Economy: The Leading Indicators Farce

**~~unlawflcombatnt~~** · 23 Nov 06,, 01:21

Monday's report on the economy, the Leading Indicator index, was touted as still further evidence of how "strong" our economy is.

The Leading Indicator report, considered a broad overview of the direction of our economy, was reported as increasing + 0.2%, slightly below the expected +0.3% predicted. A review of how today's total was calculated, however, reveals much cause for concern. Many important indexes declined. Many of the positives were only weakly positive. Manufacturers' new orders for non-defense capital goods declined 7% over the last month, for an annualized rate of decline of -84%. Building Permits declined 6.3% over the last month alone, and have and have declined 22% since April. Though Manufacturers' New Orders for Consumer Goods increased slightly (+0.4%), they are still 2% below August levels, and 4% below June's level. Even the big "gainers" are of dubious benefit. One big gainer was Stock Prices, which added +0.13% to the total index. Another gainer was the index of Consumer Expectations, which was +0.19. (Indicating media spin about the economy has been very successful.) The Average Workweek increased from 41.1 hours in August to 41.2 hours in October. This added +0.06 to the total. However, the Average Workweek was less than it was in August, July, and June, and the same as it was in May and April. Another very dubious positive.

The biggest gainer, however, was the increase in M2 money supply of 1.2% over the last month. This added a total of +0.43 points to the total +0.2 number. Had the money supply increase been 0, Leading Indicators would have shown a net change of -0.23%. Had the increase in money supply been the same as the previous month's +0.2%, the total Leading Indicator Index would have been -0.03%. Making the M2 number still more dubious is the fact that it is not an actual "recorded" statistic. It's an "imputed" statistic, meaning it is an estimate (quesstimate?) Meanwhile, the indicator considered most predictive of the health of the economy, the interest rate spread, was -0.52%.

Below is a copy of November 20th's Leading Indicator report from the Conference Board.

The Conference Board's Leading Indicator report can be found at:
http://www.conference-board.org/pdf_...ci/lei1106.pdf

Though this month's reading is touted as being "positive," a closer review indicates how spurious and artificial this increase is. Many of us cannot understand how an increase in the M2 money supply can be considered a positive. Stripping out the money supply increase alone would make Leading Indicators negative for October. Furthermore, is it really a "positive" for the money supply to increase at a 14.4% annualized rate in one month? Are we now considering inflation a positive indicator?

unlawflcombatnt

Economic Populist Forum

EconomicPopulistCommentary

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The economy needs balance between the "means of production" & "means of consumption."

**troung** · 23 Nov 06,, 02:07

Send in a battalion of LIGHT TRACKED GAVINS with an ONTOS set up with 6 106mm recoilless rifles and we could simply blast entire towns to pieces!!! Or put wings on the light body and fly them silently into position powered by the hybird electric drive and bandtracks!!!! Or put a ram and some oars and ram it through buildings or ships!!!!Or we coudl mount one to four 8inch cannons on each THICK SKINNED Gavin and give the terrorists a broadside from hell!!!!!

We can use Gavins as a platform for the LCS with oars, a sail, four to ten 8inch guns and a ram!!!! Or convert them into long ships for the McBS Corps!! You can silently run them with a sail or move quickly with oars put through the firing ports and ram terrorist warships or frigates. The 8inch gun broadside fitted in the firing ports could sik any ship.

Can't do that with a Humvee!!!! Or a Styker deathtrap!!! Can't put no ****ing oars and 8inch guns on a Humvee death-drap!!!!

They would strike their colors after tasting the cold aluminum of the TririGAVIN!!!1111!!!!

**ArmchairGeneral** · 23 Nov 06,, 03:39

ROFLOLOL

**GVChamp** · 25 Nov 06,, 19:41

Leading indicators predict the state of the economy "X" number of months out. An increase in money supply most defintley does increase national income in that period of time.
Down the road, of course, increasing the money supply like it is going out of style wouldn't be a good idea. But the best measures of "growth" years down the road would probably be those "global competitveness reports," and the US does do very well (top 10) in those.

**Major_Armstrong** · 26 Nov 06,, 01:35

So does this mean that I should join the communist party?

**Bluesman** · 26 Nov 06,, 02:16

Oh my Gawd. THIS dude again.

shek? Hangin' curve, outside corner. Swing for the fences, slugger.

**~~unlawflcombatnt~~** · 26 Nov 06,, 03:57

Originally Posted by GVChamp

An increase in money supply most defintley does increase national income in that period of time.
Down the road, of course, increasing the money supply like it is going out of style wouldn't be a good idea.

That was a large part of the point I was making. Increasing the money supply provides a temporary boost to the economy at best.

unlawflcombatnt

Economic Populist Forum

EconomicPopulistCommentary

_________________
The economy needs balance between the "means of production" & "means of consumption."

**Shek** · 27 Nov 06,, 02:03

For someone who wants to question the statistical imputation methods used by the conference board (just read page 3, it provides more data on that - I see that you still don't like reading footnotes to find answers to your questions), don't you think that extrapolating monthly data to annualized changes is just a bit hypocrtical?

BTW, we're all still waiting for that recession that you declared was right around the corner several months back? Since then, umemployment's dropped while inflation has cooled.

**Bluesman** · 27 Nov 06,, 04:16

Blame Cheney, the Prince of Darkness. He is the only one who's powers could have made that economic alchemy possible, dam' his black soul.

**~~unlawflcombatnt~~** · 28 Nov 06,, 00:50

Originally Posted by shek

BTW, we're all still waiting for that recession that you declared was right around the corner several months back? Since then, umemployment's dropped while inflation has cooled.

Let's see. 3rd quarter GDP growth 1.5%. DJI down 158 points today. Dollar dropped to lowest level in over a year. Tomorrow's estimated Durable Orders for October -6.0%. Home prices and sales falling.

Certainly a lot of "positive" news, isn't there. Let's see what happens tomorrow.

**Bluesman** · 28 Nov 06,, 02:10

Originally Posted by unlawflcombatnt

Let's see. 3rd quarter GDP growth 1.5%. DJI down 158 points today. Dollar dropped to lowest level in over a year. Tomorrow's estimated Durable Orders for October -6.0%. Home prices and sales falling.

Certainly a lot of "positive" news, isn't there. Let's see what happens tomorrow.

Yes, let's. Selling all your assets, getting liquid and moving to someplace more rationally-managed, then, are you? Buying up that prime real estate on the Yellow Sea in North Korea, you sly dog?

Prolly not, huh? Still fancy your chances of doin' all right by being tethered to this doomed ship, even as dollar-centric and absolutely sinking out of sight as we are?

Act on your convictions, Keynes. Away with what you can salvage, and never look back!

I can always spot this type: they simply won't do what they urge others to do...because they don't even believe it themselves.

**~~unlawflcombatnt~~** · 28 Nov 06,, 05:50

Originally Posted by Bluesman

I can always spot this type: they simply won't do what they urge others to do...because they don't even believe it themselves.

Actually, I've put most of my money into gold. And it's gone up over 130% since Bush stole his first election. And, yes, that is what I advise other people to do.

**sappersgt** · 28 Nov 06,, 06:36

Originally Posted by unlawflcombatnt

Actually, I've put most of my money into gold. And it's gone up over 130% since Bush stole his first election. And, yes, that is what I advise other people to do.

What kind of money as a percentage of assets are you talking about? I have stack of Kruggerands included in my GOTH plan. That's not so much as an investment but for emergency liquidity.

**~~unlawflcombatnt~~** · 28 Nov 06,, 08:21

Originally Posted by sappersgt

What kind of money as a percentage of assets are you talking about? I have stack of Kruggerands included in my GOTH plan. That's not so much as an investment but for emergency liquidity.

Over 90%. There's nothing I trust as an investment at present, because I think most stocks are going decline.

It's worth noting again that the increase in value of gold has been over 130% since January 2001. The Dow Jones has just recently passed its 2001 level. The S & P and NASDAQ still haven't recovered.

I think gold has done better.

**gunnut** · 28 Nov 06,, 08:24

Do you work for Monex?

Originally Posted by unlawflcombatnt

Actually, I've put most of my money into gold. And it's gone up over 130% since Bush stole his first election. And, yes, that is what I advise other people to do.

So you must really like Bush then. He made you a lot of money.

But now the Democrats have taken over the Congress, do you still believe gold will go up like it had? If it does, what does that mean?

We have to remember, whoever is in charge takes the blame. If the economy cools now we have only the Democrats to thank. Just like how they blamed Bush for 9-11 even they he had only spent 8 months in office while Clinton was in office for 8 years before that.

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