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Strategies & Market Trends : The Residential Real Estate Crash Index
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To: patron_anejo_por_favor who started this subject11/15/2003 6:14:54 PM
From: Elroy JetsonRead Replies (2) of 306849
 
Did anyone catch Foster Friess on Friday's episode of "Louis Rukeyser's Wall Street"? This normally bullish manager of the Brandywine Fund pointed out that the "economic recovery" barely exists as he quantified two prominent lies in government statistics, that others have highlighted for some time. (Two of the panelists looked panicked, like deer caught in a car headlights.)

The 7.1% annualized growth in GDP during the 3rd quarter was actually 1.2% once you remove the "Hedonic Pricing" by the BLS. As an example, the figures included $39 Billion of computer sales. Actual computer sales were only $6 Billion. The missing $33 Billion of sales is the value of "imputed quality improvements" since 1996. This particular lie contributed 40% of the third quarter GDP growth.

Of course the most insidious part of this lie is not the over-statement of GDP and the understatement of the Inflation Rate by $33 Billion - the most pernicious aspect is that it over-states Productivity by $33 Billion.

Hedonic Pricing lies in total reported the actual 1.2% growth rate as 7.1%.

Employment figures are over-stated by another 50,000 jobs each month. Once the Federal Government declared the economy was recovering, the Labor Department is allowed to add an extra 50,000 jobs each month (to allow for "under-counting"). These jobs do not actually exist. Last May the Labor Dept had to "revise down" actual employment by 400,000 jobs to account for the previous eight months worth of lies at 50,000 jobs per month. Employment is actually still declining and unemployment is still rising.
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