sex. Michael: Oh yeah? Ever gone a week without a rationalization? -The Big Chill > You can never underestimate the absurdity…Read More