Posted by Larry Doyle on June 26th, 2014 8:37 AM |
Anyone with a modicum of ‘sense on cents’ is well aware of the maxim ‘garbage in, garbage out.’
If we are to believe that the inflation data reported by Uncle Sam does not properly capture the true level of price increases in our economy — did somebody say intentionally misleading — then the immediate question begs, what is the real level of economic activity in the nation?
Recall that real GDP is defined as:
A measure of economic growth from one period to another expressed as a percentage and adjusted for inflation (i.e. expressed in real as opposed to nominal terms). The real economic growth rate is a measure of the rate of change that a nation’s gross domestic product (GDP) experiences from one year to another.
If inflation is under reported, and the rate of change in our economic growth is a known figure, then by definition the output (that is, real GDP) will be overstated. So I repeat my question: What is the real level, that is a more honest and accurate assessment, of our 1st quarter GDP? (more…)
Posted by Larry Doyle on April 6th, 2012 6:49 AM |
Why is Uncle Sam broke?
As with any spendthrift, the old man has continually displayed a total grasp of basic financial principles.
One would hope that those involved in managing the finances of American citizens would embrace and practice robust principles or otherwise be held to account for their failure to do so.
Was the failure of the solar energy company Solyndra simply a function of unknown and immeasurable market risks, as some in the Obama administration would have us believe? Could American taxpayer interests have been better protected? (more…)
Posted by Larry Doyle on September 7th, 2010 6:53 AM |
I have long since given up the belief that our government officials and financial regulators will demand real transparency and full disclosure in the pursuit of unquestioned integrity across our economic landscape. While some may deem me overly cynical for that statement, too much proof and too many situations leave me no other choice. Where do we witness more financial artifice this morning? Let’s look across the pond.
In late July, I questioned the integrity of the European Bank Stress Tests and wrote, Will European Bank Stress Tests Be “Garbage In, Garbage Out?”:
All eyes will turn toward Europe this afternoon for the much anticipated release of the Euro-style Bank Stress Tests. Those who truly embrace real ’sense on cents’ know that the process and the data are far more important than the actual results. Why is that? If these tests are charades or nothing more than ‘garbage in,’ then the results will most assuredly be ‘garbage out.’
Well, while gullible investors and government officials worldwide may not care to know the real state of the European banks, those of us who truly treasure ‘sense on cents’ are not surprised to now see European financial sewage streaming across the newswire. (more…)