I ran across this at Bloomberg News and I thought it was worth sharing. We have heard about green shoots and a the latest pronouncement by Bonddad today that he now agrees with Krugman even though he thought he was full of shit a few weeks back, because Krugman says he sees signs of the economy turning up. Obviously one has to question, turning up from what? If you fall of a cliff sometime you might turn your face up before going splat. How much farther will we fall before it turns up? So many questions. So much equivocation.
This article is a relative as any because no traditional economic indicator has worked in predicting the start or the demise of this. So for your consideration: some new indicators, which seem to me just as valid as any since we haven't used them so they haven't failed yet.
The one lesson we can draw from the global credit crisis is that all the traditional ways of measuring the state of the economy are about as useful as a bottle of suntan lotion in a snowstorm.
Isn't that the truth? We have Good times are a coming Bonddad on frequently to tell us all is well in various forms and then presents us with pretty charts to prove it. Some of us bang our heads on the table as we fight the temptation to get any more crude than we already our in our responses. Example: No dammit, employment is not a lagging indicator in a consumer based GDP".
All of this leads us to the question that finally may be answered. What Can we use as reliable Economic indicators? What could possible be used as an indicator when economic conditions are so FUBAR no one knows which way is up or down . Well here are some new ones. Kinda hard to chart or put technical analysis too, but give the Math Scientists some time or give Nate a new challenge and we could put up a new graphic real-time economic indicator. Talk about stickiness.
So here are two benchmarks we should all be monitoring more closely: extramarital affairs and the price of Latvian hookers. Both are telling us that there is still plenty of trouble ahead.
Ok , I'm game. So to speak. They certainly don't go for $5000 an hour so it seems like it could work. Tell me more.
"The contractual terms of prostitution are short (an hour, a night) and entry to the industry is unconstrained," he says. "That means that the prices are very flexible."
True enough. His argument is that since the prices have collapsed by about two-thirds in a year, Latvia and the other Baltic states are still in big trouble with deflation lurking.
Then the article goes on to explain the various INS and OUTS of using these indicators which I think you should read. Unfortunately Bloomberg usually doesn't use pictorial or graphics to illustrate points so you'll have to use your imagination Go see for yourself.
It appears that the predictions of joy and security that are just around the corner, may have been have fallen victim to a case of pre-economic-ulation