Yves here. Ilargi takes up one of our favorite topics, how the fetishization of numbers and measurement is at best misguided and at worst profoundly dysfunctional, as we discussed in a 2006 article, Management’s Great Addiction.
If we go by the rumors circulating in the financial press, the Obama Administration is on the verge of selecting a proven failure – Lawrence Summers – to be the next Chair of the Federal Reserve System. We can, and need to, do a lot better than that.
By RJS, a rural swamp denizen from Northeast Ohio, and a long-time commenter at Naked Capitalism. Originally published at MarketWatch 666.
Lambert here: rjs does what he does every weekend: Covers the most important economic releases from the previous week. Thanks, readers, for your feedback on formatting from last week; I hope you see some improvements. Don’t hesitate to make more suggestions. Also, the FRED geekery is fun.
Lordie, the market upset we’ve had over the past week plus over Bernanke using the T, as in “tapering” word, is escalating into a full-blown hissy fit. We now have the Wall Street Journal and other finance-oriented venues telling us how unbelievably important today’s job report is. Huh? One jobs report is just another in a long series of data points.
So why has this one been assigned earth-shaking importance?
I’m glad it’s not all rainbows and sunshine when it comes to big data in this article. Unfortunately, whether because they’re tied to successful business interests, or because they just haven’t thought too deeply about the dark side, their concerns seem almost token, and their examples bizarre.
One of the striking aspects of the furor over Thomas Herndon, Robert Pollin and Michael Ash’s dissection of the considerable flaws in the Carmen Reinhardt and Kenneth Rogoff austerity-justifying paper are the “the earth is still flat” efforts to salvage the theory.
There’s a remarkable amount of optimism in the US financial media given the underlying health of the economy. Of course, the sort of short term investors that have come to dominate securities trading had been in a “risk on/risk off” pattern for a protracted period before commodities weakness and the remarkable run of the Nikkei has led to some renewed focus on relative values of various macro plays. But the markets are still dominated by an underlying faith in the willingness of central bankers to protect the backs of investors and limit any downside (while, ironically, many of these same investors howl about ZIRP and QE, which were clearly intended to goose the value of financial assets and real estate, with the hope that would lead to more consumer spending).
And why shouldn’t the professional investors (as opposed to widows and orphans who can no longer rely on low risk bond investments to produce adequate income) be pleased as punch?