Those who wish to take a victory lap on the back of last weeks "not-as-bad-as-we-thought-it-would-be-but-still-really-bad" Unemployment Report, may not be as comforted by this weeks data. Today is the calm before the storm – as this week there will be International Trade on Tuesday, Retail Sales on Wednesday, PPI on Thursday, and, mercifully, CPI and Industrial Production on Friday. Expect all to be less than stellar. I’ll go through each one as they come out.
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And while the data will show prior periods, it opens up an opportunity for the carnival salesman of Wall Street to lure investors in with promises of a brighter future and a requirement to invest now to get in at unbelievably low prices.
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</o>Yet the metrics that we should be using, the ones that are not open to the interpretation of a salesman, are telling us something very different. Crude oil continues to fall, and is below $40 as I write. Consumer confidence is deteriorating. Equity indexes still remain drastically below the levels they were this time last year. There is a myriad of metrics that all tell you the same thing. The omniscient power of the future revealing indexes, so the salesmen say, will begin to recover before the turn in the economy actually occurs.
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</o>We should invest on proof, not faith; metrics, not belief. Faith as a motivator has repeatedly hurt those who practice it in the capital markets. “Don’t worry, housing prices only go up” is an example of faith based investment.
There is a perverse idea that being involved for the bottom and the upturn in the economy, and the markets, proves some sort of mettle, some forward looking inclination that endows people with otherwise unattainable valor. Good for those people – I’ll try to avoid the downturns, and in the end, I’ll console myself with the greater amount of money I have for my ability to not show my bravery.
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</o>As they say, the second mouse gets the cheese.
<o></o>
And while the data will show prior periods, it opens up an opportunity for the carnival salesman of Wall Street to lure investors in with promises of a brighter future and a requirement to invest now to get in at unbelievably low prices.
<o>
</o>Yet the metrics that we should be using, the ones that are not open to the interpretation of a salesman, are telling us something very different. Crude oil continues to fall, and is below $40 as I write. Consumer confidence is deteriorating. Equity indexes still remain drastically below the levels they were this time last year. There is a myriad of metrics that all tell you the same thing. The omniscient power of the future revealing indexes, so the salesmen say, will begin to recover before the turn in the economy actually occurs.
<o>
</o>We should invest on proof, not faith; metrics, not belief. Faith as a motivator has repeatedly hurt those who practice it in the capital markets. “Don’t worry, housing prices only go up” is an example of faith based investment.
There is a perverse idea that being involved for the bottom and the upturn in the economy, and the markets, proves some sort of mettle, some forward looking inclination that endows people with otherwise unattainable valor. Good for those people – I’ll try to avoid the downturns, and in the end, I’ll console myself with the greater amount of money I have for my ability to not show my bravery.
<o>
</o>As they say, the second mouse gets the cheese.
