I have long used this blog as an archive of my own writing, media appearances and quotes. If you click the Media category, you will see the long archive, going back to 2003. (This is different from the Financial Press category , which looks at the Media itself).
As another example of "Where did all the Bears Go?," this was my 3rd appearance in Alan Abelson’s column in 4 weeks. (And it was a little over one year ago that I was wondering if I would ever grace his column)
"Always more than happy to
lift a glass to an economic boom, however stealth it may have been,
what gives us just a wee bit of pause is the nagging, heretical notion
that maybe the problem is not with the boom’s visibility, but the data
that provide the basis for its belated discovery. Maybe, in short, the
boom uncovered by the diligent men and women who man (and woman) the
Bureau of Labor Statistics is itself simply a miscalculation.
That possibility begins to seem not quite so
outlandish when you peer at the text of the bureau’s September
employment report. More specifically, run your orbs over that part of
the "Explanatory Note" that deals with "reliability of the estimates"
on page 8. (We’re indebted to several keen-eyed Street scholars,
including Barry Ritholtz and, inevitably, Stephanie Pomboy, for
supplying chapter and verse on the somewhat startling material in their
recent commentaries.) If, by some remote chance, you don’t have the
document handy, here’s the relevant passage:
"Statistics based on the household and
establishment surveys are subject to both sampling and nonsampling
error…the confidence interval [range] for the monthly change in total
employment is on the order of plus or minus 430,000. Suppose this
estimate of total employment increased by 100,000 from one month to the
next. The 90-percent confidence interval on the monthly change would
range from -330,000 to 530,000 (100,000 +/- 430,000). The figures do
not mean that the sample results are off by these magnitudes, but
rather that there is about a 90-percent chance that the ‘true’
over-the-month change lies within this interval. Since this range
includes values of less than zero, we could not say with confidence
that employment has increased."
UP AND DOWN WALL STREET
Barron’s October 16, 2006
Another edition of our new series: Blog Spotlight.
We put together a short list of excellent but somewhat overlooked
blog that deserves a greater audience. Expect to see a post from a
different featured blogger here every Tuesday and Thursday evening,
Next up in our Blogger Spotlight: James Picerno is the editor of The Capital Spectator (capitalspectator.com), a blog focused on economics and investment
strategy. He is also a senior writer for Wealth Manager, a trade
magazine for financial advisers to wealthy individuals. He has been a
financial journalist since the late-1980s.
Today’s focus commentary looks at:
The head of the self-proclaimed "authority on bonds" says the rate hikes are history. PIMCO’s Bill Gross wrote in his October Investment Outlook that "the Fed is done and ultimately will have to lower interest rates in order to restimulate an asset based/housing led economy that has been its primary growth hormone in recent years."
The underlying assumption in his projection is that inflation is "leveling off" and the economic growth rate is "moving towards a 2% real growth rate or less in the next year or so…." As such, the Fed "at some point in 2007 will be forced to cut short rates." Timing and magnitude are yet to be determined, he adds.
In fact, the future may be more complicated than it appears. Economist Robert Dieli of NoSpinForecast.com documents the finer points of this complexity by plotting the history of economic cycles against instances of inverted yield curves. As he illustrates in the chart below (which, alas, we’ve squeezed a bit from the original to fit into the confines of CS), there’s a lengthy history of yield-curve inversions accompanying economic contractions and a drop in the Fed funds rate shortly after the yield inversions arrived. But that doesn’t mean the past is prologue, at least not a prologue that’s clear and obvious.
Category: Blog Spotlight
This is another of our new features: Blogger’s Take. It is inspired by — a nice word for stolen — the WSJ’s Economist’s Take, which they post after major economic data releases.
We wanted to do something a bit more informal: Looking at different subjects a bit more in depth, and take in some perspectives from a broad variety of bloggers (as opposed to a narrow slice of Wall Street Dismal Scientists.
Here are our first half dozen responses to the question: "What Up With Employment?"
"A striking characteristic of the US non-farms job data since the trough of 2002 is that recovery growth is the weakest since records began in 1939 (uncertain BLS September revision notwithstanding). Even the brief and frail recovery between the 1980 and 1981 recessions was stronger. It may be that growth has not yet peaked – but that would make this jobs recovery the slowest to pan out on record.
Moreover, the latest non-farm payrolls data paints a picture of deterioration, particularly in construction and related industries. Whilst both the unemployment rate and hourly earnings data stuck out as good news, the fact is they are lagging indicators. The Fed has ammo to hold on this data; but should coming months show job losses (not outlandish) they might still choose to wait on clearer inflation (and BLS) data before contemplating the wisdom of cuts."
- Rawdon, Capital Chronicle