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Image | In Their Own Words – Economic Quotes
In Their Own Words – Economic Quotes
by Chris Martenson

One of my favorite internet articles of all time, entitled "Pompous Prognosticators," placed quotes of various politicians and other authority figures across a chart of the Dow Jones, spanning the years 1925 to 1933. A portion of that article is located here.

Here’s an image from the original article to jog your memory, in case you can’t recall which article I am referring to:

src=

I loved that article when it came out, and still love it today, because it reveals that nothing has changed through the decades and that believing the self-interested pronouncements of "green shoots" can be hazardous to your wealth.

So I decided to recreate that effort but update it for our modern times. Let’s continue to update this chart over time and see where it goes.  The people at Lowesville will recognize the work below, because I presented it there, along with a lot of other new information, inlcuding the Crash Course Toolbox, which is a main feature of my in-person seminars.

In Their Own Words – Economic Quotes
 by Chris Martenson

One of my favorite internet articles of all time, entitled "Pompous Prognosticators," placed quotes of various politicians and other authority figures across a chart of the Dow Jones, spanning the years 1925 to 1933. A portion of that article is located here.

Here’s an image from the original article to jog your memory, in case you can’t recall which article I am referring to:

src=

I loved that article when it came out, and still love it today, because it reveals that nothing has changed through the decades and that believing the self-interested pronouncements of "green shoots" can be hazardous to your wealth.

So I decided to recreate that effort but update it for our modern times. Let’s continue to update this chart over time and see where it goes.  The people at Lowesville will recognize the work below, because I presented it there, along with a lot of other new information, inlcuding the Crash Course Toolbox, which is a main feature of my in-person seminars.

Image | Stress Test Results Announced
Stress Test Results Announced
by Chris Martenson

As I wrote about in my last report the bank "stress tests" are a sham in part because the trajectory of even the worst case stress test scenario (called "more adverse" by the regulators) has already been exceeded to the downside by real-world economic results.
Stress Test Results Announced
 by Chris Martenson

As I wrote about in my last report the bank "stress tests" are a sham in part because the trajectory of even the worst case stress test scenario (called "more adverse" by the regulators) has already been exceeded to the downside by real-world economic results.
Image | Listen to Bernanke at Your Own Peril
Listen to Bernanke at Your Own Peril
by Chris Martenson

Ben Bernanke spoke today (Tuesday May 5th, 2009) and said some very encouraging things that were widely interpreted throughout the US media machine as a claim that the "the bottom is in."

Astute observers of past Bernanke statements will quickly recall the numerous other times he made either overly-optimistic or horribly off-the-mark statements that seem, in retrospect, to have been crafted to be soothing, instead of wise or accurate.
Listen to Bernanke at Your Own Peril
 by Chris Martenson

Ben Bernanke spoke today (Tuesday May 5th, 2009) and said some very encouraging things that were widely interpreted throughout the US media machine as a claim that the "the bottom is in."

Astute observers of past Bernanke statements will quickly recall the numerous other times he made either overly-optimistic or horribly off-the-mark statements that seem, in retrospect, to have been crafted to be soothing, instead of wise or accurate.
Image | Pending Home Sales – Spin Cycle Set on “High”
Pending Home Sales – Spin Cycle Set on “High”
by Chris Martenson

Once again we have been treated to a form of news spin that borders on propaganda.

This time the information comes from the National Association of Realtors, or NAR, a group which long ago fell out of my favor for their tendency to churn out poor quality sampled “data” that was invariably out of step with reality by being overly positive.  Errors happen, but when they are always in one direction, they cease to be random errors.
Pending Home Sales – Spin Cycle Set on “High”
 by Chris Martenson

Once again we have been treated to a form of news spin that borders on propaganda.

This time the information comes from the National Association of Realtors, or NAR, a group which long ago fell out of my favor for their tendency to churn out poor quality sampled “data” that was invariably out of step with reality by being overly positive.  Errors happen, but when they are always in one direction, they cease to be random errors.
Image | New Martenson Report Ready for Enrolled Members
New Martenson Report Ready for Enrolled Members
by Chris Martenson

There’s a new Martenson Report ready for enrolled members.

This one concerns the results of bank stress tests due to be announced this week.

The Bank Stress Tests Have Already Failed

Here’s part of the conclusion:

A “stress test,” at least as far as I understand it from a scientific or engineering standpoint, is supposed to encompass a set of conditions beyond normal, or expected, values. The bank stress-test assumptions are already exceeded in each case by real-world conditions, and therefore will be neither illuminating nor predictive when they are released. Let’s all be thankful that the Federal Reserve and Treasury Department do not design bridges. If they did, they might “stress test” them by simulating an average load of traffic under average conditions and declare them perfectly safe.

I advise you to tune out what is certain to be an upbeat assessment of the condition of our banks, when the stress test results are finally released.  My opinion is that the stress tests were specifically designed to be neither stressful nor revealing.  Instead, they were designed to produce expected results for the purpose of instilling confidence in banks and in the crisis management team.

New Martenson Report Ready for Enrolled Members
 by Chris Martenson

There’s a new Martenson Report ready for enrolled members.

This one concerns the results of bank stress tests due to be announced this week.

The Bank Stress Tests Have Already Failed

Here’s part of the conclusion:

A “stress test,” at least as far as I understand it from a scientific or engineering standpoint, is supposed to encompass a set of conditions beyond normal, or expected, values. The bank stress-test assumptions are already exceeded in each case by real-world conditions, and therefore will be neither illuminating nor predictive when they are released. Let’s all be thankful that the Federal Reserve and Treasury Department do not design bridges. If they did, they might “stress test” them by simulating an average load of traffic under average conditions and declare them perfectly safe.

I advise you to tune out what is certain to be an upbeat assessment of the condition of our banks, when the stress test results are finally released.  My opinion is that the stress tests were specifically designed to be neither stressful nor revealing.  Instead, they were designed to produce expected results for the purpose of instilling confidence in banks and in the crisis management team.

Image | Bank Stress Tests Have Already Failed
Bank Stress Tests Have Already Failed
 PREVIEW
by Chris Martenson
Sunday, May 3, 2009

Executive Summary

  • The bank stress tests are a sham.
  • Reality is already worse than the worst case stress test scenario.
  • The stress test results will be used as a “positive indicator” anyway.
  • Don’t fall for it.

The bank stress tests, the results of which are to be announced later this week, have already failed. Why? Because the stress test is supposed to assess how a bank’s loan portfolio would fare under a variety of scenarios, but reality is already far worse than the worst-case scenario. The FDIC, Treasury, and Federal Reserve went ahead with their weak input assumptions to conduct the stress test, even though they knew that reality was outpacing their most dire scenario.

In other words, the stress test is a sham.
Bank Stress Tests Have Already Failed
 PREVIEW by Chris Martenson
Sunday, May 3, 2009

Executive Summary

  • The bank stress tests are a sham.
  • Reality is already worse than the worst case stress test scenario.
  • The stress test results will be used as a “positive indicator” anyway.
  • Don’t fall for it.

The bank stress tests, the results of which are to be announced later this week, have already failed. Why? Because the stress test is supposed to assess how a bank’s loan portfolio would fare under a variety of scenarios, but reality is already far worse than the worst-case scenario. The FDIC, Treasury, and Federal Reserve went ahead with their weak input assumptions to conduct the stress test, even though they knew that reality was outpacing their most dire scenario.

In other words, the stress test is a sham.
Image | Spin Cycle Set to “High”
Spin Cycle Set to “High”
by Chris Martenson

The economic news these days can be readily parsed into two separate types: increasingly positive “survey” data and increasingly worse “real” data.

I recently wrote about the flaws in the survey reports, so I won’t spend more time here discussing why these reports are best taken with a very large grain of salt.

First, the survey data that was released today:

Spin Cycle Set to “High”
 by Chris Martenson

The economic news these days can be readily parsed into two separate types: increasingly positive “survey” data and increasingly worse “real” data.

I recently wrote about the flaws in the survey reports, so I won’t spend more time here discussing why these reports are best taken with a very large grain of salt.

First, the survey data that was released today:

Image | Fuzzier Than Ever – The Latest GDP Report
Fuzzier Than Ever – The Latest GDP Report
 PREVIEW
by Chris Martenson
Thursday, April 30, 2009

Executive Summary 

  • GDP report for 1Q2009 is a mess of Fuzzy Numbers.
  • The surprising 2.2% increase in PCE, or Personal Consumption Expenditures, is discussed.
  • Ostensible signs suggest that the bottom is in, but the numbers do not line up at all with hard, factual data.
  • Sales tax receipts declined in first quarter.
  • The GDP report for the first quarter of 2009 is in serious conflict with actual state sales tax data.
  • Vehicle sales are down nearly twice as much as the 19% claimed by the BEA.
  • The extent to which investors are fooled by these government reports is the extent to which they risk losing a lot of money in the stock market.
  • Trust yourself.

As attendees of my seminars and regular readers know, I am deeply critical of the cheerleading spin cycle that exists between the government and the media, because it often inappropriately mixes facts, opinions, and beliefs. The aim, it would appear, is to foster optimism or confidence in the average investor.

Of course, as chronicled here many times, Wall Street lives off of the fees and products that it sells to retail investors, while the political machine favors a pacified, if not buoyant, electorate. Both of these aims are served by constantly spinning things to the upside.

While it is possible that "investors" are indeed optimistic, focusing on the "slightly more upbeat" report from the Fed and "signs that consumer spending rebounded," these claims deserve a bit of exploration.
Fuzzier Than Ever – The Latest GDP Report
 PREVIEW by Chris Martenson
Thursday, April 30, 2009

Executive Summary 

  • GDP report for 1Q2009 is a mess of Fuzzy Numbers.
  • The surprising 2.2% increase in PCE, or Personal Consumption Expenditures, is discussed.
  • Ostensible signs suggest that the bottom is in, but the numbers do not line up at all with hard, factual data.
  • Sales tax receipts declined in first quarter.
  • The GDP report for the first quarter of 2009 is in serious conflict with actual state sales tax data.
  • Vehicle sales are down nearly twice as much as the 19% claimed by the BEA.
  • The extent to which investors are fooled by these government reports is the extent to which they risk losing a lot of money in the stock market.
  • Trust yourself.

As attendees of my seminars and regular readers know, I am deeply critical of the cheerleading spin cycle that exists between the government and the media, because it often inappropriately mixes facts, opinions, and beliefs. The aim, it would appear, is to foster optimism or confidence in the average investor.

Of course, as chronicled here many times, Wall Street lives off of the fees and products that it sells to retail investors, while the political machine favors a pacified, if not buoyant, electorate. Both of these aims are served by constantly spinning things to the upside.

While it is possible that "investors" are indeed optimistic, focusing on the "slightly more upbeat" report from the Fed and "signs that consumer spending rebounded," these claims deserve a bit of exploration.
Image | Misplaced Priorities and Misguided Decisions
Misplaced Priorities and Misguided Decisions
by Chris Martenson

Yesterday my assistant Tito missed an important late afternoon meeting because the train he was on from NYC was delayed by more than 3 hours. The train slowly crawled north on tracks that were in too poor condition to support a higher speed. This is a regular occurrence on this line. Perhaps a few tens of millions would be required to bring these tracks up to something other than third-world condition. That money does not exist at the moment, so they will be “repaired” all the way back to “almost functioning,” just like last time.
Misplaced Priorities and Misguided Decisions
 by Chris Martenson

Yesterday my assistant Tito missed an important late afternoon meeting because the train he was on from NYC was delayed by more than 3 hours. The train slowly crawled north on tracks that were in too poor condition to support a higher speed. This is a regular occurrence on this line. Perhaps a few tens of millions would be required to bring these tracks up to something other than third-world condition. That money does not exist at the moment, so they will be “repaired” all the way back to “almost functioning,” just like last time.
Image | New Martenson Report: Survey Says….
New Martenson Report: Survey Says….
by Chris Martenson

There’s a new Martenson Report ready for enrolled members

Link to Survey Says….

Here’s a snippet:

Executive Summary

  • Beware the gap between survey data and actual economic data
  • The stock market appears to be responding to survey data, not actual data
  • Surveys contain many potential pitfalls
  • Examples of influential survey data are given
  • Tax data is a relatively reliable indicator of the true state of the economy
  • Beware the "spin"
  • The bottom is not in yet
  • Remain skeptical and bide your time wisely

The past few weeks have seen the stock market shrug off bad news and seize upon whatever glimmer of good news it could find. I am of the opinion that the stock market rally of the past six weeks is long in the tooth and built upon some highly questionable, if not patently misleading, reports. I understand the importance of consumer and investor psychology to our economy, and can even sympathize in some small way with those who spin data in an attempt to be helpful, but I still find the practice of self-deception to be distasteful.

It is my opinion that this is not the time to be lulled back into spending more, nor is it a good time to get back into the stock market, unless you are a highly skilled trader who is willing to track your positions on a minute-by-minute basis. This is a great time to lighten up on any stock or 401k positions that you might have regretted holding onto about a month ago…

One key oddity for me these past two weeks was the startling gap that appeared between so-called survey data (discussed below), which mainly surprised to the upside, and actual economic data, which mainly surprised to the downside.

This report explores that gap. My theory is that survey data is being ‘massaged’ to paint a brighter picture than actually exists. If these "glimmers of life" that Obama recently referred to, or "green shoots" as Bernanke said, have you thinking of spending more money or wading back into the stock market, you especially need to read this report carefully.

 

New Martenson Report: Survey Says….
 by Chris Martenson

There’s a new Martenson Report ready for enrolled members

Link to Survey Says….

Here’s a snippet:

Executive Summary

  • Beware the gap between survey data and actual economic data
  • The stock market appears to be responding to survey data, not actual data
  • Surveys contain many potential pitfalls
  • Examples of influential survey data are given
  • Tax data is a relatively reliable indicator of the true state of the economy
  • Beware the "spin"
  • The bottom is not in yet
  • Remain skeptical and bide your time wisely

The past few weeks have seen the stock market shrug off bad news and seize upon whatever glimmer of good news it could find. I am of the opinion that the stock market rally of the past six weeks is long in the tooth and built upon some highly questionable, if not patently misleading, reports. I understand the importance of consumer and investor psychology to our economy, and can even sympathize in some small way with those who spin data in an attempt to be helpful, but I still find the practice of self-deception to be distasteful.

It is my opinion that this is not the time to be lulled back into spending more, nor is it a good time to get back into the stock market, unless you are a highly skilled trader who is willing to track your positions on a minute-by-minute basis. This is a great time to lighten up on any stock or 401k positions that you might have regretted holding onto about a month ago…

One key oddity for me these past two weeks was the startling gap that appeared between so-called survey data (discussed below), which mainly surprised to the upside, and actual economic data, which mainly surprised to the downside.

This report explores that gap. My theory is that survey data is being ‘massaged’ to paint a brighter picture than actually exists. If these "glimmers of life" that Obama recently referred to, or "green shoots" as Bernanke said, have you thinking of spending more money or wading back into the stock market, you especially need to read this report carefully.

 

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