I will have plenty to say about football later but here was my quick take from last nights games (that I was SO close to picking the two final scores!)
-The Jets were done the second they went to a crappy zone defense. Partly by choice (they were getting burned by the 3rd and 4th receivers) and partly by necessity (a slew of injuries took away most of their secondary) the result was a second half that looked like a Colts practice drill session. Still, the Jets have plenty to build on after a great season.
-The Saints did everything possible to lose the game and then the Vikings said "Anything you can do I can do better!" and blew the game at the end. Hats off to Brett Favre who took a spectacular beating by the Saints (not all hits were clean!) but that last interception was pretty terrible. Fresh back from a Las Vegas trip, Kid Dynamite had the most hilarious line of the NFL season:
For some reason, I also repeatedly got a kick out of the way Drew Brees crouches down in the huddle - real low, like a ninja. Love it.Hear that Sonic? Drew Brees is a Ninja too!
Market Data Means What It Means Unless It Doesn't
All lies and jestsAs a scientist one of the most frustrating things about economics and market trading has to be the total lack of structure and reason behind moves in the market. I mean there is no evaluation or set of criteria. A narrative is set and then whatever information comes out is ignored or explained away if it does not fit the current consensus story. This happens on the way up and down. Puzzling.
Still a man hears what he wants to hear
And disregards the rest
-Simon an Garfunkel "The Boxer"
Tonight I wanted to look at two examples of this phenomena in action.
November Durable Goods Report
Karl Denninger was all over a major revision to the November Durable Goods report:
Durable Goods "Mistake or FRAUD?There is more in the article.
On January 5th the durables report for November was 'released'.
It showed a 0.2% increase. I didn't write on it at the time, as it didn't appear to be particularly consequential. The report, of course, came in the middle of the first-week January market rally.
But now, in the dark of night, the number has been revised - to a decrease of 0.7%. The reason is a claimed "statistical error."
I sort of remembered this number being trotted out as "proof" the economy was doing the whole "V" shaped recovery thing. A sample of new stories from that data release:
Durable orders up, jobless claims at 15-month low
WASHINGTON (Reuters) - New orders for long-lasting U.S. manufactured goods, excluding transportation items, surged in November and new applications for jobless aid hit the lowest level in 15 months last week, pointing to a firmly entrenched economic recovery.
Capital equipment orders strengthen in November
Orders for durable goods rose a seasonally adjusted 0.2% in November, held back by a massive 32.6% drop in aircraft bookings. Excluding transportation goods, orders rose 2%.
"The nation's manufacturers are returning to health," wrote Jay Bryson, global economist for Wells Fargo Securities.
So here we have a 0.2% positive print being lauded as wonderful, but almost no major media coverage of the massive downward revision can be found today. I wonder why?
I would also note that GDP played the same game with a +3.6% print initial (Rocket Ship Recovery Baby!) and then was revised all the way down to +2.2% (Backward looking indicator anyway). What makes me uneasy is this kind of massive revision work is starting to happen more frequently. Also worrying is the market's total lack of interest in the data.
Home Sales and Seasonality
Existing home sales for December came out today and they were much worse than consensus calls. A -16.7% print was worse than the -10% expected. Of course the downside surprise was shrugged off as unimportant. How this was done makes me laugh though.
Anyone that follows home sales knows that there is a monster seasonal factor associated with it. Not many people buy homes in the dead of winter and the Summer months are prime time due to children being out of school and other factors. Ok, no problem there.
Today the fact that December is a slow month for home sales was repeatedly harped on. Nothing wrong there either. The problem is that EVERY May-June-July home sale bump up is celebrated as proof positive housing is turning around when the EXACT same seasonality issue applies as well! You see, just tell a story and stick to it. It works for criminals!
Of course data being massaged is troubling but at least we the public get to see some of it. If given the choice maybe it could fall under the umbrella of "National Security" like the AIG bailout.
See this Zero Hedge article and Barry Ritholtz offers his take.
If this is not all the proof you need for immediate removal of Tim Geithner and the voting down of Ben Bernanke (maybe there is still time?) then you may have a serious problem.
Have a good night.