manipulated statistics, not inflation

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manipulated statistics, not inflation

Postby newguy » 22 Dec 2009 20:02

Inflation has it's own thread, and I don't want to make ghariton mad :wink: .
Today's 3rd GDP revision.
Does anyone think that 3.5% down to 2.2% is a little extreme? Is the initial report that inaccurate? Remember on 10/29 when the initial 3.5% report came out the big up day we had. The final (3rd) report is not watched closely and basically a non event today. In fact we hit a new yearly high in the S&P. Of course there are other factors in stock prices, but if you wanted to manipulate them, this works.

The BEA
wrote:
The "third" estimate of the third-quarter increase in real GDP is 0.6 percentage point, or $17.3 billion, lower than the second estimate issued last month, primarily reflecting downward revisions to nonresidential fixed investment, to private inventory investment, and to personal consumption expenditures.

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Re: manipulated statistics, not inflation

Postby Peculiar_Investor » 22 Dec 2009 23:17

From the horse's mouth government site, http://www.bea.gov/newsreleases/nationa ... elease.htm

Code: Select all
Revisions

      The "third" estimate of the third-quarter increase in real GDP is 0.6 percentage point, or $17.3
billion, lower than the second estimate issued last month, primarily reflecting downward revisions to
nonresidential fixed investment, to private inventory investment, and to personal consumption
expenditures.


                                         Advance Estimate     Second Estimate      Third Estimate
                                                 (Percent change from preceding quarter)

Real GDP..................................      3.5                 2.8                 2.2
Current-dollar GDP........................      4.3                 3.3                 2.6
Gross domestic purchases price index......      1.6                 1.4                 1.3

I'm not an economist, but from my quick read, the first estimate, aka "Advance Estimate" is most likely the most "finger in the sky" type estimate and I note that even the 2.2 number is an estimate. The critical question, which I believe has been asked on FWF before, is why would anyone make an investment decision based on -- predictions of estimates that are almost always revised (the estimates not the predictions).
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Re: manipulated statistics, not inflation

Postby ghariton » 23 Dec 2009 04:18

Well, I'm an economist, but my field is microeconomics, not macroeconomics.

Estimating national accounts has always been as much art as science. In particular, quarterly estimates have always been pretty shaky, because most numbers are available annually, and so there is no cross-check. I try not to use quarterly numbers if I can avoid it.

But at least the government has an ongoing program of revisiting and revising its GDP numbers. Corporations I am familiar with also issue quarterly numbers, which interestingly enough are not revised later (unless there is some major malfeasance). The revisions are simply swept up into the annual results. More interestingly, the annual results are generally not revisited or revised and just sit there -- even when companies do find problems with past numbers.

I've run into this problem when trying to analyze a company's cost trends over time. Quite often there were "jumps" and "blips" that I could not explain in the usual way. The answer was often that some of the past numbers were wrong.

So take annual numbers with a grain of salt. Take quarterly numbers with a whole cup of salt. And as for those companies that generate monthly reports, usually for internal management use only, I've never understood what earthly use these are. What management decision would turn on one month's results?

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Re: manipulated statistics, not inflation

Postby newguy » 25 Jan 2010 15:06

Durable Goods "Mistake" Or FRAUD?

I would think they'd wait for the midterm elections before doing this kind of stuff. Maybe I'm just a conspiracy nut. :roll:

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Re: manipulated statistics, not inflation

Postby kcowan » 26 Jan 2010 12:15

newguy wrote:Durable Goods "Mistake" Or FRAUD?
I would think they'd wait for the midterm elections before doing this kind of stuff. Maybe I'm just a conspiracy nut. :roll:
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I think they are playing a "confidence game".
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Re: manipulated statistics, not inflation

Postby newguy » 29 Jun 2010 15:24

Finally the Q1 sales tax receipts are out. http://www2.census.gov/govs/qtax/2010/q1t1.pdf
2010 q1 69869
2009 q1 69683
So up 0.27% yoy (basically flat)

And the retail sales series we've been listening to every month
2010-03-01 +9.2% yoy
2010-04-01 +9.8% yoy

Who to believe?

newguy

I'm sure you've all been watching the declining numbers for Q1 GDP !
I used ex food services, is that food or restaurants?
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Re: manipulated statistics, not inflation

Postby newguy » 30 Jun 2010 21:28

OMFG, I can't really believe this. I don't really mind the call in surveys you see on tv or radio because everybody knows they're retarded, but this is just.....I don't have the words. I bet they change their mind once someone points out the facts.

newguy

ps The statistics thread was locked so I figure these are some about to get manipulated.
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Re: manipulated statistics, not inflation

Postby Shakespeare » 30 Jun 2010 21:48

“Never appeal to a man's better nature. He may not have one. Invoking his self-interest gives you more leverage.” -- R.A. Heinlein, Time Enough for Love.
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Re: manipulated statistics, not inflation

Postby newguy » 30 Jun 2010 21:52

Shakespeare wrote:Beat you. :wink:

I noticed, I must have spent too much time finding a thread to put it in. Political correctness? :roll:

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Re: manipulated statistics, not inflation

Postby Shakespeare » 30 Jun 2010 21:59

Political correctness?
Well, I think that's what the Tories are trying to be by halting the sending of the forms out: some people will object - and I think you will find more objectors in the Conservative voting base (which is generally not university educated) than in the Liberal voting base (which often is - and has a better concept of selection bias). Also, it's really a Water Cooler topic, not a Finance one.
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Re: manipulated statistics, not inflation

Postby adrian2 » 01 Jul 2010 14:30

Shakespeare wrote:I think you will find more objectors in the Conservative voting base (which is generally not university educated) than in the Liberal voting base (which often is - and has a better concept of selection bias).

I strongly object to this condescending assumption, and for once I'll display my signature line in the finance forum.

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Re: manipulated statistics, not inflation

Postby Bylo Selhi » 01 Jul 2010 14:54

adrian2 wrote:I strongly object to this condescending assumption, and for once I'll display my signature line in the finance forum.

Curious display of indignation from someone whose signature alleges that everyone over the age of 40 who isn't a conservative(*) is a brainless idiot :roll:

(*) Which includes both Shakes and me.
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Re: manipulated statistics, not inflation

Postby adrian2 » 01 Jul 2010 15:01

Bylo Selhi wrote:Curious display of indignation from someone whose signature alleges that everyone over the age of 40 who isn't a conservative(*) is a brainless idiot :roll:

It's a literary technique called hyperbole; to avoid ad litteram interpretations I generally restrict its display to the Water Cooler forum.

BTW, another way of viewing Churchill's quote is exactly counter to Shakes' assumption; i.e., a Conservative voter generally has "more brains" (higher chance of being university educated) than a Liberal one. There is no mention of idiots in the original.
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Re: manipulated statistics, not inflation

Postby Dennis » 01 Jul 2010 15:13

Adrian....you are right. However, if Bylo is referring to the "Tea Party Crowd" as his definition of "conservative", then he is also right. I for one, can not see these idiots as having even half a brain!
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Re: manipulated statistics, not inflation

Postby Shakespeare » 01 Jul 2010 15:23

I'm fairly sure Canadian party voting tendencies show that higher-educated individuals are more likely to vote Liberal than Conservative, although Google was not sufficiently specific to find a reference.

Going by memory:

Higher education -> more likely to be Liberal
Very high income or low income -> more likely to be Conservative
Male -> more likely to be Conservative
Older -> more likely to be Conservative

These are general tendencies of course, with individual exceptions.

Added: when was the last time you saw a Liberal party ad attacking another leader's advanced education or foreign experience?
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Re: manipulated statistics, not inflation

Postby Bylo Selhi » 01 Jul 2010 15:30

adrian2 wrote:There is no mention of idiots in the original.
It's a reasonable inference from "you have no brain." ("idiot -- a person of the lowest order in a former classification of mental retardation, having a mental age of less than three years old and an intelligence quotient under 25.")

My objection to your objection to Shakes' observation has nothing to do with its validity. It has everything to do with who's making the objection in light of their signature. If you're offended by what you consider to be a disparagement of conservatives then stop disparaging liberals, hyperbolically, tangentially, asymptotically or otherwise. (I'll continue to make no bones about how I feel about conservatives for as long as you continue to do the same about liberals.)

And BTW Shakes referred to Conservatives and Liberals, not conservatives and liberals. Note the different capitalization.

Dennis wrote:Adrian....you are right.
Yup, especially in your case ;)

And BTW it's adrian2, not Adrian ;)
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Re: manipulated statistics, not inflation

Postby adrian2 » 01 Jul 2010 16:08

Shakespeare wrote:when was the last time you saw a Liberal party ad attacking another leader's advanced education or foreign experience?

Another slogan chanted in the post-1989 Romania (I'll let you guess by whom) was "We work, we don't think!" (it rhymes in Romanian).
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Re: manipulated statistics, not inflation

Postby adrian2 » 01 Jul 2010 16:14

Bylo Selhi wrote:My objection to your objection to Shakes' observation has nothing to do with its validity. It has everything to do with who's making the objection in light of their signature. If you're offended by what you consider to be a disparagement of conservatives then stop disparaging liberals, hyperbolically, tangentially, asymptotically or otherwise. (I'll continue to make no bones about how I feel about conservatives for as long as you continue to do the same about liberals.)

Once again, the Liberal party is #2 on my list of potential votes. I'm guessing the Tories are further down your list :).

As for my signature, which is 98%+ only displayed the non-financial areas of this forum, it means no insult to you or any other liberal or Liberal reading. Don't take it ad litteram, same as I don't feel that Dennis' signature implies that I'm a thief. :)
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Re: manipulated statistics, not inflation

Postby adrian2 » 01 Jul 2010 16:17

Shakespeare wrote:Older -> more likely to be Conservative

Hey, that's a paraphrase (almost) of Churchill's quote!
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Re: manipulated statistics, not inflation

Postby kcowan » 01 Jul 2010 18:57

You guys ought to take this over to the Water Cooler.

(PS Even though I have voted Liberal in the past, I am a conservative in many ways.)
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Re: manipulated statistics, not inflation

Postby newguy » 09 Sep 2010 12:36

Why did Dow futures jump 50 points this morning?

ISTM there is a definite bias here. We know the fed thinks a good stock market is needed to get people spending again. Anyone want to bet on next weeks revision.

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Re: manipulated statistics, not inflation

Postby Bylo Selhi » 08 Nov 2010 10:21

Speaking of manipulation and inflation: Companies making products smaller, but not their prices
As companies try to keep costs in check without catching the attention of price-conscious consumers, the recent economic downturn wasn’t just about job numbers and government deficits — it’s also been about downsizing products without downsizing their prices...

“It’s a sneaky way to pass on a price increase to consumers because the product package is either identical to what it was before or virtually identical, so the consumer thinks they’re buying the same old product, but they’re not,” said consumer watchdog Edgar Dworsky... “You’re getting less and just by definition, if you’re paying the same price and you’re getting less, that’s a bit of a ripoff.”...

“In many cases there’s something on the package, ‘new and improved,’ but usually new and improved is for their bottom line because of the downsizing, but they will almost distract the consumer’s attention,” said Dworsky.

Do StatsCan's inflation statistics correct for this sort of subterfuge?
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Re: manipulated statistics, not inflation

Postby ghariton » 08 Nov 2010 10:55

Bylo Selhi wrote:
about downsizing products without downsizing their prices...

Not exactly new. When I was a child, chocolate bars cost five cents. Then the bars started shrinking. Eventually we got the new, improved large-sized bar for ten cents, that was approximately the size of the original five-cent bar. Then the process started all over again.

Do StatsCan's inflation statistics correct for this sort of subterfuge?

They do their best. But it's not always easy, e.g. when an ISP places stringent caps on throughput, Statistics Canada has to start figuring out the monthly usage by the average consumer, and that stuff isn't always public.

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Re: manipulated statistics, not inflation

Postby Bylo Selhi » 08 Nov 2010 11:35

ghariton wrote:Not exactly new. When I was a child, chocolate bars cost five cents. Then the bars started shrinking. Eventually we got the new, improved large-sized bar for ten cents, that was approximately the size of the original five-cent bar. Then the process started all over again.

I think there's a significant difference. Chocolate bars and bags of chips, etc. tend to be discretionary purchases. You might have bought one if you had (back in the day) a nickel or dime, but not if you had to fish around your pocket/purse looking for an extra penny or two. Moreover in those days vending machines weren't very sophisticated. Often they accepted only a few coin denominations and didn't make change. So there was a valid reason for the products they vended to be sold for a single coin. It's no wonder then that it made sense to shrink the size slightly to keep the price at a nickel rather than doubling the price to a dime. Vendors could validly argue that they were doing this for everyone's convenience in the face of rising costs.

The situation today is quite different. There's no problem with increasing the price of a chocolate bar slightly from, say, 80¢ to 85¢ or even $1.00 to $1.10, rather than to shrink the amount in the package. A consumer isn't likely to forgo the purchase due to that sort of increase. Likewise the products mentioned in the article. Consumers are used to seeing the price of a container of orange juice or spaghetti sauce go up from time to time. There's no need for this subterfuge.

Indeed, such size reductions may actually increase manufacturing costs -- which compound the increase in unit prices consumers end up paying -- because it's necessary to make new molds for the smaller glass or plastic jars and make new dies for the smaller tin cans and/or modify the filling machines to accommodate the different container sizes. Moreover, a consumer who's accustomed to use a jar of sauce to make a batch of spaghetti will now have to adjust the recipe to deal with this shrinkage -- usually only after noticing that the first batch using the new container size is "off."

How is any of this any an improvement or more convenient for consumers, let alone of any real benefit to them? It's clearly an attempt to hoodwink the public. It's deceptive and possibly fraudulent.
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Re: manipulated statistics, not inflation

Postby Jo Anne » 08 Nov 2010 15:23

As George said, it's been happening for years. And not just stuff like chips and chocolate bars.

Ground coffee used to come in one-kilo containers. Now it's 900 or 950 grams. Stuff that used to be sold in one-pound containers went to 450 grams when metric came in, then gradually found its way down to 400 grams.

And it gets sneakier. The size of a can of tuna hasn't changed at all, but the ratio of liquid to fish certainly has. Oh, and it says on the tin that the net weight is 120 grams drained. They are lying. Try draining it and weighing it yourself sometime.

The bread rip-off is the one that really pisses me off. The weight of a loaf of bread hasn't changed from 16 ounces (454 grams), but for the past 8-10 years they have been slicing the bread thicker. You used to get about 20 slices to a loaf, and now it's more like 14. I first noticed this when I couldn't fit the bread in my old toaster. So if you are using bread for sandwiches, you have to buy more.
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