Time To Invest In The New Zealand ETF [View article]
Thank you for the article. However, my analysis shows that NZ will have hard time in the beginning of 2010s. It might be better to watch the near term developments. GDP will likely not be growing http://bit.ly/wNtJwG but unemployment probably will grow http://bit.ly/Am0Gkz
Delicate Relations: Markets And Macro [View article]
In theory, any model should first describe biggest signals , where the influence of defining parameters is more clear. In physics we say signal-to-noise ratio should be the biggest possible to resolve model coefficients. When nothing changes, no model can be resolved. I always admire the inventiveness of economists who explain any large change by introducing a shock, i.e. a spike of unknown origin.
Our model does look into the future when the number of 9-year-olds is used instead of GDP. A new age profile is now available from teh Census Bureau and we are going to update our S&P 500 prediction soon.
Delicate Relations: Markets And Macro [View article]
There is a reliable statistical link between the S&P 500 returns and real GDP per capita in the US. This link is not linear but contains - the returns are defined by the growth rate of GDP. The model performs the best during large changes: http://seekingalpha.co... or here http://bit.ly/zcn4vy http://bit.ly/zRbRLC
Sure, correlation is not causation, but causation is definitely correlation. So, correlation is a necessary but not sufficient condition. No model exists without correlation.
Why The Real GDP Estimate Is Wrong And Can't Be Used For Analysis [View article]
Freddy, CPI is actually larger than the GDP deflator by 20%. But teh GDP deflator is actually used to estimate real GDP. I do not think the GDP deflator is overstates its true value too much. There is a BEA paper where informal accuracy of real GDP is approximately 1%. I would agree with this figure.
In my article, I warn researchers to use the real GDP estimates from the BEA as they are. When corrected for the difference between CPI and the GDP deflator before 1978, the real GDP series provides a much better fit in major macroeconomic relationships like Okun's law. In this post ( http://bit.ly/u3Z3wF ) I try to recover real "real GDP".
Why The Real GDP Estimate Is Wrong And Can't Be Used For Analysis [View article]
If to apply the current definiton of the GDP deflator before 1978 the estimates of real GDP were different from those reported by the BEA. If to apply the " before 1978" definiton of the GDP deflator (i.e. CPI) to the estimates after 1978 these estimates of real GDP were different from those reported by the BEA. One should not mix two definitions in one time series. Otherwise, this series is wrong and results in wrong econometric inferences. It is like a shift from miles per hour to km per hour without changing nominal speed limit.
It's A Good Time To Sell Oil Futures [View article]
When I wrote this piece oil was at $84. Now it is at $78. It was a good time to sell. Today is a good time to buy. In a week or so the price of oil will be back above 80. Weekly 2% to 5% is a good return.
Some words about fundamentals. Macroeconomics comes wrong over and over and over .... If somebody still believs in supply/demand or something like that, s/he has to read Paul Krugman http://nyti.ms/p5Vs9E/ . Macro is not a science and thus worthless to explain quantitative variables.
Deflation Is a Long Term Threat for the Stock Market [View article]
Let's see what will be consumer price inflation in August. Oli fell by 12%. It should result is a negative m/m CPI inflation rate in August. About all governments printing as much money as they want - I'd recommend you to look at Japan. Why the US is different?
There is an inherent (one-off) link between real GDP and unemployment (employment). Higher unemployment rates are equivalent to low GDP growth and vice versa. If the market does not see any improvement in the labor market it also does not see any economic growth - mechonomic.blogspot.co...
Will U.S. Equities Decline Due To Demographics? [View article]
We published a similar study 5 years ago linking the S&P 500 returns and the number of 9-year-olds or real GDP per capita. We have been tracking the model prediction since and reported on Seeking Alpha - seekingalpha.com/artic...
Why The Employment Situation Isn't Improving [View article]
Only real economic growth can improve employment/unemployment situation. The US needs the rate of real GDP per capita growth at least 1.9% per year for the employment/population ratio to grow and the rate of unemployment to fall - mechonomic.blogspot.co... .
I foresee deflation since 2012 - seekingalpha.com/artic... Thus, iI the long run US dollars is the most safe asset, as one can see from Japan experience. 10-year T-notes is also an option seekingalpha.com/artic... .
Time To Invest In The New Zealand ETF [View article]
GDP will likely not be growing
http://bit.ly/wNtJwG
but unemployment probably will grow
http://bit.ly/Am0Gkz
Delicate Relations: Markets And Macro [View article]
I always admire the inventiveness of economists who explain any large change by introducing a shock, i.e. a spike of unknown origin.
Our model does look into the future when the number of 9-year-olds is used instead of GDP. A new age profile is now available from teh Census Bureau and we are going to update our S&P 500 prediction soon.
Delicate Relations: Markets And Macro [View article]
http://seekingalpha.co...
or here
http://bit.ly/zcn4vy
http://bit.ly/zRbRLC
Sure, correlation is not causation, but causation is definitely correlation. So, correlation is a necessary but not sufficient condition. No model exists without correlation.
U.S. Economy Facing Japan-Like Deflation: What Investors Need To Know [View article]
and it indeed repeats the path of Japan - http://bit.ly/wiTxci
as we described six years ago
http://bit.ly/w2LHCG
Why The Real GDP Estimate Is Wrong And Can't Be Used For Analysis [View article]
In my article, I warn researchers to use the real GDP estimates from the BEA as they are. When corrected for the difference between CPI and the GDP deflator before 1978, the real GDP series provides a much better fit in major macroeconomic relationships like Okun's law.
In this post ( http://bit.ly/u3Z3wF ) I try to recover real "real GDP".
Why The Real GDP Estimate Is Wrong And Can't Be Used For Analysis [View article]
It is like a shift from miles per hour to km per hour without changing nominal speed limit.
It's A Good Time To Sell Oil Futures [View article]
Some words about fundamentals. Macroeconomics comes wrong over and over and over .... If somebody still believs in supply/demand or something like that, s/he has to read Paul Krugman http://nyti.ms/p5Vs9E/ . Macro is not a science and thus worthless to explain quantitative variables.
Deflation Is a Long Term Threat for the Stock Market [View article]
About all governments printing as much money as they want - I'd recommend you to look at Japan. Why the US is different?
Of Job Growth And Recessions [View article]
Will U.S. Equities Decline Due To Demographics? [View article]
A paper was published in 2007 ideas.repec.org/p/pra/...
and revised in 2010 ideas.repec.org/p/pra/....
Why The Employment Situation Isn't Improving [View article]
How Low Will Oil Prices Go? [View article]
How Low Will Oil Prices Go? [View article]
ConocoPhillips' Shares Will Head Downward With Oil Prices [View article]
Deflation Is a Long Term Threat for the Stock Market [View article]