False Data Clobbers the Markets

Aug. 29, 2008 10:08 AM ETAAPL, USO, OIL-OLD49 Comments
Jason Schwarz profile picture
Jason Schwarz

What is real? Up until this point, 2008 has been a year marred by false data. The market has had no trouble digesting the real numbers. It's the false numbers that have put us into a recession-like sell off. The list of market moving inaccuracies continues to grow, here are the three latest:

1. Government GDP Report. Why doesn't the government just hold off a few weeks before releasing its reports? No data is better than false data. The latest GDP growth revision is absolutely inexcusable. I can handle a small revision from 3.1% to 3.2% but 1.9% to 3.3%? Wouldn't it be better to just wait another 3 or 4 weeks and get the numbers correct?

This isn't the first time either. The non farm payroll reports have provided us with some overreactions. The carnage of 2008 actually began on January 4th when the December payroll number was released. It came out at 18k and the Dow sold off over 800 points in ten days. Nobody paid much attention when that number was later revised up. We've lost too much market value because of seemingly negative data that was later revised. Our estimates show that such inaccuracies have cost the Dow over 1500 points.

2. The Steve Jobs Obituary. False rumors haven't been limited to the financials, Nasdaq leader Apple (AAPL) has dealt with its fair share of false rumors as well. The latest cheap shot bear tactic happened on Wednesday evening with the release of a 17-page Steve Jobs obituary over at Bloomberg. We calculate that Apple has lost approximately $30 in share price due to false rumors regarding the health of its CEO.

3. The Misinformation on Oil. Talk about getting creative, try being an oil bull for a day. We have heard lie after lie come from this group

This article was written by

Jason Schwarz profile picture
Jason Schwarz authors the popular Economic Timing investment newsletter. His fundamental and technical research has become a primary resource for hedge funds and individual investors.

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