With a major election on November 2nd that will determine the balance of power in the United States for the next two years and possibly for much longer, there is a certain pattern that investors are likely to see in government economic reports during the next several months. In order to save everyone time reading dozens of these reports when they could have a gripping fiction novel in their hands instead, I have summarized them in advance so we can all just get on with our lives.
Economic Reports Before the Election:
The Commerce Department, Labor Department, BEA, BLS [pick one] will announce higher than expected numbers for [insert report name]. Analysts will be surprised, not because the headline number beats their purposely low ball estimate that they had chosen to help make the economy look much better, but because the report contains numbers that are so obviously false and impossible that even a retarded monkey with a drug habit would notice something was amiss. No financial reporter from the mainstream press catches on however. President Obama will cite the report as evidence that his economic programs are suddenly working just in time for the election. "Finally we're getting a little something, a very little something to be sure, from that $3 trillion in deficit spending" states the president. "Fortunately, I won't be around when we have to pay it back. I'm going to let the next guy figure that one out." Off camera, the president will be heard thanking a lowly-paid government statistician that did a lot of work on the report for a job well done and congratulating him on his recent purchase of a new Lamborghini and a 28-room house.
Economic Reports for Two or Three Months After the Election:
The Commerce Department, Labor Department, BEA, BLS [pick one] will announce that the numbers for the [insert report name] were revised sharply lower for September and October. This information will be found in a footnote on page 8 of the news release. While no mainstream financial reporter will notice, persistent bloggers will want to know how the government could have stated that construction employment tripled, while at the same time housing sales fell to their lowest level since caveman days. Bloggers will also question how the earlier manufacturing numbers could have been so rosy, when so many people were living on the street and eating out of garbage cans. A spokesperson for the department will admit that numbers had been inflated by the assumption that there had been a huge increase in garbage can manufacturing and cushions for sitting on the sidewalk and it turned out that this just wasn't the case. "Who would have thought those people were so poor? Certainly no one inside the beltway, that's for sure," she will go on to state.
Economic Reports in the Summer of 2011:
The Commerce Department, Labor Department, BEA, BLS [pick one] will announce their annual revision for the [insert report name]. It will turn out the numbers for the summer and fall of 2011 were much worse than even revisions after the election indicated. The evidence that the economy entered a recession before the election becomes pretty overwhelming. Nevertheless, no mainstream financial reporter will write an article on this news because they will all be on vacation. The NBER, the body that determines when recessions begin and end, will still not be convinced though and will wait until 2025 to declare that a recession began in the summer of 2010. President Obama will not initially be available for comment because he will also be on vacation - his 23rd since the beginning of the year - in some banana republic backwater. When confronted with the news on his return, the president will state, "It's obviously George Bush's fault." The American people will react by hoping they get a new garbage can and sidewalk pillow for Christmas.
Disclosure: No positions