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« Employment Report Disinformation | Main | Understanding the Dollar »

November 05, 2007



"Malpass has been very accurate for several years, during a time when the economy has not been easy to predict."

David Malpass should be prosecuted for fraud....

Exhibit A:

"Indeed. The durability and sturdiness of the current economic expansion have been systematically underestimated due to a fixation on consumption, interest-rate hikes (rather than the level of target interest rates), house prices, the fiscal and trade deficits, and comparisons to previous and very different expansions.

Unlike other expansions, this one was built on the dollar’s value moving out of deflationary strength and into reflation. It has therefore been an unusually steady and strong expansion — one buoyed by the 2003 tax cuts which were both well-timed and well-focused."

February 10, 2006, 7:51 a.m.
An Expansion with Staying Power

In the abovellinked piece, Malpass takes on "conventional wisdom" and illustrates how a combination of faith in economic esoterica, and a distinct political bias contribute to generate absolute, unvarnished tripe. Imagine how well served his reading audience, his employer and its clients might have been served if he has simply heeded what the combination of low nominal job growth, stagnant real wages, negative savings rates, and irresponsible fiscal policy was telling us about the state of the US economy......

It is so grossly irresponsible one is left to ask if it was deliberate....

Bill aka NO DooDahs!

Which one is "pestilence?" Should I guess?

I've got probably 50 or more on RSS, but there are some I just check to see what needs debunking today ...


The trend in a jobs numbers "moving average" is important too, right? Throw out some of the outliers.

The Four Horsemen of the Blogosphere I read are Barry, Jeff, Adam Warner and the Day Shark. (There are others that I link to from my blog, too. But naming them here would wreck my Revelation metaphor.)

FSLR is up over 20% ah on their earnings. The Sun creates energy no matter what the jobs numbers are...

Bill aka NO DooDahs!

Remember how big a deal the various blowhards in the econ media made over "rounding down" or "rounding up" an unemployment figure? Imagine how giddy they would be over a trend that would raise the UE rate from 4.7 to 5.0 in a year!

Dittos, I'm not one who uses this to trade, other than very rare targets of opportunity ...


30K into 150 million jobs is .02%, 1/4 of 1% annualized. To me it looks like splitting hairs. Note: I have no idea how many jobs there are in the U.S. To make the difference significant in my investing plans would not help. The fact that the market can make the swings it makes on these numbers is the most interesting part. As with my investing philososhy (such as it is!) 1 year and 3 year type trends have more use. A $20 trillion economy is not going to change direction on a few months data. Only a few economists egos!

Bill aka NO DooDahs!

150K is 25% higher than 120K, it seems like that would be a significant difference to the non-innumerate.


Barry - If this was a matter of splitting hairs, I would not raise the issue. There is a significant difference between the 150K that you use and Roubini's 120K. It all adds up in exaggerating a picture of economic weakness.

I don't mind a back of the envelope calculation when there is no good alternative, but here there is plenty of evidence that you are incorrect. You could be a leader in getting some of these other guys to become more accurate.

People who do imply conspiracies -- like Abelson -- cite you to get started and then call it "fudging" the data.

Another question is why you want to take on those building the models. You are skilled at many things, but your experience seems to be as a critic of models, not a builder of them.

Thanks again for your comments and a willingness to engage in discussion that is sadly not shared by many.


Barry Ritholtz

I do never bought into the conspiracy theories -- if the White House couldn't keep the firing of 6 attorneys a secret, do you really think they could cook the economic books and get away with it?

Besides, ALL of the numbers are transparently posted on the BLS/Commerce web site.

I disagree with much of the modeling (i.e., B/D adj, core inflation, GDP Deflator) -- but the data is all there for those of you who want to wade in and play . . .



That you've become "the man" is a sign of success! You wouldn't be the first who started a venture with an idea solely because he was interested in it and then had it grow seemingly by itself but in truth as a result of a lot of work.

While I disagree with some of what's posted on TBP (and quite a bit with many of those who respond, as they tend to be a bit temperamental for my taste), in my opinion it sure is a nice change from the typical news "reporting". One might currently qualify it as "alternative" reporting. However, to me it looks more like groundbreaking. It's how younger generations are getting their news. This is key, imo, to a less watered-down version of the news, which we often get from television and newspapers.


I read both of you, and find both of you interesting and useful when trying to find my way around the crazy world of trading.
- In terms of who do I prefer? well it depends on my 'selective bias' at the time. Sometimes, I find Jeff's 'words of wisdom' suit my position, on other occasions, I'll go with Barry's rather more colourful views. - The truth is I feel that between you, you both provide some excellant comment and views. -- Of course I'm still waiting for the day when both of you have the same view. - I suspect though, that it may be rather chilly in Hades come that day.

Not Barry Ritholtz

A story of two reactions:

1. Good economic news released!

[Barry]The numbers are fabricated. The administration is cooking the books![/Barry]

2. Bad economic news released!

[Barry]The numbers are terrible. See? I told you so![/Barry]

Heads he wins, tails he wins.

Barry Ritholtz

I find it kinda funny that I am now thought of as an influencer, when what I have long attempted to do was push back against the "common wisdom," lazy reporting, and Wall Street spin.

I used to "fight the man" and now according to Jeff, "I am the man." I find it amusingly ironic.

The point of my back of the envelope calculations was to show that what should be perceived as an adequate or mediocre data point is being cheerleaded as something more.

As to the labor force participation rate, note that its slipped not because of retiring boomers but due to a significant decrease in women 25-39 in the labor force.

We can split hairs as to whether its 140 or 150k is mere population growth. We can debate whether or not in the coming years that number will slide as the boomers retire.

But the bottom line is that what many are celebrating as wonderful numbers (Great quarter, guys!) is merely adequate.


Jeff -
Your work is head & shoulders above TBP. Of course, that's just my opinion. But I find much more insight and positive guidance from "A Dash" than any other blog. You stay "on subject" much more than most others.
(If I want a music review, I'll go to a music blog).
Keep up the great work. And thanks.


Jimmy5 -

Disagreeing with the conclusions of others can be done in various ways. I try to engage constructively and with evidence. Barry often visits here with comments and always replies in a constructive fashion. This is very rare and noteworthy.

Barry makes multiple posts every day, taking positions on many issues. I pick issues quite selectively. Each article takes hours to prepare and write, after my trading is done. Everything is part of an overall plan to help investors. I agree with many of his observations and conclusions. Despite this, much of my current writing agenda (more coming soon) includes items where I disagree with his conclusions.

Most people do not take issue with Barry. It is a bit like David and Goliath. None of us are very important in influence next to him. Many of the gatekeepers who highlight articles do not feature anything that engages Barry. This is a very unfortunate feature of the current investment blogosphere. Constructive engagement should be encouraged. Since I am not trying to monetize traffic, I do not care very much, but others may be more concerned.

Barry has been a good sport about most of our humor posts. He has frequently offered email advice on blogging issues when I have requested it. He also accepts trackbacks on his articles, and encourages adverse commentary on his site.

The reality is that Barry's work sets the table for much of what investors think about. My hope is to change some of his views on key issues, like the one highlighted today. It is true that we have not yet won much respect from Barry, but the hope continues.

Thanks very much for making this comment. Your views probably reflect those of others, so I appreciate the opportunity to clarify.



C'mon, nobody believes this statement, "We want to be completely clear: We are long-time and big-time fans of what Barry does. Like everyone else, we read his blog daily."

You relentlessly knock on this guy making him look like a buffoon on a daily basis.


Muckdog -

Congratulations on spotting even one quote. It is one more than nearly all readers will get!

Meanwhile, the difference between 110K and 150K is quite important. You can have confidence that I would not bring it up otherwise.

I think that unemployment is going to drift toward 5%, the accepted non-inflationary rate (NAIRU) so we are going to see some lower growth numbers.

I suppose that many investors will see this as additional recession confirmation, but maybe we can help a few readers.

Thanks for participating!



I recognized BR, but not the rest! I agree with your conclusions, although I figure anything around 150K is getting the job done. A little plus or a little minus is no big deal. It's when we get the gonzo growth numbers or dramatic no-growth numbers when we have to worry.

Closeness only counts in horseshoes, hand grenades, and payroll numbers...

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