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Thread: The US Department Of Commerce Officially Jumps The Shark, Will "Double Seasonally Adj

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    Default The US Department Of Commerce Officially Jumps The Shark, Will "Double Seasonally Adj

    The US Department Of Commerce Officially Jumps The Shark, Will "Double Seasonally Adjust" GDP Data

    Submitted by Tyler Durden on 05/22/2015 19:53 -0400

    It's official: after seeing it work so well for years in China, the US Department of Commerce's Bureau of Economic Statistics has officially replaced all of its excel models with just one function. The following:

    As Steve Liemsan hinted a few days ago, in what we thought was a very belated April fools joke, th eBEA has finally thrown in the towel on weak seasonally-adjusted US GDP data, and as a result has decided to officially proceed with a second seasonal adjustment: one which will take all the bad data, and replaced it with nice and sparkly, if totally fake and goalseeked, GDP numbers.
    As Bloomberg reports, "the way some parts of U.S. gross domestic product are calculated are about to change in the wake of the debate over persistently depressed first-quarter growth. In a blog post published Friday, the Bureau of Economic Analysis listed a series of alterations it will make in seasonally adjusting data used to calculate economic growth. The changes will be implemented with the release of the initial second-quarter GDP estimate on July 30, the BEA said."
    In other words, as of July 30, the Q1 GDP which will have seen its final print at -1% or worse, will be revised to roughly +1.8%, just to give the Fed the "credibility" to proceed with a September rate hike which means we can now safely assume not even the Fed will launch a "hiking cycle" at a time when the first half GDP will print negative (assuming the Atlanta Fed's 0.7% Q2 GDP estimate is even modestly accurate).
    Will abnormally "good" data be revised lower, or whether labor market data, which is already manipulated beyond comparison by the BLS will also be adjusted due to "residual seasonality"? Don't hold your breath.
    And since economists pride themselves in giving complex names to what even 5 years olds now grasp is open data manipulation, the technical term the BEA will use to goalseek historical data is now also clear: "residual seasonality"


    Although the agency adjusts its figures for seasonal variations, growth in any given first quarter still tends to be weaker than in the remaining three, economists have found, a sign there may be some bias in the data. It’s a phenomenon economists call “residual seasonality.”
    More details on how economics has just devolved into a complete farce on a scale that even the Chinese Department of Truth will find laughable:


    “BEA is aware of the potential for residual seasonality in GDP and its components, and the agency is looking for ways to minimize this phenomenon,” the division said in the post. More information will be available in a BEA Survey of Current Business report scheduled for mid-June publication.

    The agency is exploring ways to address possible issues in measures of federal government defense spending, where research has shown that first- and fourth-quarter growth rates are lower on average, the BEA said, reiterating a statement given to Bloomberg published May 18.

    It will also start seasonally adjusting some inventory components that currently aren’t, and also some data from the U.S. Census Bureau’s quarterly services survey, it said. The latter should boost the accuracy of consumer spending estimates, it said. The changes to the calculations will cover the period from 2012 to the present.

    Additionally, the BEA is reviewing all series that figure into the GDP calculations to find and fix any leftover biases that exist within its current methodology.
    And to complete the total collapse of US reporting integrity, here is the full BEA blog post on the topic of goalseeked data, aka "residual seasonality."
    * * *
    BEA Works to Mitigate Potential Sources of Residual Seasonality in GDP
    The Bureau of Economic Analysis (BEA) is working on a multi-pronged action plan to improve its estimates of gross domestic product (GDP) by identifying and mitigating potential sources of “residual” seasonality. That’s when seasonal patterns remain in data even after they are adjusted for seasonal variations.
    Each spring, BEA conducts an extensive review–receiving updated seasonally adjusted data from the agencies that supply us with data used in our calculation of GDP. Most of the data the feeds into GDP is seasonally adjusted by the source agency, not BEA. At the same time, BEA examines its own seasonal factors for those series that BEA seasonally adjusts itself. All that work takes place in preparation for BEA’s annual revision to GDP and its major components, which will be released on July 30.
    As a result of this ongoing work, BEA is aware of the potential for residual seasonality in GDP and its components, and the agency is looking for ways to minimize this phenomenon.
    • One of the areas we’re currently reviewing is possible residual seasonality in measures of federal government defense services spending. Initial research suggests that the first and fourth quarter growth rates are lower on average than those of the third and second quarters. BEA is developing methods for addressing what it has found.
    • Time frame to implement: Improvement will take place with the release of second quarter GDP on July 30. Period covered: 2012, 2013, 2014, and forward.
    • BEA also will begin adjusting certain inventory investment series that currently aren’t seasonally adjusted.
    • Time frame to implement: Improvement will take place with the release of second-quarter GDP on July 30. Period covered: 2012, 2013, 2014, and forward.
    • Also as part of this year’s seasonal adjustment review, BEA is planning to seasonally adjust a number of series from the Census Bureau’s quarterly services survey that now have sufficient time spans to which seasonal adjustment techniques can be applied. Currently, these series are smoothed using a four-quarter moving average to attempt to smooth out seasonal trends in the data. While BEA’s review had not identified residual seasonality in the PCE services estimates, applying statistical seasonal adjustment techniques to these indicators will improve the accuracy of the underlying trends in PCE estimates.
    • Time frame to implement: Improvement will take place with the release of second quarter GDP on July 30. Period covered 2012, 2013, 2014, and forward.
    • BEA will review all series entering the GDP calculations to identify, and where feasible, mitigate any residual seasonality within its existing seasonal adjustment methodologies.
    • Time frame to implement: Review will take place with the release of second-quarter GDP on July 30. Period covered: 2012, 2013, 2014, and forward.
    • Longer term–beyond July 30–BEA will continue looking at components of GDP to determine if there are opportunities to improve seasonal adjustment methodologies. Should BEA identify other areas of potential residual seasonality, BEA will develop methods to address these findings. If research suggests that residual seasonality originates with already seasonally adjusted source data, BEA will work alongside its source data agencies to determine the appropriate course of action.
    * * *
    Some further thoughts: when, not if, the Fed's rate hike leads to a recession, that too will be seasonally adjusted away. And QE4 will be called tightening in the name of "residual seasonality."
    And, of course, once the Fed's credibility finally crashes, its seasonally adjusted credibility will be at an all time high.

    http://www.zerohedge.com/news/2015-0...djust-gdp-data
    ”The trouble with socialism is that you eventually run out of other people's money.” - Margaret Thatcher

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    Is there anything the .gov reports these days that's "REAL"?
    Semper Fi

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    AMERICANISM
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    Ban GODWIT

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    Quote Originally Posted by MagicMan View Post
    Is there anything the .gov reports these days that's "REAL"?
    does the embezzler report honestly to the company he is defrauding??
    nope
    the truth comes out when the cupboard is bare

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    What cook the books, NEVER! (Sarc)


    The Floggings will continue, until moral improves.

    Don't worry, be happy.

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    I do not love it
    Nor do I fear it.
    I just dread what it can do to my country.

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    So We’re In For an Economic Collapse. NOW What?

    with 4 comments

    PROTECTING YOUR WEALTH
    Someone asked the pertinent question, if we’re in for an economic collapse (SHTF), what can I possibly do to expatriate my money?
    To reiterate from my last post, the banks and our alleged “representatives” are working to outlaw cash, make it so that all transactions are via electronic means. This gives the police-state government the ability to track our expenditures and send the police if you withdraw too much of your own money… And it also gives the banks access to all your funds, so that they can steal your money when their bad gambling debts come due.
    So storing our money in banks is a very foolish thing to do.
    As I’d mentioned before, money is not just an exchangeable commodity for commerce. “Good” money also has some intrinsic characteristics: it’s durable, and a store of wealth (or purchasing power). It must also be easily divisible, easily transportable, and impossible to counterfeit. This last part is why American dollars (and every other fiat currency) are not money, only “currency.” Or if you really want to be precise, dollars are government-issued scrip.
    Since paper dollars cost essentially nothing to produce, and electronic dollars cost literally nothing to produce, the last point of real money is lost, where dollars are concerned. In other words, they are just like Weimar Germany Marks.

    Let me state it plainly: dollars are not money, they are not a store of value, they are no more valuable than Monopoly money. What does make dollars valuable in our current (death-spiraling) economy is the fact that we’re forced to use them “for all debts, public and private,” at the point of a government gun.
    And make no mistake, the US Treasury is a counterfeiting operation.
    Counterfeit is defined as “made in exact imitation of something valuable or important with the intention to deceive or defraud.”
    The deception is that you think you’re getting a store of value, when you most definitely are not. Because the government increases the money supply ~7% per year, your cash holdings are therefore being devalued by the same amount every year. Blue is actual inflation- what you see when you go to the grocery store, when you pay your bills or buy other consumables. The red is the government-manipulated statistics that the blow-dried talking-heads push every night, in main-stream media.
    Now, notice that the numbers start to diverge in 1983. What happened? To put it simply, the government started understating actual inflation to short-change retirees and people on Social Security. Lower stated inflation rate equals smaller cost-of-living adjustment (COLA), thus short-changing SS recipients and allowing the government to spend more money on other programs. The deep-dive explanation is here. Oh, and our alleged “representatives” also amended the law to make SS payments taxable income– another way for government to steal from those who’d already paid their taxes… Nothing like completely screwing over the elderly. Considering though, that SS taxes collected for 2014 were $855 billion and payments were $823 billion, the Ponzi scheme would already be bust if they hadn’t played this trick.
    But like anything else, when you start lying about one thing, the lies spread to other areas, including the computations for GDP. Indeed, current government data is not believed by thinking people. Only the morons still accept this propaganda:

    Gold Purchasing Power Parity
    Let’s take a little detour for a minute, and talk about the value of the dollar versus average wage/salary and the price of gold. Were we to talk about nutritional value of a particular food, it would be measured against an “ideal” standard, namely the egg. In economics the ideal measure is an ounce of gold, or more precisely, the price of an ounce of gold. 100 years ago, in 1915, an ounce of gold sold for $20.67. An average person earned $867 per year, or enough to buy 42 ounces of gold today. The average income in 2014 was reported at $53,891. If we blindly accept that the free-market gold price is $1205 (as of this writing), than the average wage earner can buy 45 ounces of gold, about the same as 100 years ago. But because we already know that inflation numbers are understated, and that the true free-market price of gold should be somewhere around $3053/oz, our actual purchasing power parity is ~18 ounces of gold, about 42% of what it should be.
    The average house in 1915 cost $3200 (155 ounces of gold); today the average house for April 2015 went for $219,400 (182 ounces of gold at current prices, but 72 ounces when gold is properly priced). Notice that when government manipulates the gold prices, the “inflation-indexed” price (as referenced to gold) remains the same, while true market prices for gold would show the average price falling over time, as a function of more efficient construction logistics.
    The Federal Reserve actively manipulates the price of gold, of that there can be no dispute. They do this to prevent people from realizing the dollar is dead, and avoid a financial collapse. YOU can take advantage of this fact by buying precious metals- both gold and silver- in the knowledge that when the dollar collapses, your wealth will not only be protected, you’ll increase your overall purchasing power by hold such PMs as compared to simply cash.

    As I posted before, it’ll be important to have cash on-hand to pay your property taxes and mortgage, when everyone around you has had their funds stolen out of the banks for “bail-ins.” At least you’ll be able to hold onto your property as repo-men attempt to seize the assets of your neighbors… until armed resistance stops the repo-men or the currency collapses. Afterwards, having PMs will be your fallback for whatever commerce you engage in. If a new currency comes along, you’ll be able to buy that currency (if desired) with the instantly recognizable PMs you’ve saved…
    Those that haven’t done so, those that merely survive on a government-doled subsistence, will go from having EBT cards, Social Security checks, welfare/WIC/whatever, that they can use at the local WalMart, to this:

    From McMansions, to this:

    I Don’t Have Much, But How Do I Protect What I HAVE?
    So now we get back to the question: how to expatriate or somehow protect what we’ve earned and saved? We know the banks are not going to protect us, and instead will steal our money with the blessing (if not downright assistance) of the Feds.
    Two recent articles just came up on http://www.lewrockwell.com yesterday, discussing this exact question (here and here), and they suggest the same tactics I proposed:

    • Maximize your stored purchasing power in precious metals
    • Have 6 months worth of cash on-hand to pay your mortgage, utilities and property taxes until the currency collapses.
    • Keep only the minimum amount of cash needed in bank accounts. Remove any surplus and keep it as cash or as precious metals.

    It’s a simple rule that you have to remember: Whether it’s cash, gold, silver, jewelry or diamonds, IF YOU DON’T HAVE PHYSICAL POSSESSION OF IT, YOU DON’T OWN IT.
    I do not recommend expatriating your money to another country or a bank account in another country; bankers are loyal only to money and power, and you (as the tiny customer) don’t represent enough money or power for them to respect and protect. By expatriation of your wealth to another country, you have surrendered possession; you no longer own it, and whenever those who possess your wealth decide to, they’ll just take it, and that’ll be the end of that.
    So… how do you maintain possession of your wealth, under your personal control? How do we keep it from being stolen by thieves (whether they wear a government costume or not)?
    It’s time to go “old-school,” as in, “do what they did during the Great Depression.” Hide money and precious in places where people wouldn’t think to look. An excellent website on this subject is Money Hiding Spots From The Great Depression. Taking these ideas and adapting them to your situation is the best way to protect your wealth.
    I don’t recommend expatriating yourself to another country, as the upcoming economic collapse will be a global event; there’s no place to run, no place to hide. Stay where you have the most people to work with as a “tribe,” where a group or small community can work together. I have extended family in Russia, and the offer is on the table for my family to move there in a SHTF event. But from my perspective, there are several problems with this:

    • The government is just as corrupt as in the USA; they’re just more overt about it. This includes the police literally robbing you on the side of the road, versus the USA (where they include a “citation” and a “judge”).
    • My money would still be at risk of inflation/confiscation by the banks and government.
    • Ownership of precious metals is not allowed.
    • Private citizens cannot own firearms (technically possible, but impossible as a practical matter).
    • In a SHTF situation, outsiders (foreignors) are not typically welcomed with open arms.

    So we stay.
    WHERE CAN I GET PRACTICAL ADVISE ON ECONOMIC COLLAPSE PREPARATIONS?
    I had previously mentioned the survivalist/prepper/zombie-attack websites; there are hundreds of websites dedicated to this subject. It’s quite common to have discussion forums where people talk about their favorite “zombie” weapon, how to build an underground bunker, combat tactics and so on… But the vast majority of such discussions are fantasyland gossip, with people somehow thinking that war, disease, starvation and death are somehow romantic.
    Let’s face it, NONE of those things are romantic, and you’d have to be a fool to actually want to be in such circumstances. But a lot of people still dream of this, God only knows why…
    So, instead of referring to more insane forums like this, I’d like to point you to a blog that was published in 2008, by a guy named Ferfal Aguirre. He lived through the financial collapse of Argentina in 2001. While this blog has been up for a long time, the lessons are timeless, practical, and actionable. In other words, he offers insights on a variety of subjects, with ideas that you can implement yourself, without spending a small fortune on. Subjects like weapons, trading in grey/black markets, physical and financial security… He also makes it clear that “romantic” notions of what’s coming are not just foolish, but flat-0ut dangerous.
    Protect your wealth, using old-school, common-sense. Do NOT trust anyone else with your money and valuables.
    [Final caveat: I get a variety of trolls that want to knit-pick certain aspects of what I post, with regard to economic theories, gold to silver ratios, exact pricing for certain products that I use for examples, etc. I’m not interested in debating minutia, any more than I want to debate whether blue is better than red. I’m putting the general information out there for people to understand, so they can make informed decisions to best protect themselves. I don’t get paid for this, I’m not selling anything or making any kind of a profit on what I post. Honest questions will be honestly answered, trolls will be quickly deleted.]
    They swore, if we gave them our weapons, that the wars of the tribes would cease.
    “As a general rule, the earlier you recognize someone is trying to kill you, the better off you’ll be.”

    "You think a wall as solid as the earth separates civilisation from barbarism. I tell you the division is a sheet of glass."



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    Awesome post as usual Lenno. I have followed Ferfal for 6 years. Great advice from first hand experience. Have a great weekend!

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    Next will be the "accuracy fairness offset" to take any numbers they can't hide and adjust them to more favorable amounts.

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    It boggles my mind to think that stocks often rise based on government economic reports.

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