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• Thursday, March 26, 2009 10:06 AM

  For the love of Dog!

  Mr. Leonard, for the love of Dog, would you please (PLEASE!)stop with the references to the short term moves in a stock index ("So, there's ample room for pessimism. And indeed, in the time it took to write this post, the Dow slumped from a 100 points up to 15 points up.") as though they mean anything at all? I can think of nothing less relevant to the discussion of signs of economic life (or lack thereof) than the utterly irrational herd behavior reflected in the minute to minute, hour to hour or day to day fluctuations of a stock index and this is especially true for a very narrow index like the DJIA.

  As far as economic reporting on things like home sales and durable goods, I'm going to suggest that you play Toto and pull back the curtain to see what is behind it. What if I told you that despite the press reports, there was a very good chance that there was NO uptick in housing beyond statistical noise, or worse than that, the very large margin of error in the numbers (widely ignored) means that there may in fact have been a fall in home sales? It's fuzzy numbers, Mr. Leonard. Check it out for yourself. See http://www.chrismartenson.com/blog/fuzzy-reporting-press-helps-distort-housing-data/15540. (Linked in my signature for click-thru.)

  More Fuzzy Reporting: http://www.chrismartenson.com/blog/more-fuzzy-reporting-new-home-sales-misrepresented/15617

  And while we're at it, remember the "positive news" on durable goods? Look closer. http://www.chrismartenson.com/blog/more-fuzzy-numbers-durables/15630

  And on the whole subject of fuzzy numbers in general: http://www.chrismartenson.com/crashcourse/chapter-16-fuzzy-numbers

  There is nothing at any of those links that is not in plain English or which requires any sort of specialized knowledge or advanced degree to understand. I encourage you to examine the analysis there. It's short, won't take much time and may be helpful in evaluating some of the "good news" that is being...uh...reported. Then again, you and others may find it all to be bunk. But I wouldn't bet on that. Not even with a credit default swap.

  —Roman Berry Read Roman Berry's other letters
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