German Bond Auction Failure Today

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Old Mar 27, 2012, 12:41pm   #31
 
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Re: German Bond Auction Failure Today

I have talked about ShadowStats before... At best, there's no reason to believe that they're any more credible than the official figures. At worst, it's a scam.

Why should I believe ShadowStats, whose methodology is completely unpublished and opaque, vs, for example, the MIT BPP data below?
Click the image to open in full size.

And, for the record, I don't have a butler and I don't know who JR is. But again, kudos for the humor.
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Old Mar 27, 2012, 12:49pm   #32
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Re: German Bond Auction Failure Today

Quote:
Originally Posted by Martinghoul View Post
I have talked about ShadowStats before... At best, there's no reason to believe that they're any more credible than the official figures. At worst, it's a scam.
I am not aware of shadowstats, so I can't comment on them. But I do know that all politically-sensitive statistics are manipulated, quite shamelessly and openly in many cases. I suppose crime figures are the most obvious and notorious.

Whatever the true inflation figure is, it is certainly higher than the government is claiming.
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Old Mar 27, 2012, 12:51pm   #33
 
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Re: German Bond Auction Failure Today

Shadow stats still calculates inflation exactly the way the BLS used to calculate it before they introduced the concept of hedonics and substitution, that is why shadow stats is credible. That is why the figures line up in the early 80's. That is why their figures match those reported by General Mills.

I read that the price of a 1st class stamp is going up 30% next month. Great news, buy 1st class stamps now, that's a guaranteed return!

Stamp prices soar to record highs - UK News - MSN News UK
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Old Mar 27, 2012, 12:55pm   #34
 
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Re: German Bond Auction Failure Today

Quote:
Originally Posted by The Leopard View Post
I am not aware of shadowstats, so I can't comment on them. But I do know that all politically-sensitive statistics are manipulated, quite shamelessly and openly in many cases. I suppose crime figures are the most obvious and notorious.

Whatever the true inflation figure is, it is certainly higher than the government is claiming.
Well, I have no problem with this as a hypothesis... However, based on the evidence available to me so far, I have not seen any actual tangible proof of this for inflation calculations. And, as if on cue, here's a post on the subject:
Argentina CPI Vs. Price Stats
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Old Mar 27, 2012, 12:56pm   #35
 
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Re: German Bond Auction Failure Today

Substitution, Weighting And Hedonics? | VIEWPOINTS OF A COMMODITY TRADER
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Old Mar 27, 2012, 1:04pm   #36
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Re: German Bond Auction Failure Today

Quote:
Originally Posted by Martinghoul View Post
Well, I have no problem with this as a hypothesis... However, based on the evidence available to me so far, I have not seen any actual tangible proof of this for inflation calculations. And, as if on cue, here's a post on the subject:
Argentina CPI Vs. Price Stats
If only our own Government was as honest as that of Argentina(Falklands aside, although our position on that has nothing to do with the character of our Government). In fact, I long for the day when the probity of our public life once again approaches that of any tinpot third-rate banana republic run by kleptocrat generals. Then we would have something to be proud of in the UK.
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Old Mar 27, 2012, 1:06pm   #37
 
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Re: German Bond Auction Failure Today

Quote:
Originally Posted by new_trader View Post
Shadow stats still calculates inflation exactly the way the BLS used to calculate it before they introduced the concept of hedonics and substitution, that is why shadow stats is credible. That is why the figures line up in the early 80's. That is why their figures match those reported by General Mills.

I read that the price of a 1st class stamp is going up 30% next month. Great news, buy 1st class stamps now, that's a guaranteed return!

Stamp prices soar to record highs - UK News - MSN News UK
No, this is a myth that has been thoroughly discredited by quite a bit of research... Moreover, comparing ShadowStats CPI with the PPI figures that the General Mills release refers to is incorrect.

Finally, John Williams, the economist behind ShadowStats, has been invited numerous times to make his exact methodology public and to debate it with other economists. He has refused every single one of these invitations and has refused to submit his "research" for peer review of any sort. Moreover, one has to be aware of the fact that ShadowStats is a business venture, which depends on publicity for revenue. All of the above suggests to me that ShadowStats is just not very credible, where actual economic data is concerned.

Finally, on the subject of UK stamps, what does that have to do with the subject of US inflation, which is what I thought we were discussing?
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Old Mar 27, 2012, 1:08pm   #38
 
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Re: German Bond Auction Failure Today

Quote:
Originally Posted by The Leopard View Post
If only our own Government was as honest as that of Argentina(Falklands aside, although our position on that has nothing to do with the character of our Government). In fact, I long for the day when the probity of our public life once again approaches that of any tinpot third-rate banana republic run by kleptocrat generals. Then we would have something to be proud of in the UK.
Well, my access to BPP isn't working at the moment, for some reason. However, if I am not mistaken, they have data for the UK, which should allow us to get an idea of how manipulated the UK data is.
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Old Mar 27, 2012, 1:15pm   #39
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Re: German Bond Auction Failure Today

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Well, my access to BPP isn't working at the moment, for some reason. However, if I am not mistaken, they have data for the UK, which should allow us to get an idea of how manipulated the UK data is.
There is no need. I can assure you that tractor production in the UK is up for the 84th year in a row, and the potato harvest this year breaks all records.

If I had to guess, when the Government was claiming RPI at 5%, I would have thought that equated to about 6.5% / 7% in reality. Obviously it is a little tricky as it depends on how one measures inflation. Different people experience it differently, of course.

That reminds me, exam results as an example. They improve every year without fail, and nobody suggests that those results weren't achieved. I also know of nobody that genuinely believes that those results represent an improvement in educational achievement.
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Old Mar 27, 2012, 1:30pm   #40
 
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Re: German Bond Auction Failure Today

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There is no need. I can assure you that tractor production in the UK is up for the 84th year in a row, and the potato harvest this year breaks all records.

If I had to guess, when the Government was claiming RPI at 5%, I would have thought that equated to about 6.5% / 7% in reality. Obviously it is a little tricky as it depends on how one measures inflation. Different people experience it differently, of course.

That reminds me, exam results as an example. They improve every year without fail, and nobody suggests that those results weren't achieved. I also know of nobody that genuinely believes that those results represent an improvement in educational achievement.
Yes, Comrade... I can't disagree with any of that.
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Old Mar 27, 2012, 1:51pm   #41
 
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Re: German Bond Auction Failure Today

Quote:
Originally Posted by Martinghoul View Post
No, this is a myth that has been thoroughly discredited by quite a bit of research... Moreover, comparing ShadowStats CPI with the PPI figures that the General Mills release refers to is incorrect.

Finally, John Williams, the economist behind ShadowStats, has been invited numerous times to make his exact methodology public and to debate it with other economists. He has refused every single one of these invitations and has refused to submit his "research" for peer review of any sort. Moreover, one has to be aware of the fact that ShadowStats is a business venture, which depends on publicity for revenue. All of the above suggests to me that ShadowStats is just not very credible, where actual economic data is concerned.

Finally, on the subject of UK stamps, what does that have to do with the subject of US inflation, which is what I thought we were discussing?
This isn't specifically about US inflation, it is about inflation in general and how the free market isn't fooled (excluding you) by Government statistics.

The fact that ShadowStats is a business venture is precisely the reason it is more credible than Governments statistics. Which of the two have a greater motivation to produce manipulated inflation figures, the Government or a private enterprise? Jees Martinghoul, your logic astounds me sometimes.

Post a link to the 'research' to back up what you say. John Williams is often quoted as an alternate source, if it was as discredited as you believe they would be out of business.

Alternate Inflation Charts
The CPI chart on the home page reflects our estimate of inflation for today as if it were calculated the same way it was in 1990. The CPI on the Alternate Data Series tab here reflects the CPI as if it were calculated using the methodologies in place in 1980. In general terms, methodological shifts in government reporting have depressed reported inflation, moving the concept of the CPI away from being a measure of the cost of living needed to maintain a constant standard of living.
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Old Mar 27, 2012, 2:05pm   #42
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Re: German Bond Auction Failure Today

These arguments between NT and MG are one the best features of this site. Always very interesting and entertaining to read.
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Old Mar 27, 2012, 4:07pm   #43
 
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Re: German Bond Auction Failure Today

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Originally Posted by new_trader View Post
This isn't specifically about US inflation, it is about inflation in general and how the free market isn't fooled (excluding you) by Government statistics.
Well, how is it, objectively, that your particular version of the "free mkt" (ShadowStats) is more valid and accurate than mine (MIT BPP)? Why should I believe John Williams's numbers more than I believe both the MIT and the BLS ones?
Quote:
The fact that ShadowStats is a business venture is precisely the reason it is more credible than Governments statistics. Which of the two have a greater motivation to produce manipulated inflation figures, the Government or a private enterprise? Jees Martinghoul, your logic astounds me sometimes.
Huh? I am astounded that you can miss something that obvious, so let me spell it out for you. John Williams sells a subscription to his service. If all his data did was provide something that's in line with the BLS figures, he would be out of business. Like, for example, HeroZedge, he has an incentive to publish stuff that is outrageous and reinforces the biases his audience has. So yes, while I completely agree that there's reason to believe that the government's figure might be biased, using and believing only ShadowStats as your alternative source of info is rather silly. What I normally do is compile a list of sources (say, official BLS, BPP, AIER EPI, etc) that, among others, includes ShadowStats. That is a much sounder strategy.
Quote:
Post a link to the 'research' to back up what you say. John Williams is often quoted as an alternate source, if it was as discredited as you believe they would be out of business.
There's quite a lot of it. You can look at some stuff like this that discusses the various issues arnd ShadowStats:
WHY IS THERE DEFLATION IN HYPERINFLATION FORECASTS? | PRAGMATIC CAPITALISM
Or this:
Why Shadow Government Statistics is very, very, very wrong. « The Traders Crucible
Or this:
Econbrowser: Shadowstats debunked

I can go on, if you like.
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Old Mar 28, 2012, 7:52am   #44
 
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Re: German Bond Auction Failure Today

First let me state the facts as they are:

FACT: The Alternate inflation chart is available for FREE on the shadow stats website.

FACT: The methodology used to calculate the alternate inflation is disclosed on the website: The CPI on the Alternate Data Series tab here reflects the CPI as if it were calculated using the methodologies in place in 1980. In general terms, methodological shifts in government reporting have depressed reported inflation, moving the concept of the CPI away from being a measure of the cost of living needed to maintain a constant standard of living.

Despite the facts that the data is free and the methodology is fully disclosed so that anyone can check it for themselves, you subscribe to the conspiracy theory that the methodology is proprietary and sensationalised to drum up business for a statistical website... Not an index linked investment fund or anything.

So, let me think this through. The government publishes inflation data for free but some economic entrepreneur thought to himself, “Hey, I can do better than that!” and came up with his own methodology to calculate CPI. However, he thought to himself that if he understates inflation he won’t get any business. So he came up with a methodology that ensures the alternate inflation figure is higher than the BLS figures (because for some reason higher = more business) but it’s cleverly and secretly calculated to be only a few percent higher than the BLS figures as this maximises his revenue. You expect me to believe this nonsense??...C’mon Martinghoul!

General Mills confirms the Shadow stats Alternate inflation data, there is no getting around that fact.
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Old Mar 28, 2012, 7:58am   #45
 
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Re: German Bond Auction Failure Today

A case study from Shadow stats:

One of my early clients was a large manufacturer of commercial airplanes, who had developed an econometric model for predicting revenue passenger miles. The level of revenue passenger miles was their primary sales forecasting tool, and the model was heavily dependent on the GNP (now GDP) as reported by the Department of Commerce. Suddenly, their model stopped working, and they asked me if I could fix it. I realized the GNP numbers were faulty, corrected them for my client (official reporting was similarly revised a couple of years later) and the model worked again, at least for a while, until GNP methodological changes eventually made the underlying data worthless.

So, does anyone here believe that this is just a fabricated story to drum up business?

If it was, does anyone here think that Shadow stats would still be in business if large manufactures were being given false and misleading data?
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