Disclaimer. After nearly 40 years managing money for some of the largest life offices and investment managers in the world, I think I have something to offer. These days I'm retired, and I can't by law give you advice. I do make mistakes, but I try hard to do my analysis thoroughly, and to make sure my data are correct. Remember: the unexpected sometimes happens. The expected does too, but all too often it takes longer than you thought it would.

The Goddess of Markets punishes (eventually) greed, folly, laziness and arrogance. No matter how many years you've served Her. Take care. Be humble. And don't blame me.

BTW, clicking on most charts will produce the original-sized, i.e., bigger version.

Friday, March 16, 2012

My Coinciding Index & GDP

The problem with GDP is that it is such a comprehensive measure.  Everything goes into the pot: spending, production, incomes, trade, inventories.  That's a problem?  Yes, because it means that preliminary estimates of GDP tend to be revised after newer and better data become available.

So I watch my coinciding index as a good and timely guide to GDP.

Click to enlarge

There's a bit of a gap opened up between the COI and GDP.  Has my trusty indicator stopped working?  I suspect not.  In fact, I think it's because GDP will be revised upwards in a year or two, as the results of census data become available.  The latest couple of years of GDP data are always a work in progress.  The reason for the excellent fit in the past is because GDP data have by now been revised.  But my COI has not been substantially revised -- seasonal factors have shifted a little, and some of the component data have been tweaked.

The US economy is quite strong.

Pity about Europe.

[Oh, and yes, my programs are working again]

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