Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Strategies & Market Trends : Mish's Global Economic Trend Analysis -- Ignore unavailable to you. Want to Upgrade?

To: Giordano Bruno who wrote (70876)	11/3/2007 9:34:45 PM
From: Tommaso	Read Replies (1) \| Respond to of 116555

>>>Why the Fed Will Cut and Cut Again <<< And the US dollar will just fall and fall again. Long ago I predicted the loonie would hit $1.10. Now I think it will hit $1.25.

To: Giordano Bruno who wrote (70876)	11/6/2007 12:30:51 PM
From: RealMuLan	Read Replies (2) \| Respond to of 116555

U.S. market's hidden dangers begin to emerge JAY BRYAN , The Gazette Published: Tuesday, November 06, 2007 canada.com If you're wondering how to react to a continuing stream of worrisome reports about U.S. credit markets and their impact on the world's biggest financial market, there's at least one powerful reason you should err on the side of caution. It's this: Corporate earnings reports and broader indicators like employment numbers are often used as guides to where the whole economy is going, which can be a big mistake right now. These numbers are never terribly good guides in isolation, because by the time they show trouble, it's probably too late to react. However, they can be even more misleading than usual at times - like right now - when there's a significant chance of a U.S. recession. The two-part survey method in the U.S. works fine most of the time, but history suggests that when there's a major change in the trend of economic activity, the household survey does a much better job of picking it up, suggests David Rosenberg, an economist with Merrill Lynch. And as it happens, the household survey, which typically shows the same broad trend as the employer survey, is now showing a much gloomier picture: with an average job loss of 18,000 per month since July compared with the average gain of 112,000 in the official number out of the employer survey. The only reason that the unemployment rate didn't rise in October is that, in a very unusual development for a healthy economy, 211,000 workers dropped out of the U.S. job market. As well, notes Ian Shepherdson of High Frequency Economics, the employer survey can't pick up on jobs at newly created companies that aren't yet included, so these numbers must be estimated. He worries that this monthly estimate seems not to be responding much to the slowdown in the economy, so it could be helping to produce an unrealistically rosy total job number. This is all pretty technical stuff, but it serves to remind us of something that's not hard at all to understand: It's relatively easy to extrapolate the future when nothing big is changing. But when some important parts of the economy are in turmoil, forecasting - or even measuring what happened last month - becomes less accurate than usual. That's when its a good idea for investors to be especially cautious. jbryan@thegazette.canwest.com