patrick.net

Reminds me of the old joke about how a politico got out of a boat & walked across the water to the shore. The headline read: Senator Smith can't swim! There's rarely any non-partisan reporting any more. The press always has an agenda, and we're spoon fed what they want us to know.

Most of these stories are about general trends and fail to show how miserable the situation is in specific areas of the country.
Here in Southern California industrail jobs are nowhere to be found yet we were given the news last week of a big "uptick" in industrial employment. The city of Industry has lost thousands of jobs and
sees no sign of any returning

Don't be fooled by the daily, 24 hour news cycle reports. Our economy will create jobs again; they will be different ones and that won't help the people who don't have the skills for them. Long term unemployment will continue to be a problem but a manageable one.

"Full" employment is considered to be 5-6%. We are at 10% unemployment now. The added unemployed will require attention (benefits, retraining, etc.) but the problem will ultimately resolve itself.

CNBC etc, had failed miserably to predict downturns, so they just try to show both sides. Let you decide more or less. Which is the way it should be. Information may be free, but good advise is not.

Case in point, I followed both Mish and ECRI. Mish was stubbornly bearish since 2008. Had I followed his investment strategy, I'd have missed out on equity return enough to pay off my neg equity on the house. But not going do that, walking to take a mulligan instead. You're welcome, banker.

We're overloaded with information now, we're given so much data that we dig and dig and dig. We're looking at very small economic pointers and tieing together 5 or 10 points and saying "I have predicted it will go up!" by ignoring 5 or 10 points pointing the other way they can claim that. And really how many points can you include? There are probably 600-1000 indicators they could use, all interacting with each other, so if 30 go up, they'll take 300 others down, but if 10 others go down, they'll making those 300 moot. It becomes massively complex, and with the amount of data we have, it's almost impossible to make correct predictions without a super computer backing you up, and without rules on every one of those indicators. Just randomly picking a few and saying I have the solution, isn't going to work.

I think the best way to go about it is using historical data points. Understanding that if things get too far out of wack, people will figure out how to make money and will pull them back inline again. That doom and gloom isn't going to happen, because we simply won't stand back and watch everything crumble around us. People say doom and gloom has hit us, but until you see the US way of living changing to a 3rd world country, then no, it hasn't changed. 3rd world would include things like #1 killer in the world taking hold here, diarrhea. Water so dirty, if you drank any of it without boiling you would keel over and be in bed for a week, and possibly die from the number one killer. When no one owns a car, or food becomes scarce. And that takes a *LOT* of changing. People say doom and gloom, but what they're looking at is a small swing up or down in our growth or unemployment rates. When our GDP drops 95+% that is a change. When it drops 10-30% that is just a swing. It goes up 10-30% in good years, down in others.

People lose their jobs, but there are more out there. Some have a hard time finding them, and when the news reports "new job upticks" it doesn't mean everyone is going back to work, it means some new jobs have been created and a few people have gone back to work. Most likely the "best" ones, and the "best connected" ones, which means, the ones who have been looking for 6 months or a year are still going to be looking and probably won't even see those jobs come up, because they're given away to the best or the most connected right away, without ever being advertised.

News reports what's interesting and what is likely to get people emotionally involved. Rents going UP!! Rents going DOWN!!

This isn't as interesting: Rents going up, but only after coming down last year, which means if you didn't move last year, you're likely to see no difference when you go looking now. BORING!

Technically, schizoid refers to people who couldn't careless about socializing.

Don’t be fooled by the daily, 24 hour news cycle reports. Our economy will create jobs again; they will be different ones and that won’t help the people who don’t have the skills for them.

Yes, including tattoo artists, conceptual doughnut designers, pornographers, nail technicians, death panel consultants and getaway drivers.

...oh, and landlording!

pkennedy,

Great post. As you point out the "problem" for lack of a better term for it, is that there is so much information, we can't absorb all of it.

Instead, we are prone to give more credence to those articles that accentuate that which we already believe. It becomes a self-fulfillment prophecy in a way. I'll freely admit that I fall prey to this much more than I want to.

I have my own views as to how things will play out (economically speaking) for the next few years, and so, I always find myself reading those articles that agree with my preconceptions, while only skimming over those that do not. It takes a concerted effort to really think about the other side of the argument.