Believe it or not, I found this less downbeat than most economic news du jour. Things are not yet as bad as they have been in past downturns, at least according to the Economist’s house measure:
The Economist’s informal R-word index is also sounding alarms. Our gauge counts how many stories in the Washington Post and the New York Times use the word “recession” in a quarter. This simple formula pinpointed the start of recession in 1981 and 1990 and 2001. In the past few years the R-word index has been extremely low. It began to rise in the second half of 2007 and, measured at a quarterly rate, has soared in early 2008 (see chart). Although the number of stories is still lower than before previous recessions, the recent jump—if sustained for a quarter—is similar to that which preceded the 2001 downturn.
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What utter nonsense! We live in a world of bad statistics – that is, statistics so thoroughly flawed by ‘mark to model’ and ‘mark to fudge factor’ that the basis on which non-inquisitive journalists (which would be most of them!) come to report the ‘R’ word is merely a function of an echo chamber of these ridiculous statistics. It’s entirely a con game of in which the players from industry, government, academia and media parrot each others spin because the fudge factor filled statistics simply lend themselves to spin. There are no actual facts; there is no actual analysis — there’s only PR and marketing in support of world views that serve the interest of all involved.
GDP is horse puckey — and so is inflation, jobs, poverty, housing and other indicators. Filled with spin.
So, should we be surprised that there appears some correlation between the use of the R word in these media outlets and the ‘time when the R started’.
Not at all in this wholly rhetorical world.
It’s a parlor game and perhaps the saddest and scariest part lies in the players — especially the so-called journalists — being so wholly unaware of their part in it.
Interesting, it matches what I read in Trader’s Narrative. There’s a spike of people searching for “recession” on the web.