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Strategies & Market Trends : The Epic American Credit and Bond Bubble Laboratory -- Ignore unavailable to you. Want to Upgrade?

To: ild who wrote (37633)	8/3/2005 2:35:57 AM
From: CalculatedRisk	Read Replies (1) \| Respond to of 110194

Do you (or anyone) know if there is a BoE repo fund future? (like the options on FED funds futures).

To: ild who wrote (37633)	8/3/2005 7:51:21 AM
From: redfrecknj	Respond to of 110194

And revisions on top of more revisions: "We have been watching, with no small degree of skepticism, a stream of improving Macro-economic data. Color us unconvinced. Many of the key releases have been fraught with misleading headlines obscuring much weaker data beneath, and last month was no different. From Inflation to Federal Deficit to Unemployment Rates to Industrial Output to recent GDP (and its revisions), nearly every data point comes with an asterisk. Take the Leading Economic Indicators (and revisions) from the Conference Board. The changes to the LEI now register a flattening yield curve as a positive for future economic activity. Only in the alternative universe where the Conference Board lives is this considered a positive. The CB now requires the yield curve to actually invert before it bodes negatively for future economic growth. The Board was apparently not pleased that 8 of the 10 past LEIs were negative. Hey, if you don’t like what the indicators are suggesting, than why not just change the model? And that’s exactly happened. Taking a page from the BLS handbook (Birth Death adjustment, anyone?), the Conference Board reduced the utility of LEIs for investors. Their work now falls into the category of economic cheerleading. Don’t care much for that private group? Then consider what BEA hath wrought. Their GDP revisions for 2005 Q1 border on the absurd. In order to crank GDP from its disappointing initial reading of 3.1% to the more vigorous final 3.8%, the BEA had to make some sketchy adjustments. Primary amongst their changes was (I am not making this up!) an actual decrease in Home Prices for Q1. Thus, by somehow emphasizing unit sales (as opposed to price appreciation), courtesy of the Price Deflator, GDP became higher in the final read. Torture the data long enough, and it will confess to whatever you want it to. Despite this gamesmanship - or perhaps because of it - much of the investing public knows only half the story when they read the economic headlines. The challenge to us is to not only attempt to discern reality, but to anticipate when the great masses do so also. Its what has caused us to title research in the past with phrases such as “Fundamentals Stink: Buy Stocks.” When the charade finally ends - probably after the last of the Bears capitulates - the finale will be ugly. bigpicture.typepad.com August 3, 2005